1. The Mexican commissioners understand that in case the two Governments resume diplomatic relations and conclude a general claims convention creating a mixed claims commission, the Government of the United States will forward concurrently with the exchange of ratifications of such general claims convention a note binding its citizens who are claimants to accept bonds for ejidos of a maximum area of 1755 hectares on the terms and conditions and with the provisions referred to in Mr. Warren's statement in behalf of the American commissioners.

2. The Mexican Government does not maintain that the acceptance of Federal bonds in payment for expropriation for ejidos of a certain area shall be regarded as an acceptance on the part of the Government of the United States of the principle that payment in bonds can be made for expropriation of lands or other property for any other purpose.

3. According to the law of January 10, 1920, and the regulations thereunder dated January 26, 1922, bonds will be issued for the payment of ejidos. These bonds will bear interest at the rate of 5 per cent per annum from the time of the taking of the land and will be made payable in 20 years. Not less than one-twentieth part of the total amount of bonds issued and outstanding shall be paid each year, the bonds to be so paid each year being determined substantially by lot as provided in such regulations. Said bonds will be accepted by the Government at par value in payment for public or national lands, in payment for interest due on contracts for the purchase or for the price of lands granted to villages as ejidos and sold to the residents, and as security in all those cases in which by virtue of a contract or concession a deposit is or may be required in bonds of the public debt. For the payment of the aforesaid bonds and coupons attached thereto the Government will apply, not excluding other sources of revenue, all the revenues coming into the Treasury from the sale of lands expropriated for ejidos by the Government to the residents of the respective localities. The revenues shall not be used by the Government for any other purpose. In addition, the coupons will be accepted by the Federal Government in payment of any Federal tax.

The Federal Government intends negotiating a loan in order to pay the indemnities for the lands expropriated for ejidos in cash, and as soon as this loan can be obtained the Government will call in and pay in cash at par such part of the aforesaid bonds then outstanding as the proceeds of such loan will pay. In case less than all the bonds issued and outstanding shall be called and paid on any one date, then the bonds thus to be called and paid shall be drawn by lot in the manner above referred to.

In case such loan cannot be negotiated, the Government intends to shorten the period of payment of the said bonds, according to the financial possibilities of the Federal Treasury, and to accept the matured bonds, and in the meantime to accept annually one-twentieth part of the outstanding bonds in payment for all kinds of Federal taxes in the same manner as coupons.

4. Owners who are citizens of the United States, in whatever form their interests may be held, who may have suffered losses or damages because of acts resulting in injustice in carrying out the expropriation of lands for ejidos, shall have recourse to a general claims commission having a general jurisdiction under the terms provided by the convention creating such a general claims commission.

5. The Mexican Government has ordered the restitution of all property and right confiscated or wrongfully taken from their owners during the revolution. Nevertheless, if in any case it is shown that a property or right of a citizen of the United States so confiscated or wrongfully taken has not been restored, the Mexican Government will issue the necessary orders for the immediate restitution, where possible, of said property or right.

6. The question of the division of large landed estates is not made the subject of a particular statement in view of the fact that the Mexican Congress has not issued any law authorizing the various States of the Republic to create agrarian debts or to issue bonds for this purpose, and in view of the fact that the American commissioners, in behalf of their Government, have

stated that all the rights of the citizens of the United States regarding such division and the expropriation or sale of lands for bonds or for any consideration other than in cash are reserved, and that the Mexican commissioners, on behalf of the Mexican Government, take knowledge that the American Government has reserved the rights of its citizens in this and in other respects.

THE PETROLEUM QUESTION

Before setting forth the pertinent provisions of the minutes with respect to the petroleum question it should be observed that by the provisions of the Mexican constitution of 1917, which became effective on May 1 of that year, direct ownership of petroleum in the subsoil was vested in the Mexican nation, and that the efforts of the Mexican authorities to give these provisions retroactive application presented a most serious situation. This Government maintained as one clear principle which lies at the foundation of international intercourse that when a nation has invited intercourse with other nations, has established laws under which investments have been lawfully made, contracts entered into and property rights acquired by citizens of other jurisdictions, it is an essential condition of international intercourse that international obligations shall be met and that there shall be no resort to confiscation and repudiation.

The questions that have arisen from the situation have not been so much concerned with the actual taking of properties, of the class described under this head, as with the constant menace to American interests growing out of threats of the Mexican authorities to take such properties. This Government succeeded in composing some of these questions before the commissioners went to Mexico, and when they began their conferences the principal questions were concerned with (1) petroleum interests, which had been made the subject, prior to May 1, 1917, of contracts of the purpose of petroleum development, and (2) subsoil interests where American owners had title to the land (through grant or lease) prior to May 1, 1917, but had not yet undertaken exploration for petroleum or had made contracts for the purpose.

The American commissioners thoroughly discussed all phases of the question with their Mexican colleagues, and the essential features of the agreement reached are embraced in the following statements of the Mexican commissioners on behalf of the Mexican Government, as they are embodied in the minutes of the conferences:

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1. It is the duty of the federal executive power, under the constitution, to respect and enforce the decisions of the judicial power. In accordance with such a duty, the executive has respected and enforced, and will continue to do so, the principles of the decisions of the supreme court of justice in the "Texas Oil Co. case and the four other similar amparo" cases, declaring that paragraph IV of article 27 of the constitution of 1917 is not retroactive in respect to all persons who have performed, prior to the promulgation of said constitution, some positive act which would manifest the intention of the owner of the surface or of the persons entitled to exercise his rights to the oil under the surface, to make use of or obtain the oil under the surface, such as drilling, leasing, entering into any contract relative to the subsoil, making investments of capital in lands for the purpose of obtaining the oil in the subsoil, carrying out works of exploitation and exploration of the subsoil, and in cases where from the contract relative to the subsoil it appears that the grantors fixed and received a price higher than would have been paid for the surface of the land because it was purchased for the purpose of looking for oil and exploiting same if found; and, in general, performing or doing any other positive act, or manifesting an intention on a character similar to those heretofore described. According to these decisions of the supreme court, the same rights enjoyed by those owners of the surface who have performed a positive act or manifested an intention such as has been mentioned above will be enjoyed also by their legal assignees or those persons entitled to the rights to the oil. The protection of the supreme court extends to all the land or subsoil concerning which any of the above intentions have been manifested or upon which any of the above specified acts have been performed, except in

case where the documents relating to the ownership of the surface or the use of the surface or the oil in the subsoil establish some limitation.

The above statement has constituted and will constitute in the future the policy of the Mexican Government, in respect to lands and the subsoil upon which or in relation to which any of the above specified intentions have been manifested; and the Mexican Government will grant to the owners, assignees. or other persons entitled to the rights to the oil, drilling permits on such lands subject only to police regulations, sanitary regulations and measures for public order, and the right of the Mexican Government to levy general taxes.

2. The Government, from the time that these decisions of the supreme court were rendered, has recognized and will continue to recognize the same rights for all those owners or lessees of land or subsoil of other persons entitled to the rights to the oil who are in a similar situation as those who obtained amparo, " that is, those owners or lessees of land or subsoil or other persons entitled to the rights to the oil who have performed any positive act of the character already described or manifested any intention such as above specified.

3. The Mexican Government, by virtue of the decisions of the President (acuerdos) dated January 17, 1920, and January 8, 1921, respectively, has granted and grants preferential rights to all owners of the surface or persons entitled to exercise their preferential rights to the oil in the subsoil, who have not performed a positive act such as already mentioned, showing their intention to use the subsoil or manifested an intention as above specified, so that whenever those owners of the surface or persons entitled to exercise their preferential rights to the oil in the subsoil wish to use or obtain the oil in the said subsoil, the Mexican Government will permit them to do so to the exclusion of any third party who has no title to the land or to the subsoil.

4. The present executive, in pursuance of the policy that has been followed up to the present time, as above stated, and within the limitations of his constitutional powers, considers it just to grant, and will continue in the future to grant, as in the past, to owners of the surface or persons entitled to exercise their preferential rights to the oil, who have not performed prior to the constitution of 1917 any positive act such as mentioned above or manifested an intention as, above specified, a preferential right to the oil and permits to obtain the oil to the exclusion of any third party who has no title to the land or subsoil, in accordance with the terms of the legislation now in force as modified by the decisions of January 17, 1920, and January 8, 1921, already mentioned. The above statement in this paragraph of the policy of the present executive is intended to constitute an obligation for an unlimited time on the part of the Mexican Government to grant preferential rights to such owners of the surface, or persons entitled to exercise their rights to the oil in the subsoil.

5. The American commissioners have stated in behalf of their Government that the Government of the United States now reserves, and reserves, should diplomatic relations between the two countries be resumed, all the rights of the citizens of the United States in respect to the subsoil under the surface of lands in Mexico owned by citizens of the United States, or in which they have an interest, in whatever form owned or held, under the laws and constitution of Mexico in force prior to the promulgation of the new constitution, May 1, 1917, and under the principles of international law and equity. The Mexican commissioners, while sustaining the principles hereinbefore set forth in this statement, but reserving the rights of the Mexican Government under its laws as to lands in connection with which no positive act of the character specified in this statement has been performed or in relation to which no intention of the character specified in this statement has been manifested, and its rights with reference thereto under the principles of international law, state in behalf of their Government that they recognize the right of the United States Government to make any reservation of or in behalf of the rights of its citizens.

It will be observed from the foregoing that the arrangement contemplates full protection for all cases of oil properties which were acquired for petroleum purposes prior to the date on which the Mexican constitution of 1917 became effective and abandons in no respect the attitude which this Government has consistently maintained with respect to property rights.

THE GENERAL AND SPECIAL CLAIMS CONVENTIONS

The department understands that these conventions are now before your committee. In view of that fact, it would seem that a discussion of their provisions is unnecessary here. However, I may point out that the general claims convention provides means for executing some of the most important features of the understanding reached with respect to both the agrarian and petroleum questions, as revealed in the foregoing summary.

With regard to your inquiry as to the action of Mexico in respect to the conventions in reference, I beg to advise you that the department's information indicates that the special claims convention was approved by the Mexican Senate on December 27, 1923, and that an extraordinary session of the Mexican Senate has been called to convene at an early date for the purpose of approving the general claims convention.

Owing to the fact that the minutes constitute a voluminous document, I have deemed it advisable to prepare the foregoing statement for the information and use of your committee. However, if it should be deemed essential, I shall be pleased to submit the minutes in their entirety for the committee's examination.

I am, my dear Senator Lodge,

Sincerely yours,

CHARLES E. HUGHES.

THE CONSTITUTION OF 1917*

Signed January 31, 1917; Promulgated February 5, 1917; Effective May 1,

1917

Translated by H. N. BRANCH, LL.B.

TITLE I

CHAPTER I

Of Personal Guarantees

Article 1. Every person in the United States of Mexico shall enjoy the guarantees granted by this Constitution; these shall neither be abridged nor suspended except in such cases and under such conditions as are herein provided.

Slaves

Art. 2. Slavery is forbidden in the United States of Mexico. who enter the national territory from abroad shall, by this act alone, recover their freedom, and enjoy the protection of the law.

Art. 3. Instruction is free; that given in public institutions of learning shall be secular. Primary instruction, whether higher or lower, given in private institutions shall likewise be secular.

No religious corporation nor minister of any creed shall establish or direct schools of primary instruction.

Private primary schools may be established only subject to official supervision.

Primary instruction in public institutions shall be gratuitous.

Art. 4. No person shall be prevented from engaging in any profession, industrial or commercial pursuit or occupation of his liking, provided it be lawful. The exercise of this liberty shall only be forbidden by judicial order when the rights of third persons are infringed, or by executive order, issued under the conditions prescribed by law, when the rights of society are violated. No one shall be deprived of the fruit of his labor except by judicial decree.

Each state shall determine by law what professions shall require licenses, the requisites to be complied with in obtaining the same, and the authorities empowered to issue them.

Art. 5. No one shall be compelled to render personal services without due compensation and without his full consent, excepting labor imposed as a penalty by judicial decree, which shall conform to the provisions of clauses I and II of Article 123.

Only the following public services shall be obligatory, subject to the conditions set forth in the respective laws: military service, jury service, service in municipal and other public elective office, whether this election be direct or indirect, and service in connection with elections, which shall be obligatory and without compensation.

The State shall not permit any contract, covenant or agreement to be carried out having for its object the abridgment, loss or irrevocable sacrifice of the liberty of man, whether by reason of labor, education or religious vows. The law, therefore, does not permit the establishment of monastic orders, of whatever denomination, or for whatever purpose con templated.

Nor shall any person legally agree to his own proscription or exile, or to the temporary or permanent renunciation of the exercise of any profession or industrial or commercial pursuit.

A contract for labor shall only be binding to render the services agreed upon for the time fixed by law and shall not exceed one year to the prejudice of the party rendering the service; nor shall it in any case whatsoever embrace the waiver, loss or abridgment of any political or civil right.

* Reprinted from the 1920-21 edition of the Year Book.