Memorandum of Conversation, by the Secretary of State

The Mexican Ambassador came in at my request. He had agreed when he last called to communicate with President Cárdenas on two points and report back to me. One point related to whether his Government could give more substantial information and assurances in regard to time and amount of payments for lands seized during the past ten years, and the other point related to the sending of a brief note I had acquainted him with and thereafter the discontinuance of note writing, with oral conversations substituted. The Ambassador gave no encouragement about the note phase but suggested that his Government be disposed to consider making a reply. He said that his Government was seriously desirous of making payment for the lands seized during the past ten years; that they would be disposed to have a commission proceed very soon with the task of valuing the lands and agreeing as to time and amount of payment; that they would agree that the valuation work should be completed within six months; and that his Government would put in its budget each year, beginning with next year, not less than $500,000, to be applied on the land payments as and when they were valued by the commission. [Page 710] I replied that this would require a great many years. The Ambassador then remarked that he did not think these lands would be valued at more than two or three million dollars, and, therefore, it would not take so much time for payment. He said that his Government would be willing to adopt a percentage basis which would determine the amount of payment each year. The inference was that this might make payments certain within a very few years. The Ambassador said that his Government could not agree to cease further seizures of lands, although he had said to me on his last visit that it could thus agree orally except as to three small tracts and one large tract which were then in process of being taken over; that it would be agreeable with his Government, however, to have such lands valued promptly and the amount due to be placed in the first budget along with amounts due for lands seized during the past ten years. I said that the only trouble with the proposition was that his Government could and might easily seize properties more rapidly than they would pay off the amounts due for seizures during the past ten years, with the result that the Mexican Government would be getting deeper in debt as it expanded its seizures. The Ambassador had no particular comment on this phase. He did not suggest any way of guarding against this sort of possible development either as to ceasing seizures or making more certain payment for seizures heretofore made. I said that his reply was somewhat discouraging and disappointing; that I would confer with my associates and if we should see any basis for progress in dealing with the matters of difference between the two governments I would advise him.

C[ordell] H[ull]