811.504 Mexico/323
Mr. Frank C. Squire of the Railroad Retirement Board to the Secretary of State 66
Dear Sir: At the meeting in your office the morning of January 27, 1944, concerning permission to import 20,000 more Mexicans for railroad work, you requested me to write you after I had consulted the other two members of the Railroad Retirement Board67 and obtained certain information.
There are two Acts administered by this Board, the Railroad Retirement Act under which old-age annuities are paid, and the Railroad Unemployment Insurance Act under which unemployment-insurance benefits are paid.
1. For support of the Retirement Act, 3¼ per cent is deducted from each Mexican worker’s pay check. If the average Mexican worker is employed at current wages for nine months, about $30 would be withheld from the pay. If such a worker should die before reaching the age of sixty-five years, his family would be entitled to about $35. Ten of these death payments have already been made. If such a worker lives to age sixty-five, he will then be entitled to a benefit having a commuted value of $300. It is obvious that the payment of very small benefits to non-English-speaking nationals of a foreign country over a period of many years will involve administrative difficulties out of all proportion to the benefits. The Government of Mexico has its own system of social insurance; there are many European precedents for arrangements under which nationals working outside their own country may receive social insurance credits therein. Such an arrangement in the present case might be appropriate.
This is not, perhaps, an opportune time to pursue the suggestion. But the Board will be glad, at such time as the State Department thinks appropriate, to work out a method of transferring the Board’s obligations to Mexican nationals under the Railroad Retirement Act to an appropriate body in Mexico, presumably the Social Insurance Institute. Should the Department and the Mexican Government look [Page 1294] with favor on such an arrangement, its effectuation would require Congressional action, at least in the United States.
2. No deduction is made from the worker’s pay check for unemployment insurance purposes. The tax creating this fund is paid entirely by the railroads. The administration of unemployment insurance requires the maintenance of a complex system of State-operated machinery for finding and offering jobs and for the application of various tests of the genuineness of unemployment. No such machinery now exists in Mexico; and it cannot be created by any agency outside the republic of Mexico itself. Under these circumstances, it would be unwise and inappropriate for an agency of the Government of the United States of America to attempt to pay unemployment-insurance benefits to persons residing in Mexico.
3. We do not expect to need a permanent office in Mexico after the recruitment of railroad workers is completed.
The Chairman and Board Member Eddy join with me in these observations.
Very truly yours,
- A copy of this letter was transmitted to Ambassador Messersmith by Mr. McOurk in a letter dated February 14 (811.504 Mexico/323). The Ambassador in his reply of February 23 expressed approval of the Board’s conclusions and its plan for future action; he said that for the present he would take no action on this matter (811.504 Mexico/338).↩
- Murray W. Latimore, Chairman, and Lee M. Eddy.↩