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Confiscatory Expropriation

Published online by Cambridge University Press:  12 April 2017

Charles Cheney Hyde
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Type
Editorial Comment
Information
American Journal of International Law , Volume 32 , Issue 4 , October 1938 , pp. 759 - 766
Copyright
Copyright © by the American Society of International Law 1938

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References

1 The views of the two Governments are set forth in communications of Mr. Hull, Secy, of State, to the Mexican Ambassador at Washington, July 21, 1938, Dept. of State, Press Release, No. 354, July 21, 1938; Mr. Hay, Mexican Minister of Foreign Relations, to the American Ambassador at Mexico City, Aug. 3, 1938, translation given to American press, Aug. 4, 1938; Mr. Hull, Secy, of State, to the Mexican Ambassador at Washington, Aug. 22, 1938, Dept. of State, Press Release, Aug. 25, 1938; Mr. Hay, Mexican Minister of Foreign Relations to the American Ambassador at Mexico City, Sept. 2, 1938, id., No. 413, Sept. 3, 1938. These notes are printed in the Supplement to this Journal, p. 181.

Concerning the expropriation and seizure by the Mexican Government of oil properties belonging to American citizens, which is not here discussed, see Frederic R. Coudert, “The Mexican Situation and Protection of American Property Abroad under International Law,” address before American Bar Association at Cleveland, July, 1938.

2 Secy. Hull’s note of Aug. 22,1938.

3 Mr. Hay’s note of Aug. 3, 1938. In the same note it is added: “There does not exist, in international law, any principle universally accepted by countries, nor by the writers of treatises on this subject, that would render obligatory the giving of adequate compensation for expropriations of a general and impersonal character.” It may be suggested in this connection that the existence of a principle of international law is not necessarily dependent upon universality of acceptance. The dissent of a few states from what the great body of states acknowledges to be the law cannot modify its character as such, still less destroy its value in testing the propriety of state conduct.

4 Id.

5 Mr. Hay’s note of Aug. 3, 1938.

6 See the views of Chief Justice Marshall in discussing the reasons for the immunity of a foreign public ship from the jurisdiction of the United States, in the Schooner Exchange v. McFaddon, 7 Cranch 116, 144, and 146.

7 Nor does such action gain support from the latitude as to terms of compensation which a belligerent may be expected to claim when as a matter of military necessity, as on grounds of self-defense, it proceeds to expropriate alien property situated within a war zone.

8 He added: “If such a policy were to be generally followed, what citizen of one republic making his living in any of the other twenty republics of the Western Hemisphere could have any assurance from one day to the next that he and his family would not be evicted from their home and bereft of all means of livelihood? Under such conditions, what guarantees of security could be offered which would induce the nationals of one country to invest savings in another country, or even to do ordinary business with the nationals of another country?”

9 Statement of Mr. Hay, Aug. 3, 1938.

10 Declared Mr. Root, April 28, 1910: “The rule of obligation is perfectly distinct and settled. Each country is bound to give to the nationals of another in its territory the benefit of the same laws, the same administration, the same protection, and the same redress for injury which it gives to its own citizens, and neither more nor less; provided the protection which the country gives to its own citizens conforms to the established international standard.

“There is a standard of justice very simple, very fundamental, and of such general acceptance by all civilized countries as to form a part of the international law of the world. The condition upon which any country is entitled to measure the justice due from it to an alien by the justice which it accords to its own citizens is that its system of law and administration shall conform to this general standard. If any country’s system of law and administration does not conform to that standard, although the people of the country may be content and compelled to live under it, no other country can be compelled to accept it as furnishing a satisfactory measure of treatment to its citizens.” (Proceedings, Am. Soc. Int. Law, 1910, pp. 16, 20–21.)

11 Note of Aug. 22, 1938. He said in this connection : “It is contended, in a word, that it is wholly justifiable to deprive an individual of his rights if all other persons are equally deprived, and if no victim is allowed to escape. In the instant case it is contended that confiscation is so justified. The proposition scarcely requires answer…. The statement in your Government’s note to the effect that foreigners who voluntarily move to a country not their own, assume, along with the advantages which they seek to enjoy, the risks to which they may be exposed and are not entitled to better treatment than nationals of the country, presupposes the maintenance of law and order consistent with principles of international law; that is to say, when aliens are admitted into a country the country is obligated to accord them that degree of protection of life and property consistent with the standards of justice recognized by the law of nations.”

12 Declared Mr. Hay: “Mexico has maintained that the so-called rights of man, among others, the right to property, with its modalities, are not principles of international law, but that their validity is derived from municipal law. The fact is not disregarded that the contrary opinion upheld by your Government has defenders, but it must be admitted that the point of view of Mexico, far from constituting an unusual theory, lacking substance and without a juridical basis, has in its turn the most solid supports.”

13 Declared Secy. Hull in his note of July 21, in reference to the Mexican program: “We cannot question the right of a foreign government to treat its own nationals in this fashion if it so desires. This is a matter of domestic concern. But we cannot admit that a foreign government may take the property of American nationals in disregard of the rule of compensation under international law.”

14 The primary question for adjudication thus appeared to call for a decision concerning what the rule of international law might be.

15 Note of Mr. Hay, of Aug. 3, 1938.

16 According to the first paragraph of Art. I of the Treaty of Washington: “The High Contracting Parties bind themselves to submit to arbitration all differences of an international character which have arisen or may arise between them by virtue of a claim of right made by one against the other under treaty or otherwise, which it has not been possible to adjust by diplomacy and which are juridical in their nature by reason of being susceptible of decision by the application of the principles of law.”

17 The proposal was set forth in the Mexican note of Aug. 3, 1938.

18 Note of Aug. 22, 1938. He asked, in this connection: “In tendering the proposal so made, is the Government of Mexico prepared to agree that no further taking will take place Without payment? Can it hold out any reasonable measures of certainty that a determination of the value of the properties affected and of the manner of payment for them can be had within a brief period of time? Pending the reaching of an agreement between the commissioners on all of these points, will the Government of Mexico set aside sufficient cash in order to assure prompt payment in accordance with the terms of an agreement so reached? Is the Government of Mexico prepared to offer satisfactory commitments on these two points?”

19 He said: “It was then suggested that the amount of compensation, together with any subsidiary questions such as the extent of the area expropriated, be determined by agreement by two commissioners, one appointed by the Government of Mexico, the other by the Government of the United States, and that, in the event of disagreement between the two commissioners regarding the amount of compensation due in any case, or of any other question necessary for a determination of value, these questions be decided by a sole arbitrator selected by the Permanent Commission at Washington provided for by the so-called Gondra Treaty, signed at Santiago, May 3, 1923, to which both our Governments are parties.

“It was likewise suggested that in order to advance a settlement of the matter the Governments of Mexico and the United States name immediately their respective commissioners and request the Permanent Commission to name concurrently the sole arbitrator.

“This Government further proposed that as an indispensable part of the act of expropriation and compensation, the Government of Mexico should set aside monthly in escrow in some agreed upon depository a definite amount for the exclusive purpose of making compensation for expropriated property as and when definite determinations of value have been arrived at in each case; and that should the determination of compensation show a reduction from the amounts now claimed the monthly deposits would be scaled down accordingly.”