812.6363/2838
The Ambassador in Mexico (Daniels) to
the Secretary of State
No. 2450
Mexico, April 12, 1935.
[Received April
17.]
Sir: Yesterday morning, accompanied by Mr.
Norweb, Counselor of the Embassy, I called on the Foreign Minister, and
told him I was leaving Monday14 for the United States to be gone several weeks. Before
going I asked to bring to his attention several questions upon which I
expected to confer with the Secretary of State when in Washington. I was
particularly desirous of ascertaining the attitude of the Government
with reference to matters touched upon in instruction No. 673,
containing the memorandum from Mr. Harold Walker, Vice President of the
Huasteca Petroleum Company. Following the expression of that
instruction, I refrained from “specific reference to the difficulties
encountered by any particular American company”, but propounded
questions designed to ascertain the situation, not only with regard to
the petroleum question, but also on the payment for agrarian
expropriations,15 and the religious
situation16 at the present time.
At my request, Mr. Norweb has prepared a memorandum of the conversation,
which is appended. The answers to my questions indicate that no
immediate response may be expected bearing on the fears
[Page 767]
of Mr. Walker with reference to the
petroleum claims of the Huasteca Petroleum Company.
As to the payment for lands expropriated, the Minister is waiting upon
the studies of the Minister of Hacienda. In view of my interest he said
he would take the matter up again with the Minister. At a previous
interview, when I called his attention to the fact that, whereas bonds
had formerly been given in payment for the lands expropriated, but none
had been provided recently, he had said that all the bonds authorized by
law had been issued, and that no new authority for additional bonds
could be obtained until Congress meets in September. A recent statement
shows that during February last nearly 50,000 hectares were
provisionally donated and 42,017 hectares definitely given to
agrarians.
In a former conversation I had told the Minister that the action of
certain Mexican states, particularly meaning Tabasco, in closing
churches and denying the exercise of their office by priests, had caused
much sentiment in favor of the Borah Resolution.17 Yesterday I told him that
tourists just from Mazatlan had told me the churches were closed, and
asked if there had been any change in the situation with reference to
churches and priests. I indicated, as I had formerly done, that such
action had militated against the best conditions between the two
countries. He realizes the situation and said that the situation is less
acute and is improving.
The Minister believes the strike situation will not be as serious as has
been generally feared in view of the declaration of some of the labor
organizations (there are several and they are antagonistic) for a
general strike on April 20th. He bases his optimistic view upon the
action of the President in the Puebla strike, brought on by a bitter
struggle between rival unions.
The Minister made reference to the fact that his predecessor, Dr. Puig,
and myself had arranged to go to the border and at first hand to study
the situation regarding the disposition of waters of the Rio Grande and
the Colorado River, which was not carried out because, as Dr. Puig was
retiring, he concluded to leave the trip and preliminary study for his
successor. “I think upon your return”, said Mr. Portes Gil, “it would be
well if you and I can carry out the original idea so our governments may
know all the conditions that must precede a treaty agreement.” I told
him that in 1934 my government had approved the visit and study and I
would be pleased to take the matter up with him upon my return in
June.
Upon taking leave of the Minister, I asked him to give the same courteous
reception and consideration to Mr. Norweb, who would
[Page 768]
be in charge in my absence on leave, he
had always shown me. The Minister and Mr. Norweb are already on good
terms and Mr. Norweb will have access to him when public business
requires. Inasmuch as May is an “off month” in government circles, with
thirteen days of holidays in the public departments, it is not probable
that any of the important matters I brought to the attention of the
Foreign Minister or now pending will come to a head during my absence.
While in the United States I wish to discuss those and other matters
with the Secretary of State at his convenience.
Respectfully yours,
[Enclosure]
Memorandum by the Counselor of Embassy (Norweb) of a Conversation
Between the American Ambassador (Daniels) and the Mexican Minister for
Foreign Affairs (Portes Gil)
In the usual Thursday interview with the Foreign Minister today, the
Ambassador told Mr. Portes Gil that he was leaving for the United
States on Monday, and that there were three questions which were
sure to be put to him in Washington, namely:
- 1
- —the petroleum question;
- 2
- —the possibility of payment for agrarian
expropriations;
- 3
- —the general politico-religious situation throughout the
country.
1. Petroleum:
With respect to this question the Ambassador remarked that the
Foreign Minister, in view of his active interest in the question in
the past, was aware of some of the difficulties experienced by the
American petroleum companies in Mexico in their current relations
with the authorities. Chief among the present difficulties was the
uncertainty as to what the Government meant by the recent
announcement of the Minister of National Economy that the Government
was making a general revision of petroleum concessions. Some of the
American companies feared that this policy might operate against the
confirmation of many important applications for concessions which
they now have pending. The Ambassador went on to explain that on the
basis of the 1928 adjustment18 approximately ⅔ of the
pre-constitutionally-held rights had been confirmed, but
applications for confirmatory concessions covering over one million
hectares of similar land had been pending now for nearly eight
years.
The Minister replied that in view of his close contact with the
Morrow-Calles arrangement of 1928 and his duties as Attorney General
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in the previous
administration, he was familiar with many of the details. He assured
the Ambassador that the study now being made in the Ministry of
National Economy covering the question of concessions was in the
nature of a housecleaning and would not in any way involve
concessions already granted. “We are not thinking,” he said, “of
withdrawing from the position adopted at that time. That is a
finished chapter. As regards concessions still awaiting
confirmation, it is my understanding that the 1928 criteria will
apply in these cases. However,” he added, “many of these cases are
difficult to decide, and if there have been delays they arise from
other causes and not as the result of the Government’s having
changed its position with regard to the criteria adopted in
1928.[”]
The Ambassador went on to say that another matter causing some
concern to American petroleum companies arose from two recent
decisions of the Supreme Court which reversed decisions of that same
body in 1932 and 1933, whereby the court now takes the position that
subsoil rights flow to the Government from declarations of national
waters. Important property holdings of American companies dating
from pre-constitutional times have been affected by these two
decisions, and there is much uneasiness in the industry that these
decisions may be used by the Ministry of National Economy to
encroach upon petroleum lands which the companies feel they have
legally acquired.
The Minister also appeared familiar with this phase of the matter, as
he referred to one of the cases by name, and pointed out that this
question of the subsoil rights in Federal Zones was a matter that
had never been definitely decided; that these two decisions of the
Supreme Court did not constitute a precedent, and that until five
decisions have been taken on this issue the Government is free to
follow the course of action dictated by the merits of each
individual case. Of course, if there were any feeling of denial of
justice in any of these cases, or in any other aspect of the
petroleum situation as it affected American companies, the Minister
would be glad to take it up with the interested Department.
The Ambassador said that he did not intend to discuss any individual
cases this morning, but that he merely wished to call the Minister’s
attention to the situation in the oil industry as it affected some
important American interests, and spoke of his concern lest
difficulties in the application of the understanding reached in 1928
might lead to a re-opening of some of the old issues which it was
intended permanently and amicably to dispose of at that time.
2. Compensation for Agrarian
Expropriations:
Upon inquiring about the present status of this matter, which had
been discussed on several previous interviews, the Ambassador was
assured by the Foreign Minister that only recently he had again
reminded
[Page 770]
the Finance
Minister of our lively interest in this question. He had, however,
nothing new to report, but he promised that this was a question to
which he would continue to give his attention. He could make no
promise, however, as to when the Finance Minister would complete his
studies.
3. Politico-Religious
Situation:
In discussing the general situation throughout the country, the
Foreign Minister minimized the seriousness of the many impending
strikes. He was sure that the President’s intervention would end the
trouble at Puebla, and that the lesson learned there would remove
the danger of a general strike in Mexico City on the 20th of this
month.
Asked if there were any change in the general religious situation
throughout the country, the Foreign Minister expressed the opinion
that the President’s recent public condemnation of excesses in the
application of the laws in this respect had had a good effect. Minor
officials, he said, in outlying districts, impressed by the
President’s words of caution, were more careful not to be
overly-zealous in their relations with Church officials. The
churches, he admitted, were still closed in some of the States, but
he had heard that in the State of Aguascalientes there was a
definite improvement in the situation, and there was a disposition
on the part of the priests to conform to the regulations.
In concluding the interview, the Foreign Minister announced to the
Ambassador that his appointment had been made with the President for
1 o’clock tomorrow—Friday—afternoon.
