312.0051/34

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

No. 4074

Sir: I have the honor to refer to my despatch No. 4000 of October 7, 1936,28 reporting that President Cárdenas had on September 22 forwarded a draft of a new law for the expropriation of private property to the National Congress for its consideration.

Upon receipt of this draft by the National Congress, it was referred to the appropriate committee of the House of Representatives for consideration. This Committee has for the past month been considering the numerous objections to the bill presented by the various business organizations, Chambers of Commerce, etc. The bill was reported out of committee and passed by the Chamber of Deputies on November 3 with but slight changes.

Under Article I which provides what shall be considered as of public use for the purposes of the law, there is added: “The conservation of places of scenic beauty, of antiques and objects of art, of buildings and monuments, of archeological interests, and of those things which may be considered as outstanding in our national culture”.

Article X which fixes the compensation to the owner remains the same, that is, that compensation for property expropriated shall be based upon the declared fiscal value for tax purposes and leaves only the improvements or deterioration of the property after the date of the declaration of its fiscal value by the owner, subject to review and decision by the courts.

Article XIX provides that compensation shall be paid the owner when the property expropriated passes to the control of the State, but Article XX appears to modify this provision by stating that “The authority which carries out the expropriation shall fix the manner and [Page 720] terms in which the compensation must be paid, which shall never exceed a period of ten years”.

Three copies (in translation) of this bill as approved by the Chamber of Deputies on November 3 are enclosed herewith. These translations were obtained through the courtesy of Mr. Armstrong, Secretary of the Association of Producers of Petroleum in Mexico, which organization specializes in the translation of important legislation for the benefit of its members.

The Headquarters of the National Revolutionary Party published in the Mexican News Letter a statement made by Sanchez Tapia, Secretary of the Department of National Economy, defending and justifying the proposed expropriation law. Three copies of this statement are enclosed herewith.29 The statement points out that the new bill is intended merely to take the place of a similar law promulgated on November 3, 1905 during the Díaz regime and that the new bill will bring the old law in accord with Article 27 of the Federal Constitution of 1917, and that it gives but very little more authority to the Federal Government. The statement tries to reassure property owners that they have nothing to fear from the new law and that if they were able to conduct their business honestly under the old law they will be able to do so equally under the new.

It is understood that the Commercial Attaché is analyzing the bill and forwarding separate copies to the Department of Commerce.

Respectfully yours,

Josephus Daniels
[Enclosure—Translation]

Text of the “Federal Law of Expropriation on Grounds of Public Welfare” As Passed by the Chamber of Deputies, November 3, 1936

  • Article 1. The following shall be considered as of public use:
    I—
    The establishment, exploitation and maintenance of any public utility;
    II—
    The opening, widening or straightening of streets, construction of roads, bridges, highways and tunnels which facilitate urban or suburban travel;
    III—
    The beautification, enlargement and sanitation of cities and ports; the construction of hospitals, schools, parks, gardens, fields for recreation and landing fields, and of any other work designed to render services for the general good;
    IV—
    The conservation of places of scenic beauty, of antiques and objects of art, of buildings and monuments of archaeologic interest and of those things which may be considered as outstanding in our national culture;
    V—
    The supplying of general necessities in times of war or civil strife; the provisioning of cities and centers of population with food [Page 721] and other necessary articles of consumption; and the processes employed to combat or prevent the spread of epidemics, fires, plagues, floods or other public disasters;
    VI—
    The means employed for national defense or for the maintenance of public safety;
    VII—
    The conservation, development or utilization of the natural resources capable of industrial exploitation;
    VIII—
    The equal distribution of wealth held and monopolized to the exclusive advantage of a few persons with prejudice to society in general or to any particular social class;
    IX—
    The establishment, maintenance or conservation of an industrial concern for the good of society;
    X—
    The means necessary to prevent the destruction of natural resources and the damages which private property may suffer to the detriment of the general good;
    XI—
    The creation or improvement of centers of manufacturing population and of their sources of livelihood;
    XII—
    Such other cases as are enumerated in special laws.
  • Article 2. In all of the cases cited in Article 1, following declaration by the Federal Executive, the expropriation, temporary, total or partial occupation or ordinary limitation of the right of private property shall be carried out for the ends of the State or in the interests of society in general.
  • Article 3. The Federal Executive shall deal with the case of expropriation, temporary occupation or limitation of the right of private property through the agency of the proper Secretariat of State, Administrative Department or Territorial Government and shall, in every case, issue the respective declaration.
  • Article 4. The declaration referred to in the preceding Article shall be made by means of a notice which shall be published in the Diario Oficial de la Federación and which shall be brought to the personal attention of the interested party. In the event the domicile of the party is not known, a second publication in the Diario Oficial shall be considered as having fulfilled the requirement of personal notification.
  • Article 5. The owners affected may, within the fifteen working days following such notification, resort to administrative action for revocation of the declaration of expropriation.
  • Article 6. Administrative recourse for revocation shall be taken before the Secretariat of State, Administrative Department or Territorial Government which may have dealt with the case of expropriation, temporary occupation or limitation of the right of private property.
  • Article 7. If administrative action for revocation to which Article 5 refers has not been employed or if such action has been decided against the claims of the appellant, the proper administrative authority shall immediately carry out the seizure of the property whose [Page 722] expropriation or temporary occupation is concerned, or shall order the immediate execution of the due processes of limitation of the right of private property.
  • Article 8. In the cases to which Fractions V, VI and X of Article 1 of this Law refer, the Federal Executive may, upon making the declaration, order the seizure of the property subject to expropriation or temporary occupation or impose the immediate execution of the processes of limitation of the right of private property, without administrative action for revocation delaying the occupation of the property concerned or the execution of the processes of limitation of the right of private property.
  • Article 9. If the properties concerned in the declaration of expropriation, temporary occupation or limitation of the right of private property were not employed to the ends which gave cause to the corresponding declaration within a period of five years, the owner affected may claim the return of the property and the withdrawal of the notification of temporary occupation or of limitation of the right of private property.
  • Article 10. The sum which shall be fixed as compensation for the goods seized shall be based on the amount declared as fiscal value to the tax or cadastral offices, since this value has been manifested by the owner or accepted, expressly or tacitly, by him in paying his taxes on this basis. The excess or demerit which the private property may have undergone by reason of the improvements or deterioration after the date of the assignment of fiscal value shall be the only point subject to the decision of the Courts and the judgment of experts. This same procedure shall be observed when the case concerns articles whose value has not been established by the tax offices.
  • Article 11. When the amount of compensation to which the preceding article refers is in dispute, the case shall be taken to the proper Court, which shall give the parties three days in which to name their experts, on penalty, if they fail to make such appointment, that the Court will itself make such appointment in default. The parties will also be notified to name jointly a third expert in case of conflict; upon failure to do so, such expert will be named by the Court.
  • Article 12. No recourse shall be taken against the judgment of the Court which selects the experts.
  • Article 13. In the event of refusal to serve, death or incapacity of any of the experts designated, those responsible shall make a new selection within a period of three days.
  • Article 14. The fees of each expert shall be paid by the party which appoints him and the fee for the third expert shall be paid by both parties.
  • Article 15. The Court shall fix a period which may not exceed sixty days in which the experts shall render their report.
  • Article 16. When the experts are in agreement on the valuation of the improvements or deterioration, the Court shall immediately fix the amount of compensation; in the event of nonagreement it shall summon the third expert who shall render his report within a period set by the Court which may not exceed thirty days. Having the reports of the experts before it, the Court shall, within a period of ten days, take such action as it deems proper.
  • Article 17. No legal recourse shall lie against the Court decision fixing the amount of compensation and, thereupon, the corresponding public deed shall be drawn up which shall be signed by the interested party, or, on his refusal, by the Court.
  • Article 18. If the occupation be temporary the amount of compensation shall be subject to the judgment of experts and Court decision following the procedure established in this Law. This same procedure shall be followed in cases of limitation of the right of private property.
  • Article 19. The value of the compensation shall be paid by the State when the article expropriated passes to its control. When the article expropriated passes to the control of a person distinct from the State, this person shall pay the compensation. These dispositions shall be carried out in cases of temporary occupation or limitation of the right of private property as well.
  • Article 20. The authority which carries out the expropriation shall fix the manner and terms in which the compensation must be paid, which shall never exceed a period of ten years.
  • Article 21. This Law is of Federal application in the cases in which it tends to reach an end toward the fulfillment of which the Nation is held responsible according to the Constitutional provisions, and also in cases of limitation of the right of private property; it is of local application for the Federal District and the Federal Territories.
  1. Not printed.
  2. Not printed.