Douglas daily dispatch., 1926-05-11

tion before the department. of foreign
relations, and because, above all,
what the principle gurantees to the
foreigners is the respect of their prop
erty rights, but not respect of these
rights Just as they existed at the time
of the acquisitions otherwise. that
would mean to deny to sovereign
state the right to impose upon all the
Inhabitants of it's territory the mo-
daIties and notifications necessary
for the defense Of it's interests and to
make possible it's future development.
beg, on the other hand, to call
your attention to the fact that the
agreement required by section I of
article 81 of the Constitution has been
improperly called waiver of the ma
tionality. No such waiver exists
and it is merely matter of an agree
ment of limited and special scope
Furthermore, the legal dispositions
in force in Mexico on this matter are
not obligatory, since, even though it
is required by law to obtain a permit
from the government in orGer THAI
a foreigner may acquire real estate.
foreigners who are not desirous to
acquire it are not obliged to secure
such permit However, from the mo-
ment that he accepts to abide by those
modalities, it must be considered thai
he has voluntarily concluded a corr
tract, which entails as consequence,
not a waiver, of his nationality bun
the agreement not to invoke the di-
plomatic protection in such matters
.saI 1, I I'll.
agreed to consider himself as a Mex
iaan, in so far as it pertains to the
acquisition of such rights, thus abid
ing Nby the guarantee and recourses
established by domestic legislation.
Moreover, 1 believe that the govern
ment of the United States shall not
reach the conclusion that the object
of these dispositions might be con-
strued as> a future deliberate purpose
of the Mexican authorities of commit
ting, unlawful acts against either for
eign citizens of good faith or invest
ments.
In this respect, should also like to
point out that this constitutional dis
position is less drastic than that re-
During foreigners in several states Of
the American union to be bona fide
limits of such states or to obtain first
citizenship papers, in order to allow
them to acpuireE rights on real proper
ty, and this provision is carried out so
far as to require full American citizen
ship, even for the obtention of work
as employees of laborers of various
kinds Among others, the state OF
Arizona has established that no per-
son might acquire titles or properties
within the state unless he be a citizen
| of the United States. or have previous
| ly declared his intention to become
such. And it is also provided in the
law, that no corporation having more
than 80 PEI cent of it's stock in pos
session of persons not citizens of the
| United States or who have not declared
their intention to become such may ac-
quire lands, titles or interest therein
| (Civil Code Ariznoa 1913, Chapter III
| Section 4716).
The provision charging the require
n1ent of the permit to foreign share
holdres in Mexican corporations is a
consequence, as it, has alerady been
said, of the general principle provid-
ed by the Mexican Constitution that
! in order that foreigners may acquire
domain on lands, waters and it's ap-
purtenances or concessions for the eX-
ploitation of mines, waters or mineral
! fuels shall obtain a permit from the
| department. of foreign relations and
enter into an agreement to consider
! themselves as Mexicans regarding the
acquisition of such rights. But, more
ic frnr of
the American government which not
only claims in behalf of alien corpora
tions, but even in behalf of MeXicans
corporations. From this policy it fol-
lows that foreign shareholders in Mex
lean corporations not only enjoy the
advantages of the domestic laws, but
also the foreign diplomatic protection
to the grave detriment for the devel-
opment of Mexican corporations with
out foreign shareholders.
1t might be objected that the permit
which fore,.'l stockholders in Mexiaan
corporations must obtain to acquire
rights theerin, shall prove handicap
to stock companies, since in order tc
buy any shares it would be necessary
to obtain previously sucn perml.' bus
this is not the case, as regards shares
to the bearer, it will not be necessary
that the bearers obtain the permit in
each case; it will be quite sufficient
tot establish in the bylaws of the
coronation that the shares to the bear
er SHALL among the obligatory pro-
visions, have an insertion to the effect
that the acquisition of shares is tant-
amount to an agreement on the part
of the holder to consider himself as
la Mexican in regard to the acquisition
of such titles, whereby the purchase
of the shares shall be implicitly con-
Isidered as coming under the require
ment of permit provided for the Mex
lean Constitution.
In this regard, I inform you as a
proof that this requisite has thus been
construed by every unprejudiced com
pany operating in Mexico, that sew
eral years since a number of com
panes have inserted this proviso in
their bylaws and shares, thus antici-
pating what the pending law now
provides and doing so in accordance
with the ST irit of the Constitution.
Among these, the consolidated Oil
Co., of Mexico,,," the "Marland Oil Co.,