The Secretary of State to Mr. Joseph R. Baker, Assistant to the Legal Adviser, and Mr. Peter H. A. Flood, Foreign Service Officer

Sirs: Reference is made to the provisions contained in the protocol signed by representatives of the United States of America and the United Mexican States on April 24, 1934,2 to the effect that the two Governments should proceed to an informal discussion of the so-called agrarian claims pending before the General Claims Commission with a view to making an adjustment thereof consistent with “the rights and equities of the claimants and the rights and obligations of the Mexican Government”, and that “pending such discussion no agrarian claims will be presented to the Commission for decision, but memorials of cases not yet memorialized may be filed in order to regularize the awards of the Commission made upon the agreed adjustments”.

Pursuant to the statement contained in the Department’s telegram of March 21, 1935, to the American Embassy at Mexico City,3 that it was prepared to send a representative or representatives to Mexico for the purpose of entering into discussions with officials of the Mexican Government under the arrangement made in the protocol, and in view of the Embassy’s telegram of March 22, 1935,3 wherein it was stated that the proposed procedure would be satisfactory to the Mexican Government which was prepared to begin discussions immediately, I direct you to proceed to Mexico City at your earliest convenience for the purpose of the informal discussion contemplated by the protocol.

Of course it would be desirable to arrange for a just settlement of all the agrarian claims and thus avoid the time and expense which would be involved in submitting them to the Commission and any proposal by the Mexican Government looking to such a settlement will be the subject of attentive consideration. However, it is naturally not the purpose of the Department to agree to any settlement which would unduly sacrifice the interests of the claimants, many of whom [Page 754] have long since suffered the loss of substantial property rights without receiving that just compensation to which they are entitled under the applicable rules and principles of international law.

Respecting the promise made to the Mexican Government by Secretary Hughes in 19244 regarding the acceptance of bonds on behalf of claimants whose lands had been expropriated up to an area of 1755 hectares in each case, you may say, if reminded of such promise, that as no such bonds were given or offered to the great majority of American claimants and since no interest has been paid for some years on the few bonds so offered and accepted, with the natural result that the market price of the so-called agrarian bonds has declined until it is but a small fraction of the face value, your Government considers itself released from such promise.

You will feel free to communicate with the Department in detail concerning any proposal for an adjustment which may be made by the Mexican Government and you may intimate to the Mexican negotiators that any such adjustment made upon a fair scale of compensation would be very favorably received by public opinion in the United States as evidencing the sense of justice of the Mexican Government.

You are aware of the advisability of concluding the discussion without much delay in order that the American Agency, General Claims Commission, United States and Mexico, may proceed in good season with the formalities incident to the submission of the agrarian claims to the Commission provided no agreement for a general adjustment seems practicable.

Very truly yours,

Cordell Hull

[Pursuant to the above instruction negotiations were carried on in Mexico City by Mr. Baker and Mr. Flood until August and were continued by Ambassador Daniels. A number of memoranda and drafts were exchanged without reaching any agreement. These papers have been omitted.]

  1. Ibid., p. 470.
  2. Not printed.
  3. Not printed.
  4. Letter (not printed) sent to the Mexican Chargé upon ratification of the General Claims Convention on March 1, 1924 (411.12/99b); see telegram No. 119, August 22, 1923, to the Chargé in Mexico, Foreign Relations, 1923, vol. ii, p. 550, and Proceedings of the United States-Mexican Commission Convened in Mexico City, May 14, 1928 (Washington, Government Printing Office, 1925), p. 44.