812.52—Agrarian Commission/273/7

Memorandum by Mr. Joseph B. Baker, Assistant to the Legal Adviser (Hackworth)

Technically and provided that it is understood that the statement is intended to relate alone to the cases covered by the arrangement of November 9–12 1938, there is some basis for President Cárdenas’ statement in his Message to the Mexican Senate, that the United States “accepts the fact” that with respect to agrarian expropriations payments “will not be … immediate to, but subsequent to the expropriatory actions”.

With regard to the cases covered by the arrangement in question, that arrangement does not provide for “immediate” payment but for payment after the claims have been submitted to and passed on as to the amounts which should be paid by a Commission. Therefore, it may be said, strictly speaking, that the United States “accepts the fact” that with regard to such claims payment will be “subsequent to the expropriatory actions.”

It will be observed that the President’s statement related to the arrangement in question which he was requesting the Mexican Senate to ratify and that he referred not to a yielding on the part of the United States respecting the rules and principles of international law but to a “fact” with regard to payment of the particular claims covered by the arrangement.

On the other hand and “with a view to preventing any possibility of misunderstanding of the position of this Government” the Department’s instruction of January 14, 1939 to the American Embassy at Mexico City carried out by note to the Foreign Office of January 16, 1939 was to the effect that the United States had not modified the position taken in previous notes that “the recognized rules of law and equity require the prompt payment of full compensation for the property that may be expropriated”. As reported by the Embassy in [Page 658] its despatch of January 26, 1939, the Foreign Office has replied by stating that the President’s pronouncement “should be understood in its relation to the entire text of the document which contains it” and that “it is clear that” he “referred exclusively and specifically to the arrangement recently concluded between the two countries in the matter of agrarian claims.”

In brief, it follows that this Government is on record with the Mexican Government on the general principle involved and that the Mexican Government has in its reply taken note of such action by this Government and stated that the President’s pronouncement referred “exclusively” to the existing arrangement between the two countries.

It would appear that there is nothing in the correspondence which has occurred or in the existing situation which would embarrass the United States in maintaining its position with respect to the payment which should be made for future expropriations.

In view of the foregoing it would not seem essential to continue the correspondence with the Mexican Government.

Joseph R. Baker