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

No. 4023

Sir: I have the honor to refer to my despatch number 4002 of October 9, 1936,17 and to the Department’s telegraphic instruction number 167 of September 30 [29], 9 a.m. [5 p.m.], regarding contemplated expropriation proceedings in the Yaqui Valley.

After receiving from Vice Consul Yepis copies of his despatches 276 of September 26 [21] and 280 of October 5, 1936, to the Department, and his telegram to me of October 10, of which I have the honor to enclose a copy,18 and as I had already mentioned the matter to the President (see my despatch number 4002 referred to above), I asked the counselor of the Embassy to call on Licenciado Beteta, the Undersecretary of State for Foreign Affairs, to discuss the matter further with him. I now have the honor to transmit herewith a copy of the memorandum which Mr. Boal has prepared of his conversation with Licenciado Beteta.

Respectfully yours,

Josephus Daniels
[Page 705]

Memorandum of Conversation, by the Counselor of Embassy (Boal)

I saw Licenciado Beteta on Saturday, October 10, and briefly spoke to him about the Yaqui Valley situation. Today, at his request, I called on him and discussed the matter fully. I left with him the attached list of pending agrarian cases.19 I then went over the Yaqui Valley situation, touching the high spots as given in Vice Consul Yepis’s despatch number 280. We examined the chart enclosed with the despatch together. Licenciado Beteta said that he had had a long talk with the President on the Yaqui Valley situation and on the agrarian question in general. He said that he had found the President more conciliatory in agrarian matters than he had ever thought he would be. He said that he (the President) was deeply concerned to prevent any crisis with the American Government on the subject and that they had discussed the subject of compensation fully. He wanted to tell me personally and quite confidentially that he was suggesting to the President a system of compensation which was to be carried out case by case confidentially. The idea was whenever property was taken from an American citizen under the Agrarian Code he would be compensated by receiving a property, not necessarily agrarian, and possibly a house, to be taken from the Bienes Nacionales. He said that this would only apply to pending and future cases, all past agrarian expropriations from Americans to be excluded, otherwise the Government would not have enough properties to go around. It would not be done as a matter of principle, but simply on a case basis and without any publicity or giving out any information. He wanted to know what I thought of this plan. I told him that it would be difficult for me to express an opinion; that much, I supposed, would depend on the character of the particular property offered in each particular case.

Speaking of the Yaqui Valley, Licenciado Beteta said that he felt that this district was in a class by itself. I had already pointed out to him that the land had never been worked by the original inhabitants of the country but that it had been bought, irrigated, cultivated and developed by the American holders who had come in under a legal contract with the Government, had paid their money in good faith and were under a colonization contract which required a certain percentage of the owners, when they came in over forty years ago, to be American citizens. Licenciado Beteta asked if those who were asking for ejidos were Yaqui Indians. I said I did not know, that I was not under the impression that all of them were. He said that this made [Page 706] a difference to the Mexican Government. However, he was not under the impression that all of them were Yaqui Indians.

He then spoke of the Laguna matter. He said he regretted that the question had come up and told me quite confidentially and personally that he could not make up his mind fully regarding it. He was not at all convinced that the course being pursued now was the one to follow. He asked if there were any American properties in the Laguna. I told him I thought there were; that American interests were involved to the extent of one-third in the Tlahualilo Company’s holdings. I added that furthermore, there were four American landowners in the Laguna, of whom three owned 3,321 acres of cultivated land and one owner, 10,621 acres, chiefly uncultivated. I said that while we had had some complaint on the score of the Tlahualilo interests, we had not yet had complaint from the other four owners. Mr. Beteta asked me to let him know immediately as soon as we had some complaint.

In summing up the agrarian situation at this present stage, I pointed out to Licenciado Beteta that we could not expect our Congress, when it came into session, to remain indifferent to the protests of Americans who were losing their properties. If we got fifty more protests from the Yaqui Valley it would cause a terrific stir at home. Furthermore, members of Congress would not wait until Congress met to make their views audible. Once the damage were done, it would be extremely difficult to undo. If the Administration were pressed into a situation where it would have to make a public statement of its relations with the Mexican Government, much of the improvement in the Mexican-American relations in the last few years might be undone. I pointed out that in most of the agrarian cases we had seen there were serious irregularities and illegal acts. In many cases laws—not the Agrarian Code only—had been violated in order to bring about expropriations under the Agrarian Code. Thus, squatters were allowed to remain on lands until they could qualify for claims for ejidos or other claims against the land. I said that of course the damaging effect of this might be lessened if the Government had public hearings in Mexico City on appeal similar to those carried out in the nationalization proceedings in the Department of Hacienda. This would presumably tend to bring about expropriations only where the law had been strictly complied with and would therefore tend to diminish the cases where expropriation is rushed through regardless of the Agrarian Code or other laws.

I asked if it would not be possible for the Government to put off the taking of property belonging to Americans for a period during which time they could evolve a process of compensation and thereafter only take property as compensation could be made. Licenciado Beteta [Page 707] said he thought that something like this could be evolved. At any rate, he was going to try to work it out with the President.

P[ierre] de L. B[oal]
  1. Post, p. 715.
  2. None printed.
  3. Not attached to file copy.