Evening star., 1938-09-05
OFFICIALS |RKED
BY MEXICAN NOTE
Economic Relations Left in
Chaotic Condition, 1t Is
Felt Here.
~ the Associated Press.

moved by Secretary Hull's strong note
Of August %, has refused to set up
sinking fund to pay for American
owned land seized under its Agra
rian laws.
1t likewise has declined to promise
that 1t would cease seizures of such
lands pending arrangements for
prompt payment.
In a note to Mr. Hull Friday Mex
leo stated that, while it did not re-
pudiate eventual compensation in the
ory, there was precedent internation-
ally for doing so.
In this connection. the note referred
pointedly to abandonment Of the gold
standard and devaluation of currency
in some countries. Without mention
ing that the United States was among
the nations which had taken such
steps, it said these measures had
been described as "confiscation pure
and simple"
Marked impatience characterized the
reaction of high officials here. 1t
was understood they felt the note
left the whole trade, financial and
business relations between the two
countries in chaotic and uncertain
condition.
Claims Over $10,oo0,0 900.
Total American claims at issue un-
der the Agrarian laws are slightly
more than $4,000, 900, but any agree
ment reached in the current discus
sions might set precedent affecting
much larger claims for seized oil
properties
While Secretary Hull refrained from
any immediate reply, it was believed
widely that Mexicos stand practically
eliminated any possibility that the
United States would resume purchas-
Ing fixed amount of Mexican silver
each month, a practice stopped soon
after the oil seizures last February.
One point of Mr.. Hull's recent pro-
posal, that joint commission be
established to arbitrate differences of
opinion on values of seized American
land. was accepted by Mexico. But
officials here were sad to feel that this
partial acceptance was unsatisfactory
without definite arrangements to pay
for land taken.
In his note Of August %, Secretary
Hull took the position that under all
recognized interna tional law and prac-
tices Mexico had no right to seize
American-owned lands without ar
rangement for compensation He
asked Mexico to agree that no further
taking OF properties of American ma
tionals should take place unless ac-
companied by arrangements for ade-
quate, prompt and effective payment"
Obligation Of Reform.
Foreign Minister Eduardo Hay re-
Piled:
Confronted with the inescapable
obligation of carrying out the Agrarian
reform-undoubtedly the most impor-
tant point of the revolutionary pro-
gram-my government must expropri-
ate all the lands that may be necessary
until their complete redistribution as
is ordered by the constitution and
Agrarian code Of Mexico which estab-
lish the duty in indemnifying the
oWllSA oA 1d1lNS tdhCll, dlUllOuk1l bIlC
indemnification may have to be post
poned.
Numerous nations, in recognizing
their economy, have been under the
necessity Of modifying their legislation
IN such manner that the appropriation
of individual interests nevertheless
does not call for immediate compen-
sation and, in many cases, not even
subsequent compensation"
1t was this declaration, with others,
that repeatedly gave officials here
their greatest shock. It was said to
have been accepted by them as evi-
dence that the Mexican government
was standing for the abolition of just
compensation, or its practical emascu-
lation and the substitution of the doc
trine Of confiscation.
Indications were this would be dealt
with in the United States reply when
1t was delivered after further study
Of the present note.
There are numerous examples of
nations" Hay continued, whose cul-
tural progress is beyond discussion,
which have seen themselves obliged,
without repudiating the right of prop
erty IN the abstract, to issue laws
which have signified appropriation
without immediate payment and some-
times without later compensation.
Gold Bans Cited.
Countries might be mentioned
which, under pressure of reasons con-
sidered to be Of public necessity, have
forced private individuals to exchange
their gold and gold certificates for
money which has already been de-
preciated, or which was deprecated
immediately afterward.
Those countries have also been
under necessity to require private per-
sons. without distinguishing between
nationals and foreigners, to receive
In payment Of obligations, which had
been contracted in gold, the already
deprecated currency Of the country.
Because appropriation was indirect it
was none the less effective the
courts OF the various countries justi-
fed them, in view precisely of a su-
perior order and Of the public inter-
est which inspired the said measures
and the necessity of maintaining the
equilibrium of the national economy.
1T is true that when these emerg-
sncy measures were adopted by coun-
tries which were economically weak,
which desired to pay off their obliga-
tions, contracted in gold, with depreci-
ated currency, the creditor nations
denounced the debtor coun-
tries before the Permanent Court of
International Justice, accusing them of
being transgressors against right. But
later the same powerful countries
which did so could not avoid having
recourse to the measures, which they
had criticized so severely, for the pur-
pose Of solving their own problems.
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