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

No. 5694

Sir: I have the honor to refer to my despatch No. 5693 of November 18, 1937, enclosing copies of various memoranda dealing with conditions in the Yaqui Valley which were left with Lic. Beteta by Mr. Boal on November 15, 1937.

Lic. Beteta said that his information secured from Lic. Gabino Vazquez, the head of the Agrarian Department, was that everything was proceeding smoothly in the Yaqui Valley. However, Lic. Beteta said that it was evident that there was a conflict of information on this subject. He said that he would take up immediately the points mentioned in the memoranda. In principle he saw no reason why the American landowners should not be allowed to select their new unirrigated properties as they deemed best within the area of property available for distribution. He reminded Mr. Boal that the giving of this new land was to be done through a Commission on which the Governor of Sonora would be represented, and said that he would discuss this whole matter with the Department of Agriculture, which was responsible for the new land, with a view to going as far as possible towards helping the Americans in the matter.

Mr. Boal urged upon Lic. Beteta the importance of reestablishing confidence in the Government among the Americans by promptly [Page 639] beginning to pay for the work which they had done in preparing the lands which were being turned over to the American farmers and in payment of the agricultural implements. Lic. Beteta telephoned to Ing. Gutierrez Roldán to inquire of the Department of Hacienda regarding the financial situation. He learned from him that he was making arrangements promptly to obtain 400,000 pesos from the Banco National de Mexico; that he was waiting to have this sum in hand to return with it to the Yaqui Valley and to begin payments.

Mr. Boal suggested that it would be better rather than to wait until all estimates were concluded to begin payments if they would start case by case to estimate the work of preparation of the land and the value of the implements, making payment on each case without waiting for the next. Prompt payments of this description might tend to improve the feeling in the Valley, he thought. Lic. Beteta said that he would recommend this procedure with a view to expediting payment. He said that no doubt where payments were made by Government “pagares” (notes) they could be discounted at once by the recipients at the Banco National de Mexico. He said, however, that the Department of Hacienda had been having some difficulty with the local banks, whose collaboration in the matter they had desired.

Lic. Beteta said that he realized that from time to time difficulties of a detailed character might arise and asked that Mr. Boal get in touch with him promptly as these things came up, so that an effort might be made to straighten them out.

Respectfully yours,

Josephus Daniels