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settle all of the claims of its citizens against each other for damages and losses sustained in either country, and for that purpose a Mixed Claims Commission was established for adjudicating the claims. The Claims Commission, not being able to dispose of all the claims within the original 3-year period allotted to it, was extended for 2 years, and later it was further extended for an additional 2 years. It was then allowed to lapse without having disposed of all the pending claims. During the 7-year period of its existence (1923–33) the Mixed Claims Commission decided claims on behalf of American citizens amounting to $2,599,166.10, and these decided claims are the greater part of the claims which the proposed bill, S. 326, covers.

At the expiration of the Mixed Claims Commission on August 30, 1933, there remained hundreds of claims of American citizens against Mexico to be adjudicated.

Consequently on April 24, 1934, a protocal was entered into with Mexico to decide as promptly as possible all the remaining claims of each government against the other, which were comprehended by and filed in pursuance of the General Claims Convention of September 8, 1923. The claims comprehended by and Aled pursuant to the terms of the Special Claims Convention of September 10, 1923, were disposed of by an ex gratis payment by Mexico to the United States of a sum of money equal to 2.6362 percent of the sum claimed by the United States in all such claims.

The claim of the Tabasco Plantation Co., it will be remembered, was a claim comprehended by and filed in pursuance to the terms of the General Claims Convention of September 8, 1923, and also comprehended by and filed in pursuance to the terms of the Special Claims Convention of Septembr 10, 1923. Since, under the protocol of April 24, 1934, the General Claims Commission and the Special Mexican Claims Commission were separate, independent, and distinct commissions, it became imperative to ascertain whether the Tabasco Co.'s claim was a "special" claim to be decided by the Special Mexican Claims Commission, or a "general" claim to be decided by the General Claims Commission. This claim and others, therefore, had to be segregated. A segregation committee composed of a representative from each of the countries decided that the claim of the Tobasco Plantation Co. was a "general” claim, and was consequently referred to the General Claims Commission for adjudication. However, the American agency charged with the duty of presenting the claims to the General Claims Commission held that the claim of the Tabasco Co. was a "special" claim. The Mexican agency charged with the duty of defending the claims before the General Claims Commission concurred with the American agency and held that the Tabasco claim was a "special" claim.

In view of the findings of the American agency and of the Mexican agency regarding the character and nature of the claim, the General Claims Commission should have, on the basis of the pleadings, ordered the Tabasco claim to be heard, adjudicated, and decided by the Special Mexican Claims Commission. However, the General Claims Commissioners failed to review the pleadings in the claims and failed to reach any decision in the case, notwithstanding that both the American agency and the Mexican agency prayed and asked that the claim be ordered to the jurisdiction of the Special Mexican Claims Commission. So certain was the Special Mexican Claims Commission that the Tabasco claim would be adjudicated to be a "special" claim by the General Claims Commissioners that the claimant's attorney was requested to submit to the Special Mexican Claims Commission a brief in support of its contentions as to the items of loss and damage, which brief the claimant's attorney did file.

Without reaching a decision in the Tabasco claim and 849 other American claims, the General Claims Commission expired. The Special Mexican Claims Commission having completed its task also expired.

As a result of the failure of the General Claims Commission to complete its task within the time allotted to it, the claim of the Tabasco Co., as well as 849 other American claims, is in a form of “suspended animation.' These claims are fully pleaded, supported by documentary proof, answered by Mexico and full of justice and equity for the claimants—but undecided.

The claim of the Tabasco Plantation Co. represents the claim of 2,600 stockholders. It represents the only assets of the corporation and its investors. It would, therefore, appear just and equitable that some provision be made in the proposed bill, S. 326, for the prompt disposition of the claims now pending before the "expired” General Mexican Claims Commission, in order that those claims which are found to be meritorious may be included among the

claims for which the payment of awards by the United States Government is contemplated in S. 326.

Twenty years or over have passed since the claimant corporation suffered and sustained its losses and damages. If the claimants are compelled to wait unitl the Department of State takes appropriate steps to negotiate another Mexican Claims Convention there may never be any payment of awards. Therefore, it would appear incumbent on the Congress of the United States to authorize and direct the Department of State to enter into negotiations immediately with the Government of Mexico for the purpose of disposing of the 850 American claims and the 220 Mexican claims remaining to be heard and decided.

The failure to adjudicate the remaining pending claims occurred through no fault of the claimants. Therefore it would appear to be unjustly discriminatory to favor one group of claimants over the other-unless some efforts are made in the pending legislation to attempt to provide appropriate means to equalize the situation in a manner satisfactory to all.



Mr. KILDAY. I am a Member of Congress from the Twentieth District, Texas, which includes the city of San Antonio. I want to be reported, Mr. Chairman, as supporting this bill. Of course, as you no doubt know, we in the city of San Antonio are very closely connected with the entire Republic of Mexico, and we have there a number of persons who are claimants under this bill.

I want to say to you that Judge 0. M. Fitzhugh, of San Antonio, is here. I want to tell you that Judge Fitzhugh is a very highly respected and honored member of the San Antonio bar, and has been there for many, many years, and he is a gentleman in whom you can have complete confidence in what he has to say. He is thoroughly familiar with the bill and with all the claims involved and has taken them through Congress, this session and the last session. So, with that, I want to be recorded in favor of the bill, and I want to solicit the very careful attention of the committee for Judge Fitzhugh.

Mr. Bloom. Thank you. Is there any other Member of Congress here who wishes to talk on this?

Mr. PARSONS. Well, I have a bill, Mr. Chairman, another bill on special claims before the committee, and I may have some amendments prepared for the Senate bill.

Mr. Bloom. Would you mind just to continue, if you have a committee to go to?


Mr. Bloom. I will ask Judge Fitzhugh to make his statement now. Judge, will you kindly be brief and specific because we have many bills we would like to take up?

Mr. FITZHUGH. All right. I will do that.

Mr. JOHNSON. Can you give us an outline of this matter as to those dates? I think that would be very helpful.

Mr. FITZHUGH. Yes; but let me identify myself first. My name is 0. M. Fitzhugh. I am an attorney from San Antonio, Tex. I represent H. G. Venable, who obtained an award from the General Claims Commission on July 7, 1927, for $140,000. Before I begin a statement of the general matter, Mr. Chairman,

' ask the privilege of putting into the record here excerpts from


speeches of Senator Warren R. Austin, of Vermont? One was made on the 18th of May 1938, in support of S. 3104.

Mr. BLOOM. Which is the same as this one? Mr. FITZHUGH. The same as this one except for a little change which Senator Sheppard called attention to. And the other speech of Senator Austin was made on the 20th of April of this year in support of S. 326.

Mr. Bloom. Which passed the Senate?
Mr. FITZHUGH. It passed the Senate on the 20th of April 1939.
Mr. BLOOM. And it was reported ?

Mr. FITZHUGH. And this bill was passed by the Senate April 20, 1939. And the other bill was passed by the Senate May 18, 1938, and later was reported favorably by this committee.

Mr. Bloom. Yes.
Mr. FITZHUGH. These are the excerpts.
Mr. BLOOM. Without objection the press clippings will be inserted.

Mr. FITZHUGH. Senator Warren Ř. Austin, of Vermont, in an address to the Senate on May 18, 1938, on bill S. 3104, pages 1938– 39 of the Congressional Record of that date, said in part:

Mr. President, reserving the right to object, let me say that I objected to this bill when it was reached on the calendar at the last call. Since that time I have made certain study of the character of the bill. I had no objection to the merits of the bill at the time I previously raised the question, but I felt a responsibility with respect to it, because it seemed to be a new undertaking by the Government of the United States, to pay the debt of another government. That is, it appeared as though the bill itself would create a liability on the part of the United States without any consideration at all for it, and without any way for the Government to indemnify itself for such an assumption of debt. For that reason I objected to the consideration of the bill.

I am persuaded, by the study I have made since then, that the bill does not create any debt. It does not make a new promise, but is a bill to carry out an old obligation entered into by a convention between Mexico and the United States, by means of which the contracting parties undertook to pay debts due from their vis-a-vis to their own nationals, and afterward offset claims on the part of each country against the other. The mechanics of doing the thing provided that the United States should pay the balance remaining after the offset or set-off on the part of Mexico for debts due by the United States to nationals of Mexico. It is upon that point that probably the first quesion would arise if this were a controverted matter.

For my part, however, I am satisfied from the terms of the treaty of September 1923, article IX, that there is this international obligation to pay all the money; that is, the obligation exists today on the part of the United States to pay the whole of the debt allowed by the Claims Commission, and the adjustment becomes purely a matter of bookkeeping.

Later in the same address Senator Austin also said:

Now, Mr. President, as to the other point, namely, what consideration is there for such a promise, the report shows—and those who have talked with me since the last call of the calendar have likewise mentioned—the disturbed situation on the Mexican border which was costing the Government of the United States large sums of money because of the necessity of defending the border by maintaining troops there, and which was also costing the Government large sums of money because of the loss of customs receipts, which, if the disturbed conditions could be alleviated, would flow into the Treasury.

Then other considerations, such as peace and human life were involved in the issue growing out of conditions which existed on the border. All these factors entered into the consideration for a mutual agreement which would compose the differences between the claimants of the two countries. I certainly regard them, theoretically, as a good consideration, and I think that what followed the clearing up of this disturbance and the recurrence of peace on the border affords ample evidence that they were a good consideration.


Mr. President, another consideration which flows from the individual claimant is that he surrendered his freedom to prosecute his claim in any legal manner which, under international law or a domestic law of either country, might be available to him and turned over to his government entire and exclusive control of his individual rights. That constituted a further element of consideration.

In view of these things I am persuaded that I ought not to object to the consideration of the bill, and I do not object to its consideration.

In addressing the Senate on bill S. 326 on May 20, 1939 (Cong. Record, pp. 1622–1624), Senator Austin, among other things, said:

Mr. President, I am interested in having the great Government of the United States deal justly. I would rather have my Government just than beneficent.

I have observed here on numerous occasions a willingness to pass over lightly, sometimes almost frivolously, legal obligations of the Government and to find great fault because finally interest has to be paid by the Government in large amounts when the Government, which ought to have paid long before, is ultimately forced in one way or another to meet its legal, just obligation.

I have no interest in the Mexican claims because they are claims of one country or another country originally, and my attention was called to this matter most accidentally. I happened to be acting as floor leader for the minority when the pending bill came up at the last session, on May 11, 1938, and I objected to its consideration because I held views respecting it similar to those of the Senator from Colorado [Mr. Adams). Those views were very superficial. They were gained only from an inspection of the bill and the report of the committee. The bill went over on my objection.

From a sense of justice to those who called on me to point out that I had caused something wrong and unjust to occur, I undertook a thorough study of the circumstances, and came to the conclusion that a legal obligation rests on the United States Government for the payment of the claims which have been passed upon and allowed by the Commission.

Mr. President, it makes no difference whether the obligation of the United States is created by an express promise or whether it is created by an implied promise. One obligation is exactly as binding as the other. It may not have effect morally, although it ought always to have effect morally; but so far as the status of my Government is concerned, as one which pays its obligations, it is, of course, an axiom that an obligation created by an implied promise is exactly as binding as one created by an express promise.

Consider the situation of these claims. The claimants had a right to pursue their own private remedy. The laws of Mexico gave such a right. The laws of the United States gave that right. International law recognized it, and the comity between nations enabled the citizens to pursue private remedies to such success as they might be able to obtain by their own efforts. This was the situation that surrounded these claims. There was trouble on the border. We were losing customs receipts. The United States Government was interested to quell those disturbances on the border and to regain the income from customs receipts. We were maintaining armed forces on the border, and that cost our Government money, and the Government of the United States therefore had a consideration in negotiating a treaty with Mexico.

More than that, there was unrest, and there was danger to the people who lived near the border, and the citizens of the United States had a vital interest involved in the treaty which ultimately was made in 1923 and which provided for the settlement of these claims on both sides of the line.

Now, consider the kind of promise, the character of promise that was contained in the treaty itself. It was a promise to take over for the citizen the business of proving his claim. In order for the citizen to get this benefit from the Federal Government, and to enable the Federal Government to have the right to compose the differences between the nationals of the two countries and the two countries themselves, there had to be something yielded on the part of the citizen. He had to give up his private power. He had to give up his human right of collecting his debts, of preserving his property, of saving that which belongs to him, and had to turn it over to his Government, and his Government had to give up something on its part, and that was immunity from liability. His Government did give that up, and said to the citizen,“We will look after your claims within 3 years. You can trust this great Government. Turn over to us all your private rights and we will enforce them for you. We will create a commission by which these debts shall be proved or disallowed.” The citizen had to give up his privilege, and the Government had to give up its immunity, and the Government thereby impliedly said to the citizen, "We will look after the establishment of your claims within 3 years."

At another point in the same address he said:
I think I will first finish what I have to say.

I started on the theo and I intend to finish on the theory, that it does not require an express promise in the treaty to create the obligation. All that I have already referred to, the circumstances of surrender of right by the citizen, the obligation to consider and decide the claims within 3 years, the obligation to pay immediately after the 30-day notice if the Government elects to pay in cash, and the failure to pay, the entire and complete injury to the complainant if the Government does not pay—all the circumstances, when considered in the light of the fact that the United States of America has had the benefits resulting from obtaining a treaty with Mexico which composed the trouble on the border, and enabled this Government to relieve itself of the cost of maintaining armed forces there and to resume the collection of customs duties, imply irresistably an obligation on the Government to pay these claims.

It is not a matter of benevolence; it is not a matter of relief. It is a matter of common honesty. If the Congress now authorizes the appropriation of the funds to pay these debts, the United States is not made a volunteer to pay the debts of another. It is but performing an obligation which is legal and binding, and is just as effective as though the Government had said, in so many words, "I promise to pay the amount on demand.”

In the same address he also said:

I have asserted time and again that we are not taking over the debts of another country; that we are dealing with the authorization of money to pay our own debt. I tried to explain how it became our debt. I say it became our debt upon full consideration being given up or forborne by the creditor. That consideration is just as good as if he had paid it in cash. He obtained the obligation of this Government to pay him by surrendering all the rights he had to collect his own debt and submitting himself to the justice of his Government. It is no longer the debt of Mexico so far as the citizen claimant is concerned. The claimant cannot now look to Mexico. The claimant looks only to the United States; and he looks to the United States because of the treaty, because of the commission which established his debt, and also because of the important consideration which the Government received, in general, through the withdrawal of armed forces, the opportunity to resume collection of customs, and all the other things.

If that situation creates a precedent, very well. It is a good precedent. I am for good precedents.

I will just say to the committee, the sum and substance of Senator Austin's speeches is an enlargement of the ideas advanced by Senator Sheppard this morning as to the obligation, the implied obligation, upon this Government to pay these awards.

Mr. JOHNSON. Mr. Chairman, may I make this observation? think Senator Austin's statement explains this bill and the reason why the Government should pay these awards in fewer words than anything else I have seen. I put it in the record the last time. I think it is a very strong and clear presentation.

Mr. FITZHUGH. In September 1923—I will make this statement to see if I can clear up the record completely with regard to the two classes of claims. In September 1923 our Government entered into two treaties with Mexico. One is dated September 8 and the other one is dated September 10, 1923. The one dated September 8, 1923, was known as the General Claims Convention, which covered and comprehended all claims of either Mexicans against the United States or Americans against Mexico, which had originated since the 4th day of July 1868, except the claims that were covered by the Special Claims Convention. The claims that were covered by the Special Claims Convention were only those that had originated between

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