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

No. 5617

Sir: I have the honor to refer to my despatch 5616 of November 2, 1937, enclosing a copy of a note from the Foreign Office regarding [Page 627] the Yaqui Valley agrarian situation, and to enclose a copy of a note left with Licenciado Beteta yesterday evening by Mr. Boal in reply to that communication.

In the course of the conversation on the subject Licenciado Beteta explained that while he had been under the impression that the President intended to have the Agrarian Department endeavor to have arrangements made between the American landowners and the agrarians for renting back the lands dotated to them until the June wheat harvest, he realized now that the President had merely referred to arrangements and he had drawn his own deductions as to the rental system.

Mr. Boal urged him to endeavor to have the arrangements made on a rental basis, pointing out that this was the current basis used in the Valley and that the crop-sharing arrangements under that system were all provided for by law in Sonora. He pointed out that the system provided that the renter pay the taxes, water charges, and other expenses connected with the land, so that the owner receives 12½% of the crop, net. He informed Licenciado Beteta that the representative of the American landowners had yesterday suggested that if rental arrangements were made under the auspices of the Agrarian Department, the American landowners would need to keep the greater part of their equipment until the harvest had been gotten in. The 12½% share could then be taken up by the Banco Ejidal and the proceeds used for the purchase of this equipment after the harvest. This would make it unnecessary for the Government to put out cash both to purchase equipment at the present time and to finance the ejidatarios for the preparation of the land and other work connected with the crop. Presumably those of the ejidatarios who now work for a wage on the land would thus continue to have employment, so that the question of tiding them over until the harvest might not arise in many cases. All this, it seemed, would be financially helpful to the Government, while the landowners would have an opportunity to make their usual crop before the lands were taken out of their hands.

In this connection, Mr. Boal pointed out that according to the representative of the American landowners many of these would prefer to have their pequeña propiedad, as offered in the Mexican Government’s note under reference, as non-irrigated land, thus keeping two or three hundred hectares, instead of one hundred. In that event it would be necessary to work out a rental adjustment which would not constitute recognition by the American landowners of lands to be dotated, since the amount and location of these lands would remain uncertain until the pequeñas propiedades of non-irrigated land had been delimited. Obviously, the Government would not wish to postpone the making of the rental arrangement until all [Page 628] the pequeñas propiedades had been measured, since that would involve a disastrous delay in the planting of the crop, to the disadvantage of all parties concerned. He also pointed out that there were few people in the Valley who made a business of planting and tending crops as contractors; that the regular farmers did not and probably would not do this; that those who did were not sufficient in number and had not enough equipment to take care of any appreciable amount of the land in the Valley planned for dotation. Under these circumstances the ejidatarios, if no rental arrangement were reached, would have to prepare the land, and it seemed likely that in the limited time remaining for planting a great deal of land would either remain un-planted or would be improperly planted and tended, so that the crops would be unsatisfactory, to the detriment of everybody concerned.

Licenciado Beteta said that he would discuss these points with the President with a view to trying to work out some arrangement.

Respectfully yours,

Josephus Daniels

The American Ambassador (Daniels) to the Mexican Minister for Foreign Affairs (Hay)

No. 2492

Excellency: I have the honor to acknowledge the receipt of the Foreign Office’s note 312243 of October 29, 1937,34 which reached me yesterday afternoon.

In this note are set forth the Mexican Government’s reasons for making a classification of the American-owned lands in the Yaqui Valley as irrigated for the purposes of determining the pequeñas propiedades, and as unirrigated with respect to the dotations to the agrarians. In the paragraph marked “Second” of that note you say:

As a result of the foregoing, if the owners prefer that they be left the small property which the Agrarian Code specifies for non-irrigated land (up to 300 hectares), there will be no difficulty in doing this—but they will not have water rights.

The representative of the American landowners in the Yaqui Valley informs me that some, and possibly all, of the American landowners wish to accept this offer and will file with such authorities as Your Excellency may indicate applications for their small properties as non-irrigated land, to receive up to three hundred hectares as provided in the Agrarian Code. My understanding is that under this arrangement the distribution of water to the American landowners [Page 629] will be governed by the existing contract for the delivery of water, but that the ejidatarios will be entitled to water rights for themselves as set forth in the Agrarian Code.

The note under reference does not take up the question of the eligibility of the persons on the census of ejidatarios. Am I correct in believing that the American landowners in the Yaqui Valley will be permitted to challenge the eligibility of persons on this list, under the Agrarian Code, not only in general but particularly if it is claimed that there are a sufficient number of applicants unsatisfied with land to cause the American landowners to receive, under the provisions of the Agrarian Code, less than the three hundred hectares for small properties of non-irrigated land?

As regards indemnification, it is my understanding from the note under reference that American landowners will receive new land, now unirrigated but irrigable by gravity, in amounts adequately compensating them for any of their lands dotated, to be improved with canals and other irrigation works at the expense of the Mexican Government, at least to the same extent as the lands to be dotated now carry such improvements. Am I correct in believing that such improvement will include the clearing of the new land, so that, when irrigated, it will be similar in character to the land dotated? Am I correct in my understanding that the irrigation system for this new land will not only be installed on the land but will be brought to it at the expense of the Mexican Government, and that this new land will be the first to be opened to irrigation when the Angostura Dam is completed? Am I correct in my understanding that the evaluation of the lands to be dotated and of the new lands to be given in compensation will be made by a commission composed of a representative of the landowners, a representative of the Governor of Sonora, with such technical assistants as may be necessary?

The note under reference does not deal with the question of improvements, such as buildings, fences, drainage systems, bridges, etc. Am I correct in believing that such improvements are to be paid for?

The note under reference makes it clear that the animals and tools belonging to the American landowners which they may wish to sell are to be valued and will be paid for by the Government in cash, at the time they are delivered by their present owners to the ejidatarios. I should appreciate receiving from Your Excellency information as to how the valuation is to be carried out.

The note under reference does not indicate what compensation will be made to American landowners for higher hauling costs in the event that new lands to be given them in exchange for lands dotated are farther removed from mills and railroads than their present holdings.[Page 630]I should appreciate receiving information from Your Excellency on this point.

The note under reference indicates that these new lands are to receive free water as soon as the Angostura Dam can provide them with this water. Am I correct in understanding that there will be no cost whatever to the American landowners for this water: that is to say, that they will not be called upon to contribute to the maintenance of the general irrigation system or to pay any kind of tax providing funds for such purposes?—and that this free water will go with the land in perpetuity, thus increasing its sales value?

The note under reference does not deal specifically with any compensation to the American landowners for the loss of crop production during the years intervening from the present time until water is brought on to their new lands and they can begin to farm them. Am I correct in understanding that the American landowners will be given permission to hold those lands for an extensive period beyond the date of their receiving the water, so that the additional value of the free water during the years when they can farm the new lands will compensate them for the years during which they have been unable to produce crops owing to lack of water?—further, that such permission will be renewable, so that the American landowners will not find themselves faced with a fixed date by which they must sell, which would presumably adversely affect the possibility of selling the land for its fair value? Am I correct in understanding that during the period to which I refer above these lands will not be subject to agrarian affectation? I should appreciate information on these points from Your Excellency.

The note under reference informs me:

Your Excellency is right in thinking that the crops obtained on these lands which have been sown with wheat up to October 30th of this year will belong to the present owners, and that crops sown later than that date should be the property of the ejidatarios. This is in fact provided for in the President’s decree, already known to that Embassy. Nevertheless, the owners will be indemnified for the work of preparing and irrigating the lands. To prevent the danger of lowered production of wheat, an effort will be made in each case to secure an arrangement between the owners and the workers whereby the planting will not be delayed and the owners not suffer losses.

I should appreciate learning from Your Excellency how the American landowners are to be indemnified for the work of preparing and irrigating the lands, and what arrangements between the owners and the workers are contemplated by your Government.

Please accept [etc.]

Josephus Daniels
  1. Ante, p. 625.