CLAIMS OF AMERICAN NATIONALS AGAINST MEXICO

TUESDAY, JUNE 30, 1942

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON FOREIGN AFFAIRS,

Washington, D. C. The subcommittee met, pursuant to call, at 10:30 a. m., in the committee room in the Capitol, Senator Elbert D. Thomas, chairman, presiding.

(The subcommittee had under consideration S. 2528, which is as follows:)

[S. 2528, 77th Cong. 2d Sess.]

A BILL To provide for the settlement of claims of the Government of the United States on behalf of American nationals against the Government of Mexico comprehended within the term of agreements concluded by the United States and Mexico

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Settlement of Mexican Claims Act of 1942".

SEC. 2. For the purposes of this Act

(a) The term "General Claims Commission" means the Commission established pursuant to the Convention between the United States and Mexico signed September 8, 1923 (42 Stat. 1730).

(b) The term "Special Claims Commission" means the Commission established pursuant to the Convention between the United States and Mexico signed September 10, 1923 (43 Stat. 1722).

(c) The term "Agrarian claims agreement of 1938" means the agreement between the United States and Mexico effected by exchange of notes signed on November 9 and November 12, 1938, respectively.

(d) The term "Agrarian Claims Commission" means the Commission established pursuant to the Agrarian Claims Agreement of 1938.

(e) The term "person" shall include an individual, partnership, or corporation. (f) The term "United States" when used in a geographical sense shall include the United States, its Territories, and insular possessions (including the Philippine Islands) and the Canal Zone.

(g) The term "American nationals" includes (1) persons who are citizens of the United States, and (2) persons who, though not citizens of the United States, owe permanent allegiance to the United States.

SEC. 3. For the purpose of this Act, the following determinations heretofore or hereafter made with respect to claims of American nationals shall be regarded as final and binding:

(a) Decisions rendered by the General Claims Commission;

(b) Appraisals agreed upon by the Commissioners designated by the Governments of the United States and Mexico, respectively, pursuant to the General Claims Protocol between the United States and Mexico signed April 24, 1934 (48 Stat. 1844);

(c) Appraisals made by the Commissioner designated by the United States pursuant to the said protocol in those cases in which the two Commissioners failed to reach agreements;

(d) Appraisals made by the Commissioner designated by the United States pursuant to the Agrarian Claims Agreement of 1938; and

(e) Decisions rendered pursuant to sections 5 and 10 of this Act.

SEC. 4. The Secretary of State shall, as soon as possible, certify to the Secretary of the Treasury lists of the awards or appraisals made in favor of American nationals referred to in subsections (a), (b), (c), and (d) of section 3 of this Act.

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SEC. 5. (a) There is hereby established a commission, to be composed of a sole Commissioner designated by the President, which shall have authority to examine and render decisions in the following categories of claims on behalf of American nationals against the Government of Mexico:

(1) Agrarian claims which arose between January 1, 1927, and August 30, 1927, inclusive, and which were not filed with the General Claims Commission;

(2) Agrarian claims which are predicated upon provisional expropriation decrees signed between August 31, 1927, and December 1, 1938, inclusive, but not published prior to December 1, 1938, and which were not filed with the Agrarian Claims Commission;

(3) Agrarian claims which arose between December 1, 1938, and October 6, 1940, inclusive, and which were not filed with the Agrarian Claims Commission on or before July 31, 1939; and

(4) All other claims (except those predicated upon acts of Mexican authorities in relation to petroleum properties, and those filed with the General Claims Commission) which arose between January 1, 1927, and October 6, 1940, inclusive, and which involve international responsibility of the Government of Mexico as a consequence of damage to, or loss or destruction of, or wrongful interference with, property of American nationals.

(b) All decisions shall be based upon such evidence and written legal contentions as may be presented within such period as may be prescribed therefor by the Commission, and upon the results of any independent investigation of cases as the Commission may deem it advisable to make.

(c) The Commission shall, upon the completion of its work, submit a report to the Secretary of State, attaching thereto (1) a list of all clains disallowed, (2) a list of all claims allowed, in whole or in part, together with the amount of each claim and the amount awarded thereon, and (3) a statement of the reasons for the allowance or disallowance.

(d) The Secretary of State shall, as soon as possible, certify to the Secretary of the Treasury a list of the awards made in favor of American nationals under this section.

SEC. 6. For the purposes of this Act appraisals made in terms of Mexican currency shall be converted into currency of the United States at the exchange rate of $0.4985, and in those cases in which awards or appraisals bear interest, such interest shall be simple interest computed at 6 per centum per annum, from the date specified in the individual awards or appraisals to November 19, 1941.

SEC. 7. (a) Subject to the limitations hereinafter provided, the Secretary of the Treasury is authorized and directed to pay, as prescribed by section 8 of this Act, an amount not exceeding the principal of each award or appraisal certified pursuant to sections 4 and 5, plus the interest thereon, in accordance with the award or appraisal and the provisions of section 6 of this Act. Such payments, and applications for payment, shall be made in accordance with such regulations as the Secretary of the Treasury may prescribe.

(b) There shall be deducted from the amount of each payn.ent made pursuant to subsections (c) and (d) of section 8, as reimbursement for the expenses incurred by the United States, an amount equal to 5 per centum thereof. The amount so deducted shall be covered into the Treasury to the credit of miscellaneous receipts.

(c) Payments made pursuant to this Act, the Act approved April 10, 1935 (49 Stat. 149), and the joint resolution approved August 25, 1937 (50 Stat. 783), shall be made only to the person or persons on behalf of whom the award or appraisal is made, except that

(1) if such person is deceased or is under a legal disability, payment shall be made to his legal representative, provided that if the amount to be disbursed at any one time is not over $500 and there is no qualified executor or administrator it may be made to the person or persons found by the Secretary of the Treasury to be entitled thereto, without the necessity of compliance with the requirements of law in respect of the administration of estates;

(2) if an award or appraisal has been made to the estate of a deceased person, and if there has been no administration of such person's estate, or if the administration of such person's estate has been terminated, the Secretary of the Treasury may make payment to such person or persons found by him to be legally entitled thereto;

(3) in the case of a partnership or corporation, the existence of which has been terminated, payment shall be made, except as provided in para

graphs (4) and (5), to the person or persons found by the Secretary of the Treasury to be entitled thereto;

(4) if a receiver or trustee for the partnership or corporation on behalf of which the award or appraisal was made has been duly appointed by a court of competent jurisdiction in the United States and has not been discharged prior to the date of payment, payment shall be made to the receiver or trustee or in accordance with the order of the court;

(5) in the case of an assignment of an award or appraisal, or any part thereof, or an assignment (prior to the making of the award or the appraisal) of the claim, or any part thereof, in respect of which the award or appraisal was made, by a receiver or trustee for any such partnership or corporation, duly appointed by a court of competent jurisdiction in the United States, such payment shall be made to the assignee, as his interests may appear; and (6) in the case of an assignment of an award or appraisal, or any part thereof, after its certification to the Secretary of the Treasury, made in writing, and duly acknowledged and filed, payment may, in the discretion of the Secretary of the Treasury, be made to the assignee, as his interests may appear.

(d) Whenever the Secretary of the Treasury shall find that any person is legally entitled to any payment under this Act, the Act approved April 10, 1935 (49 Stat. 149), or the joint resolution approved August 25, 1937 (50 Stat. 783), such finding shall be an absolute bar to recovery by any other person.

(e) Nothing in the section shall be construed as the assumption of a liability by the United States for the payment or satisfaction of any claims of American nationals against the Government of Mexico.

(f) Any person who makes application for payment under this section shall be held to have consented to all of the provisions of this Act.

(g) The decisions of the Secretary of the Treasury in making payments out of the Mexican claims fund and in making payments pursuant to the provisions of this Act, of the Act approved April 10, 1935 (49 Stat. 149), and of the joint resolution approved August 25, 1937 (50 Stat. 783), shall be final and conclusive and shall not be subject to review by any other officer of the Government.

SEC. 8. (a) There is hereby created in the Treasury of the United States a special fund to be known as the "Mexican Claims Fund," hereinafter called the "fund." There shall be covered into the Treasury to the credit of the fund all funds hereinafter specified. All payments authorized under section 7 of this Act shall be disbursed from the fund and all amounts covered into the Treasury to the credit of the fund are hereby permanently appropriated for the making of the payments authorized by section 7 of this Act.

(b) The Secretary of the Treasury is authorized and directed to cover into the fund

(1) the sum of $3,000,000, representing the total sum of payments heretofore made by the Government of Mexico under the Agrarian Claims Agreement of 1938;

(2) the balance of $2,573,180.40 remaining after deducting from the amount paid by the Government of Mexico upon exchange of ratifications of the convention signed November 19, 1941, the amount allocated to the settlement of special claims by section 10 of this Act;

(3) the amounts hereafter paid by the Government of Mexico pursuant to the provisions of the said convention: and

(4) the sum of $533,658.95 authorized to be appropriated by section 9 of this Act (in relation to claims of Mexican nationals against the Government of the United States.)

(c) The Secretary of the Treasury is authorized and directed, out of the funds covered into the fund pursuant to paragraphs 1, 2, and 4 of subsection (b) of this section, to make payments, in ratable proportions, on account of awards and appraisals certified pursuant to section 4 of this Act, according to the proportions which the respective awards and appraisals, exclusive of interest, shall bear to the total sum of the funds so covered into the fund.

(d) The Secretary of the Treasury is authorized and directed, to the extent that it may be possible to do so out of the funds hereafter covered into the fund pursuant to paragraph 3 of subsection (b) of this section

(1) to make similar payments, on account of the principal amount of such awards as may be certified pursuant to section 5 of this Act, to such extent as may be necessary to bring the payments on account of such awards

on a parity with the prorata payments made on account of awards and appraisals under subsection (c) of this section;

(2) after completing the payments prescribed by paragraph (1) of this subsection, to n.ake payments, from time to time and in ratable proportion, on account of all awards and appraisals certified pursuant to the provisions of sections 4 and 5 of this Act, according to the proportions which the respective awards and appraisals, exclusive of interest, shall bear to the total sum available for distribution at the time such payments are made; and

(3) after payment has been made of the principal amounts of the awards and appraisals, to make pro rata payments on account of accrued interest on such awards and appraisals as may bear interest.

SEC. 9. There is hereby authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, for credit of the fund established by section 8 of this Act, the sum of $533,658.95, representing the total sum of awards and appraisals, plus interest, made with respect to claims on behalf of Mexican nationals against the Government of the United States which were filed with the General Claims Commission.

SEC. 10. (a) There is hereby established a Commission, to be composed of a sole Commissioner designated by the President, which shall have authority to adjudicate, in conformity with the provisions of the Act approved April 10, 1935 (49 Stat. 149), claims or parts of claims which were filed both with the General Claims Commission and the Special Claims Commission and which were determined by the Commissioner referred to in section 3 (c) of this Act, to fall within the purview of the convention signed September 10, 1923.

(b) After the Commission shall have determined the amount allowable on account of each claim it shall reduce the amount by 43 per centum (that being the same percentage basis that the final awards of the Special Mexican Claims Commission were reduced in accordance with the provisions of section 4 of the Act approved April 10, 1935) and shall enter a final award in the reduced amount. (c) The Commission shall, not later than January 1, 1943, submit a final report to the Secretary of State, attaching thereto (1) a list of all claims disallowed, (2) a list of all claims allowed, in whole or in part, together with the amount of each claim and the amount awarded thereon, and (3) a statement of the reasons for the allowance or disallowance.

(d) The Secretary of State shall, as soon as possible, certify to the Secretary of the Treasury a list of the awards made in favor of American nationals under this section.

(e) As a consequence of the determination referred to in subsection (a) of this section. and of the determination by the two Commissioners referred to in section 3 (b) cf this Act, that certain claims or parts of claims should be adjudicated as special claims, there is hereby allocated to the settlement of claims filed with the said Special Claims Commission the sum of $426,819.60, which sum shall be deducted from the amount paid by the Government of Mexico upon the exchange of ratifications of the convention signed November 19, 1941.

(f) The Secretary of the Treasury is hereby authorized to distribute to the beneficiaries of awards rendered by the Special Mexican Claims Commission and by the Commission established pursuant to this section, all moneys heretofore or hereafter received from the Government of Mexico pursuant to the convention signed April 24, 1934, including interest on deferred payments, and also the sum of $426,819.60 allocated by paragraph (e) of this section: Provided, however, That no further distributions pursuant to the Act approved April 10, 1935 (49 Stat. 149), and the joint resolution approved August 25, 1937 (50 Stat. 783), shall be authorized by the Secretary of the Treasury on account of awards rendered by the Special Mexican Claims Commission until the Secretary of the Treasury shall have authorized distributions to the beneficiaries of awards rendered pursuant to this section to such extent as may be necessary to place them on an equal percentage basis as to payments with the beneficiaries of awards of the Special Mexican Claims Commission: Provided, further, That payments may be made at any time on account of distributions authorized prior to January 1, 1943, by the Secretary of the Treasury.

(g) So much of the Act approved April 10, 1935, or the joint resolution approved August 25, 1937, as may be inconsistent with this Act is hereby repealed.

SEC. 11. There is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary to provide for the expenses of the respective Commissions referred to in sections 5 and 10 of this Act, including personal services in the District of Columbia or elsewhere with

out reference to the civil service and classification laws; electric service, drinking water, and rooms and rent, in addition, if deemed necessary by the Secretary of State, to the lawful per diem; rent, purchase of supplies and equipment, and stenographic, translating and other services by contract, if deemed necesssary, without regard to section 3709 of the Revised Statutes (U. S. C., title 41, sec. 5); traveling expenses; communication service; purchase of lawbooks and books of reference; transportation of things; printing and binding; official cards; and such other expenses as may be authorized by the Secretary of State, including the reimbursement of other appropriations from which payments may have been made for any of the purposes herein specified.

SEC. 12. The following provisions of law are hereby repealed:

(a) So much of the Department of State Appropriation Act, 1936 (49 Stat. 76), of the Department of State Appropriation Act, 1937 (49 Stat. 1320), and of the Department of State Appropriation Act, 1938 (50 Stat. 271), as reads as follows: "Provided further, That from any sums received from the Mexican Government in settlement of a general claim of an American citizen against it, there shall be deducted and deposited in the Treasury of the United States as miscellaneous receipts, 5 per centum thereof in reimbursement of the Government of the United States of expenses incurred by it in respect of such claim."

(b) That portion of the joint resolution approved April 10, 1939 (53 Stat. 573) reading as follows: "Provided, That any expenditures from the amount herein authorized to be appropriated shall become a first charge upon any moneys received from the Government of Mexico in settlement of the respective claims, and the amount of such expenditures shall be deducted from the first payment by the Mexican Government and deposited in the Treasury of the United States as miscellaneous receipts."

Senator THOMAS of Utah (chairman). The committee will be in order. We will ask the reporter to make the proper heading and to include in the hearings a copy of the bill and certain letters which will be representative of the correspondence which has been received. All of the letters will not be included, but there will be a representation made of most of the ideas of persons who have written.

(The letters referred to are entitled "Exhibit I" in the appendix.) STATEMENT OF BENEDICT M. ENGLISH, ASSISTANT TO THE LEGAL ADVISER, DEPARTMENT OF STATE

Senator THOMAS of Utah. For the record, Mr. English, will you state your name and your position?

Mr. ENGLISH. Benedict M. English, assistant to the Legal Adviser, Department of State.

Senator THOMAS of Utah. You may proceed.

(Mr. English was accompanied by Mr. Herbert S. Bursley, Assistant Chief, Division of American Republics, State Department.)

Mr. ENGLISH. The committee knows, of course, that the United States and Mexico recently concluded a claims convention under which Mexico agrees to pay the United States in installments the sum of $40,000,000 as the balance due this Government in settlement of certain claims of American nationals against Mexico and of Mexican nationals against the United States arising between 1869 and 1940. In general the bill under consideration, S. 2528, provides for the prompt distribution of some $6,000,000, which will be available upon the passage of the bill, on a pro rata basis among the claimants whose claims have already been adjudicated or appraised as meritorious claims.

Senator THOMAS of Utah. Right there-where did you get this $6,000,000?