Evening star., 1939-06-04
Mexico Starts Paying Up
Principle of Reimbursement Properties Is Established

Like the rest of the world, the Latin
American republics have suffered from
! the universal depression. More, many
| OF them have been shaken by political
! revolutions. AS result there have been
| widespread defaults on their bonds, both
| public and private, running into hun
| dreds of millions of dollars, and held
| largely by investors in the United States.
In addition, some of these republics
| notably Mexico, Bolivia and Chile-have
been carrying out economic pro-
grams to renationalize their agrarian
| lands, oil or minerals. This has resulted
| in widespread confiscation of properties
| and exploitation rights of United States
citizens. At time when the adminis-
tration was seeking to foster the good
neighbor policy in the political realm,
both the State Department and private
organizations of bondholders have been
| forced into the distasteful role of COL
lection agents in the countries to the
south. Their efforts have not been
notably successful
Against this dark background an
action of the Mexican government stood
out last week like ray of light, giving
| new hope of compensation to American
citizens with claims against our imme-
diate neighbor to the south.
Summoning Ambassador Josephus
Daniels to the foreign Office Minister
Eduardo Hay presented him with check
for a round million dollars. This-and
a like sum to be paid yearly-will be de-
posted in a sinking fund for eventual
payment to United States citizens whose
| farm lands in Mexico have been con-
| fiscated by the national government
there for distribution among the peas
ants as part of the country's agrarian
reform program.
Principle, Not Sum, Is Important.
A million dollars is small change in
the coin of international finance. But
the payment by Mexico held a signiti-
| canoe beyond its mere amount. 1t
| established for the first time in hard,
cash terms the principle of compensa-
| ton for conf1scated American properties
| in Mexico.
| AS result, new hope was given to all
| United States citizens and corporations
with claims against Mexico that, if their
| demands are reasonable and just, they
| may be satisfied Although the agrarian
| claims are in no way linked with de-
| mands of British and American oil COM
| panies for compensation for their oil
| properties, valued at $400 0O0,OOO which
were seized by the Mexican government
| in 1888, the payment last week set a
| psychological example which may be
| helpful to them. Donald R. Richberg,
| former N R. A. official, is now negotiat-
| ing directly with the Mexican govern
| ment on behalf of the petroleum COM
| panies.
Mexicos million-dolla check-the
| first payment to be made on account of
confiscated land after nearly two de-
cades of ntroversy-resulted from an
agreement entered into last November
between Secretary of State Cordell Hull
and Minister Hay after a long (and
sometimes acrimonious exchange of
notes. High points in their settlement
were:
l. Two commissioners-one from the
| United States, the other from Mexico
were appointed to meet in Mexico City
last December l and determine the total
value of agricultural properties which
have been confscated from United States
citizens by Mexico since 1927. (The pre-
1927 claims, which fall into different
class, will be. discussed later0
May Call in Third Party.
2. Failing agreement between the two
rotinno1 no
shall be submitted to third party, neu-
trail in status, to be chosen by the Perma-
nent Commission of Arbitration, estab-
lished under the Gondra pact.
3. Pending full determination of the
amount of the claims, Mexico agreed to
pay $l,000000 this year. After the total
had been fixed, the two governments will
agree upon the amount to be paid yearly
by Mexico thereafter; but this shall be
at least $1,000,000 annually in American
currency, payable on or before June 30
| Of each year.
To obtain a clear picture of the long,
involved and sometimes bitter negotia-
tions between the United States and
Mexico over claims during the last two
decades, it is best to divide them into
| categories.
First are the land claims. These arise
out of provisions in the Mexican consti-
tuition of 1917. The primary purpose of
| legislation enacted under it was to split
up the huge estates of Mexican and for
eign landholders and divide them
among the peasants. 1t was, on smaller
| scale, the same type of socialization in
| agriculture that has been carried out in
Russia, where the lands of the former
nobility have been apportioned to COL
| lective farmers.
The law provides that, with certain
conditions and restrictions, groups of 20
or more persons may apply for allot-
ments of land for communal farming.
Most of these projects are small, but
few, like the Leguna settlement for the
large-scale production of cotton, cover
vast areas. The Leguna project, for in
stance, includes nearly 100000 acres
which is farmed by some 285 communal
groups.