the protocol on October 31, 1937. The foregoing is shown by the following tabulation:

[Source of information: History and Digest of International Arbitrations, by John Bassett Moore, vol. II (1898).]

On April 20, 1939, when the bill (S. 326) was before the Senate, Senator Adams of Colorado (Cong. Rec., p. 6322) stated that "there is no precedent in American history for such an assumption of liability" as is proposed by the bill of Senator Sheppard. It is quite clear that the Senator is in error, and that in the very case of Mexican claims, under the convention of 1839, there is a direct and positive precedent, shown as follows:

On September 11, 1838, a convention for the settlement of claims was entered into between the United States and Mexico, but because of the failure of Mexico to authorize the exchange of ratifications, within the period prescribed, the convention was not carried into effect. However, on April 11, 1839, a new convention was concluded with Mexico, creating a Mixed Claims Commission, to which two Americans and two Mexicans were to be appointed, as well as an umpire. A copy of the convention is attached, marked "Exhibit A." The act of Congress, approved June 12, 1840 (5 Stat. 383; exhibit B attached), was passed to carry the convention of 1839 into effect.

The convention of 1839 obligated Mexico to pay the awards of the Commission, as and when rendered, with the privilege of issuing treasury notes bearing interest at the rate of 8 percent from the date of the awards, in payment of which they were respectively issued. The Commission under the convention of 1839 was required to terminate its duties within 18 months from its first meeting. The first session of the Commission was held in Washington on August 25, 1840, and the Commission terminated its duties on February 25, 1842, no provision for the extension of its existence having been made. Eightyfour claims had been presented, and of these thirty had not been finally decided. The first claim considered on the merits by the Commission was on December 29, 1840.

On September 1, 1841, before the Commission had completed its duties, and while the consideration of claims was in progress Congress passed an act (5 Stat. 452; exhibit C, attached) adding to the provisions of the act of June 12, 1840, which made the convention of 1839 effective and expressly provided that the Secretary of the Treasury was authorized to issue certificates to award holders or their legal representatives and assigns as directed by section 7 of the act of June 12, 1840.

The Commission, under the convention of 1839, made total awards of $2,026,139.68, but there still remained an amount of $3,336,837.05 of unliquidated claims in cases which were submitted too late. After the termination of the Commission, the United States determined to treat as final and conclusive the decisions that had already been rendered, and entered into negotiations for the adjustment of the unfinished business of the Commission.

A new convention with Mexico was entered into on January 30, 1843 (exhibit D, attached), which definitely states that Mexico was unable to pay the awards

made by the Commission under the convention of 1839, and aticle I of the new convention provided that the Mexican Government would, on April 30, 1843, pay all interest then due on the awards, and within 5 years thereafter Mexico agreed to pay, in equal installments every 3 months, all the principal and accruing interest, making a total of 20 installments. These payments, both of interest and of principal, were to be made in gold or silver money in the city of Mexico "to such person as the United States may authorize to receive them." In 1844 Mexico ceased to pay installments under the convention of January 30, 1843. The interest to April 30, 1943, was paid, as were also the installments of principal and interest due on the 30th of July and October 1843, and on the 30th of January 1844.

Under article VI of the convention of January 30, 1843, it was provided that a new convention would be entered into between the United States and Mexico "for the settlement of all claims of the Government and citizens of the United States against the Republic of Mexico, which were not fully decided by the late Commission which met in the city of Washington, and of all claims of the Government and citizens of Mexico against the United States." The new convention was signed on November 20, 1843, but was never ratified. this unratified convention is attached as exhibit D-1.

A copy of

The Appropriation Act of Congress of August 10, 1846 (9 Stat. 94; exhibit E, attached), contained an item of $320,000 for the purpose of paying to American claimants the principal and interest of the fourth and fifth installments due in April and July 1844, under the convention of January 30, 1843, and the claimants were required to relinquish their rights to the installments to the United States, and accept in discharge of them 5 percent scrip payable in 5 years.

On July 29, 1848, Congress passed on act (9 Stat. 265, exhibit F, attached) directing the Secretary of the Treasury to pay all liquidated or adjudicated claims against Mexico under the conventions of 1839 and 1843 on the surrender by the claimants of their certificates under the act of September 1, 1841.

Therefore, it appears that the claimants had received full payment of all of the interest due on April 30, 1843, as well as the three installments of principal and interest due on July 30 and October 30, 1843, and January 30, 1844, and that Congress by the act of August 10, 1846, appropriated $320,000 for the purpose of paying the fourth and fifth installments due from Mexico, respectively, payable on April 30, 1844, and July 30, 1844, and that under the subsequent act of July 29, 1848, the claimants received from the Secretary of the Treasury the full amount of the unpaid awards upon surrender of the certificates previously issued to them. All these payments were made by the United States without first collecting the amounts due from Mexico.

The act of July 29, 1848, was in fulfillment and discharge of the obligation undertaken by the United States under article XIII of the Treaty of Guadalupe Hidalgo, signed on February 2, 1848, which provided:

"The United States engage, moreover, to assume and pay to the claimants all the amounts now due them, and those hereafter to become due, by reason of the claims already liquidated and decided against the Mexican Republic under the conventions between the two Republics severally concluded on the 11th day of April 1839 and on the 30th day of January 1843, so that the Mexican Republic shall be absolutely exempt for the future from all expense whatever on account of the said claims."

The amount appropriated by the act of July 29, 1848, was $1,519,604.73, being the balance of the principal of the awards under the conventions of 1839 and 1843, respectively, the total of such awards being $2,026,139.68, as heretofore stated; and, in addition to the unpaid principal, the act provided for the payment of interest in full thereon, and that all interest should cease from the day of payment or not exceeding 90 days after the passage of the act. Under the Treaty of Guadalupe Hidalgo the United States agreed not only to pay the adjudicated claims under the conventions of 1839 and 1843 but also, under articles XIV and XV of the treaty, it agreed to discharge the Mexican Republic from all claims of citizens of the United States not heretofore decided against the Mexican Government and to make satisfaction for same to an amount not exceeding $3,250,000. This latter sum was intended to take care of the unliquidated claims in cases submitted too late to be considered by the Mixed Claims Commission established under the convention of April 11, 1839, which claims at the time the Commission completed its work had a face value of $3,336,857.05.

The act of Congress of March 3, 1849 (9 Stat. 393; exhibit G, attached), carried into effect the stipulations of articles XIV and XV of the Treaty of Guadalupe Hidalgo, and the new American commission of three members made awards totaling $3,208,314.68 and finished its duties on April 15, 1851. Apparently all claims were paid in full. The convention of July 4, 1868, between the United States and Mexico covered claims arising since the date of the Treaty of Guadalupe Hidalgo in 1848.

1839 CONVENTION-PRESIDENT'S MESSAGE

In his second annual message to Congress, on December 8, 1846, President Polk, in reviewing the events of the Mexican War which then existed, made the following statements respecting claims of American citizens against Mexico, referring to the convention of 1839 and the wards made by the commission thereunder :

"Instead of taking redress into our own hands, a new negotiation was entered upon with fair promises on the part of Mexico, but with the real purpose, as the event has proved, of indefinitely postponing the reparation which we demanded, and which was so justly due. This negotiation, after more than a year's delay, resulted in the convention of the 11th of April, 1839, 'for the adjustment of claims of citizens of the United States of America upon the Government of the Mexican Republic.' The joint board of commissioners created by this convention to examine and decide upon these claims was not organized until the month of August 1840, and under the terms of the convention they were to terminate their duties within 18 months from that time. Four of the 18 months were consumed in preliminary discussions on frivolous and dilatory points raised by the Mexican commissioners, and it was not until the month of December 1840, that they commenced the examination of the claims of our citizens upon Mexico. Fourteen months only remained to examine and decide upon these numerous and complicated cases. In the month of February 1842, the term of the commission expired, leaving many claims undisposed of for want of time. The claims which were allowed by the board and by the umpire authorized by the convention to decide in case of disagreement between the Mexican and American commissioners amounted to $2,026,139.68. There were pending before the umpire when the commission expired additional claims, which had been examined and awarded by the American commissioners and had not been allowed by the Mexican commissioners, amounting to $928,627.88, upon which he did not decide, alleging that his authority had ceased with the termination of the joint commission. Besides these claims, there were others of American citizens amounting to $3,336,837.05, which had been submitted to the board, and upon which they had not time to decide before their final adjournment.

"The sum of $2,026,139.68, which had been awarded to claimants, was a liquidated and ascertained debt due by Mexico, about which there could be no dispute, and which she was bound to pay according to the terms of the convention. Soon after the final awards for this amount had been made the Mexican Government asked for a postponement of the time of making payment, alleging that it would be inconvenient to make the payment at the time stipulated. In the spirit of forbearing kindness toward a sister republic, which Mexico has so long abused, the United States promptly complied with her request. A second convention was accordingly concluded between the two Governments on the 30th of January 1843, which upon its face declares that 'this new arrangement is entered into for the accommodation of Mexico.' By the terms of this convention all the interest due on the awards which had been made in favor of the claimants under the convention of the 11th of April 1839, was to be paid to them on the 30th of April 1843, and 'the principal of the said awards and the interest accruing thereon' was stipulated to 'be paid in 5 years, in equal installments every 3 months.' Notwithstanding this new convention was entered into at the request of Mexico and for the purpose of relieving her from embarrassment, the claimants have only received the interest due on the 30th of April 1843, and 3 of the 20 installments. Although the payment of the sum thus liquidated and confessedly due by Mexico to our citizens as indemnity for acknowledged acts of outrage and wrong was secured by treaty, the obligations of which are ever held sacred by all just nations, yet

Mexico has violated this solemn engagement by failing and refusing to make the payment. The two installments due in April and July 1844, under the peculiar circumstances connected with them, have been assumed by the United States and discharged to the claimants, but they are still due by Mexico. But this is not all of which we have just cause of complaint. To provide a remedy for the claimants whose cases were not decided by the joint commission under the convention of April 11, 1839, it was expressly stipulated by the sixth article of the convention of the 30th of January 1943, that—

"A new convention shall be entered into for the settlement of all claims of the Government and citizens of the United States against the Republic of Mexico which were not finally decided by the late commission which met in the city of Washington, and of all claims of the Government and citizens of Mexico against the United States.'

"In conformity with this stipulation, a third convention was concluded and signed at the city of Mexico on the 20th of November 1843, by the plenipotentiaries of the two Governments, by which provision was made for ascertaining and paying these claims. In January 1844, this convention was ratified by the Senate of the United States with two amendments, which were manifestly reasonable in their character. Upon a reference of the amendments proposed to the Government of Mexico, the same evasions, difficulties, and delays were interposed which have so long marked the policy of that Government toward the United States. It has not even yet decided whether it would or would not accede to them, although the subject has been repeatedly pressed upon its consideration. Mexico has thus violated a second time the faith of treaties by failing or refusing to carry into effect the sixth article of the convention of January 1843."

Again, on July 6, 1848, after the termination of the Mexican War and the sigining of the Treaty of Guadalupe Hidalgo, President Polk in submitting copies of the treaty to Congress, in a special message, in part said:

"In addition to the amount of the debt, the treaty stipulates that $12,000,000 shall be paid to Mexico, in four equal annual installments of $3,000,000 each, the first of which shall fall due on the 30th day of May 1819. The treaty also stipulates that the United States shall assume and pay' to our own citizens 'the claims already liquidated and decided against the Mexican Republic,' and 'all claims not heretofore decided against the Mexican Government,' 'to an amount not exceeding three and a quarter millions of dollars.' The 'liquidated' claims of citizens of the United States against Mexico, as decided by the joint board of commissioners under the convention between the United States and Mexico of the 11th of April 1839, amounted to $2,026,139.68. This sum was payable in 20 equal annual installments. Three of them have been paid to the claimants by the Mexican Government and two by the United States, leaving to be paid of the principal of the liquidated amount assumed by the United States the sum of $1,519,604.76, together with interest thereon. These several amounts of 'liquidated' and unliquidated claims assumed by the United States, it is believed, may be paid as they fall due out of the accruing revenue, without the issue of stock or the creation of any additional public debt." DELAY IN PAYMENTS UNDER 1839 CONVENTION

In his book on International Arbitrations, volume 2, page 1244, John Bassett Moore comments on the delay in paying the awards under the 1839 convention, as follows:

"After the termination of the commission, attorneys for claimants whose demands had been rejected asked that the convention and all the proceedings under it be declared null and void, while the attorneys for the more fortunate claimants as strongly objected to such a course. The Government of the United States determined to treat as final and conclusive the decisions that had already been rendered and to enter into negotiations for the adjustment of the unfinished business. These negotiations were complicated by two causes-the Texan question and the poverty of the Mexican treasury. The former served to render all intercourse between the two governments difficult and precarious; the latterthe lack of money-rendered the Mexican Government unable to discharge its pecuniary obligations either to the United States or to other powers. This circumstance made it necessary to enter into another convention for the purpose of providing for the payment of the awards under the convention of 1839. Such a convention was concluded at the city of Mexico, January 30, 1843, by Mr. Waddy

Thompson on the part of the United States and Messrs. Bocanegra and Gorostiza on the part of Mexico. By this convention it was agreed that the Mexican Government should on the 30th of the ensuing April pay all interest then due on the awards, and within 5 years from that day, in equal installments every 3 months, all the principal and accruing interest. These payments, both of interest and of principal, were to be made in gold or in silver money, in the City of Mexico, 'to such person as the United States may authorize to receive them'; and for the fulfillment of this obligation the Mexican Government pledged the direct taxes of the Republic, but without restricting the United States to that fund. To each payment the Mexican Government agreed to add 21⁄2 percent for freight and other charges."

MODE OF PAYING AWARDS

Senator Adams set forth in parallel columns the provisions of the conventions covering the General and Special Claims Commission in respect of the payment of the awards, and also included a similar provision from the 1868 convention. John Bassett Moore, in volume 2, page 1315, of his digest on International Arbitrations, published in 1898, has the following comment to make regarding the mode of payment provided in the 1868 convention:

"Touching the manner in which the awards should be paid, the convention provided that when the decisions of the commissioners and the umpire should have been rendered in every case laid before them, 'the total amount awarded in all the cases decided in favor of the citizens of the party' should be deducted from the total amount awarded to the citizens of the other party'; that 'the balance, to the amount of $300,000,' should be paid 'at the city of Mexico or at the city of Washington, in gold or its equivalent, within 12 months from the close of the commission, to the Government in favor of whose citizens the greater amount may have been awarded, without interest or any other deduction' than that for the expenses of the commission; and that 'the residue of the said balance' should be paid in annual installments to an amount not exceeding $300,000, in gold or its equivalent, in any one year, until the whole shall have been paid.' "This mode of payment, while at first blush apparently a simple one, was in reality clumsy and complicated. Without affecting in the slightest degree the pecuniary liability of either government to the cther, it required each a pay a certain sum to its citizens from its own treasury, while it obligated the government in whose favor the larger amount was awarded to divide each award, and from time to time, as the installments fell due, pay part from its own funds and the rest from the moneys received from the other government. But in the case of the present commission the payment of the awards was further complicated by the fact that they were made in different moneys. As the convention provided that the decision should in each case designate whether the sum allowed should be 'payable in gold or in the currency of the United States,' some of the awards were made in United States currency, others in gold coin of the United States, and others yet in Mexican gold; and in several awards in favor of citizens of the United States certain items were allowed in United States gold and others in United States currency."

EFFECT OF WAIVING INTEREST

Total of awards, including interest up to date of award, if so provided for.. $3,056, 357, 72 Less Illinois Central claim, including interest to date of award 1, 955, 978. 19

Balance principal of awards, including interest_----

1, 100, 379. 53

The total amount of interest which is waived under Senator Sheppard's bill, if interest was paid from the date of each award to October 31, 1937, when the Commission entered its last award, is the sum of $1,093,159.60. Therefore, under the pending bill the Government is required, excluding the Illinois Central claim, to pay out of the Treasury as an advance, the sum of $1,100,379.53, and in consideration of this advance, and the assignment of the claims in full to the United States, the Treasury will have an additional claim against Mexico for interest to October 31, 1937, amounting to $1,093,159.60.

In other words, by having the claimants accept $1,100,379.53 the United States stands a chance of reaping a profit of $1,093,159.60 additional interest, of which latter sum $963,064.17 is attributable to interest waived on the Illinois Central claim.