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

No. 7667

Sir: This morning at eleven o’clock I called by appointment at the Foreign Office and was handed Mexico’s note concerning the payment for lands of American citizens expropriated under the agrarian policy of this country. After handing me the note, General Hay went over the few changes in the text, saying that they made no change whatever in the agreements already reached. As to the changes made, he said that at 10:30 he had called Ambassador Castillo Nájera by telephone and had given him the exact words of the changes made.

The Minister said that he was highly pleased that an understanding had been reached and seemed very happy about it.

He said he would not give out the text until this (Saturday) afternoon at three o’clock and would give instructions that it be released for publication in the Sunday morning papers.

I enclose the Spanish text of the note handed to me this morning by General Hay, addressed to me, and the text of the translation—revised from the Department’s translation in only a few minor details of phraseology.

Respectfully yours,

Josephus Daniels

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

Mr. Ambassador: I have the honor to acknowledge receipt of the note dated November 9, 1938 addressed by His Excellency Secretary of State Cordell Hull to the Ambassador of Mexico in the United States of America, Dr. Francisco Castillo Nájera, in which the Government of Your Excellency, while maintaining its opinion that the recognized principles of law and equity require the immediate payment of just compensation for expropriated properties, makes known its readiness to agree to a plan which, based on the proposals of my Government, may apply to the consideration and payment of agrarian expropriations (afectaciones) subsequent to 1927.

The Government of Mexico, in its turn, while reaffirming its conviction that it has not acted contrary to the rules and principles of International Law, of justice and equity, by the enactment and application [Page 718] of its Agrarian Legislation, is in agreement with the plan presented and takes pleasure in recognizing that the sentiments of cordial friendship which unite our two countries have in the end prevailed over differences of a technical and juridical order.

As was proposed in its Note of August 3 of the current year, my Government agrees that the value of the expropriated lands shall be established by a commission consisting of a representative of each Government, also that cases of disagreement between these representatives shall be decided by a third person designated by the Permanent Commission, established by the Gondra Pact, which has its seat in Washington, notwithstanding the fact that, in this instance, it is not a matter of an investigating commission, an express function in the said pact, of the commission referred to.

It agrees, likewise in conformity with its original intention, that the representatives of the two Governments shall be immediately designated and that their first meeting shall take place in the City of Mexico on the first day of December of the present year. Outlays for emoluments, travel and other expenditures, both of the representatives and of the persons assisting them in their work, shall be defrayed by the respective Governments. The two Governments shall each pay one half of the expenses incurred jointly.

Likewise, the emoluments which are to be paid to the third person referred to shall be shared equally, as proposed by your Government, by Mexico and the United States.

My Government manifests, expressly, that it agrees that the representatives designated be instructed to the effect that their work of evaluation be concluded in May 1939,56 and that the cases of disagreement be submitted to the consideration of the third person, who will likewise be requested to render his decision within a term of not more than two months, counting from the date on which his intervention has been requested.

The Government of Mexico understands that the commissioners, in proceeding to make the respective evaluation, shall take into account, among other pertinent facts, the establishment of the nationality of the claimant, the legality of his title to enter a claim and the last fiscal valuation prior to the expropriation.

Respecting the manner of payment of the corresponding indemnifications, my Government will pay the amount of one million dollars in the month of May 1939.

My Government is agreed that, once the representatives fix the amount of the indemnifications, the Governments shall agree upon the annual amount which the Government of Mexico shall pay to that of [Page 719] the United States, in the years subsequent to 1939, on the claims in question. In the determination of the said annual payments, the economic possibilities of Mexico shall be taken into account. My Government agrees, forthwith, that the annual amounts which must be paid to the United States Government shall not be less than one million dollars, United States currency, and, lastly, my Government is in agreement that the payments be made on the 30th day of June of each year.

The Government of Mexico deems necessary to have it understood that the decisions reached by the representatives designated, shall in no case extend beyond evaluation of the lands expropriated and the modalities of payment of the amount determined; that they shall not constitute a precedent, in any case nor for any reason; neither shall they decide the juridical principles maintained by the two Governments and applicable to the matter in question.

The Government of Mexico is pleased to recognize that, in formalizing this arrangement, it has been able, on the one hand, to show, as was expressed in the note to which I reply, its especial desire to safeguard its friendship with the United States, because of the mutual benefits which this reciprocal sentiment represents for both countries, and to carry out, on the other hand, the mandates of the Agrarian Legislation, an expression of our traditional policy, which, on being interpreted by the President of the Republic, was supported, formally, by the National Legislative Body, in the reply given to the message from the Executive by the President of the Congress of the Union, at the opening of the period of sessions on September 1, last.

I avail myself [etc.]

Eduardo Hay
  1. By an exchange of notes dated April 17 and 18, 1939, the time limit was extended; Department of State Executive Agreement Series No. 158, or 53 Stat. 2442.