812.6363/3298: Telegram
The Ambassador in Mexico (Daniels) to the Secretary of State
[Received April 5–3:35 a.m.]
103. Your 59, April 4, 11 a.m. I went this afternoon accompanied by Boal to a meeting with Suarez and Beteta. I had understood yesterday that General Hay would be there and as he was not able to attend, I conveyed the views expressed in your telegram 59 to [Page 746] Beteta in the presence of Suarez. They both said that they would prefer to have the conversations take place here as a great deal of data would be required, the necessary experts on various subjects are here, and they feel that under these conditions plans could be worked out more expeditiously and more satisfactorily to both countries. Suarez added that he would also prefer to have the discussions on economic cooperation resumed here.
As to oil Suarez said that he understood from the companies very definitely that while they would arrange to take inventories without prejudice they were unwilling to discuss compensation until the outcome of their amparo proceedings against expropriation filed today had been determined. It will be at least 2 weeks before the outcome of this in the District Court is reached, and whichever party is beaten will presumably then appeal to the Supreme Court, whose decision may be a matter of weeks or months.
Suarez said his plan as to compensation of the companies was as follows: He was discussing with the President for the time being setting aside a certain percentage, say 10 or 15 percent, of the proceeds from the sales of oil from all expropriated properties to be placed in a compensation fund in the Bank of Mexico for payment when a compensation adjustment with the companies was reached. In that adjustment the Government, he thought, would be prepared after deducting all operating and maintenance costs and other charges of industry to turn over the exportable balance, in oil produced, to the companies for export and marketing as compensation. He confirmed that this would be without prejudice to their legal position and could be done before the companies and the Government had worked out the complete compensation value of the properties expropriated.
As regards the agrarian compensation question Suarez and Beteta said they believed it would be feasible for our Government to estimate a monthly payment for deposit in a fund for us by our Government in compensation for lands. They thought it would be best that this monthly amount should appear as a further lump sum payment to be added to the amount already being paid in connection with claims. Of course it was understood that this payment would not be for claims already adjudicated but to meet further claims to be presented to our Government in connection with agrarian expropriations. They indicated that this payment might begin before the many questions involved had been adjusted by negotiation between the two Governments. Such questions as the status of agrarian claims already filed but not adjudicated would be left pending for adjustment between the two Governments. They would also endeavor to work out some plan which would provide some current payments for any current dotations of American properties.
[Page 747]As a preliminary to confirming their plans they wished to check with us the names of Americans who have reported dotations of their properties and the area of the latter. For this purpose Beteta will confer with Boal and Bursley99 tomorrow noon. We will make current valuations of such properties leaving amparo proceedings open to question and adjustment in any negotiations later.
I consider that today’s conversation was an encouraging opening for further discussions and that it is preferable for the time being to continue along this line rather than to press a transfer of negotiations to Washington which would involve considerable delay. If a proposal by the Mexican Government even of an informal character can be worked out and transmitted to Washington the advisability of transfer of the negotiations at that time can be considered.
- Herbert S. Bursley, Second Secretary of Embassy.↩