411.12/1761a
The Secretary of State to the Ambassador in Mexico ( Daniels )
Sir: Referring to your despatch No. 1094 of February 10, 1934, there is enclosed herewith as a basis for your further negotiations with the Mexican Government, a redraft of the proposed protocol with respect to general claims in which are embodied most of the changes suggested by the Mexican Government. The Department’s position with respect to all these points is fully explained below.
[Page 422]Before proceeding to comment on this protocol, it is desired to emphasize the facts first, that in order to proceed to the appraisals contemplated by the general claims protocol it is necessary first to obtain an appropriation from Congress; second, that, pursuant to general policy, such appropriation can not properly be requested by the President until the agreement has become definite; third, that it is the hope of the President and the Congress that the latter will be able to adjourn at an early date not to meet again until January, 1935; and, fourth, that consequently, unless the protocol can be signed within the next few weeks, it will probably be impossible to take advantage of its provisions until the middle or latter part of next year, which would be very regrettable. It is desired, therefore, that if any further exchanges of views with respect to the terms of this protocol are necessary before the signature thereof, the cable be used in that connection rather than the mails.
With the urgency of the situation in mind, the protocol was originally drafted with the object of including nothing therein to which the Mexican Government could reasonably object, while at the same time complying substantially with every reasonable desire of that Government, as expressed in the past, for a rapid, simple, inexpensive disposition of the general claims. The protocol has now been rewritten mainly as suggested by the Mexican Government. The changes from the Mexican Government’s redrafted copy are shown on enclosure one herewith as follows: Those portions of the Mexican draft which it is desired to omit are included in brackets, and those portions which it is desired to substitute therefor or to add are included in parentheses. Enclosure two48 is a redraft of the protocol in final form with these changes made. The following additional comments may prove helpful in making the necessary explanations to the Mexican Foreign Office as to the reasons for these changes:
Preamble
Third paragraph. Omit the following words: “even in the case that the other claims may at some time be subject to formal arbitration”. These words appear to be unnecessary inasmuch as by the preceding words, which were added by the Mexican Government, the agrarian claims are left in the identical status determined by the General Claims protocol of July 18, 1932, and the Mexican Government’s position on that matter is made absolutely clear. These additional and somewhat ambiguous words might prove troublesome in connection with those future negotiations regarding the agrarian claims which are contemplated by the protocol of June 18, 1932. If, therefore, these words were added for the purpose of clarity, they are unnecessary. If, on the other [Page 423] hand, they were added for the purpose of amplifying the reservation with respect to agrarian claims, it would be necessary to object to them because it is believed that all reasonable concessions have already been made on that point. The paragraph has otherwise been rewritten as suggested by the Mexican Government.
Protocol proper
Section “first”, 1st paragraph. This paragraph remains as rewritten by the Mexican Government except that the words “as provided by the General Claims protocol of June 18, 1932”, are inserted in order to make perfectly clear that the reservation made with respect to agrarian claims is exactly that provided by the protocol in question.
Section “first”, 2d paragraph. The only change made in this paragraph is a typographical correction in the interest of clarity of expression—the word “as” having been substituted for “which is”.
Section “second”. This section has been rewritten exactly as desired by the Mexican Government with the exception of the omission of the words “such of”, which are stricken out in order to make the text correspond to the Mexican Government’s elimination of the last clause of the original proposal.
Section “third”. This has been left entirely as approved by the Mexican Government.
Section “fourth”. This has been left entirely as approved by the Mexican Government.
Section “fifth”. The Department concurs in the view of the Mexican Government that a limitation of time should be put upon the Umpire for the completion of his work and, therefore, agrees in principle to the change proposed by the Mexican Government. Inasmuch, however, as only the most difficult cases would be referred to the Umpire, and it is impossible to know in advance what number of cases it might be necessary to refer to him, it is thought possible that a provision allowing two years for his work might lead to undue delay if the number of cases referred to him were small, whereas, if the number so referred were large a definite fixation of the period in advance might bring about the necessity for further extension conventions with all the difficulty entailed in such procedure. Moreover, it is believed that if the Umpire were to be required formally to assume in advance an obligation to act with reasonable expedition, the result, both practical and psychological, would be much better. The following substitution is, therefore, strongly recommended:
“The Umpire shall be required to assume the obligation to decide the cases referred to him at the rate of not less than one each week and to suspend his work not more than four weeks in any one calendar year.”
This substitution embodies the principles of the Mexican Government’s proposed amendment, but, it is believed, in a more practical and more effective manner. Probably not more than one hundred cases would be referred to the Umpire for decision, in which event his whole work would be completed within about the two year period contemplated by the Mexican Government’s suggested amendment.
Section “fifth”, last sentence. The Department notes the substitution suggested by the Mexican Government, but considers that, under the present circumstances, it would be more advisable to eliminate this provision entirely from the protocol. It involves a question which the Department would desire to consider with more deliberation than present circumstances will permit if the protocol is to become effective this year and, since the protocol contemplates a possible en bloc settlement, after the work of the two Commissioners shall have been completed, the question as to the proper procedure for the selection of an Umpire is one which may be avoided entirely by such an en bloc settlement. Should such settlement then prove impossible, however, the two Governments would, at that time, be able to consider the matter in the light of much more definite information concerning the agencies which would be agreed upon to make the selection of the Umpire than at present, since, in the intervening period, there would be the possibility of a complete change of personnel in the agencies heretofore mentioned in this connection.
In other words, the present protocol requires the conclusion of a Convention after the work of the Commissioners provided for therein shall have been completed. If that Convention takes the form contemplated by the first alternative mentioned in the first paragraph of section “Fifth” of the protocol, namely, of an en bloc settlement, this question will not arise. If, on the other hand, that Convention takes the form contemplated by the second alternative mentioned in the same paragraph, the proper procedure for selecting the Umpire could be considered more appropriately and more deliberately at that time.
Section “sixth”, subparagraph (a). There is added at the end of this subparagraph the following words: “which shall not be later than November 1, 1934”. Unless this provision is added, the signature of the protocol will still leave the date of its coming into effect entirely indefinite, as a consequence of which fact it would, in any event, be impossible for the agencies to proceed to the organization of their work with any definite schedule of accomplishment in mind. It is believed, therefore, that the Mexican Government will readily agree that this provision should be added. For your confidential information, it may be stated that this provision is considered necessary to give the protocol a sufficient degree of definiteness, after signature, to warrant a request to Congress for an appropriation with which to [Page 425] initiate the necessary preliminary work on the general claims to make possible a compliance with the protocol within two years after it becomes effective. It is probably inadvisable to explain this latter point to the Mexican Government. It is desired, however, that you insist upon the inclusion of this provision.
Section “sixth”, subparagraphs (b) and (c) remain as left by the Mexican Government.
Section “sixth”, subparagraph (d). The following substitute has been included as subparagraph (d):
“With the Memorial the claimant Government shall file all the evidence on which it intends to rely. With the Answer the respondent Government shall file all the evidence on which it intends to rely. No further evidence shall be filed by either side except such evidence, with the Brief, as rebuts evidence filed with the Answer. Such evidence shall be strictly limited to evidence in rebuttal and there shall be explained at the beginning of the Brief the alleged justification for the filing thereof. If the other side desires to object to such filing, its views may be set forth in the beginning of the Reply Brief, and the Commissioners, or the Umpire, as the case may require, shall decide the point, and if it is decided that the evidence is not in rebuttal to evidence filed with the Answer, the additional evidence shall be entirely disregarded in considering the merits of the claim.
“The two Commissioners, or the Umpire, may at any time order the production of further evidence.”
It is noted that the Mexican Government has suggested the elimination of a provision for the filing of rebuttal evidence with the Brief of the claimant Government on the ground that this provision makes possible the presentation of evidence over an “indefinite period”. The draft protocol submitted by the United States contemplated a reduction in the number of pleadings by eliminating the presentation of Replies and providing for the filing, with the claimant’s next succeeding document, rebuttal evidence which has ordinarily accompanied Replies. This procedure was followed with satisfactory results in the recent arbitration between the United States and Panama, was not found objectionable by either side, and tended to expedite the completion of cases for hearing.
It would seem fundamental that the issues of fact should be clarified as much as possible in order that the Commissioners, or the Umpire, may find it possible to reach a just appraisement of the rights of both Governments. The Department is impressed by the fact that, in the arbitral proceedings thus far conducted, both Governments have found it imperative, in certain cases, to submit evidence after all pleadings and briefs had been completed. And despite the liberality of the practice heretofore followed in this regard, it is significant that the Commission frequently found it necessary to order the production of still further evidence to clarify important questions of fact in dispute between the parties.
[Page 426]Aside from the fact that the procedure suggested by the United States does not, as alleged by Mexico, provide an indefinite period for the filing of evidence, it is believed that the inclusion of a provision for the filing of rebuttal evidence is necessary to safeguard the rights of both Governments. As a practical example of the necessity for such a provision, attention may be invited to a case which arose in a recent arbitration to which the United States was a party. The point at issue was that as to whether the claimant had been permitted to withdraw funds on deposit to his credit in a banking institution. The respondent Government submitted in evidence a document, duly executed by the appropriate officials of the bank in question, certifying that the claimant had withdrawn the funds in the year 1922. The claimant was able to submit, in rebuttal, evidence in the nature of monthly statements of account issued to him by the same bank over a period of years after 1922, showing that the funds in question had not been paid to him but had, according to the bank’s records, remained in his account. It was clear that the bank had simply made an error. The provision for the filing of rebuttal evidence in that case prevented the perpetration of a gross injustice as the result of that error. In the present arbitration either government might present a claim, for example, on behalf of one Jorge González, as a citizen, and the respondent Government might submit with its answer a certificate showing that one Jorge González had long since been naturalized as a citizen of the respondent Government. Under the procedure suggested by Mexico, the claim must be disallowed on jurisdictional grounds even though the claimant Government may possess conclusive evidence that Jorge González, the claimant, and the Jorge González who was naturalized, are entirely different persons.
The United States proposed that no evidence be submitted with the Brief except evidence strictly in rebuttal to evidence filed with the Answer, and, with a view to assuring compliance with this limitation, the original draft has been amended to provide for the rejection by the Commissioners, or the Umpire, of any evidence not so strictly limited in character. It may be observed that in the practice heretofore followed cases were frequently briefed and submitted for hearing in which the right granted by the rules to file evidence with the Reply was not exercised. The United States does not anticipate that the limited right herein proposed shall be exercised with frequency in the future, especially in the cases in which Memorials and Answers are prepared and submitted under the procedure provided for in the proposed protocol. However, it regards the maintenance of the right, in appropriate cases, a matter of importance, not only to the United States but to Mexico as well.
It will be noted that there has been added an additional provision authorizing the two Commissioners, or the Umpire, to order the production [Page 427] of additional evidence at any time. It is not anticipated that the Mexican Government will interpose any serious objection to the addition of this proposal which is designed to assist the Commissioners, or Umpire, in reaching a just appraisement of the claims.
Section “sixth”. Subparagraph (e) remains as left by the Mexican Government.
Section “sixth”, subparagraph (f). The Department agrees in principle to the addition made by the Mexican Government. It is believed, however, that, in order to remove any possibility of a criticism to the effect that the substance of the general claims convention has been changed by the protocol, it is preferable to express the desired addition of the Mexican Government in the following language: “except in so far as concerns the matter of procedure, which shall be that provided for herein”. It is to be observed in this connection that the comments of the Mexican Government on this change indicate clearly that what was in contemplation in making the change was the procedure provided for by the protocol. This substitution of language to express the wishes of the Mexican Government will, therefore, doubtless be found acceptable.
Section “sixth”, subparagraph (g) left in the form accepted by the Mexican Government.
Section “sixth”, subparagraph (h). It is noted that the Mexican Government desires to eliminate the ten percent flexibility in the matter of filing claims on the basis of the Agents’ advance notice with respect to the claims to be filed by them. It is not believed desirable, however, to make this change. While it should not occasion either Agency any difficulty, six months after the initiation of the pleading work to indicate rather definitely the total number of claims to be filed by its Government, it is almost inevitable that unforeseen contingencies will arise to make impossible an absolutely accurate statement on this point one year or more before the expiration of the period for filing memorials. Unless, therefore, some relaxation is made from this provision to cover such contingencies, it is not improbable that the Agents might undertake to provide against such contingency by notifying more claims than they really intend to plead which would destroy the real purpose intended to be served by this provision. The only other alternative would probably be a further international agreement, the necessity for which it is desirable to avoid, if possible. The very contemplation by the protocol of such a possible future agreement might lead to laxity on the part of the Agencies in the matter of giving advance notification. It is upon the relative accuracy of such advance notifications that the systematic and successful operation of the present plan largely depends.
Section “sixth”, subparagraphs (i), (j), (k) and (l) left as changed by the Mexican Government.
[Page 428]Section “sixth”, original subparagraph (m). The Department feels that the Mexican Government may have made a fundamental change in this respect without due reflection as to the possibilities to result therefrom. It is the almost uniform experience of this Government that, in the general working of agencies in connection with the pleading of large numbers of cases, there is an inclination somewhat to disregard prescribed periods for the filing of pleadings. It is believed that it is reasonable to expect that, in the stress of the work which will necessarily attend the pleading of all the remaining general claims within a period of two years, it will be found difficult, in many cases, strictly to comply, within a few days, with the periods prescribed in the protocol as originally drafted, namely, seventy days in each case. It would be most unfortunate to permit the filing periods prescribed by the protocol to remain absolutely rigid without any provision to care for emergencies and yet, at the same time, to provide sufficient sanctions to impel the Agents to advance the work in a systematic and orderly fashion. It is to be borne in mind that there is to be no Commission to issue orders or enforce the terms of the protocol and that, therefore, in the absence of such sanctions in the protocol, the inevitable result of inability or refusal to comply with the protocol by filing pleadings within the periods prescribed would be just that kind of friction and paralysis of the work which obtained in the past and which it is the whole purpose of this protocol to make impossible in future. It is, therefore, desired to insert as paragraph “m” of the protocol, the following provision to which, it is strongly felt, the Mexican Government cannot, with good reason, object:
“(m). In view of the herein prescribed limitations upon the time allowed for the completion of the work of the Agencies and the Commissioners, it is recognized that the success of this simplified plan of procedure depends fundamentally upon the prompt and regular filing of pleadings in accordance with the provisions of this section. It is agreed, therefore, that any pleading which shall be filed more than thirty days after the due date for the filing thereof, shall be disregarded by the Commissioners and the Umpire and that the respective case shall be considered by them upon the pleadings preceding the tardy pleading unless, by agreement of the two Governments, the continued pleading of the respective case shall be resumed.”
It is believed that you will have no difficulty in explaining to the Mexican Government that the clear purpose of this provision is, not to prescribe any unreasonable requirement, or any requirement differing in principle from those found in the rules under which most of the municipal courts of the world operate, but to place upon the respective Agents only a sufficient degree of responsibility for efficiently progressing the work as to insure compliance with the provisions of the [Page 429] protocol, which appears to be the only possible method by which a continuation of the friction and fruitless efforts of the past can be avoided.
Section “sixth”, original subparagraph (n). The following is a proposed substitute to reconcile the wishes of both sides:
“It shall not be necessary to attach original evidence to the pleadings but all documents hereafter submitted as evidence shall be certified as true and complete copies of the original, if they be such. In the event that any particular document filed is not a true and complete copy of the original that fact shall be so stated in the certificate. The complete original of any document filed, either in whole or in part, shall be retained in the Agency filing the document and shall be made available for inspection by any authorized representative of the Agent of the other side.
“Where the original of any document or other proof is filed at any Government office on either side, and cannot be conveniently withdrawn, and no copy of such document is in the possession of the Agent of the Government desiring to present the same to the Commissioners in support of the allegations set out in his pleadings, he shall notify the Agent of the other Government in writing of his desire to inspect such document. Should such inspection be refused, then the action taken in response to the request to inspect, together with such reasons as may be assigned for the action taken, shall be reported to the Commissioners and, in turn, to the Umpire mentioned in article 5 of this Protocol, so that due notice thereof may be taken.”
The first sentence of the above has been amended to meet the objection interposed by the Mexican Government. The last paragraph above, as proposed by Mexico, does not appear to cover the situation contemplated by the second sentence of this section as contained in the original draft. That original proposal was designed to provide for the inspection by one party of the originals of documents submitted, in whole or in part, by the other party, while the proposal submitted by Mexico appears to relate to a situation in which one party desires to present in evidence documents in the possession of the other party, but not introduced into evidence.
The addition proposed by Mexico appears unobjectionable and has been incorporated in toto in the above provision. However, the original proposal of the United States, covering a different situation, has been reincorporated in an amended form but omitting provision for the making of photostat copies, in order to comply with the apparent wishes of the Mexican Government. Since, the Department understands, the procedure contemplated by this proposal has, to a certain extent, been heretofore observed by both agencies, it is not believed that the Mexican Government will object to its inclusion.
The above suggestions and changes in the protocol represent a most liberal attitude on the part of this Government in order to meet the wishes of the Mexican Government in every reasonable respect so that [Page 430] the protocol may be promptly signed and put into effect. It is to be understood, and should be so explained to the Mexican Government, that in the event that that Government shall not promptly agree to the protocol in its present form, or to such minor changes as can promptly be arranged by cable, and a consequent delay results which makes it impossible to obtain from Congress, during the present session, the necessary appropriation with which to initiate the work on general claims this year, the Department reserves the right to reconsider the protocol in its entirety in a more detailed and more deliberate manner or to proceed to the adjudication of the claims under the existing Convention extending the duration of the General Claims Convention. It is felt that altogether too much valuable time has already elapsed without sufficiently substantial accomplishments in this matter and that, consequently, the present situation is one which requires the prompt subordination of unessential details to the essential conclusion of the work.
There is being transmitted to you under separate cover a draft of a convention for a lump sum settlement of special claims,49 as proposed by the Mexican Government. You may advise the Foreign Office that the Department agrees in principle to the conclusion of such a Convention, providing for the settlement of American special claims by the payment by Mexico of a percentage of American claims equal to the average percentage found to be due by Mexico on the special claims presented by the six European Governments. It may, however, require several exchanges of views, by mail, to arrive at complete understanding with respect to the terms of such a convention. Meanwhile, it is desired to sign the general claims protocol in order that the necessary appropriation to permit initiation of the general claims work may be promptly requested from Congress. The Department desires, therefore, that you exert every effort possible to insure the signature of the general claims protocol at once and without waiting the signature of the special claims convention.
Very truly yours,