411.12/1785: Telegram

The Secretary of State to the Ambassador in Mexico ( Daniels )

52. Your cable 41, April 13, 4 P.M., last paragraph, and Moreno’s personal letter of April 10,94 indicate a misunderstanding as to intention and purpose of proposed addition to paragraph 1 Article I of Special Claims Convention. The intended effect is this: Since, in calculating net total of American Special Claims on which to compute [Page 459] the total liability, certain deductions are to be made under paragraphs first and third of Article IV of the Convention, it is but natural and proper that the same process should be used in arriving at the percentage of liability found to exist on the European claims. For example: If gross European claims were 380 millions as shown in Annex 17 to enclosure with instruction No. 214 of December 16,95 and that amount included fifty million dollars of claims corresponding to American claims to be deducted under paragraphs first and third of Article IV of proposed convention, then the European percentage of liability should be computed on the net of 380 less 50 or 330 millions, making a difference of approximately one-third of one percent on the basic percentage of liability or of one million dollars in net liability to the United States. It is not a question of figures to be included in the Convention but merely a determination of principles which will carry out the intention of both Governments to fix liability to United States on a basis of equality with European countries. This is fundamental. Will communicate later regarding terms of Article IV.

Hull
  1. Letter of April 10 not found in Department files.
  2. For instruction No. 214 and its enclosed draft protocol regarding general claims, see Foreign Relations, 1933, vol. v, p. 814; enclosure and annexes under reference not printed.