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threatening situation. That treaty was signed to eliminate those conditions, restore a normal status between the two Governments, and secure for our Government and all our citizens the substantial benefits to accrue from reestablished peace with Mexico and unhindered commercial dealings with her people. Hence that treaty was entered into and the obligations contained in it incurred, primarily in the interest of our Government and our entire citizenship; and, in order to secure the substantial benefits thus sought for our Government and all our people, it was considered necessary for the Government completely to take over the claims of injured citizens and assume the entire responsibility for their settlement with Mexico; and that is exactly what that treaty accomplished. Such taking of private property for the public good necessarily carried with it the obligation to pay the adjudged value of that property, and that obligation is made doubly binding by the fact that the public benefits thus secured have already yielded to our Government and our citizens at large many times the amount necessary to make the payments required of our Government under the treaty, and that is all this bill proposes.

They had a distinct national end in view in taking over those claims bodily and forcefully from American claimants, and that was to restore peaceful relations with Mexico and the great profits of unhindered commerce, which at that time was in a chaotic condition. Now, I think I have covered the case.

Mr. BLOOM. I will ask unanimous consent that the Senator be permitted to put this statement in the record.

Mr. JOHNSON. Is this the same identical bill which passed the Senate at the last session of Congress and was also reported out of this committee, but it was so late in the session that it was not reached?

Senator SHEPPARD. I have already so stated.

Mr. JOHNSON. Well, I did not hear the beginning of your state

ment.

Senator SHEPPARD. Yes.

Mr. JOHNSON. I understood it was.

Senator SHEPPARD. Yes.

Mr. FORD. May I ask a question?

Mr. BLOOM. Mr. Ford.

Mr. FORD. Did these claimants more or less consent to the setting up of this tribunal for the settling of these claims?

Senator SHEPPARD. They had no voice in the matter. They were ordered to deliver those claims to the Government on penalty that they would be forever barred if they were not so delivered.

Mr. FORD. They did not participate?

Senator SHEPPARD. There was no participation whatever. That is probably the main point in the case.

Mr. KEE. How many claims were adjudicated? 124?

Senator SHEPPARD. Yes.

Mr. KEE. How many remain?

Senator SHEPPARD. Eight hundred and fifty and all the machinery for settling these 850 claims has been wiped out and no longer exists. Therefore, if those people who received favorable awards are not to be paid until every claim filed has been adjudicated, they will never

receive their money unless the Government at some time renews negotiations, and Mr. Hull stated there were no prospects of that. Mr. JOHNSON. This Commission folded up?

Senator SHEPPARD. Yes, sir.

Mr. BLOOM. I would not say "folded up"; it just disappeared.
Senator SHEPPARD. Thank you very much.

Mr. BLOOM. Thank you, Senator, for coming.

PREPARED STATEMENT OF HON. MORRIS SHEPPARD, SENATOR FROM THE STATE OF

TEXAS

Bill S. 326 was passed by the Senate on April 20, after being favorably reported by the Foreign Relations Committee and fully discussed on the floor of the Senate. Except as to one small administrative change suggested by the Secretary of State, this bill is identical with S. 3104, which, after extensive investigation and favorable report by the Foreign Relations Committee and full floor discussion, was passed by the Senate near the end of the last session of Congress and favorably reported after hearings by the House Foreign Affairs Committee, but too late for floor action by the House.

This bill authorizes an appropriation out of the Federal Treasury to pay the amounts due on the respective dates of the 124 awards and appraisals heretofore made on claims of American citizens filed under the General Claims Convention of September 8, 1923, between the United States and Mexico, aggregating approximately $3,000,000. It expressly provides, however, that such payment "shall not be construed as the satisfaction, in whole or in part, of any such award or appraisal, or as extinguishing or diminishing the liability of the United Mexican States for the satisfaction in full of such awards and appraisals, but shall be considered only as an advance by the United States until all of said awards and appraisals have been paid off and satisfied in full to the United States by the United Mexican States." This bill, therefore, does not propose to have the United States pay the obligations of the Mexican Government to American citizens.

Neither does this bill propose a new type of legislation, but, on the contrary, it follows an exact pattern already furnished by the congressional act of August 10, 1846, which appropriated $320,000 to pay to American citizens past-due installments on awards against Mexico on claims filed under the treaty of April 11, 1839; and it also follows the exact pattern and largely copies the language of the congressional act of March 10, 1928, which appropriated $50,000,000, and made another $50,000,000 available if necessary, to pay to American citizens awards by the Mixed Claims Commission on claims against Germany.

This bill proposes nothing more than the discharge of the obligations of the United States to our own citizens under the General Claims Convention of September 8, 1923. The first paragraph of article IX of that treaty requires the two Governments to settle with one another the awards in all the cases decided by deducting the total amount awarded against one Government from the total amount awarded against the other Government, the balance then to be paid by the Government owing it to the other Government. That provision completely eliminates the citizen in whose favor an award has been made unless it be implied therefrom that his Government is under the duty of paying him; and our State Department has uniformly held that such payment is contemplated by the article of the Convention referred to.

Without such implied obligations of the Governments, that treaty becomes an instrument of pure confiscation. Through it the Government decreed that all claims comprehended by it must be presented for adjudication to a tribunal created under it, and all claims not so presented are declared forever barred. In order to get a claim presented to that tribunal it had to be surrendered to the Government which thereby acquired the exclusive and untrammeled right to control it, to determine whether to prosecute it or abandon it, and to appropriate any award made on it to pay the Government's debt by offsetting such award against like awards in favor of Mexico; and the citizen is bound by any action taken by the Government. Those provisions of the treaty completely separated the citizen from his claim and stripped him of all rights with reference to it. He could not thereafter either seek its collection or accept its payment from Mexico; and there remained no source to which he can look for pay, unless he

can look to his own Government. All this amounted to vesting title to the claims in the Government; and, unless confiscation was intended, necessarily imposed upon the Government the obligation to pay the awarded value of each claim. That obligation became complete with the enforced surrender of the claim to the Government, and its maturity thereafter depended only on the adjudication of the claim; and the binding quality of that obligation is not affected by the circumstance that the total of awards in favor of the United States exceeds the total in favor of Mexico, a circumstance clearly not in contemplation when the treaty was signed because it was not then known and could not then be anticipated.

That implied obligation of the Government is further shown by the reasons which caused that treaty to be entered into, and the highly important public ends sought by it. The claims comprehended by that treaty originated in a long succession of wrongs and injuries to American citizens residing in Mexico or having business interests there which, together with the indifference of Mexico thereto, had finally caused the severance of diplomatic relations between the two Governments, destroyed commerce between the two countries, depleted customs revenues, and created a very costly and threatening situation. That treaty was signed to eliminate those conditions, restore a normal status between the two Governments, and secure for our Government and all our citizens the substantial benefits to accrue from reestablished peace with Mexico and unhindered commercial dealings with her people. Hence that treaty was entered into, and the obligations contained in it incurred, primarily in the interest of our Government and our entire citizenship; and, in order to secure the substantial benefits thus sought for our Government and all our people, it was considered necessary for the Government completely to take over the claims of injured citizens and assume the entire responsibility for their settlement with Mexico; and that is exactly what that treaty accomplished. Such taking of private property for public good necessarily carried with it the obligation to pay the adjudged value of that property; and that obligation is made doubly binding by the fact that the public benefits thus secured have already yielded to our Government and our citizens at large many times the amount necessary to make the payments required of our Government under the treaty, and that is all this bill proposes.

It must also be remembered that that treaty represents much more than the mere voluntary offer of a helping hand to our injured citizens in their attempts to collect their claims from Mexico. It is the method chosen by the Government, without any participation by the citizens, of discharging the duty the Government owed to injured citizens to help them collect their claims, and also to discharge the duty the Government owed to all our people to compose the troubled relations with Mexico. Hence, the proposal contained in this bill to carry out the obligations of the Government assumed under that treaty in order to enable it to discharge those solemn duties it owed to our citizens is in no sense an attempt to make the Government liable merely because it tried to help our citizens collect their claims.

Since this bill merely proposes the discharge of the obligations of the Government heretofore incurred under the treaty, there can be no question of a precedent involved pointing to the voluntary assumption by the Government of debts owing to our citizens by other governments, neither is there any such precedent established by the treaty itself, because that treaty was entered into because of a particular and special situation and contains only such obligations as were deemed necessary to deal with that situation. All treaties arise from special situations and comprehend the peculiar and particular facts that make the treaty seem necessary; and the obligations contained in each treaty are such as the Government deems proper and necessary to deal with the particular situation and facts covered by that treaty. The faithful carrying out of the obligations of any one treaty, arising as they do from a special state of facts, involves only the question of simple honesty with reference to the Government's own obligations, and in no manner establishes a precedent compelling the assumption of the same type of obligations under other and entirely different circumstances. The fact that the Government deemed it proper and necessary to enter into the treaty in question and incur the obligations contained therein, in order to compose the troubled, costly, and dangerous situation then existing between the United States and Mexico, and later faithfully carries out those obligations, as proposed in this bill, certainly will not establish a precedent that would require the Government to assume obligations of other

governments to our citizens not arising from any such incidents as created these obligations, and through the satisfaction of which no such public ends would be served as were served through this treaty.

Another compelling reason why this bill should be passed is found in the tragic failure to conclude the settlement of claims in accordance with that treaty. In most imperative language it required all claims then in existence to be decided within 3 years from the first meeting of the Commission, which was August 30, 1924, and no more additional time was permitted than might be necessary to complete the decision of claims which might originate and be filed after the signing of the treaty. That certainly contemplated that the whole undertaking would be completed within a little more than 3 years after the first meeting of the Commission; yet, at the expiration of that 3-year term on August 30, 1927, decisions had been made in less than 200 of the 2,871 American claims and the 836 Mexican claims which had been filed. No awards were paid, but the term of the Commission was extended 2 years, and that was repeated three times, the final extension expiring on October 31, 1937, at which time all machinery and agreements for the decision of claims also expired, leaving undecided 850 American claims and 220 Mexican claims. No further progress can be made toward the decision of those undecided claims until an entirely new agreement therefor has been negotiated with Mexico; and Secretary Hull has advised that, while attempts are being made to negotiate such an agreement, yet no assurance can be given as to when same may be concluded, or what may be agreed upon. This situation amounts in fact to an abandonment of that treaty, and both justifies and requires the payment of awards already made even if there were no treaty provisions requiring that to be done.

Secretary Hull called attention to the existing situation in the following words: "The pending claims accumulated throughout the period of 59 years running from 1868 to 1927, from which fact it will be noted that the claimants, and in many cases their successors in interest, have already been required to wait many years for the amounts due them." In addition to these facts mentioned by Secretary Hull, it is also true that more than 15 years have already been consumed on what the treaty contemplated would be completed in approximately 3 years, and nearly one-third of the job yet remains to be done, with all agreements and machinery for doing that job completely out of existence. In the light of that history, no one can tell whether there will ever be a conclusion to the deciding of claims filed under the treaty, and that would mean that nothing will ever be paid on any claim or award, if such payment is dependent on the final adjudication of the last claim filed and the collection of the money from Mexico on awards given; and thus all citizens would be completely deprive of that "just and adequate compensation" which the treaty purported to guarantee them.

Under the treaty our citizens in whose favor an award has been made are clearly entitled to their money, and our Government is clearly obligated to pay them, wholly independent of any question of subsequent repayment by Mexico. However, the treaty clearly obligates Mexico to repay to the United States any amount the United States pays on account of these awards in excess of the total sum that may be awarded in favor of Mexico; and the fact that Mexico has, as agreed, during the last 4 years paid 21⁄2 million dollars on the special claims, and within recent days has paid, as agreed, $1,000,000 on agrarian claims, furnishes satisfactory evidence that Mexico will meet its obligations under the treaty.

In conclusion, further delay in the payment of these awards will be an injustice to our citizens which cannot be justified. They have complied with every requirement of the Government, their claims have been adjudicated and a judgment rendered in their favor which our Government agreed to pay; and, as Congressman Luther A. Johnson said to the House last year, the refusal to pay these awards would be an unwarranted repudiation by the Government which cannot be defended on any ground. Furthermore, all our citizens holding awards are in serious need of their money, many of them have been driven to the verge of bankruptcy by failure to get it, and many others have no earthly assets except their awards and are living in absolute dependence on the charity of others because of the failure of the Government to pay them. I have carefully and seriously considered all facts connected with this matter for over 10 years and am convinced that this bill is absolutely just and should be passed without further delay.

STATEMENT OF HON. OSCAR YOUNGDAHL, MEMBER OF CONGRESS FROM THE STATE OF MINNESOTA

Mr. YOUNGDAHL. Mr. Chairman, if I may have the privilege, I have another meeting at 11 o'clock, and I would like to appear at this time.

I appear here this morning in the interests of the Tabasco Plantation Co., an organization in my district who have a good many stockholders. And they are one of the 850 claimants who forfeited their claim to the Government with the setting up of the Claims Commission, but whose claims have not been adjudicated. Mr. George W. Lockwood, the secretary-treasurer of this company, is here this morning. I would like to ask the indulgence of the committee to briefly hear from him, and further ask unanimous consent to place a statement in the record which will be of some length.

Mr. BLOOM. Without objection, both of those requests will be agreed to.

Mr. YOUNGDAHL. Thank you.

May I make this statement. Through no fault of this claimant, even though they have complied with all the rules and regulations of this Commission, their claim has not been adjudicated. And it seems unfair to me that certain claims should be paid and other claims remain unpaid. And as long as this condition exists there should be some way in which there can be a further deliberation of these unpaid claims, so that all claims be treated alike.

In going over the facts that have been presented to me I understand that many of these claims were considered general claims, meaning that the United States Government would have to pay them. If they had been designated special claims, then the Mexican Government would have to pay them.

Mr. JOHNSON. Will the gentleman yield?

Mr. YOUNGDAHL. Yes.

Mr. JOHNSON. What do you understand to be the distinction between what is known as a general claim and a special claim?

Mr. BLOOM. Before you answer that question-this is off the record. (Whereupon there was a discussion off the record.)

Mr. YOUNGDAHL. I merely want to close my statement suggesting a proposed amendment to S. 326. I will hand over a copy of it. Mr. BLOOM. The Chair will take it.

(Proposed amendment referred to above is as follows:)

PROPOSED AMENDMENT TO S. 326

And provided further, That the Secretary of State is hereby directed immediately to enter into negotiations with Mexico to appoint a Commission composed of two representatives, one from each country, to sit at such places and at such times as a deliberative body to consider and dispose of all general claims heretofore unheard and undecided, and to make awards in those claims found to be valid and to otherwise dispose of all such claims now pending. The Secretary of State is hereby expressly directed to conclude an agreement with Mexico within 60 days after the passage of this act. The Secretary of Treasury is expressly directed not to pay any money out of the United States Treasury in accordance with the terms of this act until such times as all general claims have been disposed of by the Commission appointed and designated for that purpose.

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