411.12/1778: Telegram
The Secretary of State to the Ambassador in Mexico ( Daniels )
47. Your No. 35, April 4, 4 p.m. If, as appears, your cable includes all suggested changes in our draft of Protocol, it would seem to be acceptable as now agreed upon by Mexico. However, before authorizing you to sign, Department desires to check air mail copy.
With reference to proposed exchange of notes regarding Special Claims Convention, it is to be observed that these notes, as drafted, include those terms of the Convention which Mexican Government desires but omit all reference to those provisions in which this Government is interested. Exchange of notes in these terms would leave this Government in an embarrassing position with reference to the balance of the Convention and, as it is believed that sufficient time remains to obtain appropriation if Protocol and Convention can be signed by middle or end of next week, Department desires you to do utmost possible with a view to concluding both agreements within that time in accordance with the following suggested changes in the Special Claims Convention.
[Page 451]Referring to form of Convention contained in enclosure 3 with your despatch No. 1267,88 following should be added to first paragraph of Article I: “In computing the total sum claimed by the Governments mentioned above, deduction shall be made of all claims corresponding to those mentioned in paragraphs first and third of Article IV hereof.” This is essential to avoid possibility of computing European percentage on a total of claims including those corresponding to deducted American claims, which would not, of course, be in accordance with the present understanding of the two Governments.
Article II. No changes.
Article III. Add “In the event of failure to make annual payments when due, however, this rate shall be increased at the rate of one-fourth of one percent per annum on the amount of deferred payments during the period of any such delay until a maximum additional rate of three percent on such overdue amounts is reached.”
Article IV. No change except elimination of amounts in paragraphs first and second, but paragraph fourth, as redrafted, is not clear. Please cable at once origin and intent of this latter paragraph, whereupon further comments will be sent you.
Article V. Should read “The total amount of the special claims of the United States, as well as the deductions to be made therefrom, in accordance with Article IV above, and the proportionate amount thereof to be paid in accordance with Article 1 above, shall be determined, et cetera,” continuing as quoted in your cable No. 35. Since no gross amount of special claims is fixed in the Convention, this change is necessary to make clear the powers and duties of the Committee referred to in Article V.
Article VI. Mexican amendment is accepted, but understanding should be arrived at in writing to the effect that the reservation with respect to the evidence will not be availed of to deprive the United States of such evidence except in cases in which the withholding thereof may be required by considerations of real political importance to the Government of Mexico. This understanding is considered necessary as a reasonable control upon the judgment of such, now unknown, persons as may have the decision in these matters in the future and may not be in harmony with the spirit which pervades the negotiation of these agreements.
Please emphasize, in connection with the foregoing, that every concession possible is being made to meet the wishes of the Mexican Government in the matter of the simultaneous signing of the two agreements, pointing out that the Department has abandoned further contention with respect to the obvious discrimination against this [Page 452] Government in Santa Isabel cases, also by reduction of interest to a maximum of one percent, except in case of default, and in the matter of evidence. With these concessions it is not believed you should encounter much difficulty in obtaining prompt agreement to the Convention in amended form. Please use your full resources and ingenuity to avoid further formal exchange of views on the matter of interest. The purpose of the indicated addition to Article III will be obvious to you, and it is hoped that you will, if necessary, use your full personal influence to obtain acceptance of this amendment.
Confident of your ability to conclude Convention on the indicated bases after a further clarification of paragraph 4 of Article IV, full powers are being sent in order that signature may be consummated at earliest possible date.