The Ambassador in Mexico (Daniels) to the Secretary of State
[Received October 26.]
Sir: I have the honor to report that this morning I had a request from the Foreign Minister to call at the Foreign Office if I could do so conveniently. I had been expecting a call from Ambassador Castillo Nájera, who had told me on Saturday that after seeing the President he would call at the Embassy before returning to Washington—either Monday or Tuesday.
When I arrived at the Foreign Office I found the Foreign Minister, General Hay, the Undersecretary, Mr. Beteta, and Ambassador Castillo Nájera. The latter opened the conversation by saying that he had talked with the President on Sunday and had afterwards discussed the question of American lands dotated, or threatened to be distributed to agrarians. He told me the President had stated to him what he had told me on my visit some days ago (see despatch No. 4002 of October 9, 193620), and had requested him to see me and the two head officers of the Foreign Office and say that he would make the budget for agrarian property just as large as possible at the first of the year. I asked if it was to be in money or in bonds. General Hay answered: “bonds”. At that juncture Mr. Beteta added that the fund was to be in bonds and some cash. I asked what proportion would be in cash. That had not been determined, he said, but at least enough to pay the interest on the bonds.
In the meantime I was informed President Cárdenas would shortly go himself to Sonora, in the section where the Yaqui lands are under consideration, to determine what should be done, and was told that he was confident arrangements could be made that would be satisfactory to the owners. Nothing will be done there unless the government and the owners of the lands can agree upon one of the several propositions of exchange of lands that have been pending and about which the Department has been informed. At the last report from the Yaqui Valley the agraristas had not accepted the proposal of the American land owners.
It might be, continued the Mexican officials, that payment could not all be made in bonds or cash, but when that was the case there would be payment in real property belonging to the Government, [Page 708] perhaps town property or other lands or buildings of a value that the Government believed would be acceptable to Americans.
Evidently these officials had been trying to work out a plan that would meet our reasonable demands. They emphasized the serious difficulties in the way and hoped we would appreciate their spirit of accommodation.
I told them that our Government was not unmindful of the agrarian problems the Mexican Government faced and that we had not wished to do more than secure compensation for lands belonging to our nationals, and I was glad they were finding a way to meet our just expectations.
Ambassador Castillo Nájera said that he was leaving tonight (Tuesday) for Washington and had an engagement with Mr. Sumner Welles for the morning of the 24th, and would acquaint him with the situation as it had been outlined to me. I felt at this meeting, as I had felt when listening to President Cárdenas, that there was a sincere desire on their part to solve a very delicate situation in a way that would satisfy our Government.