412.11 (41) Agreement/68
The Mexican Embassy to the Department of State
1. In the memorandum presented by the Ambassador of Mexico to Mr. Sumner Welles, Under Secretary of State, on November 16, 1940,18 in the chapter relative to the negotiations proposed on the claims question, it was said:
“c) The arrangement shall contain a clause in which the United States Government will agree to refrain from resorting to diplomatic action in those cases in which the agrarian legislation is applied, in the future, to lands belonging to Americans who have acquired said lands subsequent to the date of the agreement in negotiation.
“With respect to this last paragraph the explanation should be made that the Government of Mexico has serious reasons to fear that, in a more or less near future, lands which now belong to Mexican owners or to foreigners of nationality other than American, may pass, by real or fictitious sales, into the possession of United States nationals, in an attempt thus to seek the protection of the Washington Government and bring up a problem similar to the one which we are now trying to settle. In order to avoid the difficulty pointed out, which would involve further friction between the two Governments, the Government of Mexico considers it desirable that, after this arrangement has been concluded, the lands which at the present time do not belong to American nationals, if they are subsequently the object of expropriations, shall be subject to the general law and, therefore, that diplomatic action shall not be proper in those cases in which, through real or fictitious transfer, such lands appear as owned by Americans.”
2. On July 15, 1941, Mr. Laurence Duggan transmitted to the Ambassador of Mexico a draft Claims Convention,19 which was the subject of immediate preliminary observations by the Embassy.20 The third observation was expressly formulated in the following terms:
“There must be inserted in the Convention a clause stating: ‘The Government of the United States agrees not to interpose diplomatic action in favor of any of its nationals because of the application of the agrarian legislation of Mexico, in those cases in which the owners have acquired the affected properties subsequent to the date of signature of this Convention’.”
This observation, together with all the other preliminary ones made by the Embassy to the Department’s Draft, were discussed [Page 390] on July 26, 1941, by Mr. Castillo Nájera, Ambassador, Mr. Córdova, Legal Counselor, Mr. Laurence Duggan, Political Adviser of the Department, and Mr. Bursley, Chief of the Mexican section. At this meeting, according to the notes which are retained by the Ambassador and Legal Counselor Córdova, Mr. Bursley expressed his belief, which he qualified as being personal and entirely unofficial, that the points raised in the Embassy’s observations would not involve difficulties of a serious character as, of course, he thought that some of them would win complete approval. It was agreed at this meeting that the above-mentioned Mr. Bursley would confer with Lic. Córdova in the first part of the following week. The Department of State made the translation into English of the observation which has just been transcribed as follows:
“(3) There must be inserted in the (Claims) Convention a clause stating:
“‘The Government of the United States agrees not to interpose diplomatic action in favor of any of its nationals because of the application of the agrarian legislation of Mexico, in those cases in which the owners have acquired the affected properties subsequent to the date of signature of this Convention’.”
3. The Ambassador of Mexico, on August 18, 1941, together with a letter of that date, transmitted to Mr. Duggan a Memorandum21 explaining the additions, modifications and suppressions which the Mexican Counter-Draft of the Claims Treaty introduced in the United States Draft of July 15, 1941. In that Memorandum it was said textually:
“The Government of Mexico insists on the inclusion in the Convention of Article 7, which appears in the attached Counter Draft and which has to do with an undertaking by the Government of the United States not to present any claim in the future based on the application of Mexico’s agrarian laws which might result in damage or injury to properties acquired by nationals of the United States after the signing of that Convention. In this regard, it is recalled that in the Memorandum of November 16, 1940, presented by the Ambassador of Mexico to Under Secretary Welles, which, together with that which the latter had, in turn presented on October 7, 1940,22 constitutes the basis of the present negotiations, special mention was made of the fact that the settlement of claims should contain a clause under which the Government of the United States would agree ‘to refrain from resorting to diplomatic action in those cases in which the agrarian legislation may be applied, in the future, to lands or properties of Americans acquiring them subsequent to the date of the Agreement which may be concluded.’ In the same memorandum, the reasons were given on which the Government of Mexico bases its attitude and which it continues to consider absolutely justified.”
Article 7 of the Mexican Counter-Draft, to which the memorandum of August which has just been transcribed refers, is conceived in the following form:
“The Government of the United States of America agrees not to present, directly, indirectly or in any way, any claim to the Government of the United Mexican States, because of the application of Mexican agrarian legislation, which might result in damage or injury to properties acquired after the signature of the present Convention by nationals of the United States of America in the territory of the United Mexican States.”
4. On September 2, 1941, a conference was held between the Legal Counselor of the Embassy and Messrs. Herbert Bursley and Benedict English of the Department of State in which the question of diplomatic protection was taken up.23 The gentlemen representing the Department of State objected to the inclusion in the Convention of a clause containing the waiver of such protection, suggesting the possibility of an exchange of notes simultaneous with the signing of the Claims Convention; they expressed the necessity that, in any case, those notes should not be made public, and they also expressed their desire that the Mexican Government should agree to exceptions to such waiver, for the cases of Americans acquiring real property subsequent to the signature of the Convention through a title other than that of purchase, as, for example, by inheritance, judicial adjudication, etc. Counselor Córdova at once stated that he considered it possible to make the above-mentioned exceptions, whenever it was a question of acquisitions more or less involuntary on the part of Americans, and in good faith. Messrs. English and Bursley told Counselor Córdova that the question of the waiver of diplomatic protection, requested by Mexico, was undoubtedly one of the difficulties which the Department had under study, but that the Government of Mexico could depend upon the complete good will of the officials of the State Department to accede to its desires.
5. On September 15th a conference took place attended by the Ambassador of Mexico, the Legal Counselor of the Embassy, Mr. Duggan, Political Adviser, Mr. Bursley, Assistant Chief of the Division of American Republics, and Mr. English, the three last mentioned being from the Department of State.23 The Ambassador advised the American officials that on Saturday, the 13th, in the afternoon, the Embassy had received new instructions from the Department of Foreign Relations of Mexico with reference to the Draft Claims Convention, and that the purpose of the interview was to propose some amendments [Page 392] to the said Draft. Counselor Córdova read the proposed modifications and additions and then each one of them was considered separately. On the question of the waiver of diplomatic protection, it was made known to the representatives of the Department of State that the Government of Mexico appreciates the reasons of the American Government for not including in the Convention the seventh article of the Mexican Counter-Draft and is therefore in accord with making it the subject of an undertaking by means of an exchange of notes simultaneous with the signature of the Convention. The draft notes were then read which the Government of Mexico proposed on this subject, and copies of the said drafts were left in the hands of the Department of State representatives. Mr. Bursley pointed out that, in the last part of the draft note from the Department of State to the Embassy, as proposed by the Government of Mexico, it only spoke of “inheritance based on blood relationship”, without taking into account conjugal inheritance. The Ambassador of Mexico agreed to the addition of this case, and it was understood that, after the texts had been approved by Mr. Hull, the final decision on the proposed texts would be made known to the representatives of the Embassy.
6. On September 16, 1941 Mr. Bursley requested an interview with Legal Counselor Córdova24 at which the representative of the State Department set forth, with complete exactitude, the respective positions of his Department and of the Embassy on the negotiation of the Claims Treaty, which explanation limited to four the questions then pending for satisfactory solution:-(a) the amount of the annual instalments; (b) the payment of the interest on unpaid instalments; (c) the survival of five patrimonial claims originating prior to October 5, 1940 and officially presented to the two Governments after that date; and finally, (d) (the extinction of the personal claims arising after March 1, 1924, and prior to January 1, 1927).
Since September 15, 1941 the Department of State had not again made any reference to the question of the exchange of notes in which the waiver of diplomatic protection was to be made, and on the contrary, the entire negotiation was confined to the possibility of Mexico’s waiving its pretension to exclude the Banco San Lorenzo claim from the extinctive effects of the proposed Convention. Only after a satisfactory solution had been found, in principle, for the San Lorenzo question has the problem of the exchange of notes, which since September 15 seemed to have been settled, likewise in principle, again arisen in an unexpected form. This reopening of the question is all the more unexpected because now the Embassy is advised of the inability of the Department of State to agree to waive diplomatic protection for the cases of Americans acquiring real property in Mexico [Page 393] subsequent to the signature of the Convention, which inability had never even been mentioned by the representatives of the Department of State.