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

No. 4171

Sir: I have the honor to report that on Tuesday afternoon, by appointment, I visited President Cárdenas at his home. I was accompanied by Mr. Pierre de L. Boal, Counselor of the Embassy. I had sought the appointment before going to the United States on leave in order to discuss with him the agrarian dotations of land belonging [Page 710] to Americans and the new expropriation law, about which instructions had been received from the Department, and one or two other subjects in which our country is interested. We talked, the President at length discussing the subjects which I presented, and about which I had told him on a former visit that my countrymen and my government were greatly perturbed. At my request Mr. Boal has prepared a summary of the interview which is appended hereto.

I will be in Washington on Monday and will discuss the subjects touched upon in the interview with President Cárdenas and will try to give the background of the situation in Mexico.

Respectfully yours,

Josephus Daniels

Memorandum by the Counselor of Embassy (Boal)

The Ambassador and I called upon President Cárdenas on December 15th at 6 p.m., by appointment.

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Expropriation Law

The Ambassador then said that some time ago, before the Expropriation Law was passed by the Mexican Congress, he had expressed to President Cárdenas his fear of the consequences which that Law might have on opinion in the United States and investments in Mexico. He said this fear had been justified, since the State Department had been approached by many Americans asking for information regarding the situation created by the Expropriation Law and expressing great alarm. The Secretary of State in turn had urgently asked the Ambassador to advise him of the situation thus created, and tell him what the effect of the Law would be in Mexico. The Ambassador therefore asked President Cárdenas if he could tell him (1) exactly what the law purported to do and (2) how the President expected to carry it out.

President Cárdenas replied that practically every country in the world had a Federal expropriation law. Mexico, however, had not had one, and it seemed essential that this deficiency should be remedied. The law provided for the expropriation of any property which might be necessary for the public good, and this was in line with the situation in other countries. It was necessary to have this law not only for such public purposes as the making of streets and other developments, but also in order that no asset to the country should be left unproductive. His Government had no idea of expropriating going concerns that were fulfilling a Useful service to the country, but [Page 711] wished to be equipped legally so it could, if necessary, take over an industry or factory which had shut down, thus paralyzing a business or enterprise necessary for the public welfare. He cited as an example the Cruz Azul factory in the State of Mexico. He said the Government had no idea of using the law simply to permit groups which wished to take over some industry for their own purposes to achieve this end. He would not engage in any suicidal policy based on the Expropriation Law. He realized that it was necessary, as he had said in his last interview with the Ambassador, to encourage and develop American investment in Mexico. The Government would not be so childish or short-sighted as to engage in any policy which would prevent this. It would not, for instance, endeavor to take over the oil fields or the mines, since that would be impractical and would place the Government in the situation with regard to foreign investment which it intended to avoid. Wherever the Government, however, found an undertaking crippled through cloture, it would be in a position to act to protect the public welfare.

At this point the Ambassador observed that tea was getting cold, so we all had tea and cookies and the conversation briefly lapsed into less serious channels.

Agrarian Question: General, and Yaqui Valley

After this interval, the Ambassador said to the President that he wanted to tell him that since their last interview he had had a number of instructions from the State Department indicating how seriously concerned they were over developments in the agrarian question in Mexico. In particular our Government had indicated its concern over the taking of American lands without compensation.

President Cárdenas said that it was his intention, as he had said in the last meeting with the Ambassador, to have the budget this year provide for the resumption of the issuance of Agrarian Bonds. He said that the cessation of issuance of bonds had occurred during the term of President Abelardo Rodríguez, but that now he planned to resume the issuance of these bonds even if it were only for a small amount each year.

The Ambassador inquired whether this would be made available for compensation to Americans in case their lands were taken in the Yaqui Valley, and President Cárdenas replied that first bonds would have to be given to the people from whom land had been taken since the emission of bonds had been suspended; after they had been given their bonds, more recent dotations would be compensated in the order in which they occurred. He said he realized of course that the amount of compensation which landowners would actually receive each year, through the drawing each year of a portion of the bonds and their [Page 712] retirement in currency, would be considered so small as to be inadequate. However, the magnitude of the Agrarian Debt, amounting to many millions or more, precluded any other system. The Government could hardly pay out more than five or six million pesos a year when land was being taken at the rate of something like seventy-five million pesos a year. Still, it was a system through which, over a long number of years, some compensation would eventually be made to the landowners.

The Ambassador said that the situation in the Yaqui Valley in particular, which he had discussed at the last meeting, was giving a great deal of concern to our Secretary of State. He had already explained to President Cárdenas at a previous interview the serious character of this problem from the standpoint of American interests and opinion. He understood that the original contract under which Americans entered this valley, constructed irrigation works, and cultivated a previously uninhabited and undeveloped region, had been made in 1890 by an American, Mr. Charles Conant, and the Mexican Government, this contract having been ratified by the Mexican Congress at that time. Under the subsequently enacted Agrarian Code, such colonization contracts appeared to be protected against ejidal dotation. The American colonists had spent a great deal of money and undertaken a great deal of work to make the previously barren valley a productive asset for Mexico. Today, they felt they were faced with the loss of the greater part of this asset which they had created. They wanted to assist the Mexican Government in solving the ejidal problem by helping the Government to establish the agrarians on neighboring land so that their investment under the colonization contract might be respected.

President Cárdenas said that there were something like three thousand or less agrarians claiming land in the Yaqui Valley. These claimants could not be put on the remaining un-irrigated land near the Yaqui Valley, because it was the Government’s intention to use that land to give to the Yaqui Indians in order to keep that tribe quiet by satisfying their desire for land so that they would not return to the war-path as they have in the past. President Cárdenas felt that the Americans in the Valley since 1890 had been able to make money out of their agricultural holdings and should by this time have reimbursed themselves for the benefit they brought to the country in instituting this irrigation system and developing the Valley as a cultivable area. He said that he had studied the Agrarian Code very carefully and come to the conclusion that there was no protection afforded by it to colonization enterprises. They were as affectable as any other property.

[Page 713]

After consulting with the Ambassador, I asked him for the sake of clarity if there were not an article in the Agrarian Code—I thought No. 42 or 43—which protected colonization contracts against ejidal dotation, and the President said categorically that there was not. He then went on to say that at a meeting with landowners a considerable time ago, they had shown their willingness to pick out the lands for two ejidal districts in the cultivated part of the Yaqui Valley to suit the three thousand or less claimants who had asked for ejidos. President Cárdenas believed that, with regard to the remainder of the lands, they should divide up what was left among their families, so that no one would hold more than the 150–hectare maximum allowed by the Agrarian Code. He still urged this step as a measure for their self-protection against future invocation of the Agrarian Code. He thought that if this were done the problem of the Yaqui Valley would be solved, since the ejidal claimants would have part of the land and the Americans would retain the rest.

After consulting with the Ambassador, I asked him whether they would then be free to sell these lands without threat of further dotation, pointing out that the threat of dotation had made it impossible in recent months for them to continue selling their lands to Mexican citizens as they had done in the past. I pointed out that their original holdings in the Valley had been greatly reduced by sales to Mexican citizens and that it would seem that a solution which would enable them to sell off all their lands over a period of years would be an equitable way to settle the problem.

President Cárdenas said he felt the dotations had to be made, but that with regard to the remainder of the land, provision could be made to protect it from dotation so that buyers need have no fear, and the land therefore become saleable.

I pointed out that the Americans owned only something like over one-third of the total irrigated land in the Yaqui Valley, and therefore it would not seem just that they should be required to give up more than a just proportion of their holdings to the ejidatarios, I asked, therefore, if he thought that, in the event the landowners wished to give up some of their land to the ejidatarios to solve the question, it would be satisfactory if not more than this proportionate part of the total affectable land should come from American owners.

President Cárdenas said this would be perfectly satisfactory. He pointed out that each of the three thousand or less claimants would be entitled to four hectares, so the total amount taken out of the Valley as a whole would be about twelve thousand hectares. I also pointed out that a considerable number of the Americans in the Valley had only 150 hectares or less and I understood that these would be absolutely [Page 714] unaffectable and would not be included in any calculation of the affectable area of the Valley and would be protected in any case from dotation. President Cárdenas said this was correct; that those Americans who owned 150 hectares or less would be protected from dotation and would not be included in any calculations.

President Cárdenas then said he wished to ask a personal favor of the Ambassador. He said that his people had existed for many years in a state of appalling misery and poverty. It had been the ambition of the great mass of the poor agrarian workers to own the land on which they worked, and he and his government had sought faithfully to carry out this purpose. Would it not be possible for the Ambassador to enlist the assistance of President Roosevelt and of the American Government to get the American landowners in Mexico to cooperate with the Mexican Government so that this end might be achieved?

The Ambassador said that he would state this point of view to President Roosevelt and the Secretary of State and would discuss the whole question with them; that when he returned he hoped to be in a position to give President Cárdenas their point of view. It must be realized, however, that many of the American landowners who had invested all their means in land in Mexico and had contributed to the national wealth through their efforts had come from States whose Senators and Congressmen were deeply interested in their welfare. It was very possible that these Senators and Congressmen would raise the question in January when the Congress met, and the sentiment in the entire country would be contrary to the taking away of lands without compensation; and President Roosevelt would have to take this sentiment into consideration. He assured President Cárdenas that President Roosevelt had an interest in the forgotten man and would give sympathetic consideration to this request, and would wish to do everything everywhere in that direction consistent with his obligations to his country.

President Cárdenas then said that he and his Government were deeply appreciative of the attitude which President Roosevelt and our Government and the Ambassador had taken with regard to Mexico. They felt under obligation to our Government in this respect and even though it should involve a discrimination in favor of American citizens which would be very embarrassing to the Mexican Government, if President Roosevelt insisted on it the Mexican Government would wish to make any settlement that he desired with regard to the Yaqui Valley in order to save him from embarrassment and difficulty in the United States.

The Ambassador expressed his appreciation of this offer and said that he would discuss it along with the President’s views on the whole [Page 715] subject with President Roosevelt, and the Secretary of State. In the meantime, he asked for President Cárdenas’ assurance that nothing further would be done with regard to the Yaqui Valley pending his return. This assurance President Cárdenas gave, adding that he had several other matters which had to be taken up previously and he did not think they would get to the point where dotation of the Yaqui Valley lands might take place before the middle of 1937.

Migratory Bird Treaty

The Ambassador then asked President Cárdenas when we might expect the Mexican Congress to ratify the Migratory Birds and Game Mammals Convention,24 pointing out that our Congress would meet in January and that if the Mexican Congress could ratify before they met it would make it possible to bring the Convention into effect at an early date, a consummation which was very desirable from the point of view of both Governments. President Cárdenas replied that the Convention would be ratified by Mexico before the end of this year.

President Cárdenas asked Ambassador Daniels again to convey to President Roosevelt his sincere regards and best wishes, and wished the Ambassador a very pleasant journey and a happy New Year for himself and Mrs. Daniels. He said that Mrs. Cárdenas hoped to see Mrs. Daniels before she left.

The Ambassador reciprocated these sentiments and the conversation came to an end with our departure.

P[ierre] de L. B[oal]
  1. Signed February 7, 1936; for text, see Department of State Treaty Series No. 912, or 50 Stat. 1311.