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expectation to be realized only through future action not yet even explicitly defined.
I have observed Mr. Pani's statement that certain banking institutions and the British-owned Mexican Railway have been returned to their owners as well as his statement of the reason for not having returned other railways in part American-owned, which constitute the bulk of the railway properties of Mexico, but I have also noted that he offers no explanation for the failure to return other valuable American-owned properties which are being held by Mexican authorities.
Mr. Pani also refers to the reported negotiations for the resumption of payments on the Mexican national debt. I believe that, since Mr. Pani's last communication, an agreement has been formulated for this purpose but that it still awaits the approval of the Mexican authorities.
So far as the proposed Claims Conventions are concerned, to which Mr. Pani alludes, as I have already said, we should have certain suggestions to make in respect to their tenor and scope as soon as the fundamental questions to which I have referred are suitably adjusted, and I apprehend that there will be no great difficulty in reaching mutually satisfactory conclusions with respect to these conventions.
If I may be permitted to sum up the situation as to property rights I may say:
(1) It appears that negotiations have been had looking to an adjustment of the claims of the holders of bonds representing the external debt of Mexico. While this Government has not been a party to these negotiations I have learned with satisfaction of a tentative agreement between the creditors of Mexico and the representative of the Mexican authorities who took part in these negotiations.
It is understood, however, that no final agreement has yet been made and that the tentative agreement awaits the approval of General Obregon, who it has been publicly stated has said that it must also be ratified by the Mexican Congress.
(2) It is also understood that American citizens interested in oil properties in Mexico have been in negotiation with representatives of the Mexican authorities for the purpose of finding an agreed basis upon which they will be protected in their holdings and may be able to proceed to new developments of the properties, mutually satisfactory.
This Government has not been a party to these negotiations and is not prepared to discuss the merits of particular proposals, but it has been gratified at the prospect of such an agreement. Again, however, it is understood that no agreement has yet been concluded and whatever has been done is subject to the approval of the Mexican authorities.
(3) No adequate action has yet been taken for the purpose of confirming, and assuring the protection of, valid titles acquired by American citizens prior to the adoption of the Constitution of 1917.
Although it has been repeatedly said by Mr. Pani that the Mexican Congress is at liberty to regulate the interpretation of that constitution, and that it has exclusive authority for this purpose, no such action has yet been taken.
(4) I have not had opportunity as yet to examine the texts of the four decisions of the Supreme Court, but if, as seems to be implied, they follow the decision in the Texas case already announced, in order to form a precedent composed of five decisions upon the same point, they are inadequate to protect American rights against a retroactive and confiscatory application of the Mexican Constitution.
(5) Properties of American citizens have been seized and are threatened with seizure, under the guise of “expropriation " without provision for just compensation.
It would thus appear that General Obregon's administrative and political program, which Mr. Pani invokes, has not yet progressed to such effective action as could be regarded as a satisfactory substitute for the binding engagements which I have desired in order to assure proper protection to the rights of American citizens in Mexico. If General Obregon thinks it derogatory to the dignity of Mexico to enter into a treaty confirming and establishing in an appropriate way his personal assurances, still, if the purpose is firmly held to respect international obligations and to lay a sound basis for friendly intercourse, I am at a loss to understand why that effective action has not been taken by the Mexican authorities. They have had, and still have, full freedom to accomplish the desired results.
Again I must emphasize the point, which I long ago publicly stated, that this Government has no desire to stand in the way of any non-confiscatory legislation that Mexico may see fit to enact within the province of her domestic authority. If this legislation is of a character which is inhospitable to bona fide investments by citizens of countries other than Mexico, that will be a consequence which may be regretted, but would furnish no ground for objection on the basis of a breach of international obligation. The question relates to valid rights which have already attached. This Government cherishes the most friendly sentiments toward the people of Mexico and the most earnest desire through appropriate cooperation to promote their prosperity. In order, however, that this friendly
intercourse may be maintained, it is manifestly important that there should be no question as to the security of valid titles which have been acquired by American citizens in accordance with Mexican laws as they existed at the time of the acquisition, and that, if Mexico desires to expropriate any such property validly held, fair and reasonable compensation should be made. These are regarded as the foundations of helpful and friendly relations and it is hoped that the Mexican authorities will see their way clear to give, in an appropriate manner, the reasonable assurances which this Government has asked. I am [etc.]
CHARLES E. HUGHES
The Secretary of State to the Chargé in Mexico (Summerlin) No. 2185
WASHINGTON, August 15, 1922. SIR: I am in receipt of your despatch No. 5915 of July 27, 1922, enclosing copies and translations of the four decisions of the Supreme Court of Mexico in the amparo cases which were instituted before that Tribunal by the International Petroleum Company and the Tamiahua Petroleum Company,28 all of which decisions have reference to the application of Article 27 of the Mexican Constitution. You say that copies of these decisions were received by you on the twenty-fifth ultimo.
Your promptness in forwarding these documents is appreciated by the Department.
There is enclosed, for your information, a copy of a statement which the Department gave to the press on August 10, 1922, in relation to these decisions. I am [etc.]
For the Secretary of State:
Press Release Issued by the Department of State, August 10, 1922
In reply to inquiries at the Department of State with respect to the effect of recent decisions of the Mexican Supreme Court, the Department made today the following statement:
“ The Department has received the text of four decisions of the Mexican Supreme Court rendered in May last in amparo proceedings instituted by petroleum companies. These four decisions seem to be identical in all essential particulars, and together with the similar decision of that court rendered August 30, 1921,2° in the amparo case brought by the Texas Company, appear to constitute what is called a precedent in Mexican jurisprudence.
* Despatch and its enclosures not printed; see Estados Unidos Mexicanos, Semanario Judicial de la Federacion, ser. 5, vol. X (1922), p. 1308.
“ These opinions set forth that Article 14 of the Mexican Constitution, providing that "No law shall be given retroactive effect to the prejudice of any person whatsoever', does not relate to the provisions of the Constitution itself, and that when the Constitution embodies retroactive provisions these must be applied retroactively.
“It is further set forth that the fourth paragraph of Article 27 of the Mexican Constitution of 1917, referring to petroleum and other sub-soil substances, cannot be considered to be retroactive, as it does not injure previous and legitimately acquired rights', but it is apparent that the application of the principle thus declared must depend upon what is considered to be an acquired right'.
“The five decisions creating the precedent in question relate exclusively to cases of leases or contracts which were made by owners of land for prospecting for and working petroleum, and it said that thereby the privileges of the owners of the lands were translated into positive acts', and accordingly the claimants, as the lessees or holders of these contracts had acquired rights to the injury of which the provision of the Constitution of 1917 for the nationalization of petroleum could not be applied. The inference from these decisions is that petroleum properties in process of development before May 1, 1917, when the present Constitution took effect, are protected from a retroactive application of the fourth paragraph of Article 27.
“ These decisions do not, however, effectively deal with the rights of American citizens in lands containing petroleum or other subsoil substances where the lands were owned prior to May 1, 1917, but had not been developed or as to which leases or contract rights to prospect for and work petroleum had not been granted before that date.
“The question whether the owners of the land in such a case have appropriate protection is yet to be determined by the Mexican Supreme Court. It is understood that there are a large number of amparo proceedings before that Court which involve that question and are still undecided.
“The Department has also been advised by the Mexican authorities that the Mexican Congress has sole authority to regulate by an appropriate Organic Law the interpretation of the precepts of the Constitution and that no Organic Law for this purpose has yet been enacted.”
* Foreign Relations, 1921, vol. 1, p 464.
ATTITUDE OF OTHER GOVERNMENTS TOWARD RECOGNITION OF
THE OBREGON GOVERNMENT 30
The Minister in Norway (Swenson) to the Secretary of State
CHRISTIANIA, February 2, 1922.
[Received February 15.] Sir: I have the honor to report that the Norwegian Government has formally recognized Obregon as President of the United States of Mexico, under date of January 14, 1922.
The Minister for Foreign Affairs, with whom I have discussed the matter of recognition a number of times, has informed me that action has been postponed from time to time out of deference to the United States. The Mexican Chargé d'Affaires at Christiania has, since March 1921, made repeated verbal appeals to the foreign office for recognition of President Obregon. He did not, however, until recently, present the letter of notification, having been advised that no reply would be made thereto. In the meantime Norwegian business interests strongly urged recognition, and the Norwegian Chargé d'Affaires in Mexico as well as Mr. Lie, the former Norwegian Minister in Mexico City recommended it. On July 16, 1921 the Norwegian Legation at Stockholm reported that the Swedish foreign office had decided to recognize President Obregon, and on October 17th last, the Danish Minister at Christiania notified the Norwegian foreign office that his government had resumed regular relations with Mexico. Holland had taken similar action. In view of all these circumstances the Norwegian Government felt that it would not be justified in continuing its refusal to deal with Obregon, notwithstanding the attitude of the United States and the fact that certain Spanish subjects had experienced difficulties under the new regime. It was felt that the interests of Norwegian subjects were of a somewhat different nature from those of Americans and Spaniards.
On November 8th last the Mexican Chargé d'Affaires presented to the Norwegian Minister for Foreign Affairs President Obregon's letter of notification, dated December 1, 1920, together with a note, dated December 21 , 1921, translation of which you will find herewith enclosed.31 The Norwegian Minister for Foreign Affairs thereupon wrote the Mexican Chargé d'Affaires, under date of January 14, 1922, transmitting His Majesty the King's reply to President Obregon's letter of notification, thus recognizing him as President of the United States of Mexico. I have [etc.]
LAURITS S. SWENSON
Continued from Foreign Relations, 1921, vol. 1, pp. 427-439.