812.52 Agrarian Commission/194

Memorandum of Conversation, by the Assistant Chief of the Division of the American Republics (Bursley)

Present: Commissioner Serrano,
Commissioner Lawson,
Mr. Winters,
Mr. Vicente Sánchez Gavito,
Mr. Bursley.

Since it appeared that Commissioner Serrano was addressing himself directly to me, I said that Mr. Welles had asked me to attend this meeting primarily in the capacity of its secretary and that anything I might say in response to questions was unofficial. Mr. Serrano said that he understood this but that I was entirely welcome in any capacity. The meeting continued for a period of three hours in complete cordiality.

In the main, Mr. Serrano brought forth no particularly new ideas to supplement those he had advanced at the meeting in Mr. Welles’ office on August 7, or in subsequent conversations with Mr. Lawson, as reported in Mr. Lawson’s memorandum of August 9. Mr. Serrano repeated his discussion of most of the points he had heretofore raised, stressing perhaps more than others the “large amount” we claimed, the inability of Mexico to pay even 10 or 12 million dollars, and his belief that the Mexican Senate would not ratify any agreement involving a large amount. He referred to Mexico’s difficult economic situation, the great number of pesos involved in converting a large sum of dollars into pesos, and expressed the belief that Mexico should not be expected to pay more than 5, or possibly 6, million dollars. He also stated on several occasions that it was quite impossible for him, as Mexican Commissioner, to agree to a sum any way nearly approaching that proposed by the American Commissioner.

In greater detail the discussions took the following course:

Commissioner Serrano mentioned, without laying great stress thereupon, the inadequacy of the data regarding the claims supplied by the American Section; he stated that he estimated the Mexican [Page 973] Section had the fiscal values in about 90% of the cases but had been able to secure full data from Mexican sources regarding only about 10% of the claims.
Commissioner Serrano also mentioned, without emphasis, the apparent discrepancies in some cases between the American and Mexican data discussed by him in the conference of August 7 and recovered by Commissioner Lawson in a subsequent conversation with him, as reported in Commissioner Lawson’s memorandum of August 9.
At this stage, Mr. Lawson furnished Mr. Serrano with a copy of the statement replying in considerable detail to all of the “observations” advanced by Mr. Serrano in the meeting of August 7, regarding specific points of difference. When this statement was given to Mr. Serrano, it was pointed out that the scaling down of the claims from $58,000,000 to $23,000,000 was largely the result of careful consideration by the American Section of precisely such matters as those in question. It was explained to him that while the plan of discussions of a global settlement, by its very nature, precluded detailed discussion of cases, it was desired that he be informed of the facts regarding the particular objections he had advanced. Mr. Serrano took the statement, did not examine it, and made no comment upon it. The Mexican Commissioner concurred, however, that for purposes of a global settlement, these details are of no practical importance.
Mr. Serrano stated that the American figure of about $23,000,000 appeared to him to be too high and completely out of line with the Mexican figure of about 26,000,000 pesos fiscal value. He admitted, however, that fiscal values are somewhat lower than commercial values; while he was evasive as to the commercial values involved in these claims or the relationship between fiscal and commercial values in Mexico, he did refer, at another stage of the conversation, to an approximate 50% relationship.
Commissioner Serrano several times brought up his belief that the agreement of November 9–12, 1938 did not include stockholder claims and repeatedly referred to the fact that his instructions did not permit him to adjudicate stockholder claims, but he nevertheless admitted that the purpose of the proposed global agreement was the avoidance of discussion of legal technicalities. Mr. Lawson made it clear that it had already been agreed the question of the right to include stockholder claims was not to be discussed.
Commissioner Serrano informally but repeatedly stated that he could not agree himself to a figure higher than 5 or 6 million dollars; he said that Mexico was unable to pay more; that the Mexican Senate would not approve a higher sum, and, as he had done in his [Page 974] conversation of August 7, said that such a figure would represent a considerably higher percentage than that involved in previous claims settlements. It was pointed out to Mr. Serrano by Commissioner Lawson that the proposed agrarian claims settlements, dealing solely with specific and tangible matters, is not comparable with other types of claims settlements.
Mr. Lawson’s statements during the course of the conversation were essentially a reiteration of statements that he has previously made to the Department and to Commissioner Serrano, i. e., that the American Section has carefully studied all claims with a view to determining the reasonable values involved therein, eliminating a number of claims found to be improper, and eliminating improper items of individual claims, with the result that the amounts have been reduced from a total of about $75,000,000 claimed to approximately $23,000,000 appraised. Mr. Lawson stated that since he is satisfied that the amount determined by the American Section is proper and reasonable, he would be unable to agree to any substantial reduction therefor.
The two Commissioners then stated briefly that they saw no way in which they could possibly reach an agreement. Mr. Serrano, in particular, said he did not think that he was empowered under the agreement of November 9–12, 1938 to enter into a global settlement and that, in any event, he and the American Commissioner were so far apart in their evaluations that an agreement between them was out of the question. Mr. Lawson concurred. Mr. Serrano said that he would inform the Mexican Ambassador of this agreement to disagree and that he thought the Mexican Ambassador, in the discussions with the Acting Secretary of State, would not be restricted by the same considerations which limited his actions and that whatever the agreement is to be, it would have to be worked out between the Acting Secretary of State and the Mexican Ambassador or, alternatively, that the Mexican Foreign Office would have to decide the position of the Mexican Government in this matter.

Herbert S. Bursley