812.52 Agrarian Commission/1864/5

Memorandum by the American Commissioner, Agrarian Claims Commission ( Lawson ), to the Acting Secretary of State

I refer to our conference on August 7 with the Mexican Ambassador and Mexican Agrarian Claims Commissioner, during the course of which the latter discussed various aspects of the proposed lump sum settlement. You will recall that he left with us a statement prepared by the Mexican Section with respect to the claims.

I have carefully examined this statement and find that, with the exception of an incomplete indication of fiscal values (the accuracy of which is questionable in many cases), it does not constitute an appraisal of reasonable values of the expropriated properties. Although the records in the possession of the Mexican Government, particularly those presumably prepared by the Agrarian Department in connection with the land seizures, should be more complete as regards areas, kinds and qualities of lands seized than those available to the American Section of the Commission, it appears that no real appraisal has been made by the Mexican Section.

The principal importance, from our standpoint, of the Mexican Commissioner’s statement seems to be that the grouping of claims indicates the continued intention on the part of the Mexican Government to endeavor to eliminate certain classes of claims, notably those involving stockholders of Mexican companies and estate cases, and to raise technical questions in others. I should explain in this connection, however, that while Commissioner Serrano stated to me in a subsequent conversation that the Mexican Government recognizes the fact that some means must be found of compensating stockholder claimants, it is obvious that he is unable to agree upon a lump sum settlement at a sufficient figure to provide reasonable compensation to all claimants, including such stockholder claimants.

The statement also includes “observations” by the Mexican Section with respect to some forty-six individual claims. The enclosure to this memorandum lists these “observations” together with comments in reply thereto based upon information developed by the American Section in its careful study of the individual claims. Mr. Serrano and I have also discussed these points, which you will note relate largely to confusion of names of owners, differences as to areas seized, etc., and practically all of which are met by our comments.

In connection with these “observations” regarding details of individual claims, I may say, as you know, that joint evaluation of individual claims, which originally was intended, was abandoned because of the serious legal questions injected by the Mexican Section, but the American Section completed the careful consideration of [Page 971] individual claims. Subsequently, and after evading an interpretive agreement clarifying the legal questions raised, the Mexican Government suggested a lump sum settlement as a means of avoiding the necessity of discussing these questions and details of individual cases. By its memorandum of April 9, 1940, the Department expressed the willingness to reach such a settlement and urged that steps be taken at once in that direction. After a delay of four months, we now find that the Mexican Government is bringing up the same legal questions and details of individual cases, which are inconsistent with the idea of a lump sum settlement.

In my conversations with Mr. Serrano the latter has emphasized the discrepancy between the claimed amounts and the fiscal values in individual cases, and has evaded the fact that in its appraisal of the claims, for purposes of the proposed lump sum settlement, the American Section has made a reduction from the approximately 58 million dollars to approximately 23 million dollars. This reduction was the result of careful consideration by the American Section of precisely such matters as are now referred to in the above-mentioned “observations”.

The Mexican Commissioner contends that there is too wide a margin between the fiscal value of about 27 million pesos, as calculated by the Mexican Section, and the approximately 23 million dollars determined by the American Section. For the approximately 4,780,000 acres involved, the Mexican figure is at the rate of about 5.60 pesos per acre, while our figure is at the rate of about 4.80 dollars per acre. The fiscal value, which the Mexican Commissioner believes to be too high in some cases, is on its face much too low considering the large area of irrigated and other fine lands involved in the claims.

The Mexican Commissioner also placed considerable stress on the Mexican political aspects of a settlement involving payment by Mexico of more than five or six million dollars, including the two million already paid, and on the financial situation of the Mexican Government which he states would be unable to pay even ten or twelve million dollars.

It is quite apparent that the Mexican Commissioner’s recommendations for a total figure for a lump sum settlement will not exceed a total of six or seven million dollars, including the two million dollars already paid, and that further efforts by the two Commissioners to adjust the wide differences not only are entirely useless but result in delay which is, of course, entirely acceptable to the Mexican Government.

In view of the foregoing I wish to make the following carefully considered recommendations:

That negotiations between the two Commissioners to develop a figure for a lump sum settlement be terminated;
That direct negotiations be undertaken between the Department and the Mexican Ambassador to determine a figure acceptable to both Governments; and
That the final agreement with Mexico include provision for the adjudication of so-called new claims which could not be filed with the present Commission.

Lawrence M. Lawson