711.12/1367

Memorandum of Conversation, by the Secretary of State

The Mexican Ambassador called at my request. After brief preliminaries we proceeded to exchange some impressions and ideas with respect to the Mexican expropriation question. I at first said with emphasis to the Ambassador that his Government and his people must know from five years of observation and of experience in its relations with the United States that, in the first place, we have the profoundest interest in the good neighbor policy and its preservation and advancement. I said that, in the second place, this country has consecrated itself in almost every possible way to cooperation with Mexico and other countries to advance the good neighbor policy, and at the same time had bestowed upon Mexico many valuable kindnesses and courtesies over and above the normal processes governing the relations between the two countries. I added that this record of relations between our two countries must confirm the Government and the people of Mexico in the view that our interests and our friendship have been of the most whole-hearted and constant nature.

I then said that the loss to American land owners, oil owners and other American property owners, whose properties have been taken over by authority of the Mexican Government, while not intended here to be minimized, is the least of a number of much larger and broader considerations which neither of our countries can afford to overlook. These considerations I summarized as follows: (1) When a great country like Mexico establishes a policy of taking over property without any serious plan or purpose to make reasonable payment, it would at once become known to all nations and would have the inevitable effect of destroying the good neighbor policy, especially in this hemisphere. This would work most serious effects upon Mexico in many unexpected ways. (2) To adopt a policy of thus seizing oil and land and a few other properties would inevitably result in the early seizure of all foreign owned properties. In other words, if this country should acquiesce in the seizure of oil or any similar properties on account of the unpopularity of the owners, both in Mexico and in this country, those who seize it would unquestionably suspend all further law for the purpose of seizing other and all foreign owned [Page 742] properties. Other nations would quickly follow suit. (3) From any other than the immediate shortsighted viewpoint the policy of seizing properties without payment would soon work far-reaching injury to Mexico herself. No longer would the most needed capital for development come to that country from anywhere. Commercial and financial conditions, both internal and international, would steadily deteriorate until revolution or some similar upheaval would occur.

I said to the Ambassador that his Government must therefore see the impossible position in which these proposed or threatened steps by the Mexican Government are placing this Government and this country. We are expected to acquiesce in these acts that are contrary to law, equity, fair play and fair dealing and they would be so viewed by all civilized nations. Furthermore, they would occur just at the time when the world is on fire; when lawlessness is steadily expanding in many regions and when this Government is preaching to all nations the preservation of all the principles of law and order in every part of the world; that it would be an anomalous situation to announce in these preachments that we are making an exception in the case of Mexico. I said finally the Ambassador realized from his reading of the history of nations that in eight cases out of ten, the nation that undertook to pursue a policy of seizing the property of others without any concern about payment has always become a decadent nation soon thereafter and in its most vital processes of progress and civilization has steadily moved backward and downward. Finally, I said that this country and this Government spend much time every week in the year preaching its friendly feelings to each of the other countries, especially in this hemisphere, and particularly Mexico, and assures our people that similar friendly feelings are entertained in return. I then added that, in the light of certain news from Mexico, I wondered whether his statesmen preached this same state of opinion and attitude on the part of the Mexican people toward the people of the United States, and added that I hoped they would not overlook this phase in view of its importance to both countries alike.

The Ambassador listened attentively and apparently with the disposition to agree. He said that he had talked with President Cárdenas last evening over the telephone and that he was giving him still further assurances of a determined purpose to solve this situation. He stated that he appreciated what I had said and was in accord; that he would write fully to President Cárdenas today reciting our conversation and our state of mind in this country and earnestly urging that the matter be worked out without any more delay than possible. He admitted that President Cárdenas had not thus far intimated to him the time or means of making payment. The Ambassador added, however, that in his own opinion the matter could be handled. He withheld all details. He would be more than glad to exert himself in [Page 743] every possible way to stimulate and encourage his Government to work this matter out without fail. I said to him that his Government and his people should realize and must know that whatever is said or done here is done with the feeling of the most sincere friendship, and if it at times is in any sense disagreeable it is because the Mexican Government has driven us to the very edge of the precipice, so that in the interest of international law and order, and as one of its constant upholders, this Government finds itself obliged to speak or act. I said there is no possible way we can abandon basic principles such as those relating to payment when property is expropriated.

C[ordell] H[ull]