[Enclosure]
Memorandum of Conversation, by the Counselor of
Embassy in Mexico (Boal)
Mexico
, December 22, 1937.
In the course of the conversation with Licenciado Beteta this morning
he mentioned the question of the Yaqui Valley saying that a new and
awkward development had arisen there. His Government had promised
ours that the American landowners who had lost property there would
get free water for their small properties and free water for the
land to be given them. The free water in the latter case would be
given upon completion of the dam and irrigation works. The Minister
of Agriculture now told him that this would practically eliminate
revenues from land which in fact belongs to the Government and
therefore he did not see how the Government could continue to exist
if it undertook to give free water to the Americans. Of [Page 643] course they would also have to
give free water to the Mexicans and others from whom land had been
taken in that area. Licenciado Beteta stated that this created a
serious problem which he intended to discuss with the President. He
realized that it would be wrong and most prejudicial for the Mexican
Government to endeavor to withdraw from its commitment. Instructions
had been issued, he said, to the Richardson Construction Company to
give the Americans free water and the Company had countered with the
proposition that they turn the Company over “lock, stock and barrel”
to the landholders and let them run it themselves; the landowners
had refused to accept the Company. I pointed out that such a
proposition would not be a substitute for the Government’s
commitment to provide free water. Licenciado Beteta admitted this.
He said that if the Government had to subsidize the Company it would
cost the Government about three hundred thousand pesos a year. He
also said that there was a difficulty in that the agrarians had to
pay for their water and they would be upset if they felt that the
Americans were getting their water free. He believed that this might
be handled by having the Americans continue as they are doing now,
to send them “pagares” (promises to pay) for their water and then
instead of the Company collecting these, having them receipted and
returned and having the Government make them good to the Company as
payment of agrarian indemnity. Some such system he thought might be
worked out until such time as the new dam came into operation at
which time presumably the whole water system of the Valley would be
revised. He remarked that free water to the landowners would result,
in a few years, in their having in fact acquired much more value
than that of their properties. I reminded him that when he discussed
the matter before, the suggestion of free water had been made with
the idea that it would be a perpetual right going with the land and
would increase the sales value of the small properties and new lands
to be given as part compensation of the lands that had been given to
the ejidos.
Licenciado Beteta said that assuming that there were forty-six
Americans in the Valley with one hundred hectares apiece, and that
these lands were worth $100.00 pesos an hectare, the total value of
the land would be $460,000.00 pesos whereas the three hundred
thousand pesos a year that the Government would have to contribute
to keep the water company going represented the interest on around
ten million pesos.
I told him that I was not in a position to give him any estimate of
the sales value of the small properties per hectare. However, it
might be that it would be more economical for the Government
eventually [Page 644] to buy these
small properties at a fair price thereby solving their water
problem. He seemed to think that this might be the case; for the
time being he said he would discuss the matter with the President
with a view to arriving at an adjustment which would provide the
landowners with the free water promised to them.
He showed me a map of the Yaqui and pointed out that the only land
which could be irrigated by gravity lay to the South West of the
present irrigated area and had presumably been given to the
agrarians. He said that this dotation was only provisional, and he
expected to discuss with the President a readjustment since this was
the type of land that had been promised to the Americans in
compensation. He would ask, he said, that the Americans be requested
by the local representatives of the Company that each one indicate
the location of compensation lands they would prefer; they would
then see if it would be possible to satisfy them.
The reports on conditions in the Yaqui to which he referred during
this conversation had been given him by Gutierrez Roldan who has
apparently returned from the Yaqui.
Mexico, December 22, 1937.
