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

No. 1109

Sir: As you are aware, the work of the two Agencies on the General Claims Arbitration, so far as concerns the filing of Memorials, is drawing to a close. The last Memorial in support of American claims will be filed on or about June 30, 1936, which date marks the end of the period allowed by paragraph “Sixth (i)” of the Protocol of April 24, 1934,39 for the filing of such Memorials, and the American Agent has received from the Mexican Agent indications, although not a specific agreement, that the last Mexican Memorial will be filed on the same date.

It is believed that it would be to the mutual advantage of the two Governments if they were to reach an agreement at the present time with respect to the procedure to be observed by the two Agents in the matter of disposing, for all time, of the claims intended, by the Convention of September 8, 1923,40 to be barred, after the conclusion of the present arbitral proceedings. With that objective in view, there is, therefore, attached hereto for your convenience a draft of a proposed note to the Foreign Office suggesting such an agreement. That draft note is self-explanatory. It is desired that you address a note to the Foreign Office,40a in the general terms indicated, using the suggested text as far as possible, and that you endeavor to obtain its concurrence in the course of action proposed therein, at the earliest practicable time, since the proposed action will doubtless involve a considerable amount of work on the part of each Agency, which work must be completed before June 30.

Your earliest possible advices, by telegraph, that the proposal has been formally agreed to will be appreciated.

Very truly yours,

For the Secretary of State:
Wilbur J. Carr

Draft of Note To Be Presented to the Mexican Ministry for Foreign Affairs

In the pending General Claims Arbitration, the present American Agency has proceeded on the theory that it would be a futile waste of [Page 732] time, of effort and of the funds of the two Governments to submit for the consideration of the Commissioners, or the Umpire, all claims filed, regardless of their merits, and has consequently segregated from the mass of the claims and presented for adjudication only those in which the evidence filed, up to present time, appears to establish prima facie bases of liability, having held in abeyance those in which the evidence already filed by the respective claimants does not appear to measure up to that standard.

It is understood that the present Mexican Agency has proceeded along the same general lines.

It would appear to be in the interest of both Governments to take the necessary steps at the present time to insure that the present arbitral proceedings and those of the Umpire shall serve as a final disposition, for all time, of all claims of the nationals of either Government for loss or damage sustained during the long period of time covered by the barring clauses of the General Claims Convention, namely, from July 4, 1868, to the date of the exchange of ratifications of that Convention, March 1, 1924. Otherwise questions may continue to arise, on the basis of newly discovered or newly filed evidence, with respect to claims not memorialized at this time. The terms of the Convention of September 8, 1923 are such that the accomplishment of that desirable purpose would appear to necessitate an understanding between the two Governments at this time concerning a uniform course of action on the part of the two Agents with respect to the unmemorialized claims. Article VIII of that Convention seems to contemplate the barring of the claims here in question only in the event of their having been “heard and decided” by the Commission and, yet, it is for the precise purpose of avoiding the unnecessary expenditure of the time and funds necessarily incident to such hearings and decisions on the basis of unsatisfactory evidence that the American Agent (and also the Mexican Agent, it is understood) has withheld those claims from the consideration of the Commission, on the merits. In this situation, it would appear that the only practicable manner in which the desired purpose might be served, from the standpoint of a proper interpretation of the Convention, would be the presentation to the Commission by the Agent of each Government, on or before June 30, 1936, of an omnibus memorial in which would be listed, by name and docket number, all those cases not specifically memorialized for consideration on the merits, with the request that the Commissioners “hear and decide” the respective ctses on the basis of the memoranda-notices alone. That action, coupled with an agreement of the two Governments at this time to interpret the Convention, in future, in such a manner as to consider that the claims so presented have been properly brought within the purview of the barring clauses of the Convention of September [Page 733] 8, 1923, would seem to serve the purpose of definitely placing the two Governments in the position of knowing that all questions concerning claims for losses or damages originating during that long period of time comprehended by the barring clauses of the General Claims Convention had been definitely disposed of upon the conclusion of the arbitral work in those cases presented to the Commissioners on or before June 30, 1936.

It is, therefore, hereby proposed to the Mexican Government that the two Agents be instructed by their respective Governments to file, on or before the date above indicated, such an omnibus memorial as above described, including therein all claims not memorialized for adjudication on the merits, each such omnibus memorial to contain, if deemed necessary, a provision reserving the right of the respective Government to withdraw the memorial in question in the unforeseeable event that the corresponding Memorial of the other Agent should not, for some reason, be filed on or before the date indicated, or should not include all the corresponding claims of his Government.

The Government of the United States would desire to have it understood in this connection, however, that those claims of American nationals which are based on obligations of States or Municipalities of the Mexican Government and which have not been prosecuted because of the recognition of the general principle of non-responsibility of national Governments for the contractual obligations of its subdivisions shall be considered as barred only insofar as concerns the question of liability of the National Government for the consequences of its own acts during the period in question and not as claims against the respective States or Municipalities for possible delinquencies on their part during the Convention period. The Government of the United States is prepared to concede that the same understanding shall apply to the same class of Mexican claims, if any.

Moreover, inasmuch as it was agreed by the two Governments, by communications exchanged on July 8–11, 1925,41 that those claims of American nationals which were based upon bonds falling within the scope of the agreement of June 16, 192242 (otherwise known as the Bankers’ Agreement concerning the refunding of Mexican obligations), did not come within the purview of the General Claims Convention of September 8, 1923, regardless of whether or not the bonds on which those claims were based had been deposited in accordance with the terms of the Bankers’ Agreement, it will be understood, of course, that the proposed omnibus memorial of the United States will not include those claims, and that such claims are unaffected by this arrangement.

  1. Ibid., 1934, Vol. v, p. 470.
  2. Ibid., 1923, Vol. ii, p. 555.
  3. The note addressed to the Foreign Office was dated June 2, 1936.
  4. Not printed.
  5. Foreign Relations, 1922, Vol. ii, p. 686.