Memorandum of Conversation, by the Secretary of State
The Mexican Ambassador called on his own request. He said that he had had two talks with President Cárdenas recently; that President Cárdenas is very desirous of clearing up the land claims, as they relate to American interests, growing out of the seizures during the past ten years; that President Cárdenas wants us to understand that they [Page 703] intend virtually to refrain from any further American land expropriations in the meantime; and that they definitely plan to make payment “without fail” for both the Yaqui Valley and the other lands seized during the past ten years. The Ambassador then proceeded, with emphasis, to say that President Cárdenas would be willing to fix a limit of time in which these valuations should be made and payment likewise made; that in his, the Ambassador’s opinion, the Mexican Government is now so intent on making settlement of all these land claims that no third commissioner will be necessary for the purpose of ascertaining valuation, time of payment, etc. The Ambassador seemed personally to feel very strongly that this opens the way to a settlement of the land claims within a definite time in the early future and with the certainty of payment. He frequently repeated his view that here for the first time was a chance for settlement of these claims and that he hoped we might see our way clear to act accordingly.
I then said to him that I had been greatly disappointed and in fact almost flabbergasted to see his Government in its last note enter into a lengthy argument challenging the doctrine of just compensation, whether based on legal, or the most equitable or other fair and just grounds, while at the same time championing the principle of confiscation. I then briefly referred to the fact that, after careful examination, the citations of supposed law against the doctrine of compensation were deemed wholly inapplicable; that I and the best lawyers in the Department had carefully examined each of them and found them wholly to fail to sustain the attack of his Government on the ancient principle of just compensation for property taken for public purposes. I said it would require his Government exactly one thousand years to convince my Government and, in my opinion, any other important government of the world, that there is any rule of law or of right or reason or justice, that would justify one government to take the property of an individual citizen of another government without accompanying the taking with satisfactory arrangements about payment. I emphasized that this principle of just compensation is embedded in the constitution of every nation of Latin America, as it is in the Constitution of the United States, and that in fact it has been written unequivocally in Article 27 of the Mexican Constitution without challenge, so far as I was advised, until President Cárdenas and his advisers in 1936 seem to have conceived the idea for the first time that confiscation might be substituted. I said that, so far as my information goes, the court decisions and all the leading legal authorities in Mexico stood for this doctrine in its unqualified form until this new step was taken in 1936; that no other nation is undertaking to carry out social reforms or any other public purposes by this policy of confiscation; and that it will prove utterly disastrous in the long run to those who do undertake to adopt it.[Page 704]
After pointing out that the citations in opposition to the doctrine of just compensation were entirely inapplicable and beside the point, I added that another example of very loose statement was the reference to the devaluation of gold by the United States Government and the charge that it was on the same principle as that of confiscation by the Mexican Government. I said there was no resemblance whatever; that, in the first place, this Government paid its citizens for their gold, and, in the second place, they received money that had even a larger purchasing power than the old gold dollar.
I then said that reports persist that the Government of Mexico plans a campaign, ending up at the Lima Conference,49 in support of confiscation and against the principle of just compensation, and that, in my judgment, every nation except Mexico would be ready to answer “Nay” on that sort of revolutionary proposal; that in any event we and others who are undertaking to maintain this ancient principle would be prepared to defend it at any time, anywhere. The Ambassador commenced to make some defense on account of the merits of the social welfare program, and I soon interrupted him to express my surprise that he was disposed to champion confiscation, and I emphasized the point that we all alike agree as to the merits of social welfare programs and the uplifting of those who are in need of education and are in dire poverty, but it is the method of accomplishing these reforms that brings disagreement, or, in other words, whether such reforms shall be carried on by confiscation of other people’s properties, or whether a government by sound and comprehensive systems of taxation and other wholesome constructive domestic policies will place its entire system of internal improvements and social and economic progress on a legal and just foundation. I said a failure to do the latter would in due time react most disastrously on the very authors of confiscation and the very people whom they were seeking to serve. I added that this was an unofficial, individual view of my own as a friend of Mexico, unrelated to any official conversation. I repeated the deep disappointment of this Government at the open championship of confiscation, to the most sweeping extent, by the Government of Mexico. I said that in its enthusiasm the Mexican Government seems in its recent note to claim the privilege of speaking for all of the Latin American nations on the same subject. I then inquired who had authorized his Government thus to assume to speak for all Latin American Governments and to imply that they would stand for confiscation generally. The Ambassador made no response to this. I said that this sort of propaganda, coupled with other reports coming out of Mexico about a campaign against “economic imperialism”, is very discouraging to this Government in its anxiety to go to the utmost length in working out all problems between our two governments [Page 705] in an amicable way. The Ambassador insisted that his Government would not carry this sort of an issue to Lima and added that he had been selected to head the delegation to that Conference and he expected to go to Mexico within another two weeks to make up his delegation. I congratulated him and expressed great satisfaction that he was to head the delegation, and then I stated I hoped this would mean that he would not be seriously interfered with by those who are overlooking all fundamentals in dealing with present problems, and added that it is too often the case that someone back in the home office plays havoc with the work of a fine delegation on such occasions. The Ambassador indicated that he thought he would not be thus hampered. He conveyed the idea that he would remain here until we decide on our action in relation to the last Mexican note. I said I was much interested in what President Cárdenas had said to him as he detailed it to me and that all phases of the note and extraneous and kindred questions existing between our two countries would be given full and careful consideration.