The Secretary of State to the Chargé in Mexico (Norweb)

No. 1021

Sir: I have received the Embassy’s despatch No. 3260 of February 4, 1936, wherein it is stated that Mr. Henry P. Smith, representative of the Bondholders’ Protective Committee of the Guanajuato Reduction and Mines Company, an American-owned concern, called at the Embassy February 3, 1936, in relation to the labor troubles the company is experiencing and advised that Mr. MacDonald, in charge of the company’s operations, had arranged to discuss the existing situation with the Mexican Labor Department. The Embassy expresses the hope that the negotiations will result in the reopening of the company’s mines and states that it would seek to lend its good offices to that end, if and when it becomes necessary.

Respecting the statement that Mr. MacDonald, as the responsible officer of the company, had heretofore agreed with the Mexican Government to abide by decisions of Mexican authorities and not call upon the Government of the United States to intervene on behalf of the company, I remind the Embassy that this Government has uniformly held that an American citizen cannot, by entering into an agreement of this sort, divest his Government of its right to extend to him its protection abroad. While maintaining this position, the United States could not consistently decline in a proper case to exercise the right in question. It should perhaps be borne in mind in this relation that an agreement of the nature mentioned is presumably in effect extorted from interested American citizens, at least in many cases, the alternative confronting them being the threatened expropriation of property rights theretofore obtained in accordance with the laws of Mexico.

Very truly yours,

For the Secretary of State:
Sumner Welles