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CLAIMS AGAINST MEXICO 
 
 A BRIEF STUDY OF THE INTERNATIONAL LAW 
 APPLICABLE TO CLAIMS OF CITIZENS OF THE 
 UNITED STATES AND OTHER COUNTRIES FOR 
 LOSSES SUSTAINED IN MEXICO DURING THE 
 REVOLUTIONS OF THE LAST DECADE. 
 
 BY ^ 
 
 RAOUL E.^^ESVERN.INE 
 of the New York Bar 
 
 With a Foreword 
 
 BY 
 LiXDLEY M. GaRRISON 
 
 Revi?ed Second Edition 
 1922 
 
Copyright 1921 
 
 by 
 
 RAOUL E. DESVEBNINE 
 
 Copyright 1922 
 
 by 
 
 RAOUL E. DESVEBNINE 
 
o> 
 
 IS 
 CQ 
 
 C/9 
 
 To 
 
 My Respected Uncle, 
 
 DR. PABLO DESVERNINE, 
 
 Some-time Minister to the United States and recently 
 Secretary of State of the Republic of Cuba. 
 
ancro ft Library 
 
 TABLE OF CONTENTS. 
 
 PAGE 
 
 Foreword i 
 
 Preface — 3 
 
 Chapter I. — Responsibility 7 
 
 A. — In General. The Modern Trend Toward Responsi- 
 bility - 7 
 
 B. — The Attempt of Latin-American States to Avoid Re- 
 sponsibility by Municipal or Constitutional Regu- 
 lation - - -. — 17 
 
 C. — De Jure, de Facto and Local de Facto Governments. 
 Brief Review of Mexican History, Beginning with 
 the Overthrow of Diaz. A Discussion of the Nature 
 of the Successive Governments and Revolutionary 
 Bodies and of the Liability of the Present Govern- 
 ment for the Acts of Each — 20 
 
 Chapter IL — Diplomatic Interposition 27 
 
 A. — Denial of Justice as a Ground for Diplomatic Inter- 
 position 27 
 
 B. — Conditions Prerequisite to Diplomatic Interposition 28 
 
 1. Nature of the Claim and Status of the Claimant 
 
 as AflFecting the Right to Interposition 28 
 
 2. When Local Remedies Must First be Exhausted 30 
 
 Chapter III. — The Presentation and Adjudication of 
 
 International Clai ms 37 
 
 Chapter IV. — Particular Classes of Claims. The Rules 
 OF International Law Applicable to 
 
 Each 49 
 
 A. — Land, Petroleum and Mineral Claims. Effect of 
 
 Article 27 of the Mexican Constitution of 191 7 49 
 
 B. — Contract Qaims 7 1 
 
 I. Contracts Between Individuals 71 
 
'1 TABLE OF CONTENTS. 
 
 PAGE 
 
 2. Contracts with the Mexican Government. — Con- 
 
 cessions 71 
 
 3. Bonds of the Mexican Government or Bonds 
 
 Guaranteed by It 74 
 
 C. — Acts of Authorities 'jy 
 
 D. — Sanitary Measures 82 
 
 E. — Acts of Soldiers 83 
 
 F. — Arrest or Imprisonment 85 
 
 G. — Claims Based on Revolutions and Insurrections 87 
 
 1 . In General 87 
 
 2. Martial Law « 93 
 
 3. Compensation for Property Taken or Destroyed 
 
 for Belligerent Purposes 94 
 
 4. Claims Resulting from Seizures of the Revolu- 
 
 tionist's Resources 98 
 
 5. Revolutionary Finance. Forced Loans, Mone- 
 
 tary Decrees, Bank Liquidations and Revolu- 
 tionary Finance in General 98 
 
 6. Damages from Wanton and Unlawful Acts 105 
 
 7. Railroad Claims 107 
 
 8. Federal Liability for the Acts of Insurgents and 
 
 Revolutionaries 109 
 
 H. — Acts of Private Persons 115 
 
 1. In General 115 
 
 2. Acts of Individuals „ 118 
 
 3. Mob Violence 120 
 
 4. B rigandage 1 22 
 
 Chapter V. — Obstacles and Defenses to Presentation of 
 
 Claims 1 29 
 
 A. — Expatriation _ 130 
 
 B . — Renunciation 131 
 
 1. Contractual Renunciation 131 
 
 2. Implied Renunciation 131 
 
 C. — Censurable Conduct 1 32 
 
 1 . In General 1 32 
 
 2. Concealment and Denial of Citizenship 132 
 
TABLE OF CONTENTS. Ill 
 
 PAGE 
 
 3. Fraudulent or Exorbitant Claims „ 133 
 
 4. Malice and Negligence 134 
 
 5. Evasion of National Duties, and Particularly 
 
 Military Service — — 135 
 
 6. Breach of the Local Law _ 135 
 
 7. Breach of International Law 136 
 
 8. Breach of National Law „ 136 
 
 9. Trading with the Enemy or Prohibited and Un- 
 
 lawful Trading 136 
 
 10. The Effect of Declarations of President Taft 
 
 and President Wilson on the Liability of the 
 Mexican Government 137 
 
 11. Unneutral Conduct or Unfriendly Acts 141 
 
 (a) Unlawful Ebcpeditions 141 
 
 (b) Unneutral Military or Other Acts of 
 
 Service to Foreign Countries or Bel- 
 ligerents ~ 141 
 
 (c) Acts in "Aid and Comfort" 143 
 
 12. Acts Against Public Policy _ 144 
 
 Chapter VL — The Measure of Damages 145 
 
 Conclusion ™ - 14^ 
 
FOREWORD. 
 
 Whatever views may be entertained as to the advisability 
 of the United States entering into what have been termed 
 "entangling alliances" with other nations, the desirability of 
 closer commercial relations between all nations and between 
 the nationals of the nations can hardly be doubted. We, in 
 the United States, have shown a national reluctance toward 
 learning International Law, but closer commercial relations 
 will inevitably require from us a greater knowledge of this 
 subject than has heretofore been necessary. Among other 
 things we must become familiar with the rules which obtain 
 where nationals of one government have claims against 
 another. To this end the careful study and the concise state- 
 ment^ of certain principles of international law made by the 
 author of this work will be fcund to be of great use. While 
 this work by its title, specifically covers only claims against 
 one particular government, that of Mexico, the underlying 
 principles discussed are universal in their application. It is 
 nmch to be regretted that the inclination of our citizens to 
 confine themselves too much to their own interests and to 
 those of their country has led them to neglect the acquisi- 
 tion of knowledge concerning other countries and of those 
 broad principles of law which underlie international dealings. 
 The size of our country and its rapid development have 
 tended to make us too self-centered. The self-interest, how- 
 ever, involved in acquiring and creating foreign trade is 
 rapidly causing a change, and treatises such as this one are 
 of great value in helping this change to come about. This 
 volume, in addition to its general value, has, it seems to me, 
 a great and unique usefulness in the specific field it assumes 
 to cover. Mexico seems to be attaining her equilibrium at 
 last and it is hoped that she will soon resume her normal posi- 
 tion in the family of nations. It will be necessary for Mexico 
 in order to regain her normal position in the world to meet 
 fully all her obligations, more especially those toward any 
 
who have legitimate claims against her. This book presents 
 the fundamental rules and considerations which govern the 
 subject of claims, and points out the proper course to be 
 pursued in the presentation and prosecution of such claims 
 with the hope that an orderly procedure will ensue and that 
 the claims will be adjudicated fairly and equitably. The 
 arrangement seems to me to be excellent, and the treatment 
 of the subject-matter as comprehensive as possible in a 
 volume of such small compass, and its usefulness unlimited 
 within its field. I feel a certain degree of pride that one of 
 my partners has made this unique and valuable contribution 
 to an important subject. 
 
 LINDLEY M. GARRISON. 
 New York City, 
 
 May 20, 1921. 
 
PREFACE. 
 
 The misunderstanding between Mexico and other nations 
 in the matter of claims for losses sustained during the Mex- 
 ican revolutions since 1910 has been intensified by the failure 
 of many statesmen, politicians and publicists, particularly in 
 Mexico and the United States, to reach conclusions in accord- 
 ance with well-settled principles of international law and 
 sound diplomatic practice. When occasion has arisen for a 
 determination of policy, tragedy has several times threatened 
 because eloquence displaced clear thinking and judicial 
 deliberation. 
 
 Many estimates of the damages sustained by aliens in 
 Mexico have been made, but these estimates at best are but 
 guesses. Strange though it may seem, there has heretofore 
 been no attempt to collect the principles of international law 
 applicable particularly to the Mexican situation, and to view 
 the issue of responsibility and liability, and to measure the 
 recoverable quantum of damage, with such a codification as 
 a foundation. 
 
 In the preparation of this volume there has been little 
 occasion for originality. Practically the entire subject is 
 governed and controlled by diplomatic precedents readily 
 available to the student and discussed in the works of author- 
 ities. This treatise is not, therefore, a composition, but a 
 compilation. Selection has been made, wherever possible, of 
 international precedents covering controversies to which 
 Mexico has been a party, and because of the peculiar position 
 of the United States under the Monroe Doctrine, particularly 
 of precedents between the United States and Mexico ; further- 
 more, it has not been possible within a volume of this size to 
 exhaust the subject or even to indicate the law applicable 
 to every possible type of claim. The intention has been to 
 include only the major classes of claims. 
 
 Whenever possible, only well-settled principles of mter- 
 national law have been stated. When, on any question, there 
 
has been room for a fair diversity of opinion, an effort has 
 been made to express both sides with equal force unless a 
 conclusion seemed necessary by a distinct overbalancing of 
 the logic of one viev^ or of the precedents supporting it. 
 
 It is universally recognized that Mexico cannot come to 
 the fullest development of her wonderful resources and to her 
 highest evolution as a State, except through the aid of foreign 
 capital and enterprise. This aid will surely be available only 
 upon a renewal of normal relations with the rest of the world. 
 Only when other nations are satisfied that their citizens, 
 holding claims against Mexico, are in a fair way to be 
 accorded justice, will the resumption of normal relations and 
 the consequent development of Mexico begin. It is believed 
 that even so moderate an effort as the present one, to codify 
 or indicate the principles of international law applicable to 
 the claims situation, will help materially to hasten the day 
 when Mexico will come to an understanding with her sister 
 nations and agree upon a basis for an adjudication of the 
 claims. 
 
 It is with a sincere belief in the possibilities of Mexican 
 development, a development unquestionably dependent upon 
 a resumption of normal relations with her sister states, that 
 this volume is offered. 
 
 This book was rendered possible by the collaboration of 
 Mr. Rene A. Wormser, with whom I share credit for any merit 
 which it may deserve. 
 
 RAOUL E. DESVERNINE. 
 
 24 Broad Street, New York City. 
 May 1 8th. 192 1. 
 
CLAIMS AGAINST MEXICO. 
 
CHAPTER I. 
 
 RESPONSIBILITY. 
 A. 
 
 IN GENERAL. THE MODERN TREND TOWARD 
 RESPONSIBILITY. 
 
 The natural evolution of international law has been accom- 
 panied by a gradual extension of the protection accorded citi- 
 zens abroad and a corresponding extension of the principle that 
 the State is responsible for the maltreatment of aliens within 
 its borders. Before the beginnings of closer international rela- 
 tions, the State was law unto itself and aliens within its confines 
 were in a position inferior to nationals, being at first even treated 
 as outlaws.^ Gradually the status of aliens improved until, at the 
 present time, an alien, under well recognized principles of inter- 
 national law, is entitled, at the very least, to the treatment ac- 
 corded nationals. 
 
 The exponents of the theory, that it is an assault upon the 
 sovereignty of the State to hold it internationally accountable for 
 the treatment accorded aliens within its borders, and that such 
 matters should be left entirely to the discretion of the sovereign 
 power, are now distinctly in the minority .^ The generally accepted 
 theory of international responsibility holds that there are certain 
 fundamental rights of the individual alien which must be respected 
 by all states. 
 
 "States are legal persons and the direct subjects of international 
 law. They are admitted into the international community on con- 
 dition that they possess certain essential characteristics, such as a 
 defined territory, independence, etc. In addition, they must mani- 
 
 1 A very clear story of the development of the protection of aliens may be 
 found in Borchard's "Diplomatic Protection of Citizens Abroad," particularly 
 In Section 17. 
 
 2 Mr. Julius Goebel, Jr.. in an article "International Responsibility of 
 States" in VI 11 American Journal Int. Law. p, 802, traces the development of 
 the modern theory of responsibility, and presents many evidences of its 
 general acceptance. 
 
lO 
 
 emment is subject to the rules of the fundamental and universal 
 law which is supreme over both international and national law, 
 and is pervasive throughout the whole society of peoples and 
 nations regardless of national limits. Though the American 
 people have in fact secured the fundamental rights of the indi- 
 vidual by our own national law, through constitutional prohibi- 
 tions, we do not regard these fundamental rights as created 
 either by our own national law or by international law, but by 
 a law universally pervasive and supreme over both, which we 
 'recognize/ and which we consider that we must recognize on 
 penalty of reversion to barbarism. One may adopt the religious 
 hypothesis and call this supreme universal law the law of God, or 
 the philosophical hypothesis and call it the law of nature, or the 
 juridicial hypothesis and call it the law of human society. Perhaps 
 the simplest way out of the difficulty of determining the source 
 of this law is to regard it as a law made by human society as an 
 organized unitary community, and to call it 'the fundamental law,' 
 understanding by this that law which is supreme over all other 
 human law, whether international, national or municipal, and 
 which deals directly with the rights of the individual man as a 
 human being as against all human society. As Bonfils and 
 Fauchille say, slavery is abolished everywhere because society 
 in general feels that it is in violation of fundamental rights of 
 the individual merely as a human being regardless of the citizen- 
 ship, and hence destructive of all human society. That there 
 are rights of the individual which he has merely as a human being 
 and which follow him throughout the world, is proved by the 
 fact that each enlightened human being, if he searches his own 
 conscience, finds himself compelled so to believe. The existence 
 of this law cannot be proved by ordinary methods of proof. It 
 must be accepted as an axiomatic and self-evident truth." 
 
 It must be said, however, that the student of international 
 law is often forced to the conclusion that the fundamental rights, 
 so much discussed by jurists, are neither as easily enumerated 
 nor as clearly defined, in many instances, as most of these writers 
 would have one believe. What is more unfortunate in the view 
 of those who seek clarification of international jurisprudence, is 
 the fact that the so-called international rights represent generally 
 
IT 
 
 the rights insisted upon, for its citizens, by a stronger government 
 a^^ainst a weaker. After all, these international rights vary with 
 the changing conceptions of national government, and of the re- 
 lation of the individual to the group, entertained by the society 
 of the more conservative nations. The world does seem to be 
 drifting steadily toward an increase in the control permitted to 
 exist by society over its individuals ; and with this drift there must 
 eventually come a change in the degree to which a nation will be 
 held internationally accountable because of the control which it 
 exercises over its inhabitants. Fundamental international rights 
 there are, but they change and evolve in a gradual way, so that, 
 at a given time, the quantum of these rights, as a practical matter, 
 represents the commonly accepted ideas of the family of strong 
 nations on the subject — these nations impressing their mutual will 
 upon the rest of the world. 
 
 In recent years, the United States has developed a greater 
 realization of the necessity of international responsibility to the 
 rapid development of amity between nations. The Great War, 
 and the peculiar position taken by the United States in it, raised 
 this nation to a high plane of moral leadership in world affairs. 
 On the other hand, the Mexican revolutions since 1910 have 
 drawn Mexico away from world events ; and, forcing the nation's 
 attention almost exclusively to domestic affairs, have induced 
 an unbalanced and unnatural increase in the nationalistic spirit 
 of the government and people. We encounter, then, a difference 
 of philosophies — the United States with a nationalism intense 
 enough, but modulated by its recent participation in world events 
 to a greater appreciation of internationalism, and Mexico with 
 its nationalism intensified to a point where, in its aggravated state, 
 nationalism has almost eclipsed internationalism. 
 
 The rule that the fundamental rights of the individual must 
 be respected, is accompanied by the rule that a State will gen- 
 erally be held responsible only for the measure of protection of 
 the rights of foreigners which it is able to exercise in view of 
 the circumstances and its condition. It is almost solely in the 
 interpretation and application of these rules that authorities differ 
 and diplomatic departments of governments come to issue. 
 
 The Supreme Court of the United States in the case of Logan 
 
12 
 
 V. The United States^ held that there are certain fundamental 
 rights, recognized and declared but not granted or created by the 
 Constitution, and thereby guaranteed against violation or infringe- 
 ment by the United States, or by the States, as the case may be, 
 and some observe that these "fundamental rights" are not limitable 
 by municipal regulation. 
 
 In the case of Kepner v. United States^, the Supreme Court of 
 the United States gave its approval to a collation of the provisions 
 of the Constitution of the United States made in the instructions 
 of the President to the Commission for taking over the civil gov- 
 ernment of the Philippines from the Military Authorities, dated 
 April 7, 1900. The instructions read''' : "There are certain great 
 principles of government which have been made the basis of our 
 governmental system, which we deem essential to the rule of law 
 and the maintenance of individual freedom, and of which they 
 have, unfortunately, been denied the experience possessed by us ; 
 that there are also certain practical rules of government which 
 we have found to be essential tO' the preservation of these great 
 principles of liberty and law, and that these principles and these 
 rules of government must be established and maintained in their 
 islands for the sake of their liberty and happiness, however much 
 they may conflict with the customs or laws of procedure with 
 which they are familiar." 
 
 The collation is as follows : 
 
 "That no person shall be deprived of life, liberty or property 
 without due process of law ; that private property shall not be 
 taken for public use without just compensation ; that in all criminal 
 prosecutions the accused shall enjoy the right to a speedy and 
 public trial, to be informed of the nature and cause of the accusa- 
 tion, to be confronted with the witnesses against him, to have 
 compulsory process for obtaining witnesses in his favor, and to 
 have the assistance of counsel for his defence ; that excessive bail 
 shall not be required, nor excessive fines imposed, nor cruel and 
 unusual punishment inflicted ; that no person shall be put twice 
 in jeopardy for the same offence or be compelled in any criminal 
 
 5 144 U. S. 263, 293. 
 
 6 195 U. S. 100, 123. 
 
 7 Opinion of Justice Day, p. 122. 
 
13 
 
 case to be a witness against himself ; that the right to be secure 
 against unreasonable searches and seizures shall not be violated; 
 that neither slavery nor involuntary servitude shall exist except 
 as a punishment for crime ; but no bill of attainder or ex post facto 
 lav^ shall be passed; that no law shall be passed abridging the 
 freedom of speech or of the press or of the rights of the people 
 to peaceably assemble and petition the government for a redress 
 of grievances; that no law shall be made respecting an establish- 
 ment of religion or prohibiting the free exercise thereof, and that 
 the free exercise and enjoyment of religious profession and 
 worship without discrimination or preference shall forever be 
 allowed." 
 
 Justice Day, in his opinion, comments as follows upon this 
 collation : 
 
 'These words are not strange to the American lawyer or 
 student of constitutional history. They are the familiar language 
 of the Bill of Rights, slightly changed in form, but not in su]> 
 stance, as found in the first nine amendments to the Constitution 
 of the United States, with the omission of the provision preserving 
 the right to trial by jury and the right of the people to bear arms, 
 and adding the prohibition of the Thirteenth Amendment against 
 slavery or involuntary servitude except as a punishment for crime, 
 and that of Art. i, s. 9, to the passage of bills of attainder and 
 ex post facto laws. These principles were not taken from the 
 Spanish law ; they were carefully collated from our own Consti- 
 tution ; and embody almost verbatim the safeguards of that instru- 
 ment for the protection of life and liberty." 
 
 (The Supreme Court has held these constitutional prohibitions 
 to be ''fundamental rights."^) 
 
 The Mexican Constitution, in Chapter i, of Title i, contains 
 provisions varying but little, in essence, from those of the Consti- 
 tution of the United States protecting fundamental rights, and, 
 with a few exceptions, to be found principally in Article 2y, the 
 Mexican Constitution may be considered in accord with that of 
 
 8 See Kepner v. United States, 195 U. S., 100, 123; Dorr t. United States, 
 195 U. S. 138, 144, 148; Hawaii v. Mankichi, 190 U. S. 197, 217. 
 
14 
 
 the United States. It is interesting to note, however, that the 
 Mexican Constitution of 1917 differs from its predecessor of 1857 
 in several important respects on the subject of fundamental rights. 
 Section i of Title i of the Constitution of 1857 is entitled : "Of 
 the Rights of Man." The first article of this section reads as 
 follows: "The Mexican people recognize that the rights of man 
 are the basis and object of social institutions. Consequently they 
 declare that all the laws and all the authorities of the country must 
 respect and maintain the guarantees which the present constitu- 
 tion grants." This provision seems to be a recognition of the 
 fundamental rights internationally accorded man and known to 
 Anglo-Saxon constitutional law as the Bill of Rights provisions. 
 
 The Constitution of 19 17 adopted a new title for the cor- 
 responding section, calling it "Title i, Chapter i. Of Personal 
 Guarantees." That this change was not accidental but intended, 
 is indicated by the changed wording of Article i of this chapter: 
 "Every person in the United States of Mexico shall enjoy all 
 guarantees granted by this Constitution; these shall neither be 
 abridged nor suspended except in such cases and under such con- 
 ditions as are herein provided." A comparison of these sections 
 of the two constitutions is likely to convince the reader that the 
 Constitution of 1917 was adopted by a nation which had, through 
 its years of revolution and political turmoil, lost its sense of inter- 
 nationalism and had come to an unduly intensified nationalism. 
 Article i of Section i of Title i of the Constitution of 1857 un- 
 doubtedly expressed, in conformance with the basic philosophy 
 of its creators, the intention that the subsequently enumerated 
 rights of the individual should serve merely as a collation, as 
 accurate as possible, of the fundamental rights of man, which are 
 supreme over any constitution. The Constitution of the United 
 States, by the Ninth Amendment, guarantees to the people their 
 fundamental rights in so many words : 
 
 "The enumeraition and the constitution of certain rights, shall 
 not be construed to deny or disparage others obtained by the 
 people." 
 
 Article i of Chapter i of Title i of the Mexican Constitution 
 of 1917 indicates an intention on the part of its creators, to chs- 
 
15 
 
 tinctly limit the fundamental rights of man to the particular rights 
 enumerated in the Constitution. 
 
 A comparison of the terms of the two constitutions at length 
 is not here possible. Suffice to say, the language of the Constitu- 
 tion of 1917, when compared with the language of the correspond- 
 ing sections of the earlier constitution, does substantiate the 
 theory above advanced that the creators of the existing constitu- 
 tion intended to limit individual rights to those specifically enumer- 
 ated therein. 
 
 If it is true that there are fundamental rights which are not 
 created by legislation but can only be recognized by it, it would 
 seem that the present Mexican Constitution, in so far as it attempts 
 to make its enumeration of fundamental rights exclusive, cannot 
 succeed. 
 
 As a matter of fact, there is very little actual conflict between 
 jurists and statesmen in regard to the existence of particular 
 fundamental rights. Consequently, the constant utterance by pub- 
 licists and statesmen of the commonly-accepted, platitudinal prin- 
 ciples of constitutional and fundamental law, are of no particular 
 value. It is in the application of the commonly-accepted principles 
 that the conflict arises. When the diflference is between Latin 
 and Anglo-Saxon jurists, conflict in interpreting these funda- 
 mental principles is probably to be accounted for largely by the 
 influence, respectively, of the Civil law and the Anglo-Saxon com- 
 mon law. 
 
 It is unfortunately true that in many instances the more pow- 
 erful nations, while insisting on the responsibility of weaker states, 
 have denied responsibility when they themselves were indicted. 
 The diplomatic history of the United States presents examples of 
 this inconsistency. This country has always been ready to press 
 claims for injuries and has been uniformly successful in obtaining 
 acknowledgments of liability, but has occasionally repudiated lia- 
 bility when itself called to account, even where it has actually 
 granted indemnity. Cases of this latter variety are the Spanish 
 Claims of 1850, the Italian Lynchings and the Chinese cases. This 
 inconsistent policy of the United States and other nations has 
 been a great discredit to their statesmanship and much to be re- 
 gretted as an obstacle to the clarification of international law. 
 
i6 
 
 The Latin-x^merican countries have been the staimchest sup- 
 porters of the theory of non-responsibility. They have been 
 forced to this stand by the frequency with which they have been 
 visited by insurrections, uprisings and banditry, and have, by 
 necessity, been compelled to develop, through their statesmen and 
 publicists, a justification for their reiterated attempts to deny lia- 
 bility. 
 
 Furthermore, Latin- Am erica objects to the theory of responsi- 
 bility because of the conviction existing in the countries of the 
 south that the enforcement of international responsibility is usually 
 only a pretext for the securing of economic advantages to the 
 citizens of the interposing nation. The Latin-Americans fear a 
 loss of sovereignly and independence through the frequent appli- 
 cation of the theory of responsibility. Mexicans, especially, seem 
 to believe that 'might makes right" is the foundation of the re- 
 sponsibility theory, and that the United States, in particular, usu- 
 ally acts to her own advantage and with no consistent adherence to 
 international and moral principles. It is unfortunate that this 
 misinterpretation of the motives of the United States exists in 
 Mexico. The United States has occasionally misapplied interna- 
 tional law, and has in several instances been guilty of breaches 
 of good international practice ; but it is undoubtedly true that the 
 record of the United States in its foreign relations, when com- 
 pared with those of others of the powerful nations, is surprisingly 
 free from unfairness or international injustice. The resentment 
 of Mexicans and other Latin-Americans toward foreign interposi- 
 tion has some ground in fact, because this interposition has often 
 been arbitrary, impolitic and abusive. But it is submitted that 
 this resentment against diplomatic interposition by the United 
 States is not well grounded in fact. 
 
 There is small justification in modern international law for 
 the constant attempts of Latin- America to avoid liability; and 
 these attempts at the repudiation of responsibility have invariably 
 proved futile. 
 
17 
 B. 
 
 THE ATTEMPT OF LATIN-AMERICAN STATES TO 
 EVADE INTERNATIONAL RESPONSIBILITY BY MU- 
 NICIPAL OR CONSTITUTIONAL REGULATION. 
 
 Latin-American history since 1852, when Venezuela tried to 
 spread the idea through Latin-America, presents a consistent at- 
 tempt on the part of many of the more tempestuous and revolu- 
 tion-ridden of the Latin-American states to evade international 
 responsibilities through the insertion, in treaties contracted be- 
 tween themselves, and in their constitutional law and municipal 
 law, of provisions limiting the state liability for injuries to aliens. 
 
 The Institute of International Law in 1909 expressly con- 
 demned the making of treaties reHeving nations of responsibility 
 as creating bad precedents. However, the parties to treaties limit- 
 ing the rights of the respective nationals of one country in the 
 territory of another, would be bound thereby. Regulations of 
 municipal and constitutional law of the kind described above have 
 proved futile against the claims of citizens of European states and 
 of the United States. 
 
 Mexico's most recent attempt to thus evade international re- 
 sponsibility is found in the new Constitution of 1917, Article 2^, 
 which reads in part as follows : 
 
 "Legal capacity to acquire ownership of lands and waters of 
 the nation shall be governed by the following provisions : — 
 
 "i. Only Mexicans by birth or naturalization and Mexican 
 companies have the right to acquire ownership in lands, waters 
 and their appurtenances, or to obtain concessions to develop 
 mines, waters or mineral fuels in the Republic of Mexico. The 
 Nation may grant the same right to foreigners, provided they 
 agree before the Department of Foreign Affairs to be considered 
 Mexican in respect to such property, and accordingly not to in- 
 voke the protection of their Governments in respect to the same, 
 under penalty, in case of breach, of forfeiture to the Nation of 
 property so acquired." 
 
 The above constitutional provision has been characterized by 
 
i8 
 
 Mexicans as one of the triumphs of the revolution, and as a de- 
 stroyer of the alleged favoritism shown to foreigners under the 
 regime of the late Porfirio Diaz, equalizing the position of nationals 
 and foreigners in the enjoyment of property rights. 
 
 Such regulations and provisions are in contravention of estab- 
 lished rules of international law and are ignored or denied by the 
 non-Latin-American States of the world. 
 
 "The United States has vigorously opposed the attempt of the 
 Latin-American countries to pass upon the scope of their interna- 
 tional duty. As was said by Secretary of State Bayard, in 1887: 
 
 *If a government could set up its own municipal laws 
 as the final test of its international rights and obligations, 
 then the rules of international law would be but the 
 shadow of a name, and would afford no protection either 
 to states or to individuals. It has been constantly main- 
 tained and also admitted by the Government of the 
 United States that a government can not appeal to its 
 municipal regulations as an answer to demands for the 
 fulfillment of international duties.' 
 
 "The principle that equality of treatment between nationals 
 and aliens releases a state from pecuniary responsibility for injury 
 to aliens is conditioned upon the fact that its administration of 
 justice satisfies the standard of civilized justice established by 
 international law. Foreign states, however, undertake to judge 
 for themselves as to the local state's compliance with international 
 standards — a defect in the system which arbitration has done 
 much to remedy. 
 
 "The United States has never taken the position that one who 
 acquires a residence in a foreign country does so at his peril and 
 assumes the risk of ilRreajtment or injury identically with citizens. 
 Where a state does not normally possess or is not disposed to 
 employ sufficient power to prevent injury to the alien, the state's 
 resjx)nsibility is considered as established; the delinquency may 
 occur either in its legislative, executive, or judicial departments. 
 One reason why the alien is not bound to submit to unjust treat- 
 ment equally with nationals, against which the national has no 
 judicial redress, is because the latter is presumed to have a 
 political remedy, whereas the alien's inability to exercise political 
 
19 
 
 rip^hts deprives him of one of the principal safeguards of the 
 rights of the citizen. For this reason diplomatic interposition may 
 be invoked by the alien for the enforcement of his rights. The 
 alien, therefore, is not bound to accept the treatment accorded to 
 nationals if such treatment is in violation of the ordinary princi- 
 ples of civilized justice, and notwithstanding the fact that the 
 national has no immediate remedy against the injustice."^ 
 
 Whether or not limitations in the constitutional or municipal 
 law of one Latin-American state would be binding upon the 
 others having similar limitations on the rights of aliens, is a de- 
 batable question. In the case of those nations which adopted the 
 resolutions of the several Pan-American Congresses on claims and 
 diplomatic intervention wherein attempts were made to incorpc^- 
 rate into "American Law" limitations on the rights of aliens, it 
 might be successfully contended that the signatory nations were 
 bound morally and in international law by these regulations, at 
 least as against each other. 
 
 1 Borchard's Diplomatic Pro. of Cit Ab., pp. IM to 107. 
 
20 
 
 DE JURE, DE FACTO AND LOCAL DE FACTO GOV- 
 ERNMENTS. BRIEF REVIEW OF MEXICAN HISTORY 
 BEGINNING WITH THE OVERTHROW OF DIAZ. A 
 DISCUSSION OF THE NATURE OF THE SUCCESSIVE 
 GOVERNMENTS AND REVOLUTIONARY BODIES AND 
 OF THE LIABILITY OF THE PRESENT GOVERNMENT 
 FOR THE ACTS OF EACH. 
 
 Before summarizing the recent historical events in Mexico 
 and their results as affecting the liability of the government it 
 will be well to point out the respective character and attributes 
 of de jure and de facto governments. A de jure government, as 
 the term implies, is a legal government which has succeeded to 
 the sovereign power by legal means, while a de facto government is 
 one actually holding the reins of power while not of legal origin. 
 A usurping government which has overturned the existing legal 
 order and succeeded to the actual power would be de facto.' 
 Whether or not a de facto government exists is a question of fact. 
 Elements determining its existence are the extent and supremacy 
 of its power, acknowledgment by the people of this power, and 
 the recognition accorded it by foreign nations. A de facto gov- 
 ernment may develop into a de jure government, the transition 
 being brought about generally by its continuance in the saddle, 
 the sustained support given it by the nation and the recognition 
 accorded it by foreign powers. 
 
 It is important to note that the burden of establishing the 
 de facto nature of the government and its consequent liability 
 falls on the claimant. Recognition by the claimant's nation does 
 not prove its de facto character. It is a question whether or not 
 failure of the claimant's country to recognize the de facto nature 
 of a revolutionary government precludes the claimant from assert- 
 ing its de facto character. 
 
 Both de jure and de facto governments succeed to the liabili- 
 ties and obligations of previous de jure or de facto governments. 
 In addition, upon the success of a revolutionary movement, respon- 
 
21 
 
 sibility for the acts of the revolutionists becomes merged into the 
 liability of the de facto government created by the revolution. 
 
 The principles briefly discussed above in respect of de facto 
 governments apply only to general de facto governments. An 
 important distinction between these and local de facto govern- 
 ments must be made. The latter are characterized as exercising 
 control over part of the country only. The liability of the fed- 
 eral government for the acts of the local de faicto government is 
 generally denied. 
 
 "A temporary occupant or local de facto government car- 
 ries on the functions of government, supported usually directly 
 or indirectly by military force. It may appoint all necessary 
 officers and designate their powers, may prescribe the revenues 
 to be paid and collect them, and may administer justice. Foreign- 
 ers must perforce submit to the power which thus exercises 
 jurisdiction, and a subsequent de jure government cannot expose 
 them to penalties for acts which were lawful and enforced by 
 the de facto government when done. The temporary de facto 
 government may legislate on all matters of local concern, and in 
 so far as such legislation is not hostile to the subsequent de jure 
 government which displaces it, its laws will be upheld. A military 
 occupant as a general rule may not vary or suspend laws affecting 
 property and private personal relations or those which regulate 
 the moral interests of the community. If he does, his acts in so 
 doing cease to have legal effect when the occupation ceases. Po- 
 litical and administrative laws are subject to suspension or modifi- 
 cation in case of necessity. 
 
 "The collection of taxes and customs duties within the terri- 
 tory and during the period of occupancy of the local de facto 
 government relieves merchants and tax-payers from a subsequent 
 second payment upon the same goods to the succeeding de jure 
 government. Such a temporary government may levy contribu- 
 tions on the inhabitants for the purposes of carrying on the war, 
 but they must not savor of confiscation. It may seize property 
 belonging to the state and may use it. It may receive money due 
 the state and give receipts in the name of the state. This, how- 
 ever, applies only to debts payable within the territory and period 
 of occupancy. 
 
22 
 
 "Debts due by the state cannot be confiscated or the interest 
 sequestered by a temporary occupant, and private property must 
 be respected. The occupant or local de facto government cannot 
 alienate any portion of the public domain. The fruits thereof 
 may be sold, but only that part accruing during the period of 
 occupancy. A local de facto government may become the owner 
 of movables, which it may sell and hypothecate. A succeeding 
 government takes such mortgaged property as rightful owner sub- 
 ject to the liens thus created in good faith. As a general rule, 
 however, a succeeding de jure government is not liable for debts 
 contracted by a displaced local de facto government. A person 
 dealing with a local de facto government assumes the risk of his 
 enterprise. The de facto government may issue paper money, 
 and private contracts stipulating for payment in such money will 
 be enforced in the courts of the succeeding de jure government. 
 Under compulsion, a government has at times admitted liability 
 for the wrongful acts of previous local de facto governments. "^ 
 
 Porfirio Diaz was elected in 1910 to his eighth term as Presi- 
 dent of the Republic of Mexico. Shortly before his election an 
 insurrectory movement started in northern Mexico which in- 
 creased in momentum and finally led to the resignation of Diaz on 
 March 18, 191 1, and the designation of Francisco de la Barra as 
 President ad interim. De la Barra's short administration was that 
 of a de facto government. Madero, who had headed the revolu- 
 tionary movement against Diaz was elected on October 15th to 
 the presidency and continued the ad interim de facto government, 
 succeeding thereby to the obligations and liabilities of the regular 
 de jure Diaz government as well as of the de facto de la Barra 
 government. Madero did not control the whole country. Large 
 sections of Mexico were in continued and open revolt against 
 him from the very beginning of his regime. It can hardly be 
 doubted that his was the de facto central government, but having 
 at no time been in control of the entire country it might seriously 
 be doubted that his government was responsible for the acts of 
 the scattered outstanding revolutionists. However, as most of 
 these revolutionists joined in one of the later revolutions and so 
 
 1 From article by Edwin M. Borchard in the Chicago Legal News, May 
 tl, 1917, "International Pecuniary Claims Against Mexico." 
 
23 
 
 aided In effecting the overthrow of the central government, lia- 
 bility for the larger part of the acts of these revolutionary bodies 
 eventually became merged in the central government through their 
 participation in eventually successful revolutionairy movements. 
 
 On February 8, 191 3, Victoriano Huerta who commanded the 
 government forces deserted his chief and went over to the rebels. 
 The revolution was carried into Mexico City, led chiefly by 
 Huerta and Felix Diaz, a nephew of the former President. 
 Madero was captured and forced to resign on February 13, 1913. 
 Several days thereafter Madero and Vice-President Suarez were 
 shot and killed. Under the Mexican Constitution the succession 
 went to Pedro Lascurain, the Minister of Foreign Affairs, who 
 appointed General Huerta Minister of the Interior. Lascurain 
 then resigned and Huerta became provisional president. There- 
 after the United States consistently refused recognition to Huerta, 
 although recognition was accorded him by several of the other 
 Powers. 
 
 In the meantime Venustiano Carranza had started a revolution 
 in the State of Coahuila, of which he was Governor. On March 
 26, 191 3, he proclaimed the "Plan of Guadalupe," which asserted 
 that Huerta had acted treasonably and which named Carranza 
 First Chief of the Constitutional Army and depositary of the 
 executive power when that Army should occupy Mexico City. 
 Villa, Zapata and other revolutionists later joined Carranza and 
 contributed to the success of his movement. It seems clear, then, 
 that for the acts of these either revolutionary leaders and their 
 followers committed in aid of Carranza's revolutionary movement, 
 his government, upon succeeding to the de facto control of the 
 country, was responsible. For their acts after Carranza's acquisi- 
 tion of the central power, a different rule would apply. Carranza's 
 government would probably be absolved from liability regarding 
 the acts of these revolutionary bodies committed after his entry 
 into Mexico City on the ground that they consisted of inde- 
 pendent revolutionary movements not acting with him but acting 
 against him. 
 
 President Wilson's attempt in July, 1913, to volunteer the good 
 offices of the United States in the political confusion by sending 
 to Mexico the Hon. John Lind, formerly Governor of Minnesota, 
 
24 
 
 proved fruitless, and President Wilson continued in his speeches 
 to term Huerta as "s. mere military despot." 
 
 In April, 1914, occurred the regrettable Vera Cruz incident 
 and intervention by the United States. The events which followed 
 resulted successively in the forced resignation of Huerta, the 
 setting up of the makeshift government of Francisco Carbajal 
 and the proclamation of General Gutierrez as provisional presi- 
 dent. Villa and Zapata agreed to the selection of Gutierrez as 
 President, but Carranza refused to give up his claim to the presi- 
 dency. After considerable turmoil and some fighting Carranza's 
 supporter, Obregon, defeated Villa at Celaya on April 2, 1915, 
 and broke the opposition to Carranza's supremacy. On October 
 19th the Carranza government was recognized by the United 
 States as the ''de facto Government of Mexico." 
 
 On August 31, 1917, Carranza's government received the de 
 jure recognition of the United States. ^ 
 
 With the beginning of 1920 opposition to Carranza was quietly 
 but surely intensifying. When, in March, Carranza presented 
 Bonillas as a candidate for the presidency, he hastened his own de- 
 struction. On April 9th the leaders of the forthcoming revolu- 
 tion — de la Huerta, Calles, Salvador Alvarado, Obregon and 
 others, — issued the plan of "Agua Prieta," declaring President 
 Carranza's attitude and conduct unconstitutional and proclaiming 
 support of the 191 7 Constitution. The revolution spread until 
 Carranza was compelled to flee on May 9th. On May 22nd 
 Carranza was killed. Thereafter de la Huerta was duly and le- 
 gally elected provisional president under section 84 of the 191 7 
 Constitution. In September, 1920, General Alvaro Obregon, at 
 a popular election, was overwhelmingly elected President of the 
 Republic. He was inaugurated on December ist, 1920. 
 
 In accord with the general principles of governmental succes- 
 sion and the liability of the succeeding government for the acts 
 of its predecessors, the present government of President Obregon, 
 de jure, though unrecognized as yet by the United States, would 
 succeed to the liabilities of the previous de la Huerta and Carranza 
 regimes. In the liabilities of the Carranza regime would be in- 
 cluded liability for the acts of the revolutionists who joined or 
 
 2 See Oetjen v. Central Leather Co., 246 U. S. 297. 
 
25 
 
 aided in the overthrow of General Huerta. Similarly in the lia- 
 bilities to which the Obregon Government would succeed from 
 the de la Huerta Government would be included the liability aris- 
 inp^ from the acts of those revolutionists who aided or joined in 
 the overthrow of General Carranza. 
 
 It is well settled that a nation is not responsible for the acts of, 
 and services rendered to, revolutions which, though ultimately 
 unsuccessful, were, at the time of the acts or services, beyond the 
 power of the government to control, and so the Mexican Gov- 
 ernment would clearly not be liable for the acts of, and services 
 rendered to, any of the revolutionary bodies committed or rendered 
 during a period when this movement had temporarily been beyond 
 suppression by the federal government, and which had not par- 
 ticipated in any revolution which was eventually successful in 
 succeeding to the Federal de facto or de jure power. However, 
 it is equally clear that the government created through revolution 
 is responsible as well for the acts of and services rendered to 
 the revolution as for those of the preceding de facto or de jure 
 government. It is interesting to note here that the successful 
 revolutionists would even appear to be bound from the beginning 
 of their movement by the stipulations of previously existing na- 
 tional treaties. 
 
 The acts of a general de facto government would undoubtedly 
 bind succeeding governments, but as above noted the liability of 
 the succeeding general government for the acts of a local de facto 
 government is greatly limited. The administration of Huerta 
 presents interesting questions in view of this rule. Grave doubts 
 have been expressed regarding the legality of Huerta's assump- 
 tion of power. If the procedure above described made him a 
 legitimate constitutional President his government undoubtedly 
 would have bound the nation. If he was merely a usurper, his 
 government probably, at its inception at least, ruled as a de facto 
 government. While his government probably started as a general 
 de facto government it became gradually weakened through the 
 growing success of the opposition and became eventually nothing 
 more than a local de facto government. As against those countries 
 which recognized Huerta's as the general de facto government it 
 would probably be difficult for any successor Mexican administra- 
 
26 
 
 tion to liimit its liabilities arising out of the Huerta regime on the 
 theory that it was eventually only a local de facto government. 
 However, against the United States, and such other governments 
 as refused to recognize Huerta in any way, this theory should be 
 successfully applied in limiting the Federal government's responsi- 
 bility for the acts of and services rendered to General Huerta, at 
 least during the latter part of his administration. 
 
 It is interesting to note, in this connection, that in all the recent 
 conversations between representatives of the Mexican Govern- 
 ment and other persons regarding the external debts of Mexico, 
 there has been a studied purpose to omit Huerta's bonds from 
 consideration. Carranza^s Government consiistently took the posi- 
 tion of not recognizing the validity and legality of Huerta's loan 
 and considering it as no binding obligation of the Mexican Gov- 
 ernment, though Carranza never showed the slightest intention 
 to repudiate or deny any of the other external debts of Mexico. 
 
 The responsibility of the Mexico of today for the acts of all 
 the administrations since the fall of Diaz, except that of Huerta's, 
 is clear. As above indicated, however, there is a fair possibility 
 that the Mexican Government may be able successfully to deny 
 responsibility for the acts of Huerta's revolution and administra- 
 tion. 
 
V 
 
 CHAPTER II. 
 
 DIPLOMATIC INTERPOSITION. 
 
 A. 
 
 DENIAL OF JUSTICE AS A GROUND FOR DIPLOMATIC 
 INTERPOSITION. 
 
 Diplomatic interposition by the home government may be 
 either in protection of the rights of the State itself, with which 
 form of interposition we are not here particularly concerned, ex- 
 cept as it affects the presentation of claims by individuals or in 
 protection of individuals and their international rights as indi- 
 viduals in a foreign land. This latter variety of interposition is 
 always based on a denial of justice to the individual.^ The term 
 "justice" is best measured by a comparison of the treatment ac- 
 corded nationals with that accorded foreigners, except in those 
 situations where the treatment of nationals does not reach the 
 standard of the generally recognized "rights of man"2 which 
 are internationally binding on all states — on the enlightened 
 ones by common consent, and on the less-enlightened states by 
 the force, moral and physical, of the stronger and more enlight- 
 ened.^ 
 
 1 See Mr. JeflFerson, Sec. of State, to Mr. King, Dec. 7, 1793, 5 MS. Dom. 
 Let. 388 and Mr. Jefferson, Sec. of State, to the At. Gen., Mar. 13, 1793, 5 MS. 
 Dom. Let. 70; Mr. Fish, Sec. of State, to Mr. Foster, min. to Mexico, No. 21, 
 Aug. 15, 1873, MS. Inst. Mex. XIX, 18, citing Calvo, Droit Int. II, 397; Brad- 
 ford, At. Gen., 1794, 1 Op. 53. See to the same effect. Black, At. Gen. 1859, 
 9 Op. 374; Mr. Evarts, Sec, of State, to Mr. Langston, min. to Haytl, No. 23, 
 April 12, 1878, MS. Inst. Hayti, II, 136; same to same, No. 50, Dec. 23, 1878, 
 Id. 160; Mr. Davis, Act. Sec. of State, to Mr. Langston, No. 187, Aug. 27, 
 1882, id. 299; Mr. Evarts, Sec. of State, to Mr. Fairchild, min. to Spain, Jan. 
 17, 1881, MS. Inst. Spain, XVIII, 591; VI, Moore's Int. Law Dig., §986. 
 
 2 Fiore Sections 67, 68, 69, gives a not entirely inclusive list. See also 
 Chapter I, part A. 
 
 3 In connection with this subject see Chapter I A. 
 
28 
 
 B. 
 
 CONDITIONS PREREQUISITE TO DIPLOMATIC IN- 
 TERPOSITION. 
 
 I. 
 
 Nature of the Claim and Status of the Claimant as Af- 
 fecting THE Right to Interposition. 
 
 Citizenship is an absolute prerequisite to diplomatic interposi- 
 tion. A nation will not, nor may it, interpose in behalf of a person 
 not its own citizen.^ It is solely within the discretion of the 
 claimant's government to decide whether or not the claimant is a 
 citizen, but claims commissions, notably the Spanish Treaty Claims 
 Commission, have often admitted evidence pro and con to deter- 
 mine the citizenship of the claimant. Where unnaturalized Cubans 
 were serving in the United States Army they were held not to be 
 entitled to diplomatic aid in the presentation of claims against 
 Spain arising from the Cuban laws.^ It has been generally held 
 that citizenship of the wife follows that of her husband,^ but the 
 United States might well insist on a change in this rule in view 
 of the recent amendment of the Constitution admitting women 
 to suffrage. Injuries to seamen and soldiers by mobs, in riots 
 and at the hands of insurrectionists, present cases, under certain 
 circumstances, where recovery may be had as if the injured parties 
 had been civilians.* But the general rule is that applied by the 
 Spanish Treaty Claims Commission: — ^that members of military 
 forces injured in the line of their duty cannot make claim against 
 a foreign government.^ A declaration of intention to become a 
 citizen is not sufficient.^ Naturalization is never retroactive in 
 its effect and an injury occasioned before naturalization will not 
 be made the basis of diplomatic representation."^ 
 
 International claims are not assignable and no diplomatic as- 
 
 1 204 MS. Dom. Let. 532, 6 Moore's Digest 631. 
 
 2 230 MS. Dom. Let. 378, 6 Moore's Digest 631. 
 
 3 Bodenmuller v. U. S., 1889, 39 Fed. Rep. 437; 6 Moore's Digest 630. 
 
 4 MS. Inst. Chile XVII. 416, and For. Rel. 1901, App. 362. 
 
 5 McCann v. U. S., 30 Spanisli T. C. Commission, 6 Moore's Dig. 632. 
 
 6 153 MS. Dom. Let. 194, 195; Sen. Doc. 287, 57th Cong. First Sess.; 
 For. Rel. 1899, 440 et seq. ; For. Rel. 1900, 715-773; 6 Moore's Dig. §980. 
 
 7 6 Moore's Dig. §981, and precedents cited. 
 
29 
 
 sistance will be given the assignee of even a completely just claim.^ 
 Nor will a claim derived from partnership associations be diplo- 
 matically aided.^ However, intervention in behalf of a partner- 
 ship is proper when its partnership interests have suffered injury. 
 It is well settled law that "a government may intervene in 
 behalf of a company incorporated under its laws or under the 
 laws of a constituent state or province."!^ Since the famous 
 Delagoa Bay case^^ intervention in behalf of national (American) 
 stockholders in a foreign (Mexican) company has been consid- 
 ered in accord with good diplomatic practice, where the interna- 
 tional rights of the stockholders have actually been abridged. In 
 the later case of "El Triunfo Company,"!^ the Salvadorean gov- 
 ernment contended "that the case as one affecting a Salvadorean 
 corporation was exclusively for the Salvadorean courts," but the 
 United States Government took the ground that the American 
 citizens who were the substantial owners of the enterprise were 
 injured and denied justice by the Salvadorean government, and 
 having no other recourse should be protected by their home gov- 
 ernment. A majority of the arbitrators appointed under a pro- 
 tocol concluded at Washington, December 19, 1901, concurred in 
 an award of damages, saying in their opinion, "We have not 
 discussed th^ question of the right of the United States under 
 International Law to make reclamation to these shareholders in 
 El Triunfo Company, a domestic corporation of Salvador, for the 
 reason that the question of such right is fully settled by the con- 
 clusions reached in the frequently cited and well understood 
 Delagoa Bay Railway Arbitration. "^^ 
 
 8 6 Moore's Dig, §982. 
 
 9 6 Moore's Dig. §983. 
 
 10 6 Moore's Dig. §984; see nlso, Borchard, Dip. Prot. Clt. Abroad, §279 
 et seq. 
 
 11 Moore Int. Arbitra. II, 1865-1899, For. Rel. (1902) 848-852 Moore's Dig. 
 vol. 6, pp. 647-649. 
 
 12 Moore's Digest, Vol. 6, pp. 649-651. 
 
 13 Moore's Dig. Vol. 6, p. 651. At the end of the discussion on this case, 
 Moore has the following note: 
 
 "At page 846 Judge Penfield. Solicitor of the Department of State, In a 
 report to Mr. Hay, Secret.iry of State, says: 'While the Department does not 
 dispute the contention that intervention by the Government of the United 
 States would not be in entire accord with certain dicta expressed in the ca.se 
 of the Antioguia in respect of intervention in behalf of American stockholders 
 in a foreign corporation, it is consistent with the actual grounds of that deci- 
 sion. But if all the rensons stated in that case against the right of inter- 
 rention were to be accepted, even if intervention had been refused solely on 
 the academic reasons given, the decision of this case would be controlled by 
 the later decision of the Department in the case of the Delagoa Bay Railway.' " 
 
Other societies and unincorporated bodies are generally not 
 proper claimants for injuries to persons or on lives lost.^* 
 
 2. 
 
 When Local Remedies Must First Be Exhausted. 
 
 Some authorities insist that in no case is there an absolute 
 obligation on the claimant to first exhaust his local remedies.^ 
 The State itself, and not the individual alone, is injured by an 
 m justice to its citizen abroad and can of its own right diplo- 
 matically interpose — ^this is the theory advanced by these author- 
 ities and it is probably fundamentally sound. However, the rule 
 is generally accepted that recourse must first be had to the local 
 remedy before diplomatic assistance can be rightly invoked.^ 
 
 It has been the established practice of the United States to 
 adhere firmly to this general rule in the case of claims by for- 
 eigners against the United States,^ and it has also been followed 
 by this country in the case of claims of citizens of the United 
 States against foreign governments.^ 
 
 Despite the general acceptance of the rule above, states have 
 frequently resorted to diplomatic interposition in behalf of their 
 citizens abroad under an exception to this rule that local remedies 
 
 14 See article, Vol. I, A. J. I. L., p. 8. 
 
 1 See, "International Responsibility of States" by Julius Goebel, Jr., in 
 VIII A. J. I. L., p. 802. 
 
 2 The principle that local redress must first be sought has been so fre- 
 quently reiterated that no attempt will here be made to collect a large num- 
 ber of citations. Many may be found in 6 Moore's Dig. §987. 
 
 3 Randolph, At. Gen., 1792, 1 Op. 25; Lincoln, At. Gen., 1803, 5 Op. (App.) 
 692; Ackerman, At. Gen., 1871, 13 Op. 547; Butler, At. Gen. 1837, 3 Op. 254; 
 Mr. Buchanan, Sec. of State; Dec. 26, 1846. MS. Notes to Gt. Britain, VII, 
 149, 6 Moore's Dig. 659; Mr. Seward, Sec. of State, to Lord Lyons, Jan. 12, 
 1863, MS. Notes to Gr. Brit. IX, 402; Mr. Olney, Sec. of State, to the Presi- 
 dent, Feb. 5, 1896, For. Rel. 1895, I, 251, 259; H. Doc. 225, 54 Cong. 1 Sess. ; 
 VI, Moore's Dig. §987. 
 
 4 Ackerman, Atty. Gen., 1872, 13 Op. 554; Mr. Buchanan, Sec. of State, 
 to Mr. Larrabee, Mar. 9, 1846, 35 MS. Dom. Let. 426; Mr. Fish, Sec. of State, 
 to Mr. Ruger, Oct. 21, 1869, 82 MS. Dom. Let. 224; Mr. Davis, Act. Sec. of 
 State, to Mr. Taylor, Oct. 20, 1871, 91 MS. Dom. Let. 154; Mr. Fish, Sec. of 
 State, to Mr. Becker, May 3, 1871, 89 MS. Dom. Let. 250; Mr. Olney, Sec. 
 of State, to Mr. Dessaw, Nov. 19, 1896, 214 MS. Dom. Let. 66; VI, Moore's 
 Dig. §987. 
 
31 
 
 need not first be sought when there is little or no possibility of 
 securing redress.^ This exception has been tersely stated by Mr. 
 Fish, the United States Secretary of State,^ as '*a claimant in a 
 foreign State is not required to exhaust justice in such State 
 when there is no justice to exhaust." 
 
 In the case of Messrs. Ulrich and Langstroth, who made claim 
 against the Mexican Government for losses inflicted, and forced 
 loans imposed, by insurgents at Monterey, the United States Gov- 
 ernment interposed in behalf of the claimants on the theory that 
 they had been denied an opportunity of proving their case."^ 
 
 The good sense of this exception to the rule above is scarcely 
 to be doubted. There are certainly situations where the foreigner 
 can only be protected by the immediate interposition of his home 
 Government. But this right of interposition should be used 
 with great caution. It is a dangerous world policy that would 
 permit a nation, except in the most evidently necessary situations, 
 to arrogate to itself the right to judge the standards of justice 
 applied by a sister nation. International comity demands, in all 
 cases where there is not some perfectly obvious and undeniably 
 serious flaw in the local machinery of justice, that the alien be 
 forced by his home Government to seek local redress before 
 interposition will be undertaken in his behalf. Secretary of State 
 Seward of the United States^ ofiicially took notice of the dangers 
 of permitting an arbitrary interposition under the above excep- 
 tion to the rule respecting local redress, as follows : 
 
 "We are unfortunately too familiar with complaints of the 
 delay and inefficiency of the courts in South American republics. 
 We must, however, continue to repose confidence in their inde- 
 pendence and integrity, or we must take the broad ground that 
 these states are like those of oriental semi-civilized countries — 
 outside the pale within which the law of nations, as generally 
 accepted by Christendom, is understood to govern. The people 
 
 5 See Mr. F. W. Seward, Act. Sec. of State, to Mr. GIbbs, mln. to Peru, 
 No. 133, Feb. 10, 1879, MS. Inst. Peru, XVI, 381; Lord Palmerston, In the 
 House of Commons, June 25, 1850, on the case of Don Paclflco, Hansard, 
 Pari. Debates, CXII, 382-387. 
 
 6 MS. Inst. Venezuela II, 228. 
 
 7 6 Moore's Dig. 678-80. 
 
 8 Instruction to Mr. Burton, Minister to Colombia, on April 27, 1866, No. 
 137 Diplomatic Correspondence 1866, III, 522-23. 
 
32 
 
 who go to these regions and encounter great risks in the hope 
 of great rewards, must be regarded as taking all the circumstances 
 into consideration and cannot with reason ask their government 
 to complain that they stand on a common footing with native 
 subjects in respect to the alleged wants of an able, prompt, and 
 conscientious judiciary. We cannot undertake to supervise the 
 arrangements of the whole world for litigation, because American 
 citizens voluntarily expose themselves to be concerned in their 
 deficiencies." 
 
 Where a government has superseded local remedies with 
 others, the alien is, of course, not obliged to resort to local rem- 
 edies first,^ and where the local remedy is in the nature of an 
 appeal to a commission of nationals, diplomatic action is not prt- 
 eluded by the existence of such a commission.^^ 
 
 As a corollary of the generally recognized duty to seek local 
 redress first when possible, an unjust judgment is not interna- 
 tionally binding.ii "The defense of res adjiidicata does not apply 
 to cases where the judgment set up is in violation of international 
 law."i2 xhe United States refused to recognize the validity of 
 judgments of the British Prize Courts which violated settled 
 principles of international law.^^ A judgment should not, how- 
 ever, be questioned on purely technical grounds.^* 
 
 The following excerpt from an article by Elihu Roo.t,i^ enti- 
 tled 'The Basis of Protection to Citizens residing Abroad," is a 
 valuable commentary on this subject: 
 
 "* * * The rule of obligation is perfectly distinct and 
 settled. Each country is bound to give to the nationals of another 
 
 9 See citations in 6 Moore's Dig. §989. 
 
 10 6 Moore's Dig. §990. 
 
 11 See discussion of judicial acts in Chapter IV, part C. 
 
 12 Wharton's Int. Law Dig. II, 671; See Wheaton, Lawrence's Ed. of 
 1863, pp. 673-4, citing Grotius de Jur. Rel. Ac. Pac, Lib. Ill, cap. 2, Sec. 5, 
 No. 1; See also, Bynkershock, Quaest. Jur. Pub. Lib. 1, cap. 24, and Vattel 
 Droit des Gens, Liv. 11, Ch. 18, Sec. 350; See also, Mr. Fish, Sec. of State, 
 to Mr. Nelson, min. to Mexico, Jan. 2, 1873, MS. Inst. Mex. XVIII, 357; Mr. 
 Evarts, Sec. of State, to Mr. Foster, min. to Mexico, April 19, 1879, MS. 
 Inst. Mex., XIX, 570; VI, Moore's Dig. §991. 
 
 13 See "British Prize Court Decisions in the Chicago Packing House Case," 
 by Chandler P. Anderson, XI, A. J. I. L. 269. 
 
 14 Report of Mr. Olney, Sec. of State, to the President, Feb. 5, 1896, in 
 relation to the case of John L. Waller, H, Doc. 225, 54 Cong. 1 sess. 7; For. 
 Rel. 1895, T, 257-258. 
 
 15 Vol. IV, A. J. I. L. 521. 
 
33 
 
 country 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 standard of civilization. 
 
 ''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 adminis- 
 tration does not conform to that standard, although the people of 
 the country may be content or compelled to live under it, no other 
 country can be compelled to accept it as furnishing a satisfactory 
 measure of treatment to its citizens. In the famous Don Pacifico 
 case, Lord Palmerston said, in the House of Commons: 
 
 *If our subjects abroad have complaints against in- 
 dividuals, or against the government of a foreign country, 
 if the courts of law of that country can afford them 
 redress, then, no doubt, to those courts of justice the 
 British subject ought in the first instance to apply; and 
 it is only on a denial of justice, or upon decisions mani- 
 festly unjust, that the British Government should be 
 called upon to interfere. But there may be cases in 
 which no confidence can be placed in the tribunals, those 
 tribunals being, from their composition and nature, not 
 of a character to inspire any hope of obtaining justice 
 from them. It has been said : "We do not apply this 
 rule to countries whose governments are arbitrary or 
 despotic, because there the tribunals are under the con- 
 trol of the government, and justice can not be had; and, 
 moreover, it is not meant to be applied to nominally 
 constitutional governments, where the tribunals are cor- 
 rupt." 
 
 'I say, then, that our doctrine is, that, in the first 
 instance, redress should be sought from the law courts of 
 the country; but that in cases where redress can not be 
 so had — and those cases are many — to confine a British 
 subject to that remedy only, would be to deprive him of 
 the protection which he is entitled to receive. ♦ * * 
 
 *We shall be told, perhaps, as we have already been 
 
34 
 
 told, that if the people of the country are liable to have 
 heavy stones placed upon their breasts, and police officers 
 to dance upon them ; if they are liable to have their heads 
 tied to their knees, and to be left for hours in that state; 
 or to be swung like a pendulum, and to be bastinadoed as 
 they swing, foreigners have no right to be better treated 
 than the natives, and have no business to complain if the 
 same things are practiced upon them. We may be told 
 this, but that is not my opinion, nor do I believe it is the 
 opinion of any reasonable man.' ^^ 
 
 Nations to which such observations apply must be content to 
 stand in an intermediate position between those incapable of 
 maintaining order, and those which conform fully to the interna- 
 tional standard. With this understanding there are no exceptions 
 to the rule and no variations from it. 
 
 "The most frequent occasions of appeal by citizens for pro- 
 tection in other countries arise upon the assertion that justice has 
 been denied them, in the courts, and this appears, unfortunately, 
 to be a frequent occurrence. * * * 
 
 "A large proportion of such complaints are, however, without 
 just foundation. Citizens abroad are too apt to complain that 
 justice has been denied them whenever they are beaten in a litiga- 
 tion, forgetting that, as a rule, they would complain just the 
 same if they were beaten in a litigation in the courts of their own 
 country. When a man goes into a foreign country to reside or to 
 trade he submits himself, his rights, and interests to the jurisdic- 
 tion of the courts of that country. He will naturally be at a 
 disadvantage in litigation against citizens of the country. He is 
 less familiar than they with the laws, the ways of doing business, 
 the habits of thought and action, the method of procedure, the 
 local customs and prejudices, and often with the language in 
 which the business is done and the proceedings carried on. It is 
 not the duty of a foreign country in which such a litigant finds 
 himself to make up to him for these disadvantages under which 
 he labors. They are disadvantages inseparable from his prose- 
 cuting his business in a strange land. A large part of the dissatis- 
 faction which aliens feel and express regarding their treat- 
 
 16 See Hansard, Pari. Debates CXII, 382-7. 
 
35 
 
 ment by foreign tribunals results from these causes, which furnish 
 no just ground for international complaint. It is very desirable 
 that people who go into other countries shall realize that they 
 are not entitled to have the laws and police regulations and 
 methods of judicial procedure and customs of business made over 
 to suit them, or to have any other or different treatment than 
 that which is accorded to the citizens of the country into which 
 they have gone ; so long as the government of that country main- 
 tains, according to its own ideas and for the benefit of its own 
 citizens, a system of law and administration which does not violate 
 the common standard of justice that is a part of international law ; 
 and so long as, in conformity with that standard, the same rights, 
 the same protection, and the same means of redress for wrong are 
 given to them as are given to the citizens of the country where 
 they are. On the other hand, every one who goes into a foreign 
 country is bound to obey its laws, and if he disobeys them he is 
 not entitled to be protected against punishment under those laws. 
 It follows, also, that one in a foreign country must submit to the 
 inconvenience of proceedings that may be brought in accordance 
 with law upon any bona fide charge that an oflfense has been com- 
 mitted, even though the charge may not be sustained. Neverthe- 
 less, no violation of law can deprive a citizen in a foreign country 
 of the right to protection from the government of his own coun- 
 try. There can be no crime which leaves a man without legal 
 rights. One is always entitled to insist that he shall not be pun- 
 ished except in accordance with law, or without such a hearing 
 as the universally accepted principles of justice demand. If that 
 right be denied to the most desp>erate criminal in a foreign country, 
 his own government can and ought to protect him against the 
 wrong." 
 
 Unjust discriminations in the execution of local justice will 
 form a basis for national interposition.!"^ Mr. Bayard, United 
 States Secretary of State, in a letter to Mr. Copeland, Feb. 23, 
 1886,1^ declining to present the claim of the petitioner for the 
 
 17 Mr. Fish, Sec. of State, to Mr. White, Jan. 7, 1874; MS. Inst. Arg. 
 Rep. XVI, 57. Opinion of Dr. Francis Wharton, Solicitor of the Dept. of 
 State, in the case of William A. Davis v. Great Britain, 1885, cited In Mr. 
 Day, Act^^Jec. of State, to Messrs. Lauterbach, Dittenhoefer & Limburger, 
 April 6, iflTs. 227 MS. Dom. Let. 228. 
 
 18 159 MS. Dom. Let 138. 
 
36 
 
 muirder of his father in Mexico, said: "By the principles of 
 international law, accepted by both Mexico and ourselves, we can 
 no more permit ourselves to seek redress for injuries inflicted by 
 private individuals in Mexico on one of our citizens, than we 
 could permit Mexico to intervene to seek redress for injuries in- 
 flicted on Mexicans by private individuals in the United States. 
 The rule is that, where the judiciary is recognized in a country 
 co-ordinate with the executive, having committed to it all suits 
 for redress of injuries inflicted on aliens as well as on citizens, 
 then the judiciary and not the executive must be appealed to for 
 redress. There are, it is true, two exceptions recognized to this 
 rule : First, when there is undue discrimination against the party 
 injured on account of his nationality ; secondly, where the local 
 tribunals are appealed to, but justice was denied in violation of 
 those common principles of equity which are of the law of 
 nations." 
 
 Under a decree dated October i, 1918, President Carranza 
 established a Claims Commission, composed of nationals, for the 
 purpose, as stated in Article II, "of passing upon claims for in- 
 juries to individuals or to property, occasioned by the revolution- 
 ary movements which took place in the Republic during the years 
 1910-1917." The time within which claims must be presented to 
 the Commission, under the terms of the decree establishing it, was 
 extended to February i, 1922. Whether a further extension will 
 be granted is not known at the time of writing. A discussion of 
 this Commission and its work is not particularly valuable. As 
 mentioned somewhere above, diplomatic action is not precluded by 
 the existence of the unused remedy of an appeal to a local commis- 
 sion of nationals,^ ^ and arrangements will probably have to be 
 made between Mexico and the countries whose citizens have 
 claims against her, whereby an appeal to Carranza's Commission 
 will not be a pre-requisite to the presentation of a claim to the 
 Commission which will eventually adjudicate these claims against 
 Mexico. Indeed, it is very probable that in the ultimate protocols 
 or agreements certain classes of claims will be enumerated in 
 regard to which no local remedies whatsoever will need to be 
 exhausted. 
 
 19 6 Moore's Digest, §990. 
 
37 
 
 CHAPTER III. 
 
 THE PRESENTATION AND ADJUDICATION OF 
 INTERNATIONAL CLAIMS. 
 
 International claims may, of course, be presented to the local 
 government for relief. In the event of an actual or anticipated 
 defect in local justice, or in case the injury complained of is an 
 injury at the same time to the rights of the claimant's government, 
 claims may be presented to the home State Department, and, if 
 adjudged by it to be worthy and valid, should be presented diplo- 
 matically to the foreign government. "In a * * * communi- 
 cation, the Department of State explained that claims against the 
 Government could be presented only in one of two ways: (i) 
 Either by the claimant's availing himself directly of such judicial 
 or administrative remedy as the domestic law might prescribe; 
 or (2) in the absence of such remedy, if the claimant was an 
 alien, by his government 'formally presenting the claim as an 
 international demand to be adjusted through the diplomatic chan- 
 nel.' "1 
 
 In order to secure the approval of a Department of State the 
 claim must present merely prima facie evidence of good cause, 
 such as would ordinarily, in a private law action, authorize an 
 equity court to issue ex parte process. An exhaustive examina- 
 tion of the merits of a claim will not generally be made until a 
 contest arises upon presentation of the claim to the other govern- 
 ment. A prima facie case must be made out, however .2 
 
 We are not here concerned with claims which are presented 
 to the local government for settlement by the individual foreigner. 
 We need discuss in this section, consequently, the procedural 
 aspects of the settlement of such claims only, as have already been 
 
 1 Moore's Digest, Vol. VI, p. 608, quoting Mr. John Davis, Act. Sec. of 
 State, to Baron de Fava, July 9, 1884, MS. Notes to Italy, VIII, 92. See also 
 Mr. Olney, Sec. of State, to Mr. Smythe, min. to Hayti, No. 136, March 20, 
 1896, MS. Inst. Hayti, III, 479. See also, Mr. Gresham, Sec. of State, to Mr. 
 Smythe, tel., March 21, 1895, MS. Inst. Hayti III, 439. 
 
 2 Mr. Bayard, Sec. of State, to Mr. Denby, Feb. 5, 1886, MS. Inst. China, 
 IV, 118. See also, Mr. Bayard, Sec. of State, to Mr. Cox, min. to Turkey, No. 
 69, Jan. 9, 1886, MS. Inst. Turkey, IV. 366. 
 
38 
 
 placed in the hands of the home government of the foreigner 
 claimant or of such claims as are the subject of arbitration or 
 settlement between nations. 
 
 In recent years many disputes between nations have been 
 amicably settled by resort to the mechanics of The Hague court. 
 Others, as in the case of the Aslop claims, where the United States 
 and Chile appointed Edward VII of England as mediator, have 
 been settled by the appointment under a protocol of an Amicable 
 Compositeur. Some disputes between the Latin-American States 
 have been settled by the Pan-American Court of Arbitration. It 
 is quite possible that a body under the League of Nations may 
 begin to function in the near future as an arbitrator of interna- 
 tional disputes, but it can hardly be expected that a smooth arbi- 
 tration system will be developed under the League in time to 
 adjudicate the claims against Mexico. Furthermore, neither the 
 United States nor Mexico is represented in the League of Nations 
 at the time of writing, and it is hardly possible that claims of 
 United States citizens against Mexico will be submitted for set- 
 tlement by these two countries to a body not as yet supported by 
 them. It is submitted that the most satisfactory and probably 
 the eventual method of settling the claims against Mexico will be 
 found in the creation of a mixed claims commission. 
 
 Mexico has several times experienced a Mixed Claims Com- 
 mission for the settlement of claims against her. A ''Convention 
 for the Adjustment of Claims of Citizens of the United States 
 Against Mexico" was concluded on April ii, 1839, and proclaimed 
 April 8, 1840. Under this Convention the claims were referred 
 to a Board of four commissioners, two selected by each country 
 and the King of Prussia was designated to appoint an arbitrator 
 and umpire. A "Convention for the Settlement of Claims," signed 
 by the United States and Mexico July 4, 1868, and proclaimed 
 February i, 1869, provided for a Board of two Commissioners 
 with an umpire to settle the disputed questions. On March 2, 
 1897, the United States and Mexico again signed a Claims Conven- 
 tion called the "Protocol Concerning Claims of Oberlander and 
 Messenger." This was no Mixed Claims Commission, however, 
 as it provided merely for the selection of an arbitrator. On May 
 22, 1902, there was signed by the two countries the famous "Pro- 
 
39 
 
 tocol for the Adjustment of Certain Contentions Arising under 
 what is known as the 'The Convention of the CaUfornias.' " This 
 protocol provided for four commtissioners, two to be selected by 
 each country, and none to be nationals of the contending coun- 
 tries, with an umpire to be selected under the rules of The Hague 
 Conference.^ 
 
 A Convention between the United States and Mexico* was 
 signed at Washington on March 24, 1908, and proclaimed on 
 June 29, 1908. This was one of the Arbitration Treaties con- 
 tracted by Root while Secretary of State. Article i of this Treaty 
 reads as follows: 
 
 "Differences which may arise whether of a legal nature 
 or relating to the interpretation of the treaties existing 
 between the two contracting parties and which it may 
 not have been possible to settle by diplomacy, in case no 
 other arbitrator should have been agreed upon, shall be 
 referred to the Permanent Court of Arbitration estab- 
 lished at The Hague by the Convention of the 29th July, 
 1899, provided that they do not affect the vital interest, 
 independence, or the honor of either of the contracting 
 parties and do not prejudice the interests of a third 
 party." ^ 
 
 The Convention of 1908, quoted above, is still binding on 
 Mexico and the United States, but its wording permits the estab- 
 lishment of a Mixed Claims Commission. Augustus O. Bacon, 
 U. S. Senator from Georgia, pointed this out in an Article — 
 "The Senate Amendments to the Arbitration Treaties," pubHshed 
 in the North American Review.^ In discussing the difference be- 
 tween the two treaties negotiated by Secretary of State Knox and 
 the twenty-five negotiated by Root, he says as follows: 
 
 "In each of the 25 Root treaties it is agreed that the interna- 
 
 3 These Conventions and Protocols have been published by the Govern- 
 ment Printing Ofl3ce at Washington. 
 
 4 Treaty Series No, 500 U. S. Government Printing Office. 
 
 5 The Second and Fourth Articles of this Convention provide for a method 
 of procedure and ratification respectively. Section 3 states that Article XXI 
 of the Treaty of Guadnlupe Hidalgo signed on February 2, 1848, shall remain 
 in effect. This Article XXI provides for the peaceful settlement of disputes 
 but is rather weak inasmuch as it permits either of the two nations to reject 
 arbitration if it is "deemed by it altogether Incompatible with the nature ot 
 the difference, or the circumstances of the case." 
 
 6 Republished as Senate Document No. 654, 62nd Congress, Second Ses- 
 sion — quoted from page 3. 
 
40 
 
 tional differences shall be referred for settlement to the Perma- 
 nent Court of Arbitration at The Hague. In the 2 Knox treaties 
 it is provided that these international differences shall be referred 
 to this court at The Hague 'or to some other tribunal/ as may be 
 decided by the parties in each case. This difference in the terms, 
 respectively, of the Root and Knox agreements is inappreciable, 
 and is unimportant in view of the fact that in case of any differ- 
 ence arising between the United States and any one of these 25 
 nations it would be perfectly competent, if desired, for the parties 
 to agree to refer the same for settlement to some other tribunal 
 than the Permanent Court at The Hague." 
 
 A Mixed Claims Commission is generally organized under a 
 convention or protocol of the two governments concerned, such 
 a convention or protocol being substantially an agreement to arbi- 
 trate claims of citizens of the one State against the other.. Details 
 regarding procedure vary. It is customary to agree to the 
 appointment of two commissioners or arbitrators, one by each of 
 the executives of the two nations, with a provision that the two 
 executives, or the two commissioners, shall between them select 
 a third commissioner, usually a citizen of a third nation, to act 
 as umpire and having the decisive vote in case of a disagreement 
 between the other two arbitrators. In the convention between 
 the United States and Mexico, signed July 4, 1868, it was pro- 
 vided that the two commissioners first sit on all the claims and 
 that they appoint an umpire, merely for the settlement of the 
 disputed claims. In the event of their failing to agree on an 
 umpire, it was provided that they each appoint a representa- 
 tive, and that it be decided, for each disputed claim, by lot, which 
 representative should sit as arbitrator. The convention between 
 the United States and the Republic of Chile, signed at Santiago, 
 August 7, 1892, and ratified January 26, 1893, established, it is 
 submitted, a better procedure, inasmuch as it provided that, 
 upon the failure of the two executives to select a third commis- 
 sioner within three months, said third commissioner would be 
 selected by a third party — in this case, the President of the Swiss 
 Confederation. 
 
 The present claims controversy presents the situation, how- 
 ever, of claims by more than one government against Mexico. 
 
41 
 
 To cover this situation, one of several courses might be adopted. 
 The other claimant governments could under an arrangement with 
 the United States and in compliance with one interpretation of 
 the Monroe Doctrine turn over the prosecution of their claims 
 to the United States Government. It is doubtful, however, 
 whether the United States would consent to this procedure. A 
 second plan might be the appointment of a commissioner by each 
 of the claimant governments to sit with the Mexican Commis- 
 sioner and the umpire on the respective claims presented by his 
 government. These two plans seem to be preferable to a pos- 
 sible third, that of establishing separate commissions for the con- 
 sideration of the claims of each government, as they would sim- 
 plify the work for the Mexican Government. 
 
 To assure the claimants a fair opportunity to present their 
 claims adequately, it is necessary to secure to them in the protocol 
 or agreement establishing the commission, the right to examine 
 books, records and documents and to take depositions in either 
 country. Without this right, and without a considerable amount 
 of co-operation on the part of both Governments, it would be 
 practically impossible in almost all instances for the claimant to 
 properly prepare his case. 
 
 The Spanish Treaty Claims Commission, before which were 
 brought some 542 claims based on losses or injuries suffered dur- 
 mg the Cuban Insurrection (the claims totaling $642,931,694.51, 
 and covering almost every possible variety of damage), consumed 
 nine years "in the reception, examination and adjudication of these 
 claims.""^ In the words of the final report of the Commission 
 "perhaps two years might have been saved, if, at the beginning, 
 there had existed practical methods for procuring testimony in 
 Cuba and Spain." The following excerpt from the same report 
 will serve to illustrate the diffkulties which should be anticipated 
 upon the organization of the claims commission : 
 
 "Sources of Evidence. 
 
 Soon after the organization of the commission it was 
 ascertained that practically all of the evidence on which 
 the cases would be tried would come from four sources, 
 namely, the records of the State Department, the Spanish 
 
 7 Senate Document 550, 61st Congress, 2d Session. 
 
42 
 
 archives in Madrid, witnesses in Cuba and Spain, and 
 witnesses in the United States. Under the organic act, 
 it was provided that 'all reports, records, proceedings, 
 and other documents now on file or of record in the 
 Department of State or in any other department, or cer- 
 tified copies thereof, relating to any claims prosecuted 
 before said commission shall be furnished to the com- 
 mission upon its order.' An order was thereupon issued 
 for certified copies of all such documents. The State 
 Department was without funds for this purpose, and the 
 work of securing these records was delayed until an 
 appropriation was made therefor by Congress. 
 
 Methods for Procuring Testimony. 
 
 The act creating the commission empowered it to 
 appoint one or more commissioners to take testimony. 
 There was no trouble or delay in this respect, so far as 
 taking depositions in the United States was concerned, 
 but it was soon apparent that there existed no practical 
 method of taking depositions in foreign countries. It 
 was also apparent that a large majority of the witnesses 
 upon whom both claimants and the Government must 
 depend resided either in Cuba, where the losses occurred, 
 or in Spain, to which the armies of that Kingdom, in Cuba 
 during the insurrection, had returned at the close of the 
 Spanish-American war. The laws of practice and pro- 
 cedure of Spain and Cuba were so radically unlike those 
 of this country that it was practically impossible to pro- 
 cure testimony except by complicated methods, involving 
 great delay and expense, and in a form wholly inadequate 
 to bring about a full and fair trial of the cases. 
 
 The complications were multiplied by the fact that the 
 testimony of these witnesses would necessarily be in the 
 language of those countries. Fortunately, the island at 
 the time was under the military control of the United 
 States, and this situation was relieved, so far as taking 
 testimony in Cuba was concerned, through the issuance, 
 by the military government in Cuba, of Order No. 79, 
 dated Habana, March 15, 1902, giving any commissioner 
 duly appointed by the Spanish Treaty Claims Commis- 
 sion ample power to take testimony in Cuba, which order, 
 by an enactment of Congress, known as the Tlatt amend- 
 ment,' became a permanent law of that island. Further 
 relief was given by an act of Congress approved June 
 30, 1902, amending the act of March 2, 1901, conferring 
 additional powers upon the commission, and vesting it 
 
43 
 
 with 'all the powers now possessed by the circuit and 
 district courts of the United States to take or procure 
 testimony in foreign countries,' and by an act approved 
 June 28, 1902, authorizing the commission to appoint 
 salaried commissioners to take testimony in Cuba, and 
 per diem commissioners whenever necessary. 
 
 After the island was turned over to the Republic of 
 Cuba it was soon evident, notwithstanding the enabling 
 measures above mentioned, that they were so vaguely 
 comprehended by the Cuban courts of the first instance 
 it would require patient negotiations to secure the active 
 cooperation of the judges, without which no progress in 
 the way of taking depositions could be hoped for. The 
 credit of overcoming obstacles is largely due to the ser- 
 vices of Mr. David Mead Massie, of Ohio, appointed by 
 the commission as a salaried commissioner to take tes- 
 timony in Cuba, by virtue of the act of Congress above 
 referred to." 
 
 Such a large number of claims may be expected against 
 Mexico and the difficulties in the way of proof will be so great 
 that an adjudication of them by a mixed commission would be a 
 farce, unless there were incorporated in the organic act establish- 
 ing the commission, clauses mandatory and binding regarding 
 the offering and guaranteeing of facilities for securing evidence 
 and unless there was, in addition, a whole-hearted and honest 
 spirit of co-operation between the Governments involved that 
 would overcome the diffilculties suggested by the experiences of 
 the Spanish Treaty Claims Commission. This spirit would shorten 
 by years the sittings of the Commission and at the same time 
 would tend to make the adjudication of the claims equitable and 
 fair. The technical difficulties to be overcome may not be lightly 
 viewed and the negotiations preceding the establishment of the 
 commission should proceed in full realization of the enormous 
 task ahead. 
 
 It is submitted that a workable agreement providing for a 
 mixed claims commission should include articles following the 
 suggestions enumerated below. This list is not presented as a 
 complete framework for a protocol, but merely an enumeration 
 of some of the clauses considered of importance. 
 
 I. The commission should be given authority to examine 
 
44 
 
 and judge by a vote of two out of the three commissioners the 
 claims presented. 
 
 2. There should be provisions regarding procedure in case 
 of the death of one or more of the commissioners, the places and 
 times of meeting and of the oaths of said commissioners. 
 
 3. The Commissioners should be limited in considering evi- 
 dence to that brought forward by the contending Governments, 
 but should be bound to receive all such evidence. 
 
 4. The two governments should be permitted as counsel one 
 person nominated by each of the two executives and the claim- 
 ant himself shall be entitled to counsel. The Governments should 
 be bound to furnish the commission, at its request, with papers in 
 their possession which might be pertinent to the claims. 
 
 5. The decisions of the Commissioners or two of them should 
 be final and conclusive and should be made in writing for each 
 claim, stating the amount of the award to be made, if any, and 
 the date from and to which interest is to run, if any. 
 
 6. A time limit should be fixed within which claims must be 
 presented, though a provision should be added extending that 
 time when reasons for the delay appear valid to two of the com- 
 missioners. 
 
 7. The commission should be bound to make all of its deci- 
 sions within a time limit. 
 
 8. In the matter of procedure the commission should be given 
 almost entirely full rein. 
 
 9. Provision should be made for the payment of the awards. 
 
 10. Records of proceedings and awards should be kept. Each 
 executive should be authorized to appoint a secretary and the 
 commission should have the power to appoint such other officers 
 as might be deemed necessary. 
 
 11. Expenses should be divided and those of the third com- 
 missioner paid by the two Governments, but the commission's 
 
45 
 
 whole expenses partly paid by reductions from the awards made 
 to a limited percentage. 
 
 12. A method of ratification should be laid out. 
 
 13. The commission should apply, in adjudicating the claims, 
 the well recognized principles of international law. 
 
 14. Provision should be made for examination of records 
 and documents and the taking of depositions in both countries. 
 
 Mr. Amos S. Hershey, in the American Journal of Interna- 
 tional Law,^ in an article on "The Calvo & Drago Doctrines," 
 discusses the legitimacy of the average international claim in the 
 following interesting fashion: 
 
 "While we do not deny the responsibility of govern- 
 ments to foreigners and their liability in certain cases, 
 even during times of civil war and insurrection, it is 
 certain that the major part of such demands are usually 
 far in excess of liability and are based on erroneous 
 principles. The following examples, selected for the most 
 part from Moore's Work on Ai'bitration, may serve to illus- 
 trate the exorbitant amounts of most of these claims. 
 
 "The Civil War claims of Great Britain against the 
 United States, which were settled by a mixed commission 
 in 1873, amounted (with interest) to about $96,000,000. 
 Less than $2,000,000 was actually awarded to the British 
 claimants. Of the 478 British claims, 259 were for prop- 
 erty alleged to have been taken by the military, naval 
 or civil authorities of the United States; 181 for prop- 
 erty alleged to have been destroyed by the military and 
 naval forces of the United States; 7 for property de- 
 stroyed by the Confederacy; 100 for damages for the 
 alleged unlawful arrest and imprisonment of British sub- 
 jects by the authorities of the United States; 77 for dam- 
 ages for the alleged unlawful capture and condemnation 
 or detention of British vessels and their cargoes as 
 prize of war by the naval forces and civil authorities of 
 the United States. 
 
 "The claims of France growing out of the Civil War 
 were also settled by a mixed commission which met in 
 1880-84. They aggregated about $35,000,000. The 
 
 8 Vol. I, p. 43. 
 
46 
 
 amount actually awarded was $625,566.35, i. e., less than 
 2 per cent of the amount demanded. Many of the claims 
 are said to have been fraudulent and others were greatly 
 exaggerated. Most of the awards were for injuries in- 
 flicted by the armies of the United States, i. e., presum- 
 ably for violations of the laws of warfare. 
 
 "The claims of the citizens of the United States against 
 Mexico, presented to the mixed commission which met 
 in July, 1869, and continued in session until January, 
 1876, amounted to the enormous sum of $470,000,000. 
 The actual amount awarded was $4,000,000 or less than 
 one per cent. The claims of citizens of Mexico against 
 the United States amounted to $86,000,000. They re- 
 ceived $150,000. 
 
 "The mixed commissions which adjudicated the claims 
 against Venezuela at Caracas during the summer of 1903, 
 awarded 2,313,711 bolivars to claimants of the United 
 States out of 81,410,952 which were demanded; 1,974,818 
 to Spanish claimants who had demanded 5,307,626; 
 2,975,906 to Italian claimants who had asked for 
 39,844,258; 2,091,908 to German claimants who had de- 
 manded 7,376,685; 9,401,267 to British claimants inatead 
 of 14,743,572 as demanded; and 10,898,643 to Belgian 
 claimants who had only demanded 14,921,805 bolivars. 
 The demands of French claimants, which amounted to 
 nearly $8,000,000 were cut down to $685,000. 
 
 "Besides being excessive in amount, it is believed 
 that many of these claims are bottomed on fraud and 
 tainted with illegality and injustice. It is notorious that 
 the sums received by a government are often far below 
 the face value of the loan and many of the claimants for 
 losses during civil war or insurrection are not above a 
 well-grounded suspicion of having themselves been en- 
 gaged in unneutral or insurrectionary acts. 
 
 "In view of the ill-founded character of many, if not 
 most, of such claims and of the danger of the peace and 
 safety of the states of Latin America resulting from their 
 forcible collection by leading European powers, the 
 United States would be fully justified even in advancing 
 a step beyond the Drago Doctrine and declaring formally 
 to the world that it could not see with indifference any 
 attempt at the forcible collection of private claims of a 
 pecuniary nature on the Western Continent. The Mon- 
 roe Doctrine, at least in its present form, forbids the 
 further acquisition, colonization or permanent occupa- 
 tion of American territory by any European power, and 
 
47 
 
 it is believed that such a declaration would not only be 
 in harmony with the spirit of that doctrine but that it 
 would lend strength to the principle of non-intervention. 
 
 ''In view, however, of the fact that some of these 
 claims may be well-founded and that the judicial tribunals 
 in certain portions of Central America are notoriously 
 inadequate for the impartial and effective administration 
 of justice, and because of the frequency of revolutions, 
 due mainly to fraudulent elections, it might be well to 
 couple this declaration with another, insisting that all 
 such claims be submitted to fair and impartial arbitral 
 tribunals or mixed commissions composed of representa- 
 tives from both the creditor and debtor nations. 
 
 "The United States has no desire to become a Mebt 
 collecting agency' for European creditors or to establish 
 a protectorate over the states of Latin America. For 
 these reasons our government should avoid, if possible, 
 the responsibility of an e.v parte decision regarding the 
 validity of these claims, although the assumption of such 
 a burden would be preferable to their forcible collection 
 by European powers. Our insistence upon arbitration 
 in the case of the famous boundary dispute between Great 
 Britain and Venezuela in 1895, points the way toward 
 what is at once the easiest and most equitable settlement 
 of such disputes." 
 
 There are many classes of injuries for which, under Interna- 
 tional Law, there can be no compensation. Enormous losses of 
 these varieties have, since 1910, been sustained in Mexico and 
 cannot, because of their nature and the peculiar circumstances 
 involved, be repaired. Many foreigners will find, even in cases 
 where there has unquestionably been grievous injury, that their 
 claims will often stand upon no valid principles of legal liability. 
 In addition, there will probably be many claim.s which would be 
 thrown out by a Commission on one of the grounds discussed in 
 Chapter V. 
 
 Various estimates have been made regarding the total number, 
 and the aggregate sum, of the claims which will be presented 
 against Mexico. All of such estimates are at best guesses. It is 
 safe to say, however, that when the claims are finally adjudicated 
 in the light of the rules of International Law, the number and 
 amount of the claims will be shown to have been far in excess 
 of the real liabilitv of Mexico. It is to Mexico's interest to have 
 
48 
 
 the claims adjudicated at the earliest possible moment in order 
 that these greatly exaggerated estimates of liability will be dissi- 
 pated. The establishing of Mexico's true liability and indebted- 
 ness will be a stabilizing influence both to her and to the world in 
 general. Furthermore, no plans for the rehabilitation and devel- 
 opment of Mexico, a rehabilitation and development in which 
 other nations are vitally interested, will be found workable which 
 do not include a just settlement of the claims problem. Conse- 
 quently such plans are almost certainly doomed to at least partial 
 failure until they are based no longer on estimated liability, but 
 on adjudged indebtedness. 
 
49 
 
 CHAPTER IV. 
 
 PARTICULAR CLASSES OF CLAIMS. THE RULES 
 OF INTERNATIONAL LAW APPLICABLE TO 
 EACH. 
 
 (A classification will be used in this Chapter which is by no 
 means perfect and some of the groups may be found to overlap 
 others. This classification has been intended not as an ideal divi- 
 sion but as a convenient one. It will be noticed that only such 
 claims are here considered as might arise as a result of the internal 
 strife in Mexico from 1910 to 192 1 or of governmental acts dur- 
 ing this period.) 
 
 A. 
 
 LAND, PETROLEUM AND MINERAL CLAIMS. EFFECT 
 
 OF ARTICLE 27 OF THE MEXICAN CONSTI- 
 
 TION OF 1917. 
 
 Where there is a conflict of laws, questions involving land are 
 governed by the lex rei sitae.^ Local limitations on the right to 
 hold property and on the exercise of property rights are valid 
 and binding within the commonly accepted principles of interna- 
 tional law, provided these limitations are placed upon nationals 
 as well as upon foreigners, and provided they are not in violation 
 of those rights of man (see Chapter I-A) which relate to prop- 
 erty rights. But where there is undue discrimination against 
 aliens, a denial of justice by the judex rei sitae or a violation of 
 one of the rights of man, diplomatic intervention is not precluded. 
 The most important of the applicable rights of man would be the 
 following: The individual must be permitted to enjoy his prop- 
 erty; vested rights must be recognized and not interfered with 
 except under the police power; and no property may be confis- 
 cated without due process of law. 
 
 1 Mr. March, Sec. of State, to Mr. Seldlng, March 3, 1856, 45 MS. 
 Dom. Let. 123. To the same effect, see Mr. Fish, Sec. of State, to Mr. Conk- 
 Ung, April 13, 1869, 80 MS. Dom. Let. 564; Mr. Fish, Sec. of State, to Mr. 
 Wilder, May 6, 1876, 113 MS. Dom. Let. 294; Mr. Frelinghuysen, Sec. of State, 
 to Mr. Hall, Min. to Cent. Am., June 18, 1882, MS. Inst. Cent. Am. XVIII, 
 245; Mr. Frelinghuysen, Sec. of State, to Mr. Scruggs, Feb. 19, 1884, MS. Inst. 
 CoUimhia, XVII, 381; Mr. Porter, Acting Sec. of State, to Mr. Hall, June 9, 
 1885, MS. Inst. Cent. Am. XYIII, 518. 
 
50 
 
 It is well to note, however, that erroneous conceptions of the 
 meanings of the terms, "due process of law," "property," "police 
 power" and 'Vested rights," and mistaken views regarding the 
 significance of these terms in constitutional and international law 
 are prevalent. This may be explained by the strong faith of a 
 large part of humanity in the absolute truth of the established 
 order and the great inertia of this group toward change. This 
 firm belief in things as they are sways this group toward a con- 
 viction that the terms quoted above are fixed and unchanging in 
 their connotations within the purview of both constitutional and 
 international law. In consequence, this group attempts to limit 
 the exercise of "police power" to a field wherein it does not in- 
 fringe on "vested rights," deeming the latter to be property rights 
 as they stand before each new contemplated restriction under the 
 operation of the "police power." 
 
 As a matter of fact, these terms do change in their connota- 
 tions.2 
 
 2 In a recent opinion in the New York Supreme Court in the case of 
 People ex rel Brixton Operating Corporation v. La Fetra, etc., Justice Giege- 
 rich discusses these terms in the following interesting fashion: 
 
 "At the outset, in the consideration of the constitutional question 
 presented, it should be remembered that the meaning of the words police 
 power and the meaning of the word property are not and cannot be fixed 
 and unchanging. The two concepts are more or less in conflict, and as 
 one is enlarged the other is sometimes correspondingly diminished. The 
 one represents the right of the community to protect itself. The Roman 
 maxim was 8alus populi suprema lex. The other represents the right of 
 the individual to dominion over such things as are permitted by the state 
 to be the subjects of ownership. But the individual right of dominion 
 extends only so far as the welfare of the community permits it to extend, 
 or probably it would be more accurate to say so far as the preponderant 
 public sentiment of thp time deems that the welfare of the community 
 can safely permit it to extend. As John Stuart Mill expresses it, 'The 
 idea of property is not some one thing, identical throughout history and 
 incapable of alteration, but is variable like all creations of the human 
 mind ; at any given time it is a brief expression denoting the rights over 
 things conferred by the law or custom of some given society at that 
 time; but neither on this point nor on any other has the law and custom 
 of a given time and place a claim to be stereotyped forever.' (31 Fort- 
 nightly Review, 513; Chapters on Socialism, p. 527.) 
 * * * * * ** * * * 
 
 "As industrial and economic and social conditions change, and indeed 
 as public sentiment changes, the idea of property changes, and with it the 
 correlated idea of police power changes. 
 
 "Whatever injuries an individual may suffer in the dimunition of his 
 property rights are, however, deemed to be made up to him by his shar- 
 ing in the general benefits which the regulations secure to the community 
 of which he is a member (People ex rel Nechamous v. W^arden, 144 N. Y. 
 529, 535) ; * * * And it was in a still more recent case (Atlantic Coast 
 Line R. R. t. Goldsboro, 232 U. S. 548, 558) that the court said: 'It is 
 settled that neither the contract clause nor the "due process" clause has 
 the effect of overriding the power of the state to establish all regulations 
 that are reasonably necessary to secure the health, safety, good order, 
 comfort or general welfare of the community * * » and that all con- 
 tract and property rights are held subject to its fair exercise.' " 
 
51 
 
 There is a conflict between vested right and public interest which 
 operates to alter from time to time the meaning of "property" and 
 to change, also, the meaning of "police power." 
 
 Property rights are not inviolable when the public interest is 
 involved. The foundation of this principle lies in the fact that 
 the individual holds property rights at the sufferance of society 
 and that his holding is in the nature of a public trusteeship. It is 
 true that he may alienate and may put the property to his own 
 use with an almost unlimited independence, but he is not per- 
 mitted to work his entire free will on his property. His use and 
 occupation is subject to certain very definite restrictions imposed 
 by an exercise of the police power that is uniformly approved. 
 Moreover, the exercise of the State's right of eminent domain 
 very clearly deprives the individual of so-called vested rights in 
 the interest of the public good. A restriction or abrogation of 
 vested rights is not always accompanied by compensation. The 
 taking of property under eminent domain is always accompanied 
 by compensation to the individual, but the common restrictions on 
 the use of property, for example, a restriction that particular 
 industries may not be undertaken on a particular piece of prop- 
 erty (such a restriction being just as much the taking of vested 
 property rights as a taking under eminent domain), do not in- 
 volve compensation. Moreover, all confiscations of property in 
 the public interest are not compensated, nor need they be. When 
 necessary sanitary measures require the confiscation of private 
 property,^ the State is not compelled by any nature of law, munici- 
 pal or international, to compensate the individual whose property 
 has been destroyed. 
 
 There is nothing fixed, sacred and unchangeable about the 
 term vested. It connotes merely the substance of the tolerance 
 of society. When society deems necessary to the general good, a 
 change in the quantum of rights to be allowed the individual, a 
 modification of the respective connotations of the terms vested 
 rights, due process, and police power occurs which reduces the 
 substance of the vested rights, lessens the restrictions of the due 
 process and expands the police power. This process of change 
 is no contravention of a sacred rule that rights are fixed and 
 
 3 See Chapter IV-D. 
 
52 
 
 cannot be altered by the State in its development, but rather a 
 manifestation of the undoubtedly sound rule that private rights 
 must be subordinated to the public good. 
 
 On March 8, 1921, the New York Court of Appeals held 
 constitutional the so-called "Emergency Rent Laws."* In his 
 opinion Justice Cuthbert W. Pound says as follows : 
 
 "The legislative or police power is a dynamic agency, 
 vague and undefined in its scope, which takes private 
 property or limits its use when great public needs re- 
 quire, uncontrolled by the constitutional requirement 
 of due process. Either the rights of property and con- 
 tract must, when necessary, yield to the public conveni- 
 ence and the public advantage or it must be found that 
 the State has surrendered one of the attributes of sov- 
 ereignty for which Governments are founded, and made 
 itself powerless to secure to its citizens the blessings of 
 freedom and to promote the general welfare. 
 
 "Emergency laws in time of peace are uncommon, 
 but not unknown. Wholesale disaster, financial panic, 
 the aftermath of war, earthquake, pestilence, famine and 
 fire, a combination of men or the force of circumstances 
 may, as the alternative of confusion or chaos, demand the 
 enactment of laws that would be thought arbitrary under 
 normal conditions. Although emergency cannot become 
 the source of power, and although the Constitution can- 
 not be suspended in any complication of peace or war, 
 an emergency may afford a reason for putting forth a 
 latent governmental power already enjoyed but not 
 previously exercised. 
 
 "Laws directly nullifying some essential part of pri- 
 vate contracts are rare and are not lightly to be upheld 
 by heavy and sw^eeping generalization on the common 
 good, but no decision upholds the extreme view that the 
 obligation of private contracts may never be directly im- 
 paired in the exercise of the legislative power. No vital 
 distinction may be drawn between the exercise in times 
 of emergency of the police power upon the property right 
 and upon the contract obligation for the protection of the 
 public weal. 
 
 :)c J|t 5|C 5|C * * * 
 
 "The question comes back to what the State may do 
 for the benefit of the community at large. Here the 
 
 4 Reported in the New York Times, March 9, 1921. 
 
53 
 
 legislation rests on a secure foundation. The struggle 
 to meet changing conditions through new legislation con- 
 stantly goes on. The fundamental question is whether 
 society is prepared for the change. The law of each age 
 is ultimately what that age thinks should be the law." 
 
 The New York rent laws were held constitutional by the 
 Supreme Court of the United States in the very recent case of 
 Marcus Brown Holding Company, Inc., vs. Feldman, reported in / 
 the New York Law Journal of April 23, 192 1. y 
 
 Mexico has recently attempted, within the spirit of this mod- 
 ern theory of property rights and the police power, to conserve 
 her oil and mineral resources by constitutional provision. In 
 adopting the modern theory, she came into conflict with the rules 
 of international law, which protect certain hard to define but 
 nevertheless well-internationally recognized vested individual 
 rights. An appreciation of this theory of property rights which 
 is rapidly being adopted the world over, is necessary to a clear 
 appreciation of the oil situation in Mexico as the Mexicans are 
 strong contenders for this theory and as they justify their position 
 by advancing it. 
 
 Since the birth of the new Mexican Constitution of May ist, 
 1917, which superseded that of 1857 and came into eflfect shortly 
 after the defeat of Huerta by Carranza's party, the oil contro- 
 versy has been the most troublesome international problem in the 
 Mexican situation. For this reason the subject is perhaps treated 
 at greater length than the size of this volume would ordinarily 
 warrant. 
 
 Article 2y of the new Constitution reads in part as follows : 
 
 "The ownership of lands and waters comprised within 
 the limits of the national territory is vested originally 
 in the Nation, which has had, and has, the right to trans- 
 mit title thereof to private persons, thereby constituting 
 private property. 
 
 "Private property shall not he expropriated except for 
 reasons of public utility and by means of indemniUcation. 
 
 "The Nation shall have at all times the right to im- 
 pose on private property such limitation as the public 
 interest may demand as well as the right to regulate the 
 development of natural resources, which are susceptible 
 
54 
 
 of appropriation in order to conserve them and equitably 
 to distribute the public wealth. For this purpose neces- 
 sary measures shall be taken to * * * prevent the 
 destruction of natural resources. * * *_ Private 
 property acquired for the said purposes shall be consid- 
 ered as taken for public utility (in the public interest). 
 
 "In the Nation is vested direct ownership of all miner- 
 als * * * petroleums and all hydrocarbons — solid, 
 liquid and gaseous. 
 
 "In the Nation is likewise vested the ownership of the 
 water of territorial seas ^ * ^ 
 
 "In the cases to w4iich the two foregoing paragraphs 
 refer, the ownership of the Nation is inalienable and may 
 not be lost by prescription; concessions shall be granted 
 by the Federal Government to private parties or civil or 
 commercial corporations organized under the laws of 
 Mexico * * *^ 
 
 "Legal capacity to acquire ownership of lands and 
 waters of the Nation shall be governed by the following 
 provisions : 
 
 "1. Only Mexicans by birth or naturalization and 
 Mexican companies have the right to acquire ownership in 
 lands, waters and their appurtenances, or to obtain con- 
 cessions to develop mines, waters or mineral fuels in the 
 Republic of Mexico. The Nation may grant the same 
 right to foreigners provided they agree before the Depart- 
 ment of Foreign Affairs to be considered Mexicans in 
 respect to such property, and accordingly not to invoke 
 the protection of their governments in respect to the 
 same, under penalty in case of breach, of forfeiture to the 
 Nation of property so acquired * * * 
 
 "The Federal and State laws shall determine within 
 their respective jurisdictions these cases in which the 
 occupation of private property shall be considered as 
 private utility * * * ^ 7^/^^ amount fixed as compen- 
 sation for the expropriated property shall be based on the 
 sums at which the said property shall be valued for fiscal 
 purposes in the catastral or revenue office * * * fo which 
 there shall be added ten per cent. * * *." 
 
 The Constitution of 1917 was not adopted by means constitu- 
 tional under the old Constitution of 1857, but Mexican authorities 
 differ in interpreting the intended character and effect of the new 
 
55 
 
 Constitution. While some hold the new Constitution to be a crea- 
 ture fundamentally different from its predecessor and having an 
 entirely independent origin, others maintain the new one to be in 
 the nature of an amended edition of the old. A great many 
 chan<^es were made, some of them, like several in Article 27, very 
 radical changes, but a comparison of the two constitutions will 
 show that the general plan and numbering of the older one was 
 followed throughout that of 1917, and the substance in general 
 as well. The intent that the Constitution of 191 7 should be in the 
 nature of an amended edition of the older one is important in 
 determining questions of constitutional construction. 
 
 By decrees and regulations promulgated since the establish- 
 ment of the new Constitution, Article 2^, or that part of it re- 
 ferring to subsoil rights, has been interpreted retroactively as 
 well as prospectively, and it has been this retroactive interpreta- 
 tion which has been the main subject of international dispute in 
 the oil controversy. 
 
 The Mexican Government undoubtedly has the moral and the 
 international right to regulate the holding of property and the 
 conservation of its mineral resources in any way it sees fit, pro- 
 vided there is no unjust discrimination against foreigners and 
 provided, also, there is no violation of international rights. 
 Consequently, a prospective interpretation of Article 27, which 
 would apply its provisions only to subsoil rights acquired after 
 May 1st, 1917, would be no violation of international law. 
 
 "It is the duty of every state to determine the property which 
 may be possessed or owned, establish the legal means of acquiring 
 and disposing of property, and assume the exercise and enjoyment 
 of all the rights of the owner, placing the foreigner in the same 
 position as the citizen with respect to the local law and regula- 
 tions."5 
 
 "Legislative jurisdiction must be recognized on the part of 
 the territorial sovereignty in the following respects : 
 ******* 
 
 "(d) To limit the exercise and enjoyment of rights 
 over property with a view to safeguarding the public 
 interest and the organization of landed property and to 
 assure the protection of the rights of property. 
 
 B Flore's "International Law Codified," tr. by Borchard, p. 453. 
 
S6 
 
 "(e) To regulate the effects of possession and the 
 legal consequences arising from a state of facts and re- 
 lations established between persons and property within 
 the national territory." 
 
 s|e sK >K * * 5i! * 
 
 "Legislative jurisdiction concerning property situated in the 
 territory of the state, considered objectively, must be ascribed 
 exclusively to the territorial sovereignty. 
 
 "This sovereignty has not only the power to determine the 
 legal status of property, but has also the power to fix the condi- 
 tions necessary for the validity of rights in rem and to determine 
 the legal resource which the owner may have as to his own prop- 
 erty or that of others situated within the national territory."^ 
 
 Retroactive interpretation of Article 27 under the theory that 
 it was a necessary measure for the conservation of the national 
 resources, would be valid enough, in international contemplation, 
 if such interpretation were combined with the procedure followed 
 in the case of condemnation under the right of eminent domain, 
 when the taking of vested property must always be compensated."^ 
 Unfortunately, this solution is not a very practical one in view of 
 the present financial situation of Mexico. 
 
 But a i5are retroactive interpretation not combined with com- 
 pensation for those deprived of their property rights vested before 
 the enactment of Article 2'j, is a clear breach of international law 
 and is a ground for diplomatic intervention by the home Govern- 
 ments of foreigners holding such previously vested rights. Secre- 
 tary of State Blaine of the United States in 1881 said: "* * * 
 the proposition that a retroactive law, suspending at will the sim- 
 plest operations of justice, could be applied without question to 
 an American citizen, is one to which this government would not 
 give anticipatory assent."^ "Every person who voluntarily brings 
 himself within the jurisdiction of the country, whether perma- 
 nently or temporarily, is subject to the operation of its laws, 
 whether he be a citizen or a mere resident, so long as, in the case 
 
 6 Fiore, pp. 450 and 451. 
 
 7 See Borchard's Dip. Pro. of Cit. Ab., pp. 125-7 and 182. 
 
 8 Mr. Blaine Sec. of State, to Mr. Lowell, Min. to Gr. Brit, May 2», 1881^ 
 For. Rel. 1881, 530; Moore's International Law Digest. 
 
57 
 
 of the alien resident, no treaty stipulation or principle of inter- 
 national law is contravened."^ 
 
 "The legislature is an organ of the state for whose acts the 
 state is directly responsible. It has been noted that in municipal 
 law no action lies against the government for acts of legislation 
 unless the statute itself or the constitutional law of the state so 
 prescribes. But a statute is no defense against a breach of inter- 
 national obligations. When acts of legislation, — among which 
 may be included administrative decrees and ordinances having the 
 force of law — have been deemed violative of the rights of aliens 
 according to local or international law, foreign governments have 
 not acquiesced in the theory of the non-liability of the state and 
 have on numerous occasions successfully enforced claims for the 
 injuries sustained by their subjects. "^^ 
 
 It would not be a difficult matter for Mexico to retain the 
 benefits of Article 27 and at the same time avoid a violation of 
 vested rights and a consequent breach of international law. 
 
 Article 14 of the Constitution of 19 17 runs as follows: 
 
 "No law shall be given retroactive effect to the preju- 
 dice of any person whatever. 
 
 "No person shall be deprived of life, liberty, property, 
 possessions or rights without due process of law insti- 
 tuted before a duly created court in which the essential 
 elements of procedure are observed in accordance with 
 previously existing laws * * *." 
 
 If the above Article should apply to Article 2j, a retroactive 
 interpretation of the latter would be clearly illegal. Article 14 
 of the previous Constitution of 1857, corresponding to Article 14 
 of that of 1917, ran as follows : — 
 
 "No retroactive law shall be enacted * * *." Certainly 
 the spirit of Article 14 is against retroactive interpretations even 
 if constitutional. There is some doubt, however, as to whether the 
 actual wording makes Article 14 applicable to the Constitution 
 itself. "Law" has been variously defined and interpreted. Dic- 
 tionaries give it a very wide meaning and include constitutional 
 
 9 Mr. Blaine, Sec. of State, to Mr. O'Connor, Nov. 25, 1881, 139 MS. Dom. 
 Let. 663; See also, Mr. Blaine, Sec. of State, to Mr. PlattI, Dec. 6, 1881, 140 MS. 
 Dom. Let. 86; Moore's International Law Digest. 
 
 10 Borchard, Dip. Prot. of Clt. Ab., p. 181. 
 
S8 
 
 provisions and even customs. In the case of State ex rel Teague 
 V. Board of Com'rs of Silver Bow County,^^ it was held that "law" 
 as used in the Constitution, Article 5, Section 31, which provided 
 that no law shall extend the term of office of a public officer after 
 his election, did not refer to the Constitution. In Warfield v. 
 Vandiver,i2 "law" was held not to apply to proposed constitu- 
 tional amendments where the Constitution said ''Bills" must be 
 presented to the Governor before they can become "laws." On 
 the other hand "law" has often been held to include constitutions. 
 In Kern v. Arbeiter Unterstuetzungs Verein,^-^ it was held that 
 the State and Federal Constitutions are "laws" within the meaning 
 of How. Ann. St., c. 164, Section 4, which contains provisions for 
 beneficial associations organized thereunder, shall not make rules 
 contrary to the laws of the United States or of that State. 
 
 As a matter of constitutional law it would not be difficult tg 
 give only a prospective interpretation to this Article ; in fact, the 
 accepted rules of constitutional and legislative construction are 
 decidedly against an unnecessary retroactive interpretation, par- 
 ticularly when such a retroactive interpretation involves a taking 
 of vested rights as the term is ordinarily understood. 
 
 "A doubtful provision will be examined in the light of prior 
 and contemporaneous history, and of the conditions and circum- 
 stances under which the constitution was framed. The court 
 should look to the history of the times, and examine the state of 
 things existing when the constitution was framed and adopted, 
 with a view to ascertaining its objects and purposes. It should 
 consider, for example, the former law, the mischief and the rem- 
 edy intended to be prevented. In such cases the relation of a 
 doubtful provision to known political truths and to political insti- 
 tutions will be considered ; and previous legislation and the usages 
 of the government will also be given weight."^* 
 
 :}£ :je * H: * * * 
 
 "Many of the state constitutions contain provisions against 
 retrospective laws. But even in states where specifically and 
 formally prohibited, there are certain classes of retrospective laws 
 
 11 87 Pac. 450. 
 
 12 60 Atl. 538. 
 
 13 102 N. W. 746. 
 
 14 12 Corpus Juris, p. 710. 
 
59 
 
 which have been sustained as valid and constitutional. The pro- 
 hibition is against only such retrospective legislation as injuriously 
 
 affects some substantial right of a citizen. "^^ 
 
 ******* 
 
 "For the purpose of determining the constitutionality of stat- 
 utes there is a strong presumption against an intent to give them 
 a retrospective operation, which can be overcome only by the 
 
 plain tenns of the statute."!^ 
 
 ******* 
 
 "The adoption of constitutional provisions abrogating or other- 
 wise affecting property rights operates prospectively and has no 
 effect on property rights that are vested at the time of their adop- 
 tion, unless it clearly appears, expressly or by necessary implica- 
 tion, that they were intended to operate retrospectively. 
 
 "* * * an intention to take away or destroy individual 
 rights is never presumed; and to give effect to a design so unjust 
 and so unreasonable would require the support of the most direct 
 and explicit affirmation declarative of such intent. Also where 
 great inconvenience will result from a particular construction, or 
 great public interests will be sacrificed, that construction is to be 
 avoided unless the meaning plainly requires such construction. 
 And where the literal interpretation involves any palpable ab- 
 surdity, contradiction, or, as it has been held, any extreme hard- 
 ship or great injustice, the courts have deviated a little from the 
 literal meaning of the words, and interpreted the instrument ac- 
 cording to the apparent intent of its authors. But this rule should 
 be applied with caution. 
 
 "So consideration of expediency and of sound public policy 
 
 may be of determining influence in case of doubt as to the real 
 
 meaning of a constitutional provision arising from the uncertainty 
 
 of the language used."!"^ 
 
 ******* 
 
 "The state has no power to divest or impair vested rights, 
 whether such an attempt to do so be made by legislative enactment, 
 by municipal ordinance, or by a change in the constitution of the 
 state. This result follows from prohibitions contained in the con- 
 
 is ibid, p. 1086. 
 
 16 ibid, p. 1091. 
 
 17 ibid, p. 703. 
 
6o 
 
 stitutions of practically all the states. Before the adoption of the 
 Fourteenth Amendment there was no prohibition in the Constitu- 
 tion of the United States which would prevent the states from 
 passing laws divesting vested rights, unless these laws also im- 
 paired the obligation of contracts, or were ex post facto laws ; but 
 vested property rights are now protected against state action by 
 the provision of the Fourteenth Amendment that no state 'shall 
 deprive any person of life, liberty or property without due process 
 of law/ "18 
 
 (There is a similar "due process" clause in the Mexican Con- 
 stitution — the second paragraph of Article 14 quoted above.) 
 
 The retroactive uncompensating interpretation of Article 2^ 
 cannot stand. Citizens of the United States and other countries 
 hold large tracts of mineral lands in Mexico, acquired before the 
 birth of the Constitution of 191 7, and their respective home Gov- 
 ernments will not countenance a confiscation of their vested 
 rights. 
 
 It is encouraging to note that President Obregon, under pro- 
 nouncement April 2, 1921, made executive declaration against a 
 retroactive and confiscatory interpretation of Article 27, in these 
 words : 
 
 "The present administration believes the time has 
 come to make knowm, through its foreign representatives 
 that in order to obtain a legitimate prestige among other 
 nations of the world, it will continue to follow a line of 
 conduct absolutely consistent with the precepts of morals 
 and law, which policy it adopted several months ago and 
 demonstrated by a number of acts, and which it will con- 
 tinue to follow without interruption until all its purposes 
 have been fulfilled. 
 
 :|c * ^ * ^ * 4( 
 
 "Extraordinary sessions of Congress are to be called 
 to discuss principally reforms of legal character. Article 
 27 of the new constitution, inasmuch as oil legislation is 
 concerned, is to be studied with a spirit of equity and its 
 dictates to be changed so that they will be non-confisca- 
 tory nor have retroactive interpretations." 
 
 Furthermore, legislation has been introduced into the current 
 
 18 ibid, p. 857. 
 
6i 
 
 session of the legislature which will provide for the application 
 of Article 14 to Article 2J. (This action of President Obregon 
 and the legislature follows the recommendations made to the 
 Mexican Government by the writer.) 
 
 (If legislation is passed withdrawing the retroactive applica- 
 tion of Article 27, and it is almost certain that such legislation 
 will pass in the comparatively near future, a great problem will 
 arise. What will be the rights of those foreigners who under 
 more or less duress accepted Article 27 in its present interpreta- 
 tion and denounced oil properties in accordance with the proce- 
 dure laid down by the Mexican Government? This problem is 
 one of some difficulty, but no attempt will here be made to solve 
 it.) 
 
 Since the publication of the first edition of this volume, the 
 Supreme Court of Mexico has filed a decision in the "Amparo" 
 suit brought by the Texas Company, holding in part that 
 
 "There is nothing in the letter or the spirit of constitution- 
 al Article 2^, which indicates that it was intended to affect the 
 rights in the petroleum subsoil acquired before May ist, 19 17, 
 the date when the new Constitution became effective. 
 
 Many persons have been under the impression that this case set- 
 tled the interpretation of the Constitution as finally and definitely 
 as would a similar adjudication by the Supreme Court of the 
 United States. This is far from true. The decisions of the Mex- 
 ican Supreme Court are not binding upon itself, and the Court 
 may reverse itself at will. Furthermore, the Mexican system of 
 jurisprudence does not include a "case law" system and decisions 
 of courts in Mexico, even the Supreme Court, are of no, or infin- 
 itesimal, value as precedents. 
 
 An admirable article in the November, 192 1, number of the 
 Journal of the American Bar Association, written by Mr. Edward 
 Schuster, of the New York City Bar, entitled "The Texas Com- 
 pany's Amparo Case," brings out very clearly this distinction be- 
 tween the system of jurisprudence in Mexico and in the United 
 States. Unfortunately, the problems presented by Article 2y can- 
 not be solved by judicial decision. The defects in Article 27 must 
 be corrected by legislation if at all. 
 
 Having attempted to define the principles of international law 
 
62 
 
 applicable to the oil controversy, we come to the most difficult 
 problem involved — that of establishing exactly what rights were 
 "vested" when the 19 17 Constitution went into effect. Rights, of 
 course, which had not become vested on May i, 1917, would not 
 be protected against an application of Article 27. What class of 
 sub-surface properties, then, should be protected as vested rights? 
 
 Under the Old Spanish Law, from which, upon the separa- 
 tion of Mexico from Spain, the Mexican law on this subject was 
 derived, mineral wealth, though in the hands of private indi- 
 viduals, constituted the property of the Crown. No interest in 
 the minerals as such passed under a Royal grant of the land in 
 which they were contained, without express words designating 
 them. By the ordinary grant of land, only an interest in the 
 surface or soil, distinct from the property in the minerals, was 
 transferred. 
 
 These doctrines of the Spanish Law were established at a very 
 early period. Chief Justice Field of the California Supreme 
 Court, in discussing the history of the Spanish and Mexican 
 mining laws in the case of Moore v. Smaw,^^ says: 
 
 "By a law of the Partidas, which was promulgated as 
 early as 1343, it was declared that the mines were so vested 
 in the king that they did not pass in his grant of the land, 
 though not excepted in terms: Law 5, tit. 15, p. 2. By a 
 law of Alphonso XI, all mines of silver and gold, and of 
 other metals, and the produce of the same, were declared to 
 be the property of the crown, and no one was allowed to 
 work them, except by special license or grant, or unless 
 authorized by immemorial prescription ; Rockwell's Spanish 
 and Mexican Laws, 126. By a law of John I, this rule was 
 modified, and a general license was granted to all persons to 
 search for and work the mines in their own lands, and by per- 
 mission of the owners, in the lands of others, and to retain 
 one-third of the net produce, the balance to be rendered to 
 the king; Rockwell's Spanish and Mexican Laws, 126. Under 
 this law, few mines were discovered and worked, owing in 
 part, as was supposed, to the fact that a great proportion of 
 the mines of the country had been previously granted to 
 
 19 17 Calif. 199 (1861) 79 Am. Dec. 123, at p. 127. 
 
63 
 
 noblemen, and others with bishoprics, arch-bishoprics, and 
 provinces, with exclusive privileges. To remove the obsta- 
 cles thus interposed to the discovery and development of the 
 mineral wealth of the country, Philip II, by a decree pro- 
 mulgated on the tenth of January, 1559, annulled all previous 
 exclusive grants made by himself or his predecessors, except 
 in those cases where the mines were at the time worked ; and 
 resumed and incorporated into his patrimony all the mines of 
 gold, silver and quicksilver in his kingdom, wherever found, 
 'whether in public, municipal, or vacant lands, or in inher- 
 itances, places, and soils of individuals'; Halleck's Mining 
 Laws of Spain and Mexico, 6. * * * From the promul- 
 gation of this decree, the ownership of the precious metals 
 by the sovereign throughout the dominions of the Spanish 
 monarchy was, in all subsequent legislation, fully recognized, 
 and the policy of allowing; all persons to search for, and upon 
 discovery to work, the mines, was rigidly followed." 
 
 Ordinances pursuant to this decree were passed at various 
 times. Without referring to their provisions, it is sufficient 
 to state that they all proceeded upon the admitted right of 
 the Crown to the minerals. "Those established on the 
 twenty-second of August, 1584, and generally designated as 
 the 'new ordinances/ to distinguish them from regulations of 
 an earlier date known as the 'old ordinances,' whilst revoking 
 all previous laws, edicts, privileges, and customs, in express 
 terms excepted the decree of January 10, 1559, so far as it 
 vested in the crown all mines of gold and silver and quick- 
 silver, and annulled all grants which had been previously 
 made."^ In Article 22 of the Royal Mining Ordinance of 
 1783, published by proclamation of the Viceroy throughout 
 New Spain in January, 1784, and revoking all previous ordi- 
 nances on the subject, the right is granted by the crown to 
 denounce mineral deposits, including "bitumens and the 
 juices of the earth." Doubtless oil would be included under 
 this denomination. 
 
 When Mexico became independent of Spain, the Mexican 
 Government claimed and exercised the rights and privileges 
 
 20 (Idem.) 
 
64 
 
 of the Spanish Crown in regard to the mineral wealth within 
 its borders. By the Amendment of December 14, 1883, to the 
 Constitution of 1857 (Article 72, Section X of the 1857 Con- 
 stitution) Congress was given the power "To enact codes of 
 mining * * * obligatory throughout the Republic." In 
 execution of this power, the Federal Government promul- 
 gated in 1884 a Mining Code unifying the law on this subject 
 throughout the country. 
 
 Article 10 of the Mining Code of November 28, 1884, 
 reads in part as follows: 
 
 "The following substances are the exclusive property 
 of the owner of the soil, who may, therefore, exploit and 
 avail himself of them without the need of denouncement 
 or special adjudication ; 
 
 I. The deposits of the various kinds of coal, 
 jj * * * 
 jjj * * * 
 
 IV. The salts existing on the surface, the fresh and 
 salt waters, whether found on the surface or under the 
 ground ; petroleum and gaseous or thermal and medicinal 
 water springs." 
 
 It would seem that a more emphatic statement that petro- 
 leum is "the exclusive property of the owner of the soil" 
 could hardly be formulated. Furthermore, the Civil Code of 
 1870 further substantiates the provisions of the Mining Code. 
 Article 827 reads : 
 
 "Ownership is the right to enjoy, to use and dispose 
 of a thing, without any other limitations than those fixed 
 by law." 
 
 Article 828 reads : 
 
 "Property is inviolable. It cannot be occupied ex- 
 cept for cause of public utility and upon previous indem- 
 nity." 
 
 Article 829 reads : 
 
 "The owner of land is the owner of its surface and 
 of that which is thereunder. He may, therefore, use it 
 and make on it all the works, plantations or excavations 
 which he may wish, under the restrictions established 
 under the Title of Easements, and subject to the pro- 
 visions of the special Mining Legislation and the Police 
 Regulations." 
 
65 
 
 The Civil Code of 188421 repeated exactly the provisions 
 established by Articles 827 to 829, inclusive, of the Civil Code 
 of 1875. 
 
 The next Mining Code was passed in 1892. Article 4 of 
 this law reads f 
 
 "The owners of the soil shall freely exploit, without 
 the necessity of any special concession in any case, the 
 following mineral substances: Mineral cornbustibles, 
 mineral oils and waters, the rocks of the land, in general, 
 which may serve as direct elements, or as raw materials 
 for the purpose of building or ornamentation, the sub- 
 stances of the soil, such as earth, sands and clays of all 
 kinds, the mineral substances for which no concession 
 is required under Article 3 of this Law and, in general, 
 all those not specified in said Article." 22 
 
 It has been contended that this legislation of 1892, which 
 merely allows the owner of the soil to exploit his own land 
 for oil, and says nothing regarding his ownership of such sub- 
 soil wealth, impliedly changes the law in regard to his prop- 
 erty in such deposits. It is more likely, however, that the 
 Legislature took for granted that the owner retained the title 
 to the subsoil deposits which had previously been granted 
 him by the Mining Code of 1884, and merely declared his 
 fullest right to exploit them as an incident to such ownership. 
 
 Subsequently there was passed the Codigo de Mineria of 
 November, 1909, which went into effect on January i, 1910, 
 and was in force at the time the 191 7 Constitution was 
 adopted. While this Mining Code of 1909 declares in Chapter 
 I, Article i, that there is in the Nation direct ownership 
 (dominio) of 
 
 "I. Ore bodies of all inorganic substances which in 
 veins, in blankets, or in masses of whatsoever form, con- 
 stitute deposits, the composition of which is distinct from 
 that of the country rock, such as deposits of gold, plat- 
 inum, silver, copper, iron, cobalt, nickel, manganese, lead, 
 mercury, tin, chromium, antimony, zinc and bismuth ; of 
 sulphur, arsenic and tellurium; of rock-salt; and of 
 precious stones. 
 
 "IT. Placers of gold and platinum." 
 
 21 Article 729 to 731 inclusiTe. 
 
 22 Article 3 referred to In the above question does not contain anj ref- 
 erence to petroleum or mineral oils. 
 
it expressly provides in Article 2 that among those things 
 which are "the exclusive property of the owner of the soil" 
 shall be "ore bodies or deposits of mineral combustibles of 
 whatsoever form or variety" and "ore bodies or deposits of 
 bituminous substances." In this law, therefore, unlike the 
 previous Code of 1892, and in accord with that of 1884, the 
 stress is again placed on ownership rather than on the right 
 to exploit. Article 2 in full reads as follows: 
 
 "The following are exclusive property of the owner 
 of the soil : — 
 
 I. Ore bodies or deposits of mineral combustibles, of 
 whatsoever form or variety. 
 
 II. Ore bodies or deposits of bituminous substances. 
 
 III. Ore bodies or deposits of salt which outcrop at 
 the surface. 
 
 IV. Springs of surface and subterranean waters, sub- 
 ject to the prescriptions of the general law and of the 
 special laws on waters, without prejudice to the pro- 
 visions of Article 9. 
 
 V. The country rock and substances of the soil, such 
 as slate, porphyry, basalt and limestone, and the earths, 
 sands and clays. 
 
 VI. Bog and residual iron, alluvial tin, and the 
 ochres." 
 
 These Mining Codes, passed pursuant to the amendment 
 of December 14, 1883, to the Constitution of 1857, it is con- 
 tended by many North American and other foreign oil oper- 
 ators, changed the law of Mexico as to coal and oil deposits 
 in that they excepted these products from the ownership of 
 the State. It is argued that the purchase of surface rights, 
 subsequent to this new legislation, carried with it the owner- 
 ship of subsoil properties as well. If this be true, to put into 
 effect the provisions of Article 27 of the Constitution of 191 7, 
 with regard to holdings acquired subsequent to 1884 ^nd 
 prior to May i, 1917, would be to make the Article not only 
 retroactive but confiscatory of rights perfected and vested 
 prior thereto. 
 
 A comparison of cases decided in the United States in 
 regard to minerals, under Statutes or grants analogous to the 
 
67 
 
 Mexican Mining Codes, tends to confirm the conclusions 
 reached by a study of the words of the Mining Codes them- 
 selves. 
 
 Such cases in this country have repeatedly held that 
 patents of land by the Federal Government under Statutes 
 in this country analogous to the combined force of the Mexi- 
 can Constitution of 1857 and the Mining Codes authorized 
 thereby, include both surface and subsurface rights, unless 
 the latter are specifically reserved by the Federal Govern- 
 ment. 
 
 For example, in the case of Moore v. SmaavP in interpret- 
 ing the Act of Congress of March 3, 185 1, governing land 
 grants in California, the court held that while in the United 
 States title to public lands may be conveyed without pass- 
 ing title to minerals contained therein, a patent or grant of 
 public lands by the Federal Government to an individual 
 under an Act containing no limitations or reservations carried 
 all the interest of the United States in everything embraced 
 within the signification of the term "land," and this included 
 not only the face of the earth, but everything under it and 
 over it, as in the case of an ordinary conveyance by an indi- 
 vidual. 
 
 To that effect the Court in that case said: 
 
 "The question arises as to what passed by the patents 
 * * * and to this question there can be but one answer: 
 all the interest of the United States, whatever it may have 
 been, in everything connected with the soil, in everything 
 forming any portion of its bed or fixed to its surface, in every- 
 thing which is embraced within the signification of the term 
 *land'; and that term, says Blackstone, 'includes not only the 
 face of the earth, but everything under it or over it. And, 
 therefore,' he continues, 'if a man grants all his lands, he 
 grants thereby all his mines of metal, and other fossils, his 
 woods, his waters, and his houses, as well as his fields and 
 meadows;' 2 Bla. Com. 19. Such is the view universally 
 entertained by the legal profession as to the effect of a patent 
 from the general government." 
 
 23 17 Cal. 199 (1861), 79 AM. Dec. 123. 
 
68 
 
 So, too, in Hill v. Martinr^ it was held that the sale of state 
 public lands under a state law providing for their disposition 
 but not reserving the minerals, passes the title to the subsoil 
 wealth as well as the surface.^^ 
 
 In U. S. V. San Pedro & Cafion Del Agua Co. ,2^ however, 
 the Court, in passing upon a patent issued under the same 
 Act of Congress of March 3, 185 1, as that considered in 
 Moore v. Smaw, decided that the title to the subsoil wealth did 
 not pass by the issue of a patent under that act. In Moore v. 
 Smaw the California Court had said that inasmuch as there 
 was nothing in the Act of Congress restricting the operation 
 of the patents to the interests acquired by claimants from 
 the former government, or distinguishing the patents in 
 any respect from the general class of conveyances made, 
 under that designation by the United States, patents should 
 issue to all claimants alike, whose claims have been finally 
 confirmed, without words of reservation or limitation, "with 
 the exception that they shall not affect the interests of third 
 persons — an exception which would exist independent of its 
 legislative recognition." The court in U. S. v. San Pedro, 
 however, decided that the lack of a reservation regarding 
 mineral rights in the Act of Congress of March 3, 1851, did 
 not, by such omission, cause the passing of title to subsurface 
 wealth in lands conveyed by patents under such act, but, on 
 the contrary, patents issued under such an Act should be 
 construed strictly against the grantee and where nothing in 
 the Act is said affirmatively granting such mineral wealth 
 no title to it should pass. The Court distinguished the case 
 from Moore v. Smaw, on the ground that this was not a case 
 of a grant of land in which mines are later found, but a con- 
 veyance of "well known mineral land," and that the early and 
 continuous manifestation of Congress of its purpose to re- 
 
 24 Tex. civ. App. 1902, 70 S. W. 430. 
 
 25 Texas, unlike other Western and far Western States, was excluded 
 from the operation of the Congressional Mining Acts, because the govern- 
 ment never obtained any public domain within Its borders. By the terms 
 of Its admission Into the Union it retained all vacant and unappropriated 
 land for the purpose of paying the debts contracted by It while an inde- 
 pendent Republic, and has, therefore, its own mining law. 
 
 26 4 N. M. 225, (1888), 17 Pac. 337, at 405, aff'd. 146 U. S. 120. 
 
69 
 
 serve mines would lead the Court to determine that under 
 a general grant of confirmation they did not intend to direct 
 the conveyance of well known and established mines of gold 
 and silver. 
 
 Applying the doctrine of this case to the Mining Codes of 
 Mexico, however, does not change the result reached by the 
 rule in Moore v. Smaw. For if the Act of Congress of March 
 3, 185 1, by omitting to grant or reserve subsoil rights left 
 room for the construction of the Statutes and for a spelling 
 out of the intention of Congress, the Mexican Mining Code 
 of 1884 and its successors left very little doubt as to the 
 intent of the Mexican legislative body in respect of the own- 
 ership, and exploitation by the owner of the surface, of petro- 
 leum deposits found underneath the surface. 
 
 The case does, however, make an interesting distinction 
 when it diflFerentiates between lands well known to contain 
 valuable deposits and "those where at the time of the patent 
 there is no reason to anticipate such a condition." Applied 
 to Mexico this would mean that oil found on lands purchased 
 prior to May i, 1917, but in which up to that time there had 
 been no reason to anticipate petroleum deposits, would not 
 belong to the owner of the surface. 
 
 It is interesting to note that on November 18, 1920, the 
 Supreme Court of the Philippines sustained the contention of 
 the United States Government that, under the laws in eflFect in 
 the Islands when they were taken over from Spain, title to all 
 mineral and petroleum deposits belonged to the State, that upon 
 the acquisition of the Islands by the United States, this country 
 succeeded to the title to all such deposits and that these deposits 
 could only be exploited with the permission of the Govem- 
 ment.^"^ The most interesting part of this case is the fact that in 
 it the United States took the position taken in the controversy 
 over Article 'zy by the Mexican Government. 
 
 There has been an important and interesting development in 
 the mining law of Mexico since the publication of the first edilion 
 of this volume. A great many mining properties owned by for- 
 
 27 The decision is reported in "La Vanguardia," a newspaper of Manila, 
 issue of November 19, 1920. 
 
7U 
 
 eigners in Mexico have, in recent years, been confiscated for non- 
 payment of taxes. A decree was recently issued and promulgated 
 by publication in the Diario Oficial of March lo, 1922, providing 
 for a method of reinstating ownership. Through the payment of 
 the unpaid taxes, part down and the rest in installments, mine 
 owners, whose properties have been confiscated for non-payment 
 of taxes, can apply for and secure a revocation of the declarations 
 of forfeiture of their properties. Many foreigners, who had mine 
 properties in the revolution-ridden States and had, as a practical 
 matter, good reason for not paying taxes, will be glad to take 
 advantage of this new procedure and will be willing enough to 
 pay up their unpaid taxes in order to be reinstated in their 
 properties. 
 
71 
 B. 
 
 CONTRACT CLAIMS. 
 
 Contract claims should be divided into three classes: (i) 
 those arising out of contracts between individuals ; (2) those 
 arising out of contracts between aliens and the Mexican 
 Government (concessions) ; (3) those arising out of defaults on 
 or alterations in the obligations of governmental bonds or bonds 
 guaranteed by the Government. These classes will be treated 
 separately, as they are subject to different rules of international 
 law and practice. 
 
 I. 
 
 Contracts Between Individuals. 
 
 In the case of contracts between individuals, the govern- 
 ment of the foreign contractor should only interpose when 
 there has been a denial of justice or an undue delay in the 
 administration of it in the local Mexican courts.^ 
 
 Contracts With the Mexican Government — Concessions. 
 
 Here, again, diplomatic interposition will not be made 
 available to prevent an anticipated breach of international 
 law. There must actually have been a breach and a denial of 
 justice. Governments are not as zealous in pressing the 
 claims of citizens arising out of contract as in the case of 
 torts. An alien, entering into a contract with the Mexican 
 Government, does so voluntarily, taking into consideration 
 the possibilities of performance and the risks to be run. Fur- 
 thermore, he submits himself to the operation of the local 
 law when contracting abroad, and such local law gives him 
 certain remedies which he must pursue before he may right- 
 fully seek the aid of his home government. Besides, a govern- 
 ment usually allows itself to be sued in one way or another, 
 and the alien is rarely without a local remedy. Mr. Marcy,^ 
 
 1 Moore's Arbi. 3456, 3458, 3409-70; Ralston 182. 
 
 2 Wharton II, 655. 
 
72 
 
 then Secretary of State of the United States, m 1856, stated the 
 Department's poHcy as follows: 'The government of the United 
 States is not bound to interfere to secure the fulfillment of con- 
 tracts made between their citizen-, and foreign governments, it 
 being presumed that before entering into such contracts the dis- 
 position and ability of the foreign power to perform its obliga- 
 tions was examined, and the risk of failure taken into considera- 
 tion." 
 
 Diplomatic intervention may undoubtedly be resorted to 
 if one of the following situations is present: (i) where, as 
 mentioned above, there is a denial of justice, a lack of facili- 
 ties for securing justice, or an undue delay in its administra- 
 tion ;^ (2) where there has been an arbitrary cancellation of a 
 contract (frequently the case with concessions) without re- 
 course to a determination by a judicial body regarding the 
 legitimacy of the act (this being in the nature of a taking 
 "without due process of law")* — in such case the Calvo clause 
 in the concession or other contract depriving the alien of his 
 right of appeal to diplomatic aid, has been held by the claim- 
 ant's government to be no bar;^ (3) where there have been 
 other arbitrary acts, such as might reduce the value of con- 
 tracts, presenting a situation similar to the immediately pre- 
 ceding one;^ (4) when the governmental breach of contract 
 involves a tort — here the claimant's government will be much 
 more ready to assist him;''' (5) some claims are considered 
 especially equitable and are consequently more urgently 
 pressed;^ (6) when an arrangement for the liquidation of a 
 claim has already been made, it will generally be enforced 
 through diplomatic pressure.^ 
 
 Despite their reluctance to press contract and concession 
 claims diplomatically, governments have always been ready 
 to present such claims to boards of arbitration.^^ "Practically 
 
 3 Moore's Arbi. 3517; 6 Moore's Dig. 724; Borchard D. P. C. A. 291. 
 
 4 6 Moore's Dig. 287; Borchard D. P. C. A. 292. 
 
 5 Ralston 819, 322; Moore's Arbi. 1643; See also, Intern!. Law Assn. 24th 
 Report, 1908, and 6 Moore's Dig. 725. 
 
 6 6 Moore's Dig. 729, 724; Moore's Arbi. 3567-8, 3465, 4939. 
 
 7 For. Rel. 1898, 274-91, 6 A. J. I. L. (1912), 396, 407. 
 
 8 Wharton's Dig. II, 658; 6 Moore's Dig. 714-15. 
 
 9 6 Moore's Dig. 719, 720-21, 711-12. 
 
 10 Borchard, Sec. 115. 
 
73 
 
 all international commissions, where the terms of submission 
 in the protocol could be construed as sufficiently broad, have 
 exercised jurisdiction over contract claims, for example, the 
 United States-Spanish Commission of February 22, 1819, the 
 three Mfexican commissions of April 11, 1839, of March 3, 
 1849 (domestic), and of July 4, 1868, the United States- 
 British Commission of February 8, 1853, and August 18, 1910, 
 the United States-Peruvian Commission of January 12, 1863, 
 the United States-French Commission of January 15, 1880, 
 the United States-Venezuelan Commission of December 5, 
 1885, and the Venezuelan Commissions of 1903 sitting at 
 Caracas, and many others. A conflict arose in the commis- 
 sion of July 4, 1868, due to the difficulty of reconciling vacil- 
 lating opinions with proper judicial action. Commissioners 
 Wadsworth, Palacio and Umpire Lieber (though the latter 
 was not always consistent) had allowed claims on contracts 
 concluded between citizens of the United States and agents 
 of Mexico for the furnishing of arms, munitions, and other 
 material to the Mexican Government, on the ground that the 
 failure to pay for such goods constituted an ^injury' to the 
 'property' of an American citizen under the terms of the 
 protocol. The Mexican commissioner, Palacio, while adher- 
 ing to the view of his colleagues that contract claims were 
 within the jurisdiction of the commission, believed that a de- 
 mand and refusal of payment was a condition precedent to the 
 allowance of the claim. Subsequently, upon the death of Dr. 
 Lieber and the resignation of Commissioner Palacio, Sir Ed- 
 ward Thornton became umpire and Sefior Zamacona the 
 Mexican commissioner. Thereupon a different view was 
 taken as to the jurisdiction of the commission over contract 
 claims. Sir Edward Thornton considered that he ought to 
 follow the practice of the Executive of exercising discretion 
 in assuming jurisdiction of contract claims, for which reason, 
 while admitting the jurisdiction of the commission over con- 
 tract claims, he declined to allow such as were based upon 
 voluntary contract, in the absence of clear proof of the con- 
 tract and proof that gross injustice had been done by the 
 defendant government. The decisions of the commission. 
 
74 
 
 therefore, are at times contradictory, claims of exactly the 
 same nature having been allowed by Wadsworth, Palacio and 
 Lieber, and rejected when Zamacona became the Mexican 
 commissioner and Thornton the umpire. "^^ 
 
 3. 
 
 Bonds of the Mexican Government or Bonds Guaranteed 
 
 By It. 
 
 The peculiar nature of government securities and the 
 limited rights of the holders of such securities are well known, 
 and must be supposed to have been taken into consideration 
 by purchasers of and traders in such securities. This ex- 
 plains in great measure the reason for the general interna- 
 tional view that such claims should be presented with great 
 reluctance. 
 
 Some publicists hold that bond contract claims are in the 
 same class as ordinary contract claims, and should be treated 
 similarly.12 Offsetting these we have the followers of the 
 doctrine so ably supported by Dr. Luis Drago, former Minis- 
 ter of Foreign Affairs of Argentine,^^ that armed foreign in- 
 tervention for collecting public debt should be a breach of 
 international law. Many have misunderstood the true Drago 
 doctrine, and believed it to have been a protest against 
 any kind of intervention, even peaceable and diplomatic. The 
 United States has taken the attitude as expressed in the 
 Porter doctrine, presented by General Horace Porter at The 
 Hague Conference,!* that the use of force for the collection 
 of public debts, should not be pernlissible until arbitration 
 had settled the justice of the amount of the debt as well as 
 the time and manner of payment. Drago has not tried to 
 preclude diplomatic interposition for the collection of public 
 debts. The question has been presented to arbitral tribunals 
 
 11 Borchard D. P. C. A. 299. 
 
 12 Vattel, Book 2, Chap. 14, Sees. 214-216; Phillimore, 3d ed. Book 2, 
 Chap. 3, 8, et seq. ; Hall, 6th ed., 276; and Moore's Arbi. 3650. 
 
 13 For. Rel. 1903 1-5; see also article of Amos S. Hershey, "The Calvo 
 And Drago Doctrines" in 1 A. J. I. L. 24-45. 
 
 14 Reported in Scott's Hague Peace Conference II (Doc.) 357, 361. 
 
75 
 
 in several instances,^^ without very satisfactory results in the 
 v.ay of establishing clear precedents. Arbitration is surely 
 the preferable way of settling international disputes arising 
 out of public indebtedness. Neither the claimant nor the de- 
 faulting state can have much objection to the discussion and 
 determination of such claims by a neutralized and unbiased 
 arbitral body. 
 
 A situation slightly different from one of ordinary public 
 indebtedness under bond issues, is presented by bonds of 
 private corporations which have been guaranteed by the Mexican 
 Government. It is submitted that Mexico cannot withdraw 
 from its obligation as underwriter or insurer of such bonds 
 and that upon her default on such an obligation, a foreign 
 government may rightfully seek diplomatic aid to press the 
 claims of its citizens holding such bonds. 
 
 One of the greatest problems which confront Mexico 
 and which must be satisfactorily solved before foreign capital 
 can again feel safe in investing in Mexican enterprises is the 
 settlement of claims based on losses occasioned by the de- 
 fault of the Government in its capacity as guarantor of pri- 
 vate and public service and railroad bonds. As stated above, 
 the obligation of the Government is clear, but the losses sus- 
 tained are so large that it is probable that some arrangement 
 will have to be made whereby the Government would be 
 discharged of its international liability upon partial payment 
 or will be given time within which to pay. Whether such 
 arrangements will be made under a Mixed Claims Commis- 
 sion or under an agreement between the Mexican Govern- 
 ment and a committee of bankers or bondholders remains to 
 be seen. Unquestionably, the latter is preferable and should 
 be urged by all parties concerned, as such agreement will per- 
 mit of a general consideration of the rehabilitation of the 
 properties. This would be of great advantage, and would 
 probably insure to the Republic much needed transportation 
 facilities and to the bondholders a profitable and good future 
 investment of capital. The situation should not and cannot 
 satisfactorily be viewed from the single viewpoint of adjudi- 
 
 15 Borchard D. P. C. A., Sec. 124. 
 
76 
 
 cation and payment, but must rather be viewed in a broader 
 way, looking to reconstruction, rehabilitation and the devel- 
 opment of facilities upon which the whole economic future 
 of the Republic depends. Mexico's ability to pay her just 
 obligations is primarily conditioned on her economic and 
 financial future, which, in turn, is unquestionably dependent 
 on transportation facilities. Transportation is the determin- 
 ing factor in the development of Mexico, and the settlement 
 of claims respecting railroads and bonds must be made in 
 the light of national development, otherwise the entire finan- 
 cial and economic structure will collapse and the collection 
 and payment of even adjudicated claims will be found im- 
 possible. 
 
77 
 C 
 
 ACTS OF AUTHORITIES- 
 
 Braodlj speaking, the liabilitj of Mcxko tor acts of its 
 ''andioffitics'' is determined by the ofdinanlj accepted rules 
 of pmrate law l especting agencj. So, dearly, she is rc^oosi- 
 ble for tlie acts of her oflidals within die scope of their an- 
 thonty.^ It is equally dear diat she is not regp on si b le for 
 the acts of 4^flM"«al^ ontside of their apparent authority. 
 
 "The general nde of intematioiial law observed by the 
 United States is that sorcrcigns are not liable in diplomatic 
 procedure for damages occasioned by the misconducrt of 
 petty officials and agents acting out of the range not only 
 ci their real but of their ap parent authority."* 
 
 The rr^wnsibility for acts of its functiofnaries, be these 
 aj Jii i iMMji jii i iy or yadadad, rests upon a personal basis, rather 
 tbau a mate r ia l ooe, as in the case of re^Mmsibility for acts 
 of private indrridualsu The rdation to the indrridual con- 
 cerned rather than the act itself makes die state re^nmsible. 
 [ Another distinctioa of inqmrtance is the question of re^Nmsi- 
 bility for acts done within and without tibe scope of an offi- 
 cer's agency. Acts within the scope of an officer's agency, if 
 in coutiaie ntiop to the princq>ies of international law, will 
 be r^;arded as acts for whidi the government is rc^Nmsibleu 
 dionld be made, however, in cases of military 
 responsibility wiD be primarily a matter of 
 depending on die natnre of the act& The 
 of statutes by which a state denies rc^onability 
 for acts of its agents, are w itfmut intematianal sanction and 
 are an imjustifiable attempt on the part ci the state to ex> 
 tricate itsdf from its international oUigationSw As r^ards 
 acts widiont die scope of an officer's agency, diese can no 
 more ghre rise to an international obligation than can a 
 I Iw uglaiy or hold-up. Municipal law should provide means 
 of l ec oie r y against sudi individuals^ International compli- 
 
cations arise where such legislation is lacking, and not from 
 the acts themselves."^ 
 
 Outrageous oppressions and cruelties by government offi- 
 cials have often been made the subject of diplomatic repre- 
 sentations.^ 
 
 Judicial bodies or justices are not considered agents of 
 the government in the sense that the government is liable for 
 their judicial acts,^ and Mexico would not ordinarily be liable 
 for the wrongful acts of its lower and inferior courts.^ This 
 is principally on the theory discussed in Chapter II, Part B, 
 Section 2, that the individual should exhaust his local rem- 
 edies before asking diplomatic interposition. 
 
 In the case of the claim of Jonan v. Mexico, of July 4, 
 1868,'^ the failure of the Mexican Government to prevent an 
 illegal assumption of jurisdiction by a court, on remon- 
 strance, was held by the United States Government to place 
 upon the Mexican Government the responsibility for injuries 
 resulting. In the case of Colesworth and Powell, British 
 citizens,^ the Colombian Government condoned or approved 
 the illegal act of a judge, and the British Government held the 
 Colombian Government to responsibility on the ground that 
 the British citizens had no redress other than through diplo- 
 matic channels. The United States interposed against Great 
 Britain in the case of the Barque Jones, February 8, 1853,^ 
 when the British Government refused to investigate an unjust 
 judgment but sustained it after remonstrance.^^ 
 
 3 Julius Goebel, Jr. "International Responsibility of States" VIII Amer. 
 Jour. Int. Law, p. 816. 
 
 4 Case of Wheelock, brought in Venezuela, 6 Moore's Dig. 744; Case of 
 Wilson, shot at Bluefields, For. Rel. (1894) 468; For. Rel. (1894), 470, 475, 
 477; 6 Moore's Dig. 746; Case of Geo. Webber, subjected to cruelties in Turkey, 
 6 Moore's Dig. 746; Case of Dr. Shipley, For. Rel. (1903) 733; 6 Moore's Dig. 
 747; Case of a Mexican, Zambrona, shot by a U. S. Ranger, For. Rel. (1904), 
 473-482; 6 Moore's Dig. 747; and many others. 
 
 5 See 6 Moore's Dig. Sec. 1002. 
 
 6 Borchard "Diplomatic Protection of Citizens Abroad," Sections 81 and 
 128. 
 
 7 Moore's "International Arbitrations Digest," page 3251. 
 
 8 Moore's Arbitrations, pages 2051, 2085. 
 
 9 Moore's Arbitrations, page 3051. 
 
 10 See also Holtzendorff Handbuch, II, 74, Fiore Dr. Int. Codifie, Sec- 
 tions 339. .340; Calvo I, Section 348; Pradier-Fodere I, Section 402; Bluntschll, 
 Section 340, as cited in Borchard, page 199, Note 2. 
 
79 
 
 "Where there were judicial proceedings, the Commission- 
 ers recognized the principle that a State is politically answer- 
 able only for the decisions of its highest tribunals, but when 
 the course of decisions in the highest court was absolutely 
 uniform, and a reversal of the condemnation was hopeless, 
 the claimant was not required to show that he had prosecuted 
 an appeal. "1^ 
 
 In the absence of one of the factors above described, the 
 alien must pursue the available legal remedies before the 
 State can be held accountable by his home government. 
 
 A different situation is presented when the alien has taken 
 his case to the highest local court and has there been denied 
 justice.^- Having tried without success to obtain justice in 
 the highest court the alien has no other recourse than an 
 appeal to the diplomatic arm of his own government for aid. 
 He has the right then to avail himself of this last remedy, a 
 remedy not shared by the national. 
 
 It is not true that Americans doing business abroad or 
 participating as stockholders in a business abroad subject 
 themselves to the local law to such an extent that they must 
 suffer injustices alike with nationals. When the national has 
 exhausted the local remedies he has no further recourse; but 
 the alien who has appealed to the highest local court and has 
 still clearly been denied justice has a further remedy, — the 
 interposition of his home government. 
 
 Where there has been some flagrant denial of justice sanc- 
 tioned by the court of last resort the State is liable for this 
 wrongful act of its highest judiciary .^^ If the decision of 
 this court is merely an erroneous and unjust interpretation 
 of the law, without any unlawful taint or irregularity in pro- 
 cedure, the State will not be brought under liability. "Pro- 
 vided the system of law conforms with a reasonable standard 
 of civilized justice and provided that it is fairly administered, 
 
 11 Moore's Arbitrations, page 4472, discussing the opinion of Commissioner 
 Kane on the French indemnity of 1831; see also ibid, page 4544. Final 
 Report on the Van Ness Convention with Spain, February 17, 1834, to the 
 same eflfect 
 
 12. Borchard, p. 197. 
 
 13 Borchard, Section 81 and 128. 
 
aliens have no cause for complaint in the absence of an actual 
 denial of justice."^* 
 
 It must appear clearly that there has been something un- 
 lawful or irregular about judicial proceedings before a gov- 
 ernment should intervene in behalf of a citizen claiming 
 judicial injustice abroad.^^ The maladministration of justice, 
 alone, will not suffice. Even an adjudication based on an 
 evidently erroneous interpretation of the law will not do. 
 There must be fraud, corruption, bribery, a denial of a fair 
 opportunity to present a case, or some similar element, to 
 bring the situation within the class of those warranting diplo- 
 matic interposition. 
 
 *Tt has already been observed that the state is not respon- 
 sible for the mistakes or errors of its courts, especially when 
 the decision has not been appealed to the court of last resort. 
 Nor does a judgment involving a bona fide misinterpretation 
 by the court of its municipal law entail, on principle, the in- 
 ternational liability of the state. Only if the court has mis- 
 applied international law, or if the municipal law in question 
 is in derogation of the international duties of the state, or if 
 the court has willfully and in bad faith, disregarded or mis- 
 interpreted its municipal law, does the state incur interna- 
 tional liability .1^ 
 
 It has in several important cases been held that "a grossly 
 unfair or notoriously unjust decision may be and has been 
 considered as equivalent to a denial of justice. "^'^ In the 
 case of Frederic Bronner v. Mexico, No. 115, decided under 
 the Convention of July 4, 1868,^^ Umpire Thornton held that 
 the judgment of the Mexican Court, which had approved a 
 confiscation by Customs officials of imported goods, on the 
 ground that the invoices showed fraud, was so unfair as to 
 amount to a denial of justice. In his report, Thornton said: 
 "The umpire is always most reluctant to interfere with the 
 sentences of judicial courts, but in this instance, the decision 
 
 14 Borchard, pa.ge 198; see also page 197. 
 
 15 Borchard, page 197. 
 
 16 Borchard, Dip. Prot. Cit. Ajbroad, p. 332. 
 
 17 Borchard, Dip. Prot. Cit. Abroad, p. 340. 
 
 18 Moore's International Arbitrations, p. 3134. 
 
8i 
 
 seems to be so unfair as to amount to a denial of justice." 
 In the case of Jacob Idler v. Venezuela, No. 2, under the 
 Convention of December 5, 1885, between the United States 
 and Venezuela, the Commission held that the judgment of 
 the Superior Court should not be binding and awarded dam- 
 ages to Idler on contract claims which had been denied by 
 the Venezuelan Courts. The decision was based on very- 
 much the some theory as the Bronner case.^^ 
 
 19 Moore's International Arbitrations, p. 3497. 
 
D. 
 
 SANITARY MEASURES. 
 
 During the epidemic of diarrhea cholera in the Valley of 
 Parahyba, State of Rio, Brazil, in 1894, traffic over the rail- 
 road from Rio de Janeiro to Sao Paulo was suspended and 
 several lots of watermelons were seized and destroyed by the 
 Sanitary Authorities of the State of Sao Paulo. Some of the 
 producers of these melons were citizens of the United States 
 and their claims for indemnity having been denied by the 
 State of Sao Paulo, they appealed to their own Government 
 for diplomatic aid. In August, 1896, the Department of State 
 held that the measures taken by the Sanitary Authorities were 
 justified by the circumstances and that no indemnity could 
 be demanded by the Americans involved.^ 
 
 1 Mr. Adee, Act. Sec. of State to Mr. Thompson, Min, to Brazil, No. 350, 
 August 21, 1896, MS. Inst. Brazil XVIII, 202; and see 6 Moore's Dig. 751. 
 
83 
 E. 
 
 ACTS OF SOLDIERS. 
 
 Mexico is not liable for the unauthorized acts of its sol- 
 diers unless they were acting in the field or constructively 
 under its authority in contravention of the rules of civilized 
 warfare.^ 
 
 "A tribunal of arbitration, sitting in Chile, adopted certain 
 rules of decision, among which was the following: 
 
 'Acts committed by soldiers or persons connected with 
 the army without orders from their superiors in com- 
 mand do not compromise a government.' 
 
 With reference to this rule the Department of State said: 
 
 *The position of this Government is, that while a 
 government is responsible for the misconduct of its 
 soldiers when in the field, or when acting either actually 
 or constructively under its authority, even though such 
 misconduct had been forbidden by it, it is not responsi- 
 ble for collateral misconduct of individual soldiers 
 dictated by private malice. But the mere fact that 
 soldiers, duly enlisted and uniformed as such, commit 
 acts "without orders from their superiors in command," 
 does not relieve their government from the liability for 
 such acts.' " 2 
 
 In the case of Owen Young, a United States citizen, who 
 was shot and killed on September 24, 1884, by a Peruvian 
 soldier, when the former protested at the acts of soldiers who 
 had overrun his place after an engagement with the enemy, 
 the United States demanded punishment of the criminal and 
 reparation to the family of the deceased. Secretary of State 
 Frelinghuysen based his claim as follows : — 
 
 "The mere fact that soldiers, duly enlisted as such, commit 
 acts without orders from their superiors in command, does 
 not exempt their Government from liability for such acts. A 
 
 1 Pear's Case, For. Rel. (1900) 701-702, 6 Moore's Dig. 7«2. 
 
 2 Mr. Bayard, Sec. of State, to Mr. Buck, Min. to Peru, No. 33, Oct. 27, 
 1885, For. Rel. 1885, 625. The United States is not liable for injuries result- 
 ing from the unauthorized acts of individual soldiers. Mr. Magoon, law 
 officer, division of insular aCCairs, Feb. 6, 1901, Magoon's reports, 328. 
 
84 
 
 government may be responsible for the misconduct of its sol- 
 diers when in the field, or when acting, either actually or 
 constructively under its authority, if such misconduct, even 
 though it had been forbidden by it, was in contravention of 
 the rules of civilized warfare."^ 
 
 When Jose M. Delgado, an American citizen, was shot 
 under the orders of the Spanish General Melguizo during the 
 Cuban insurrection, despite the fact that Delgado had ex- 
 hibited his United States citizenship papers, the American Sec- 
 retary of State, Olney, demanded reparation.* 
 
 Again, when Bernard Campbell, a citizen of the United 
 States, was beaten in April, 1899, by soldiers of the Haytian 
 army, presumably for his refusal to serve in the Haytian 
 navy, the United States demanded a substantial indemnity.^ 
 
 3 Mr. Frelinghuysen, Sec. of State, to Mr. Phelps, min. to Peru, No. 81, 
 Dec. 5, 1884, For. Rel. 1885, 587; Mr. Bayard, Sec. of State, to Mr. Buck, min. 
 to Peru, No. 85, Aug. 24, 1886, MS. Inst. Peru, XVII, 231. For prior cor- 
 respondence in relation to this case, see For. Rel. 1884, 432-436; For. ReL 
 1885, 587-616. 
 
 4 Mr. Olney, Sec. of State, to Mr. Taylor, min. to Spain, May 11, 1896, 
 For. Rel. 1896, 586-588. 
 
 5 Mr. Gresham, Sec. of State, to Mr. Smythe, min. to Haytl, Jan. 31, 
 1896, For. Rel. 1895, II, 811. 
 
85 
 F. 
 
 ARREST AND IMPRISONMENT. 
 
 Probable cause is all that is necessary to justify arrest, 
 and where proceedings are regular and the foreigner is really 
 an offender or there is good cause to believe him such, no 
 reparation may be asked for his arrest and none for his im- 
 prisonment if he is brought to an early trial and given the 
 recognized rights of a person accused of crime. "With refer- 
 ence to the case of Dr. Peck, a citizen of the United States, 
 while in Cuba for his health, who was, as it was alleged, 
 arrested and thrown into prison without accusation of crime, 
 the Department of State said: 'The United States ask no 
 immunity for their own citizens when offenders, but they 
 cannot quietly submit to see them arrested and thrown into 
 prison and there detained without any charge against them.' "^ 
 
 Where the arrest is palpably false or the detention irregu- 
 lar the claim for reparation may be instituted.'^ 
 
 Forcing accused and imprisoned aliens to labor pending 
 trial is clearly a contravention of international law. "In 
 remonstrating against the action of the Mexican authorities 
 in the case of two American citizens, who, while imprisoned 
 at Piedras Negras on a charge of crime, of which they were 
 afterwards acquitted, were compelled to labor on the public 
 highways until the court, on the protest of the American 
 consul, relieved them, the Department of State said: 'The 
 deprivation of liberty following upon a charge of crime is 
 allowed, because, without it, the punishment of criminals 
 would be impracticable, although in many cases the innocent 
 may thus be made to suffer unjustly. The exaction of labor 
 rests on a wholly different ground. It is essentially a penalty, 
 just as the imposition of a pecuniary fine ; and it is understood 
 
 6 Mr. Marcy, Sec. of State, to Mr. Cueto, Span, min., unofficial, April 
 17, 1855, MS. Notes to Span. Leg. VII, 56. 
 
 7 Case of Frederick Nevs, in Hayti, MS. Inst. Hayti, III, 304, 305, 310. 
 6 Moore's Dig. Sees. 1011, 1012. The case of Van Boltkelen in Hayti, Moore's 
 Int. Arbitra. II, 1807-1853, 6 Moore's Dig. 772, is an example of tlie violation 
 of treaty rights in this case by irregultir imprisonment. 
 
86 
 
 that this distinction is clearly laid down in the Mexican 
 law/ "8 
 
 "Detention of witnesses, * * * not unduly prolonged 
 or harshly enforced, * * * jg merely a temporary meas- 
 ure in the administration of justice."^ 
 
 8 Mr. Blaine, Sec. of State, to Mr. Dougherty, charge, No. 423, Dec. 29, 
 1890, MS. Inst. Mexico XXII., 687. 
 
 9 Mr. Frellnghuysen, Sec. of State, to Mr. Langston, Min. to Haytl, No. 
 324, Jan. 20, 1885, For. Rel. 1885, 490. 6 Moore's Dig. 773. 
 
87 
 
 G. 
 
 CLAIMS BASED ON REVOLUTIONS AND INSUR- 
 RECTIONS. 
 
 I. 
 
 IN GENERAL. 
 
 Claims such as would be founded upon damages sustained 
 merely as the result of operations of war during the recent 
 revolutions and insurrections in Mexico are not usually al- 
 lowed. It is not true, however, that foreigners must always 
 share the treatment accorded nationals. If the nationals are 
 unjustly treated in the matter of presenting or adjudging 
 claims, the foreign resident or property holder may rightly 
 resort to diplomatic representations by his home govern- 
 ment — he is not left to suffer injustice merely because the 
 nationals are accorded injustice. It is true, however, that 
 where there exists the established practice of denying a par- 
 ticular class of claims of nationals, and there is no interna- 
 tionally adjudged injustice connected with the practice, such 
 claims by foreigners will be rightly denied. Where there is 
 nothing unfair or unjust in the treatment accorded nationals, 
 foreigners must share in the treatment. Most claims result- 
 ing from operations of war or revolution are ordinarily denied 
 under the theory and practice as stated above.^ 
 
 1 Mr. Cass, Sec. of State, to Mr. Burns, M. C, April 26, 1858, 48 MS. 
 Dom. Let. 323, Mr. Seward, Sec. of State to Mr Mercler, French, min.. Nor. 
 8, 1862, Dip. Cor. 1863, II, 742; same to same, Feb. 24, 1863, Id. 752. Mr. 
 Seward, Sec. of State, to Count Wydenbruck, Austrian min., Nov. 16, 1865, 
 MS. Notes to Aust. Leg. VII., 193, Mr. Fish, Sec. of ^tate, to Mr, Thorn- 
 ton, British min.. May 16, 1873, MS. Notes to Gr. Brit, XVI., 101. Reaffirmed 
 in same to same, Oct. 6, 1873, id. 235. Mr. Bayard, Sec. of State, to Mr. 
 O'Connor, Oct. 29, 1885, 157 MS. Dom. Let. 483. Mr, Olney, Sec. of State, to 
 Mr. Thompson, min. to Brazil, No. 315, Jan. 29, 1896, MS. Inst. Brazil, XVIII., 
 171; same to same, No. 358, Oct. 10, 1896, id. 210. Moore, Int. Arbitrations, 
 IV., 3710, adopted in Bacigalupi v, Chile, United States and Chilean Claims 
 Commission (1901), 151. See also, Wilson's Case, Spanish Claims Commis- 
 sion (1881), Moore, Int, Arbitrations. IV., 3674-3675. Mr, Magoon, law officer, 
 division of Insular affairs, War Dept., Feb, 6, 1901, Magoon's Repts. 33a 
 Mr. Blaine, Sec. of State, to Mr. Langston, July 1, 1881, MS. Inst. Hayti, II., 
 275. Mr. Fish's report of May 15, 1871, giving the reports of Mr. Whiting, 
 Solicitor of the War Department, oh claims by aliens for damages in the 
 civil war, is in Senate Ex. Doc. 2. 42 Cong. Special sess. Mr. Lawrence's 
 report on war claims of aliens is found in House Rept. 262, 43 Cong. 1 sess. 
 
88 
 
 Calvo^ denies absolutely the responsibility of governments 
 to indemnify aliens for losses sustained during revolutions as 
 being "a deep injury to one of the constituent elements of the 
 independence of nations — that of the territorial jurisdiction." 
 
 Pradier-Fodere^ points out the inconsistency of the posi- 
 tion of the European states (and with them in this matter 
 may be classed the United States) in formally asserting the 
 principles of responsibility for losses occasioned through rev- 
 olution when the defendant government is one of the Re- 
 publics of South America, and denying as firmly the same 
 principles when they are themselves defendants. Whenever 
 a European state does pay an indemnity for this variety of 
 loss, says Pradier-Fodere, the payment is made with a declara- 
 tion that it is "an act of spontaneous liberality," not binding 
 as a precedent. In supporting Calvo this author says as fol- 
 lows: 
 
 "To sum up, the generally admitted rule, according to 
 which in principle states need not indemnify foreigners for 
 losses suffered during a civil war, rests on the following very 
 serious conditions: Foreigners who settle in a country to 
 carry on their business submit themselves by that act to the 
 same laws and to the same tribunals as citizens of the coun- 
 try, and the government cannot be held responsible towards 
 them for the consequences of an outbreak or of a civil war, 
 without making such responsibility an unjustifiable inequality 
 between foreigners and nationals. Every sovereign state has 
 the right indeed to compel respect for the order established 
 in its territory, even by the employment of arms, and it does 
 not rest, in respect of damages which result from resorting to 
 force, under obligations more extensive as to foreigners than 
 as to its own nationals. To demand this would be to do in- 
 jury to the territorial jurisdiction of a sovereign state; it 
 would introduce into international relations a privilege fa- 
 vorable to strong states, injurious to weak states." 
 
 But Pradier-Fodere does limit the application of Calvo's 
 doctrine "to states which are capable of fulfilling their inter- 
 
 2 Droit Int. III., Sec. 1280. 
 
 3 Traite rle Droit Int. Tub. I., 343, Sec. 205, citing Calvo; also Funck- 
 Bentano and Albert Sorel Precis de Droit des Gens, 1877. 
 
89 
 
 national obligations," and with such as are not, he claims 
 diplomatic interposition is justifiable. 
 
 Fiore* asserts that foreigners cannot demand indemnity 
 for injuries resulting from "force majeure" or from the gov- 
 ernmental acts necessary to the suppression of a revolution 
 or insurrection, but that the government subjects itself to 
 liability if it does not do everything necessary to protect the 
 property and goods of foreigners or if it does not endeavor 
 to repress the violence and oflfenses of its citizens. 
 
 Hall^ seems to lean strongly to Calvo's doctrine, saying: 
 "The highest interests of the state are too deeply involved 
 in the avoidance of such commotions to allow the supposition 
 to be entertained that they have been caused by carelessness 
 on its part which would affect it with responsibility towards 
 a foreign state." 
 
 Pillet^ states the rule substantially in agreement with 
 Fiore. 
 
 The following resolution on the responsibility of states for 
 damages suffered by foreigners during riots, insurrections or 
 civil war, was adopted by the Institute of International Law 
 at the session of Sept. lo, 1900,''' and clearly presents a sound 
 view of this branch of international law : 
 
 "1. Independently of cases where indemnity may be 
 due to foreigners in virtue of the general laws of the 
 country, foreigners have a right to indemnity when they 
 are injured in their person or property in the course of a 
 riot, an insurrection, or a civil war; (a) when the act 
 through which they have suffered is directed against 
 foreigners as such, in general, or against them as sub- 
 ject to the jurisdiction of any given state; or (b) when 
 the act from which they have suffered consists in the 
 closing of a port without previous notification at a sea- 
 sonable time, or the retention of foreign vessels in a 
 port; or (c) when the damage results from an act con- 
 trary to law committed by an agent of the authority; or 
 (d) when the obligation to make indemnity is established, 
 in virtue of the general principles of the laws of war. 
 
 4 Droit Int. Pub. Paris 1885, C. Antolne's Translation I, Sec. 675. 
 
 5 Int. Law 5th ed. 222-22^? : Bluntschli, Sec. 380; Calvo, Sees. 292-295. 
 
 6 Les Lois actuelles de la Guerre (Paris 1901) 29. 
 
 7 Annuaire de I'lnstitut de Droit Int. XVIII, 253-256. 
 
go 
 
 "2. The obligation is likewise established when the 
 damage has been committed (No. 1 (a) and (d)) on the 
 territory of an insurrectionary government, either by 
 said government or by one of its functionaries. Never- 
 theless, demands for indemnity may in certain cases be 
 set aside when they are based on acts which have occurred 
 after the state to which the injured party belongs has 
 recognized the insurrectionary government as a belliger- 
 ent power, and when the injured party has continued 
 to maintain his domicile or habitation in the territory 
 of the insurrectionary government. So long as this latter 
 is considered by the government of the injured party as 
 a belligerent power, claims contemplated in line i of 
 Article 2 may be addressed only to the insurrectionary 
 government, not to the legitimate government. 
 
 "3. The obligation to make indemnity ceases when the 
 injured parties are themselves the cause of the events 
 which have occasioned the injury. There is especially 
 no obligation to indemnify those who have entered the 
 country in contravention of a decree of expulsion, or 
 those who go into a country or seek to engage in trade 
 or commerce, knowing, or who should have known that 
 disturbances have broken forth therein, any more than 
 those who establish themselves or sojourn in a land 
 offering no security by reason of the presence of savage 
 tribes therein, unless the government of said country has 
 given the immigrants assurances of a special character. 
 
 "4. The government of a federal state composed of 
 several small states represented by it from an inter- 
 national point of view, can not invoke, in order to escape 
 the responsibility incumbent on it, the fact that the con- 
 stitution of the federal state confers upon it no control 
 over the several states, or the right to exact of them the 
 satisfaction of their own obligations. 
 
 "5. The stipulations mutually exempting states from 
 the duty of extending their diplomatic protection must 
 not include cases of a denial of justice, or of evident 
 violation of justice or of jus gentium. 
 
 "Recommendations. 
 
 "The Institute of International Law recommends that 
 states refrain from inserting in treaties clauses of re- 
 ciprocal irresponsibility. It thinks that such clauses are 
 wrong in excusing states from the performance of their 
 
91 
 
 duty to protect their nationals abroad and their duty to 
 protect foreigners within their own territory. 
 
 "It thinks that states which, by reason of extraordi- 
 nary circumstances, do not feel able to insure in a suf- 
 ficiently effective manner the protection of foreigners on 
 their territory, can escape the consequences of such a 
 state of things only by temporarily denying to foreigners 
 access to their territory * * * , 
 
 "Recourse to international commissions of inquiry 
 and international tribunals is, in general, recommended 
 for all differences which may arise because of damages 
 suffered by foreigners in the course of a riot, an insur- 
 rection, or a civil war." 
 
 Mr. Julius Goebel, Jr., in his admirable article in 8 Am. 
 Jour. Int. Law, p. 802, on "Internatioilal Responsibilities of 
 States," maintains that the international point of view on this 
 question represented by such publicists as Calvo, Pradier- 
 Fodere and Hall, is based on an erroneous application of private 
 law principles to international law and a confusion of the 
 fundamental principles of diplomatic interposition and the 
 rights of states. He grants that the state is not responsible 
 for all the losses sustained as a result of revolution, but main- 
 tains that the burden should be on the state to excuse itself 
 from liability, whereas the theorists above mentioned place 
 the risk of injury on the foreign resident and the burden upon 
 him. 
 
 Mr. Goebel at p. 841 comments on the attitude toward 
 this question once aired by Mexicans: 
 
 "Like other Latin-American countries, Mexico since her 
 independence had been prey to continuous insurrection dur- 
 ing which considerable losses had been sustained by foreign- 
 ers, more particularly by French subjects. The basis of the 
 relations between France and Mexico was a provisional treaty 
 which had never been signed by Mexico, and for this reason 
 no attention was paid to French demands. France finally 
 made a peremptory demand for an indemnity of 600,000 
 francs,^ but this was refused, and accordingly diplomatic re- 
 lations were severed and Mexican ports declared to be under 
 
 8 27 Br. & For. St. Pap., p. 1178; H. Bancroft Works, Vol. 13, p. 187. 
 
92 
 
 blockade. This procedure did not bring Mexico to terms. 
 Reinforcements were sent and, following an unsuccessful con- 
 ference, Vera Cruz was bombarded and abandoned by the in- 
 habitants. At this point Great Britain offered to mediate, and 
 the two contendents agreeing, a new conference was held. 
 France did not, however, follow up her advantage but ac- 
 cepted practically the same conditions which had been pre- 
 viously offered her by the Mexican Government.^ 
 
 "During the course of the dispute, an interesting doctrine 
 was aired by the Mexicans. They declared that:^® 'We are 
 a nation always agitated by revolutions ; as such we suffer all 
 the consequences of a state of revolution, popular tumult, rob- 
 beries; plunderings, assassinations, unjust decrees, and since 
 we are obliged to suffer all these evils, we consider that the 
 foreigners who may be in our country must suffer like our- 
 selves, without a chance of redress or compensation.' How- 
 ever anarchistic this confession of faith may appear, it is not 
 an isolated expression of opinion. It stands as the most can- 
 did and concise statement of the principle which the Latin- 
 Am.erican states are forever reiterating." 
 
 The importance of the general principle, that claims re- 
 sulting from operations of war and revolution and insurrec- 
 tion are not recoverable, cannot be overestimated in its appli- 
 cation to the present Mexican situation. A very considerable 
 number of the alleged existing claims against Mexico, which 
 have arisen since 1910, fall within the operation of this prin- 
 ciple, and its fair and impartial application will probably in- 
 validate the claims of many foreigners who were occasioned 
 real suffering but who are measuring their expected recov- 
 eries not on established principles of law but on their hopes 
 for indemnity. A full and clear appreciation of the meaning 
 and effect of this principle would eliminate one of the chief 
 elements of international friction in the Mexican claims situa- 
 tion. An elimination of claims, which not only do not present 
 a prima facie case but are ruled out by as fundamental a prin- 
 ciple as the one above discussed, would help very decidedly 
 
 9 27 Br. & For. St. Pap., p. 1186 ff. 
 
 10 Ibid., p. 1176. 
 
93 
 
 to clarify the claims situation and to focus attention upon 
 those claims which really are based upon sound principles 
 of international law. 
 
 2. 
 
 Martial Law. 
 
 In the institution of Martial Law, international law finds 
 nothing reprehensible. Each nation is left to declare a state 
 of martial law at its own discretion, and the fact that an alien 
 has been subjected to treatment under such law, more severe 
 than would have been his treatment under the civil law, will 
 not per se be a valid basis for diplomatic interposition by his 
 home government.^ Mr. Seward, the U. S. Secretary of State, 
 in a letter to Mr. Edwards,- said that it had been the expe- 
 rience of the United States that the detention of neutrals on 
 suspicion which "investigation found insufficient to warrant 
 the continuance of such restraint" was one of the unavoidable 
 incidents of civil war. 
 
 If there is "probable cause" for an arrest and detention 
 under martial law no claim may be made. In the case of 
 Manuel Gil dos Reis, a Portuguese subject imprisoned in 
 Hawaii under martial law, the United States Secretary of 
 State declared that there was "probable cause" and that the 
 arrest under martial law as such could not be a basis for an 
 international claim.^ But if the act under martial law is vin- 
 dictive or without "probable cause" a claim will be pressed 
 by the Government of the offended alien. In the case of the 
 Panama "Star & Herald," a newspaper owned and edited by 
 Americans, which was repressed under martial law in Pan- 
 ama in 1886, the United States insisted on reparation to the 
 owners on the ground that the order of General Santo 
 Domingo Vilar, suppressing the paper, was a vindictive, un- 
 
 1 See case of British subjects in Memphis, U. S. in July, 1864. Pari. 
 Papers No. 363, 1864 or 1 Hallecks' Int. Daw (Baker's Ed.) 351. 
 
 2 80 MS. Dom. Let. 369. 
 
 3 Mr. Hill, Act. Sec. State, to Viscount de Santo Thyrso, Port. Min. Feb. 
 15, 1901, MS. Notes to Port. Leg. VII., 280. 
 
.94 
 
 authorized act by a military authorit}^ using his power for a 
 vicious purpose and making his government responsible.^ 
 
 It is probable that claims will be made against the Mexican 
 Government for losses sustained incidental to a detention or 
 imprisonment under martial law. Such claims will be invalid 
 unless the losses were occasioned by thefts and pilferings of 
 the authorities who enforced the martial law. The Mixed 
 Claims Commission organized under the Spanish-United 
 States Agreement of 1871 awarded damages to an American 
 engineer, part of whose effects had been stolen by Spanish 
 soldiers while he was imprisoned under Spanish martial law 
 in Cuba.^ 
 
 3. 
 
 Compensation for Property Taken or Destroyed for 
 Belligerent Purposes. 
 
 When property is taken for the purposes of belligerency 
 a situation arises similar to that of the exercise of "eminent 
 domain" and adequate compensation must be made. The 
 following is a good statement of the rule and its logic: 
 
 "Every civilized state recognizes its obligation to make 
 compensation for private property taken under pressure of 
 state necessity, and for the public good. The state is the 
 transcendental proprietary of all the property, real and per- 
 sonal, of its citizens or subjects. This transcendental right — 
 the eminent domain of the state in all countries where rights 
 are regulated by law — is so exercised as to work no wrong, 
 to inflict no private injury, without giving to the party ag- 
 grieved ample redress. This doctrine was not engrafted on 
 the public law to give license to despotic and arbitrary sov- 
 ereigns. It has its foundation in the organization of societies 
 and states, and is as essential to a republic as to the most 
 absolute despotism. It is of the very essence of sovereignty, 
 and without it a state could not perform its first and highest 
 duty, its own preservation. Vital as is this high prerogative 
 
 4 6 Moore's Dig. 775, 782. 
 
 5 Moore's Int. Arbitration IV, 3268. See also S. Ex. Doc. 108, 41 Cong. 
 2 Sess. 203, 204. 
 
95 
 
 of states, it must be exercised in subordination to the clear 
 principles of justice and right. Whenever, from necessity or 
 policy, a state appropriates to public use the private property 
 of an individual, it is obliged, by a law as imperative as that 
 in virtue of which it makes the appropriation, to give to the 
 party aggrieved redress commensurate with the injury he has 
 sustained. Upon any other principle the social compact 
 would work mischief and wrong. The state would have the 
 right to impoverish the citizen it was established to protect; 
 to trample on those rights of property, security for which was 
 one of the great objects of its creation. * * * 
 
 " 'Is the state bound to indemnify individuals for the 
 damages they have sustained in war? We may learn from 
 Grotius that authors are divided on this question. The dam- 
 ages under consideration are to be distinguished into two 
 kinds — those done by the state itself or the sovereign, and 
 those done by the enemy. Of the first kind some are done 
 deliberately and by way of precaution, as when a field, a 
 house, or a garden, belonging to a private person, is taken for 
 the purpose of erecting on the spot a tower, a rampart, or 
 any other piece of fortification; or where his standing corn 
 or storehouses are destroyed to prevent their being of use to 
 the enemy. Such damages are to be made good to the in- 
 dividual, who should bear only his quota of the loss.' (Vat- 
 tel, 403.) * * * 
 
 "The authorities cited (Vattel and Grotius) are direct and 
 emphatic, and are supported by every writer of respectability 
 upon public and national law."^ 
 
 The United States Government insisted on the indemnifi- 
 cation of some of its citizens who were forced by the Spanish 
 authorities in Cuba to build defenses and to contribute large 
 sums for other military constructions." 
 
 6 Grant's Case, 1 Ct. CI. 41, 43-44, citing Mitchell v. Harmony, 13 How., 
 113. See also, United States v. Russell, 13 Wall, 623. See Magoon's Reports 
 338, 615. 
 
 7 Mr. Fish, Sec. of State, to Mr. Mantilla, Spanish mln., Jan. 11, 1876, 
 MS. Notes to Span. Leg. IX., 414. See also supra. Sec. 540, IV., 20-21. The 
 exactions here referred to were incidents of the Ten Years' War In Cuba, 
 1868-1878. The statement that they could not be justified "In time of peace" 
 referred to Spain's contention that war in the internntional sense did not 
 exist. See, in connection with the foregoing note of Mr. Fish to Mr. Mantilla, 
 the instruction of Mr. Fish to Mr. Gushing, May 22, 1876, supra. Sec. 183, 
 Vol. 2, p. 66, 
 
96 
 
 There has been some reluctance to compensate for the 
 destruction of property for belligerent purposes. The North 
 German Confederation, of which Count Bismarck was Chan- 
 cellor, indemnified the British owners of six colliers which 
 were sunk in the River Seine by Prussian troops during the 
 war of 1870.^ It is doubtful, however, whether any other 
 similar claims were paid.^ 
 
 Samuel B. Crandall, in his article on the "Law Applied by 
 Spanish Treaty Claims Commission,"^^ says of the work of 
 that commission: 
 
 "In order to recover for the burning of property by the 
 Spanish authorities it was necessary, under the ruling of 
 the Commission, to show either that the burning was wanton 
 and unnecessary, or that it was not a legitimate war measure. 
 In no case was a claimant successful in recovering for the 
 burning of cane by Spanish authorities, and in only a few 
 cases were awards made for the burning of buildings by the 
 Spanish authorities. (Casanova, No. 33.) The evidence be- 
 fore the Commission in the various cases showed that a large 
 part of the burning of buildings chargeable to the Spanish 
 authorities was for the effective enforcement of the concen- 
 tration of the rural population in fortified centers, which was 
 recognized as a legitimate war measure. If, however, the 
 Spanish authorities appropriated or made use of the claim- 
 ant's property, relief was granted. Awards were made in 
 many cases for the appropriation of cane tops for forage, the 
 use of buildings as quarters for the troops or for reconcen- 
 trados or for other purposes. In the Constancia, No. 196, 
 an award was made for the use of claimant's private railway 
 by the Spanish troops. The largest and most numerous 
 awards were made for the appropriation of cattle by the 
 troops. (Reyes, No. 153; Del Valle, No. 222; Del Valle, No. 
 278; Iznaga, No. 279; Iznaga, No. iii.) Of the principle of 
 liability for the appropriation of private property as distin- 
 
 8 61 Brit. & For. St. Pap. 575, 7, 8, 611. 
 
 9 Mr. Everett, charge at Berlin, to Frelinghuysen, Sec. of State, No. 
 309, April 3, 1882, Ms. Desp. from Germany, in reply to Department's No. 304, 
 March 21, 1882. 
 
 10 IV., A. J. I. L., p. 820. 
 
97 
 
 guished from the principle of liability for its destruction the 
 Commission in its final report says: 
 
 'Awards were * * * made for appropriations of 
 property by the Spanish authorities in cases where the 
 property was used by such authorities, regardless of the 
 purpose of the appropriations. In other words, a dif- 
 ferent rule was applied in cases where property was 
 destroyed to prevent its falling into the hands of the enemy 
 from that applied where property, for like purpose, was 
 seized and used by the Spanish authorities. In the one 
 case, ordinarily the state, under international law, incurs 
 no liability, while in the other, the owner of the property, 
 in the class of cases passed upon by the Commission, is, 
 in the opinion of the Commission, entitled to compensa- 
 tion for the property so appropriated and used. 
 
 'In these cases (cattle cases) the Spanish oflBcials, 
 operating from their permanent garrisons, made the ap- 
 propriations systematically from time to time, taking 
 live stock for the sustenance of the garrisons and for 
 shipment to the larger cities in the island. These ap- 
 propriations for shipments were undoubtedly made for 
 the double purpose of furnishing supplies to the Spanish 
 soldiers stationed at the points to which the cattle were 
 consigned, and at the same time to prevent their appro- 
 priation by the insurgents.* 
 
 "Under Number lo, of the governing principles announced 
 by the Commission in April, 1903, and given above — that the 
 stipulation in Article VII of the treaty between the United 
 States and Spain of 1795, that the subjects and citizens of 
 each nation, their vessels or effects, should not be liable to 
 any embargo or detention on the part of the other for any 
 military expedition or other public or private purpose what- 
 ever, embraced property on land as well as vessels and their 
 cargoes — awards were made in the cases of Hernsheim, No. 
 297; Bauriedel, No. 239, and Gato, No. 171, for the detention 
 of tobacco in Havana under a decree of the Governor and 
 Captain-General of May 16, 1896, prohibiting the exportation 
 of leaf tobacco from the Provinces of Havana and Pinar del 
 Rio." 
 
 A Commission sitting on claims against Mexico might well 
 be guided by the experiences and decisions of the Spanish Treaty 
 Claims Commission on this subject. 
 
98 
 
 4- 
 
 Claims Resulting from Seizures of the Revolutionist's 
 
 Resources. 
 
 War supplies found in territory under the control of an 
 insurgent or revolutionist army may legally be confiscated 
 by the Federal Government. Cotton was such a "war supply" 
 during the civil war in the United States. After the war or 
 revolution is over claims for confiscations of this nature may 
 be presented and will be granted when it appears that the 
 claimant has furnished no voluntary aid to the enemy or 
 insurgent government.^^ 
 
 Revolutionary Finance. Forced Loans, Monetary Decrees, 
 Bank Liquidations and Revolutionary Finance in Gen- 
 eral. 
 
 Revolutionary finance in Mexico since the overthrow of 
 Diaz presents an interesting if tragic story. Many and large 
 claims may be expected from losses of the kinds described 
 in this section. No attempt can here be made to study in 
 great detail the operations employed by the successive revo- 
 lutionary bodies and governments to finance themselves and 
 their, at times, desperate efforts to keep their heads above 
 water. Nor will it be possible to discuss the exact extent to 
 which there has become merged in the liability of the Federal 
 Government the obligation to reimburse individuals and or- 
 ganizations for the various types of losses sustained by 
 reason of the, usually dictatorial and confiscatory, financial 
 operations hereafter described. It will be possible only in 
 merest outline to note these losses and what liability for 
 them there may exist. 
 
 Revolutionary finance may be grouped under three 
 heads, — forced loans, levies and confiscations in occupied ter- 
 ritory; forced acceptance of fiat or depreciated currency; and 
 forced liquidations of banks. 
 
 11 Young V. United States, 97 U. S. 39. See also, the case of Maza & 
 Larache reported in 6 Moore's Dig. 895. 
 
99 
 
 Before its ultimate success each revolutionary movement 
 was characterized, in its financial operations, by very much 
 the same procedure. The revolution of Francisco I. Madero 
 left in its wake, in the captured territory, banks wholly or 
 partly ruined. These banks had been subjected to heavy 
 levies, with the proceeds of which Madero and his leaders 
 had paid their troops and financed the revolution. At the 
 time Madero was overthrown, his Congress was considering 
 means of reimbursing the despoiled banks, but the next revo- 
 lution interrupted any plans that may have been begun and, 
 since then, no attempt has been made to satisfy the Federal 
 liability to these injured banks. Injustices similar to the 
 Madero confiscations were done under each of the successive 
 revolutionary movements after his overthrow. Huerta's con- 
 fiscations were possibly not as great, or as obvious, as those 
 of Madero, but to him are attributable numerous interfer- 
 ences with the monetary system which must have done great 
 injury to foreigners. It should also be noted that Huerta 
 attempted to finance himself by means of a foreign loan, 
 whereas the other governmental heads attempted to do so by 
 forced loans, increased taxation, and, in some cases, by illegal 
 seizure and appropriation. 
 
 To Carranza and to those who at times aided him in revo- 
 lution — Villa, Zapata, Urbina and others — may be attributed 
 the largest part of the monetary confiscations for which the 
 Government must now find itself liable. Wherever Carranza 
 or his agents overran territory, heavy levies were put upon 
 the banks. In some cases, as for example, in Torreon, all the 
 cash and bank notes held by the banks were seized. 
 
 Some of these levies were frank confiscations, while others 
 were so-called "loans." In either case the Government liability 
 is clear. Confiscations will obviously form a basis for inter- 
 national claim. The rules in regard to forced loans are also 
 quite clear. Secretaries of State Fish and Cadwalader in 
 1873-74, when considering the case of loans forced from 
 Ulrich and Langstroth, claimed that Articles 8 and 14 of the 
 United States-Mexican Treaty of 183 1 had the effect of ren- 
 dering the Mexican Government liable for the repayment of 
 
lOO 
 
 forced loans.^ But Mr. Evarts, while Secretary of State, in 
 1877, held that this same treaty did not really exempt United 
 States citizens from such forced loans.^ Aside from treaty 
 provisions, it is certainly better international practice that 
 foreigners should be exempted from forced loans.^ 
 
 Loans once forced from foreigners by a government must 
 be repaid by that government. Mr. Cadwalader when Acting 
 Secretary of State, in an instruction to Mr. Foster, Minister 
 to Mexico,* applied this rule to loans forced by insurgents as 
 well as Federal authorities: "It may be conceded that by the 
 public law foreigners in a country in a state of insurrection 
 cannot expect to be indemnified for all losses sustained from 
 insurgents when the regular government shall have been re- 
 stored. The case of a forced loan, however, is believed to be 
 an exception. The meaning of the word loan is, that the 
 money borrowed is to be returned. If the borrower is a sov- 
 ereign, his obligation to repay the amount is as sacred as that 
 of a private individual. If he is an insurgent, who for the 
 time usurps the regular authority, the latter may justly be 
 expected to make it good if the loan was an involuntary 
 one. 
 
 Let us proceed to the second group of revolutionary finan- 
 cial operations — the forcing of acceptance of depreciated or 
 fiat currency. Not many of the hysterical and unsound meth- 
 ods of bolstering up failing finances and depreciating cur- 
 rency were overlooked by the revolutionary leaders of 
 Mexico. Faced with extraordinary expenses in the conduct 
 of Government by reason of the large armed forces continu- 
 ally in the field, with the revenue machinery of the Diaz 
 regime sadly paralyzed and with foreign credit suspicious 
 and unready, these leaders were often forced by circumstances 
 to adopt unsound monetary policies which sometimes tem- 
 porarily ameliorated financial conditions but generally failed 
 
 1 See No. 21, Mans. Inst. Mexico XIX., 18, No. 54 Id. 48 and No. 141 id. 
 121. 
 
 2 No. 4, 85 Mns. Desp. to Consuls 519, No. 3991, Mns. Inst. Mexico XIX., 
 349, No. 511 id. 448, No. 542, id 478. See also. No. 568, For. Rel. 1879, 772. 
 
 3 See Mr. Bayard, Secretary of State to Mr. Buck, Minister to Peru, No. 
 «5, May 20, 1886, Mns. Inst, Peru, XVII, 215. 
 
 4 No. 141, September 21, 1874, Mns. Inst. Mex. XIX, 121. 
 
lOI 
 
 from their inception to do other than aggravate the evils 
 sought to be cured. A detailed review of the monetary regula- 
 tions which were put into operation by the successive govern- 
 ments since Diaz, and the effects of these regulations, would 
 take a volume in itself. There are many such decrees and 
 regulations and each should be separately considered in de- 
 termining the validity of claims by foreigners presented for 
 losses occasioned under them. 
 
 The rule cannot be denied that, regardless of the degree 
 of liability to which the Government of Mexico may be held 
 accountable by its own citizens, it may be held liable for 
 losses to foreigners occasioned by such of these decrees and 
 regulations as plainly interfere with the obligation of con- 
 tract. Flagrant and notorious examples of such an inter- 
 ference with the obligation of contract may be found in the 
 history of the Banco Nacional de Mexico and the Banco de 
 Londres y Mexico. At this point, it is well to remember that, 
 under the doctrine of the "El Triunfo" case (discussed in 
 Chapter II, Part B, Section i), claims by foreign stockholders 
 in Mexican banks should receive diplomatic aid, and are not 
 precluded because the claimants are stockholders in a na- 
 tional corporation. 
 
 The issues of fiat currency are particularly interesting. 
 With the advent of Carranzista fiat paper currency began the 
 most depressing period of finance in the revolutionary years. 
 Early in 1913 Carranza had issued his first paper money, 
 called the "Monclova." The public was forced under ex- 
 treme penalties, and with the aid of troops, to accept in 
 liquidation of debts and as full legal tender this fiat money. 
 
 Shortly after the arrival of the Constitutionalist Army at 
 Tampico, there appeared the "Ejercito Constitucionalista" 
 issue of paper currency, and when Carranza triumphantly en- 
 tered Mexico City he brought this currency with him. Worse 
 than this, he established his printing presses in Mexico City 
 and a continuous stream of the new paper flowed from 
 these presses. Gresham's Law immediately came into opera- 
 tion. Metal currency, even the smaller coins, and bank 
 notes, disappeared, and the worthless paper money was 
 
102 
 
 everywhere. The soldier forced the money on the shop- 
 keeper, the shopkeeper paid the wholesaler with the same 
 money, the wholesaler took it to the banks and the banks 
 turned it back to the people. 
 
 When Villa dispossessed Carranza for a short time in 
 Mexico City, the capital was during that period flooded with 
 Villa issues (dos caras sabanas), while Carranza at Vera 
 Cruz kept his presses busily at work turning out millions of 
 "Vera-Cruzanas," with which he deluged the capital upon 
 his re-entry. The Villa money was declared void and those 
 who were unfortunate enough to be caught with quantities of 
 it suffered loss. 
 
 It is of some importance to point out that the mortgage 
 banks in Mexico, in particular, were subjected to great losses 
 through being forced to accept depreciated or fiat currency. 
 These banks had loaned large sums on mortgage, to be re- 
 paid, under the terms of the mortgages, in gold. The losses 
 occasioned the mortgage banks when the Government de- 
 creed that all mortgage loans, despite the fact that the 
 mortgagors had contracted to repay in gold, might legally 
 be repaid in paper, were consequently enormous. This seems 
 to be a very clear interference with the obligation of con- 
 tract. Certainly when foreign banks were involved in these 
 losses, claims arose in their favor on the ground that the 
 Government had interfered with their fundamental contract 
 rights. 
 
 There were some two hundred issues, large and small, of 
 fiat paper currency during the revolutionary period, the total 
 value probably considerably exceeding one billion pesos. All 
 of these issues took about the same course. Forced on the 
 public and having nothing behind them, they depreciated so 
 rapidly that Carranza finally found himself forced to turn to 
 some other field of finance more promising than the printing 
 of worthless paper. 
 
 When the paper currency period came to an end and the 
 country returned to a metallic currency, the banks held in 
 their vaults the greater part of the coin and bullion in Mex- 
 ico. Carranza, sorely in need of funds and no longer able to 
 
103 
 
 pay his soldiers in depreciated or fiat paper, began a cam- 
 paign against the banks which marked the last stage in the 
 collapse of financial security in the Republic. The purpose of 
 this campaign was ostensibly to rectify the unhappy financial 
 situation, but was in reality ill-concealed confiscation of the 
 metallic funds of the banks, often resulting in their complete 
 destruction. The condition of the Mexican banks of issue 
 whose reserves had been greatly depleted during the turmoil 
 following the overthrow of Diaz, oflfered an opportunity to 
 Carranza that he soon took advantage of. The old Banking 
 Law of Mexico provided that banks of issue must keep their 
 metallic reserve up to an amount equal to all their bills in 
 circulation. All or most of these banks had been unable to 
 maintain this reserve, whether by reason of governmental 
 loans or assessments or whatnot, but were nevertheless sol- 
 vent and fundamentally in sound financial condition. Under 
 a short period of normal conditions, they would have been 
 able to replenish their reserves and to comply with the old 
 law, which they had been prevented from satisfying princi- 
 pally by reason of the national emergency. Carranza seeing 
 in this situation the possibility of replenishing his treasury, 
 under color of legal proceedings, on September 15, 1916, as 
 First Chief of the Constitutionalist Army of the Republic of 
 Mexico, issued a decree declaring the abrogation of all the 
 banking laws of Mexico, of the General Law of Credit Institu- 
 tions and of the laws authorizing concessions to banks of 
 issue, and abrogating also the charters of all banks of issue 
 organized or existing under the Mexican law. The decree 
 then provided that all banks of issue be given sixty days 
 within which to increase their metallic reserves to an amount 
 equal to their bills in circulation. After the sixty-day period 
 a Board of Sequestration was to be appointed by the Depart- 
 ment of the Treasury, in the interests of the conservation of 
 the banks only, which Board was to act as a commission to 
 conserve the metallic specie of the banks where it had not 
 been kept up to the required figure. 
 
 On December 14, 1916, Carranza issued another decree 
 ileclaring all banks of issue, which had not brought their me- 
 
104 
 
 tallic reserves up to the required standard within the sixty- 
 day period, to be in a state of liquidation. 
 
 On April 4, 1917, Carranza created by decree the "Com- 
 ision Monetaria," a commission to reorganize the circulation 
 of fiduciary coin in Mexico. 
 
 By decree of April 6, 1917, Carranza ordered that the 
 Comision Monetaria was to liquidate the banks of issue in 
 accordance with the above-mentioned decrees. 
 
 It is important to observe that it was largely because of 
 the control of the Department of Finance, through the Board 
 of Sequestration and the Comision Monetaria, that most of 
 the banks were unable to retire their bills in circulation and 
 to build up their reserves. Furthermore, monies were con- 
 tinually withdrawn from the banks under various pretexts by 
 the Boards and the Comision and large sums never repaid. 
 
 In most cases no liquidation proceedings were inaugurated 
 beyond the taking over of physical possession of the banks 
 and their assets by the Comision. In many instances the 
 officers of banks were forced by imprisonment and intimida- 
 tion to turn over to the Mexican Government parts or the 
 whole of the metallic reserves of their respective banks, these 
 monies being used not to conserve the reserves and to liqui- 
 date, but for the general administration expenses of the gov- 
 ernment and to pay the armies. Another frequent procedure 
 was to demand, on order of Carranza, that the bank officials 
 turn over to the mint of the Republic for immediate coinage 
 the bars of silver and gold held in the bank vaults as part of 
 the metallic reserve. When this was done, generally only 
 a small part of the coin specie was returned to the banks. 
 
 In spite of the control of the banks by the Department of 
 Finance, they were forced from time to time to make so- 
 called loans to the government. In most instances these 
 loans consisted of forcible extractions from the vaults of 
 the banks, without provision for repayment. 
 
 These exactions of forced "loans" were in clear contra- 
 vention of good international practice. They might be sup- 
 ported as necessary emergency measures, but the methods 
 employed in executing these measures withdrew from them 
 
105 
 
 any possible sanction that international law might have given 
 them. Furthermore, it is clear that most of these exactions 
 must be considered, from an international law viewpoint, as 
 being not in the nature of extraordinary taxes, but as forced 
 loans, and the obligation of the Mexican Government i,? make 
 repayment for all such "loans" is unquestionably absolute. 
 
 On January 31, 1921, President Obregon issued a "Decree 
 Regulating the Return and Liquidation of Suspended Banks." 
 This decree provided in Art. i as follows: 
 
 "Art. I. The banks which were declared to be in liquida- 
 tion, by virtue of the decree of December 14th, 1916, shall 
 recover their judicial j>ersonality and shall be returned to 
 their legitimate representatives under the terms and condi- 
 tions of this law." 
 
 The procedure for the return of the suspended banks is set 
 forth in the decree in detail. It is probable that many of the 
 banks which have been out of operation since 19 16 will take 
 advantage of the decree and attempt to resume business; several 
 of the larger banks have already taken advantage of this decree. 
 From the text of the decree it would seem that the same does 
 not operate to destroy any claims the banks may have against 
 the Government for losses sustained during the revolutions. 
 
 6. 
 
 Damages for Wanton and Unlawful Acts. 
 
 A nation is now undoubtedly held internationally responsible 
 for damages to aliens occasioned by the wanton and unlawful acts 
 of authorities or military forces.^ 
 
 "We do not, at the present day, often hear, when a town is 
 carried by assault, that the garrison is put to the sword in cold 
 
 1 Mr. Seward, Sec. of State, to Mr. Dayton, Mar. 13, 1863, Ms. Inst. 
 France XVI., 345; Mr. Frellnghuysen, Sec. of State, to Mr. Logan, June 7, 
 1883, Min. to Chile, June 7, 1883, For. Rel. 1883, 107. Mr. Bayard, Sec. of 
 state, to Mr. Hall, May 27, 1886, MS. Inst. Cent. Am. XVIII., 615. Andrew 
 Moss V. Chile, No. 25, United States and Chilean Claims Commission, 1901. 
 See Mr. Blaine, Sec. of State, to Mr. Chrlstlancy, No. 153, June 21, 1881, Ms. 
 Inst. Peru, XVI., 501. The Commission disallowed a claim for the loss of 
 property by the burning of Chorillos by the Chilean forces, the burning 
 resulting from the taking of the place by storm. Peter Baclgalupi r. Chile, 
 No. 42, United States and Chilean Claims Commission, 1901. 
 
io6 
 
 blood, on the plea that they have no right to quarter. Such things 
 are no longer approved or countenanced by civilized nations. 
 But we sometimes hear of a captured town being sacked, and the 
 houses of the inhabitants being plundered, on the plea that it was 
 impossible for the general to restrain his soldiery in the con- 
 fusion and excitement of storming the place ; and under that 
 softer name of plunder it has sometimes been attempted to veil 
 *all crimes which man, in his worst excesses, can commit ; horrors 
 so atrocious that their very atrocity preserves them from our full 
 execration, because it makes it impossible to describe them,' It is 
 true that soldiers sometimes commit excesses which their officers 
 can not prevent ; but, in general, a commanding officer is respon- 
 sible for the acts of those under his orders. Unless he can con- 
 trol his soldiers, he is unfit to command them. The most atro- 
 cious crimes in war, however, are usually committed by militia 
 and volunteers suddenly raised from the population of large 
 cities, and sent into the field before the general has time or op- 
 portunity to reduce them to order and discipline. In such cases 
 the responsibility of their crimes rests upon the state which em- 
 ploys them, rather than upon the general who is, perhaps, un- 
 willingly, obliged to use them."^ However, when no officers or 
 officials of the government are in any way connected or identi- 
 fied with the transaction, no international liability arises.^ 
 
 The Spanish Treaties Claims Commission held that Spain was 
 entitled in endeavoring to repress the Cuban revolution to adopt 
 "such war measures for the recovery of her authority as are sanc- 
 tioned by the rules and usages of international warfare," but that 
 if "it be alleged and proved in any particular case that the acts 
 of the Spanish authorities or soldiers were contrary to such rules 
 and usages, Spain will be held liable in that case."* 
 
 2 Halleck's International Law and Laws of War (San Francisco, 1861, 
 Sec. 22, p. 442), citing Kent's Commentaries, Vattel's Droit de Gens, and other 
 authorities. 
 
 3 Mr. Fish, Sec. of State to Count Corti, Italian min. Dec. 9, 1872, MS. 
 Notes to Italy, VII., 150; Moore, Int. Arbitrations, IV., 4029. 
 
 4 Statement by the president of the Spanish Treaty Claims Commis- 
 sion, Mr. William E. Chandler, Nov. 24, 1902, concurred in by Commissioners 
 Diekema and Wood. (S. Doc. 25, 58 Cong. 2 sess.) Commissioners Maury and 
 Chambers dissented for the reason that even though it was correct as an 
 abstract proposition, it tended to qualify the liability of the United States 
 under Art. VII, of the treaty of peace with Spain of Dec. 10, 1898. (S. Doc. 
 25, 58 Cong. 2 sess. 10, 12.) The foregoing propositions were repeated, under 
 the numbers 5 and 9, in a statement issued by the commission on April 28, 
 1903. (Id. 6, 7.) 
 
107 
 
 ^^^^en the claims against Mexico are presented, it will prob- 
 ably appear that many of them are based on the wanton acts of 
 military forces. The Federal Army has always been principally 
 composed of uneducated and not entirely civilized Indians, and 
 largely of former bandits inveigled into the Federal service, as 
 much, in some cases, to keep them out of mischief as for their 
 military value. In the execution of their military purposes, sol- 
 diers of this type are very likely to be only semi-disciplined and 
 to indulge in excesses and unnecessary wanton acts. Each suc- 
 cessive revolutionary movement has called to its standards a mis- 
 cellany of banditti, discontents and malefactors. These conglom- 
 erate forces have represented all stages of civilization and moral- 
 ity, consequently, inasmuch as liability for the acts of these 
 revolutionary forces became merged in the Federal liability upon 
 the success of the particular revolution which they assisted, the 
 Federal liability is likely to be extensive. 
 
 7. 
 Railroad Claims. 
 
 Three classes of railroad claims may be anticipated: (i) those 
 arising out of the guaranty by the Mexican Government of rail- 
 road bonds and securities. These claims are considered else- 
 where herein. (Giapter IV-B). 
 
 (2) Claims arising out of the operation of the roads after 
 their seizure by the Carranza Government. 
 
 (3) Claims based on the destruction of railroad properties. 
 
 The second and third classes of claims are covered by pro- 
 visions of the Mexican Law. 
 
 Acting entirely within its rights, the Mexican Government, 
 during the revolution, took over the management and operation of 
 privately-owned railroads. Chapter VIII of the Railroad Law 
 of Mexico is entitled, "Rights Reserved to the Nation." It says 
 in part as follows: 
 
 "Art. 145. The Nation will have the following 
 rights : 
 
 "te « 4c :|c 9|c 4c * 
 
io8 
 
 "X. The federal authorities are entitled, in case, in 
 their opinion, the defense of the country requires it, to 
 make requisitions on the railroads, their personnel and 
 all their operating material and to dispose of them as they 
 may consider advisable. 
 
 "In this case the Nation shall indemnify the railroad 
 companies. If no agreement is reached as to the amount 
 of the indemnification, the latter shall be based on the 
 average gross earnings in the last five years, plus ten per 
 cent, all expenses being borne by the company. 
 
 "If only a part of the material is required the pro- 
 visions of paragraph IV of this article w^ill be observed 
 
 "XI. In the event of v^ar or of extraordinary circum- 
 stances, the executive may take measures to render un- 
 serviceable either the v^hole or part of the road, also the 
 bridges, telegraph lines and signals forming part of the 
 road. 
 
 "What may have been destroyed shall be replaced at 
 the cost of the Nation, as soon as the Nation's interests 
 allow of it. 
 
 "XII. In case the executive orders the suspension of 
 the service, for the sake of the country's defense or the 
 public peace, it may also order that all the rolling stock 
 and any other material shall be removed. 
 
 "In such cases the war department will determine the 
 places to which said material is to be taken." 
 
 It will be observed that this article clearly gives the Mexican 
 Government the right to take over the roads in cases of public 
 emergency. That the existence of revolution presents a public 
 emergency is obvious. It will further be noticed that the second 
 paragraph of section X provides specific indemnification for the 
 owners of the road. The second paragraph of section XI provid- 
 ing for the replacement at the cost of the Nation of property 
 destroyed under governmental direction in times of national 
 stress, is peculiarly worded, inasmuch as it provides for replace- 
 ment '*as soon as the Nation's interests allow of it." The word- 
 ing of this phrase might permit the Government to delay the date 
 of reparation until it has sufficiently recovered from the National 
 emergency to make provision for such reparation. The obliga- 
 tion, however, to replace is absolute. 
 
109 
 
 Qaims based simply upon injuries to railroad properties oc- 
 casioned by the acts of revolutionaries or bandits, are treated 
 elsewhere. Probably only when there is present wantonness, 
 maliciousness, negligence or similar factors will liability fall upon 
 the Government. 
 
 There is nothing in the nature of claims under classes (2) 
 and (3) noted above which would, without a denial of justice, 
 bring them into the group of those for which diplomatic inter- 
 position would be possible. As above indicated, the Mexican law 
 makes ample provision for reparation and compensation and the 
 private owners would undoubtedly have to seek their local rem- 
 edies before they could obtain the aid of their own governments, 
 unless Mexico consents to include such claims in an eventual 
 arbitration. 
 
 8 
 
 Federal Liability for the Acts of Insurgents and Revolu- 
 tionaries. 
 
 If the insurgents eventually become successful in their move- 
 ment, liability for their acts will be merged in the general Habil- 
 ity of the Government.^ It is the liability of the nation for the 
 acts of unsuccessful insurgents that will be here considered. 
 
 "The general rule is that a sovereign is not ordinarily respon- 
 sible to alien residents for injuries they receive on its territory 
 from belligerent action or from insurgents whom he can not con- 
 trol."2 'They are not entitled. to greater privileges or immunities 
 than the other inhabitants in the insurrectionary district. * * * 
 By voluntarily remaining in a country in a state of civil war they 
 must be held to have been willing to accept the risks, as well as 
 the advantages of that domicile."^ 
 
 The government is not responsible for the acts of insurgents 
 or revolutionaries when it has given all the protection in its 
 power, is not itself culpable, and the revolution has gone beyond 
 
 1 This subject is discussed In Chapter I-C. 
 
 2 1 Amer. Journal of Int. Law 35; 6 Moore's Dig., pp. 885, 886. See also, 
 Wharton, pp. 577, 578; 6 Moore's Dig., Sees. 1032-1049. 
 
 3 Secy. Seward to Count Wydenbruch in 1865; 6 Moore's Dig., p. 885; 
 1 Amer. Jour. Int. Law, 36. 
 
no 
 
 control.^ There is no federal liability when the revolution has 
 reached the state where the whole government forces are needed 
 to combat it. The United States disclaimed liability for the acts 
 of the confederacy in part on this ground.^ 
 
 Recognition of the insurgents as belligerents relieves the Fed- 
 eral government of responsibility for the acts of the insurgents 
 against nationals of the recognizing nation. This was true in the 
 case of the recognition by England and France of the belliger- 
 ent status of the confederacy.^ 
 
 A state may avoid liability for the acts of insurgents within 
 its borders by recognizing their belligerent status. 
 
 Aliens cannot claim the protection of a state if they enter a 
 part of the territory notoriously in a condition of upheaval, or 
 when the government has decreed that they do so at their own 
 peril."^ But "the mere 'revolutionary state' of a part of Mexico 
 can not be accepted by the United States as a defense to a claim 
 on Mexico for injuries inflicted on citizens of the United States 
 in Mexico in violation of treaty engagements."^ 
 
 President Jackson in his annual message, December 7, 1835^ 
 said: "Unfortunately, many of the nations of this hemisphere 
 are still self-tormented by domestic dissensions. Revolution suc- 
 ceeds revolution ; injuries are committed upon foreigners engaged 
 in lawful pursuits. Much time elapses before a government suffi- 
 ciently stable is erected to justify expectation of redress. Min- 
 isters are sent and received, and before the discussions of past 
 
 4 Moore's Int. Arbi., V, 4615-17; 212 MS. Dom. Let. 450; Mr. Seward, 
 Sec. of State, July 9, 1868; 79 MS. Dom. Let. 69; Mr. Olney, U. S. Sec. of 
 State, Jan. 29, 1896, to Mr. Thompson, Min. to Brazil, Ms. Inst. Brazil, XVIII., 
 171; Mr. Olney to the President, Dec. 7, 1896, For. Rel. 1896, LXXXII. and 
 LXXXV.; Mr. Uhl, Acting Sec. of State to U. S. Vice-Counsel General at 
 Havana, July 1, 1895, For. Rel. 1895, II., 1216. 
 
 5 Moore's Int. Arbi., II., 1622, III., 2982-85. 
 
 6 See Mr. Adams, Min. to England, to Mr, Seward, Sec. of State of 
 U. S., June 14, 1861; Diplomatic Correspondence 1861, 87, 89; and Mr. Seward, 
 Sec. of State to Mr. Dayton, Min. to France, Jan. 12, 1864, Dip. Cor. 1864, 
 III., 17; 6 Moore's Dig. 956, 957. 
 
 7 Mr. Davis, Acting Sec. of State, to Mr. Marlibreit, Min. to Bolivia, 
 No. 55, July 7, 1871, MS. Inst. Bolivia, I., 145. In this connection see Chapter 
 V, Part C, Section 10. See also the case of the "Seven Mexican Shepherds" 
 cited in Chapter IV, Part H, Section 2. 
 
 8 Mr. McLane, Sec. of State, to Mr. Butler, Min. to Mexico, June 20, 
 1834, MS. Inst. Mex. XV., 27; Wharton Int. Law Digest II., 576, Sec. 223. 
 
 9 Richardson's Messages, III., 147, 151. 
 
Ill 
 
 injuries are fairly begun fresh troubles arise; but too frequently 
 new injuries are added to the old, to be discussed together with 
 the existing government after it has proved its ability to sustain 
 the assaults made upon it, or with its successor, if overthrown. 
 If this unhappy condition of things continue much longer, other 
 nations will be under the painful necessity of deciding whether 
 justice to their suffering citizens does not require a prompt re- 
 dress of injuries by their own government competent and en- 
 during enough to discuss and to make satisfaction for them."^® 
 
 It is reasonably well settled that liability will arise where the 
 injury violates a treaty right and there is no other form of re- 
 dress; where there has been undue discrimination against for- 
 eigners in adjudicating or allowing claims; where there has been 
 an evident denial or palpable violation of justice; and, perhaps, 
 even where international law and the rules of civilized warfare 
 are seriously violated.^^ 
 
 The liability of a state is undeniable where it has been negli- 
 gent or has lacked due diligenceP The following excerpt from 
 Samuel B. Crandall on "Law Applied by Spanish Treaty Claims 
 Commission,"i3 states clearly the rules of due diligence applied 
 by that Commission: 
 
 " The Commission having previously held that the insurrec- 
 tion from the first, as a whole, went beyond the control of Spain, 
 and it appearing and being conceded by the claimant in this case 
 
 10 Richardson's Messages, III, 147, 151. 
 
 11 See article by Amos S. Hershey, "Calvo and Drago Doctrines," 1 A. J. 
 I. L. 36. 
 
 12 Mr. Olney, Sec. of State, to Messrs. Lauman & Kemp. Jan. 13, 1896, 
 207 MS. Dom. Let. 146; Ralston, Umpire, case of Sambiaggio, Italian-Venez- 
 uelan Mixed Commission, protocol of February 13, 1903, Ralston's Report 666; 
 case of (;uastini, id. 730. 747; and other cases, id. 753, 769, 810, 816. This 
 ruling was followed by Duffleld, Umpire, case of Van Dissel & Co., German- 
 Venezuelan Mixed Commission, protocol of February 13, 1903, Ralston's Re- 
 port, 565, 573; also by Plumley, Umpire, case of Aroa Mines Co. (Limited), 
 British-Veftezuelan Mixed Commission, protocol of February 13, 1903, Ral- 
 ston's Report 344, 350; and case of Henriquez, Netherlands-Venezuelan Mixed 
 Commission, protocol of Feb. ^28, 1903, Ralston's Report, 896; and also in 
 another case, id. 903. It was also held by the American -Venezuelan Mixed 
 Commission, under the protocol of Feb. 17, 1903, in Jarvis' case. In an opinion 
 delivered by Bainbridge, the American commissioner, that the Venezuelan 
 Government could not be held liable for the payment of bonds issued by 
 uTisufcos«!^ul 7-t'T''^lutionists in payment of services rendered them. Ralston's 
 Report, 145; 6 Moore's Dig. 972. 
 
 13 IV.. A. J. I. L. 818. 
 
112 
 
 that the Spanish troops did not fail to use due diligence on the 
 15th of December at Hormiguero, it is questionable whether the 
 Commission is authorized to review the military situations and 
 operations at the various times and places mentioned, so remote 
 were they from the 15th of December and Hormiguero, and to 
 condemn the plans, acts, omissions of the military command- 
 ers as proving such a lack of due diligence on the part of the 
 Spanish authorities as to make Spain liable for the damages done 
 by the insurgents at that time and place. At all events, it is cer- 
 tain that no legal precedents have been found which would in our 
 opinion, justify the Commission in entering upon such review and 
 condemnation/ 
 
 "Under this ruling of the Commission, in order to establish 
 liability of Spain for damages by insurgents it was necessary to 
 prove the failure of the Spanish authorities at the time and place 
 to exercise due diligence in affording protection. A large amount 
 was claimed, before the Commission for the burning of cane by 
 the insurgents. Early in the insurrection the general in charge 
 of the Cuban forces, with the twofold purpose of depriving the 
 Spanish Government of revenue and of compelling, by removing 
 the possibility of employment, the colonos and laborers on the 
 sugar plantations to join the Cuban forces, ordered the burning 
 of cane fields. The order was subsequently limited to those es- 
 tates which attempted to grind. The evidence taken in the cases 
 before the Commission clearly established as a general proposi- 
 tion the impossibility of protecting, by forces of the regular army, 
 the extensive cane fields throughout the Island, In only one case, 
 that of the Central Tuinucu Sugar Company, No. 240, was re- 
 covery for the burning of cane fields by the insurgents granted. 
 The facts in this case were peculiar. The Commission found in 
 this case evidence to show that the insurgents threatened to de- 
 stroy the property if an attempt at grinding was made, that ihe 
 Spanish authorities ordered the claimant to proceed with the 
 grinding and promised protection. While a Spanish force of 350 
 men was erecting fortifications on the batey, the insurgents be- 
 gan burning the cane fields of the estate and continued buming 
 them for several days, until the fields were nearly all burned. 
 The Spanish forces rem.ained within the batey and made no ef- 
 
"3 
 
 fort to prevent the burning. It was contended by the defendant 
 that it was a question of military discretion, which could not be 
 reviewed by the Commission, on the part of the commanding offi- 
 cer whether he should divide his forces in order to prevent the 
 burning of the cane, and possibly so weaken the force on the 
 batey as to enable the insurgents to burn the mill or whether he 
 should keep his forces united for the protection of the buildings 
 of the batey. The Commission held, however, that the Spanish 
 authorities were neglig^ent and made an award accordingly. 
 
 **In the case of Rodriguez, No. 479, an award was made for 
 the destruction of household goods by the insurgents, the Span- 
 ish authorities having at'bitrarily refused the claimant permission 
 to remove them to a place of safety. So also in the case of 
 Thorne, No. 248, an award was made for a quantity of tobacco 
 burned by the insurgents, it appearing to the Commission that 
 the claimant had been prevented by the Spanish authorities from 
 removing it to a place of safety. In reporting these cases the 
 Commission says : 
 
 " 'In neither of the above-cited cases was it shown that by 
 reasonable diligence the Spanish Government could have pre- 
 vented the destruction of the buildings, but having unreasonably 
 refused to permit the removal of the household goods in the one 
 case, and having actively and without warrant interrupted and 
 prevented the removal of the tobacco in the other case, awards 
 were made the respective claimants, the Commission feeling that 
 it was justified under the broad jurisdiction granted it by statute 
 to disregard the strict application to these cases of the common- 
 law principles which, if applied, would perhaps have prevented 
 a recovery and defeated what were regarded by the Commission 
 as meritorious claims.* "^^ 
 
 Mr. Bayard, then Secretary of State of the United States, in 
 a communication to Mr. Sutphen, on January 6, 1888,^^ in dis- 
 cussing the rules of due diligence applicable to this subject, states 
 that they must be held to vary with the nature of the insurrec- 
 tion, the territory involved and the situation, and quoted Mr. 
 Fish in his instructions to Mr. Foster of August 15, 1873, when 
 
 14 Vol. IV., Amer. Journ. Int. Law, 818. 
 
 15 166 MS. Dom. Let. 509. 
 
114 
 
 discussing the United States claims against Mexico for injuries 
 sustained from insurrectionary violence, as saying that the rule 
 sustaining such claims "should not always apply to persons domi- 
 ciled in a country and rarely to such as may visit a region notori- 
 ously in a state of civil war." 
 
 Mr. Bayard cited several other important precedents — cases 
 in which the United States had disclaimed liability, or refused to 
 hold another nation liable, on the ground that sufficient diligence 
 had been employed, or that the claimant had voluntarily sub- 
 jected himself to undue risk. Moreover, he pressed the theory 
 that the continued maintenance of an insurrection is ''prima facie 
 proof of vis major which throws upon the party alleging particu- 
 lar negligence the burden of proving it," continuing as follows : 
 
 "Nor can the Department refuse to apply to citizens of the 
 United States visiting foreign lands where insurrections for the 
 time prevail, or the local government is powerless to suppress 
 sudden tumults, the rule that it applied to foreigners who visited 
 portions of our territory where insurrections for the time pre- 
 vailed, or when the local government was without the power to 
 repress sudden tumults. Spain can not be held to a greater de- 
 gree of liability to foreigners for losses incurred by reason of 
 lawlessness in Cuba, than is the United States for similar dis- 
 orders within its jurisdiction; nor can the United States claim 
 for its citizens residing voluntarily in foreign lands, immunities 
 which it will not concede when claimed against itself. We hold 
 that foreigners who resort to localities which are the scenes of 
 lawless disorder in this country do so at their own risk, and 
 must apply the same rule to our own citizens in foreign lands." 
 
IT5 
 
 H. 
 
 ACTS OF PRIVATE PERSONS. 
 
 I. 
 
 In General. 
 
 To give rise to the responsibility and liability of the Mexican 
 Govemment in the case of injuries by individuals acting alone 
 or in groups as brigands or mobs, some independent delinquency 
 of the Government itself, a failure after opportunity afforded 
 either to prevent the injury or to punish the guilty must be shown. 
 A govemment is not, as is so often erroneously assumed, a guar- 
 antor of the security of aliens. Under ordinary circumstances, 
 a government is merely under a duty to furnish governmental 
 machinery which normally would protect the alien in his person 
 and property. This does not mean that this machinery must be so 
 efficient as to prevent all injury to aliens, but merely that it must 
 be so organized, constituted and operated that a violent assault of 
 one individual upon another is only a fortuitous event. Under 
 the particular circumstances existing all reasonable measures 
 must have been taken to prevent the injury and punish the guilty. 
 As a corollary of this principle, a government's duty, and conse- 
 quent responsibility for breach, is measured by its ability to pro- 
 tect the alien in a given case under given circumstances.^ 
 
 Commissioner Wadsworth in the United States-Mexican 
 Arbitration of 1868, expressed the opinion that the test of a 
 nation's responsibility for injuries committed upon aliens in its 
 territory by private citizens, is whether it has enforced its laws 
 "with reasonable vigor and promptness to prevent violence when 
 practicable, or failing in that to punish the offenders criminally, 
 or to indemnify the injured party by [its] remedial civil justice."^ 
 
 To render the Government liable, therefore, it has been estab- 
 lished by precedents to be necessary for the claimants to prove 
 some actual or implied governmental complicity in the act, before 
 
 1 Dowley (U. S.) vs. Costa Rica, July 2, 1860, Moore's Arb. 3032; Calvo, 
 Droit International (6th ed.) Sec. 1274, makes the "facilities at hand" the 
 test of responsibility. Mr. Hay, Secretary of State, to Mr. Dudley, Minister 
 to Peru, September 5th, 1899, 6 Moore's Dig. 806. But the apprehension and 
 punishment of the guilty will be demanded. Borcfltiard, Diplomatic Protec- 
 tion of Citizens Abroad, Sees. 86, 87. 
 
 2 Mills (U. S.) V. Mexico, July 4, 1868, Moore's Arb. 3034. 
 
ii6 
 
 or after it, either by directly ratifying or approving it,^ or by an 
 implied, tacit or constructive approval of the negligent failure 
 to use due diligence to prevent the injury,* or to investigate the 
 case, or to prosecute and punish the guilty individuals.^ Inci- 
 dental grounds would be: Inadequate punishment,^ negligently 
 permitting offender to escape,"^ inexcusable delay in investigat- 
 ing the facts,^ or to enable the victim to pursue his civil remedies 
 against the offenders.^ 
 
 What is the due diligence which is contemplated by the rule 
 ds applied in the illustrations given above depends upon the cir- 
 cumstances of each case and is sometimes expressed by the phrase 
 that "ability is a test of responsibility." 
 
 Notwithstanding this general rule, cases have not been infre- 
 quent where a more rigorous test of liability has been imposed, 
 notably against more poorly organized or weak states like China, 
 Turkey, Morocco and formerly Greece. Here liability for as- 
 saults by private individuals has been predicated, not on any im- 
 puted governmental complicity or negligence, but on the mere 
 failure to prevent the injury.^^ In many of these cases there has 
 
 3 Kane's notes on arbitration convention with France, 1831. Philadel- 
 phia 1836, p. 31. Piedras Negras claims (Mexico vs. United States, July 4, 
 1868, Moore's Arb. 3035). 
 
 4 Hubbell, et al. v. United States (1879), 15 Ct. CI. 546 (Chinese indem- 
 nity) ; Alabama claim (U. S.) vs. Great Britain, May 8, 1871, 6 Moore's Dig. 
 999; Evarts (Netherlands) v. Venezuela, Feb. 28, 1903, Ralston, 904. The re- 
 cent case of "Pussyfoot" Johnson in London, where the police without resist- 
 ance, it seems, permitted a mob to assault this individual, illustrates the 
 rule of governmental liability. 
 
 5 De Brisset (U. S.) v. Venezuela, Dec. 5, 1885, Moore's Arb. 2858; Pog- 
 gioli (Italy) v. Venezuela, Feb. 13, 1903, Ralston, 869; Renton Claim v. Hon- 
 duras, For. Rel. 1904, p. 363 (refusal to diligently prosecute and punish). 
 
 6 Lenz claim v. Turkey, Mr. Hay, Secretary of State, to Mr. Strauss, 
 Mar. 25, 1899, For. Rel. 1899, p. 766. 
 
 7 Lenz and Renton cases, supra. 
 
 8 Ruden (U. S.) v. Peru, Dec. 4, 1868, Moore's Arb. 1653. 
 
 9 Unjustifiable pardon to the offenders — Montijo (U. S.) v. Colombia, Aug. 
 17, 1874, Moore's Arb. 1421, 1444. Cotesworth and Powell (Gt. Brit.) v. 
 Colombia, Dec. 14, 1872, ibid., 2050, 2085. 
 
 10 Cases of private murder of aliens in China, reported in For. Rel. 1880, 
 Japanese subjects murdered in China, 1874, Moore's Arb. 4857; Dreyfus, Arbi- 
 trage International, 176, 177; Lieut. Cooper claim (Gt. Brit.) v. Turkey, 1888, 
 81 St. Pap. 178; Caldera (U. S. v. China, Nov. 8, 1858, Moore's Arb. 4629; 
 Hubbell V. United States, supra (based principally on treaty obligation) ; 
 Russia V. Turkey, 1826 (Turkey held liable for depredations of Moorish 
 pirates) 13 St. Pap. 899, 16 St. Pap. 647, 657. Five cases of British subjects 
 injured in Greece, about 1850, by acts of individuals, Baty, 116-118; Marcca 
 V. Morocco, 1900 (1901) 28 Clunet. 205. Murder of Italian soldier in Crete, 1906 
 (1907) 1 A. J. I. L. 158; (1906) 13 R. G. D. I. P. 223; Montijo (U. S.) v. Colombia, 
 Aug. 17, 1874, Moore's Arb. 1421 ff. (absence of power considered equivalent 
 to omission to use it.) Turkey and Morocco held responsible for acts of 
 pirates from their shores on three occasions, (1905) 12 R. G. D. I. P. 563-565. 
 "Insufl3ciency of the protective measures afforded." an alleged ground of lia- 
 bility in certain cases in Turkey, For. Rel. 1897, p. 592. 
 
117 
 
 been a disregard of the rule that an individual assumes a risk in 
 visiting notoriously unstable countries or regions, and the local 
 government has been held to accountability as an insurer of the 
 safety of aliens, or rather of the citizens of powerful countries. 
 The weaker countries, notwithstanding their lesser ability to pro- 
 tect aliens, have thus in these instances been held to a higher de- 
 gree of responsibility for the safety of aliens than strong states. 
 This departure from principle has been strongly influenced by the 
 fact that, in international relations, arguments are generally of 
 importance according to the physical power of their proponents. 
 
 While a consular agent is usually only a local resident busi- 
 ness man who exercises minor consular functions, he has, never- 
 theless, been deemed to be entitled to a measure of special protec- 
 tion by the local authorities not enjoyed by the ordinary private 
 alien.ii m^ official position alone, however, should not serve to 
 make the local government an insurer of his safety, although this 
 doubtless renders it more difficult for the government to over- 
 come the presumption of negligence ordinarily attaching to a no- 
 torious act of brigandage in a populous town. 
 
 It is a fundamental principle that every nation, whenever its 
 laws are violated by anyone owing obedience to them, whether 
 citizen or alien, is privileged, free from interference by other 
 states, to inflict the penalties incurred by the transgressor if found 
 within its jurisdiction, provided that the laws themselves, the 
 methods of administering: them, and the penalties prescribed are 
 not in derogation of modern standards of civilized justice.^- It, 
 of course, sometimes appears that the criminal procedure of for- 
 eign countries contains harsher provisions and is deficient in many 
 safeguard'^ which the American law provides for the benefit of 
 
 11 Attacks on German consulate in Havre, 1888, In Messina, 1888, and in 
 Warsaw, 1901 (1889) 16 Clunet 250; Borchard, sees. 86, 90. French and Ger- 
 man consuls murdered in Salonica, 1876, 67 St. Pap. 917; 6 Moore's Dig. 
 Sec. 704, discusses cases in Venezuela, Peru, Nicaragua, Santo Domingo and 
 United States. See the following authorities; Vattel, Chittys ed. Bk. IV, Ch. 
 VI, Sec. 75, p. 469; Philliraore, II, Sec. 246, p. 263; Pradier-Fod6r6, IV, Sec. 
 2108. But see case of Servian Vice-consul assassinated in Turkey, 1890, Baty, 
 224 and Wipperman (U. S.) v. Venezuela, Dec. 5, 1885, Moore's Arb. 3041, which 
 were not taken out of the general rule of non-liability. 
 
 12 Mr. Mnrcy, Secretary of State, to Mr. Jackson, charge at Vienna, Jan- 
 nary 10th, 1854, 2 Moore's Dig. 88; Ballis (U. S.) vs. Venezuela, Feb. 13, 
 1903, Senate Document 317, 58th Congress, Second Session, p. 376. 
 
ii8 
 
 the accused. This, however, does not constitute ground for 
 diplomatic complaint, as the right of the United States is confined 
 and limited to a demand that its citizens be given the full and fair 
 benefit of the system of law which exists, without discrimination 
 in favor of natives or other aliens.^^ 
 
 2. 
 
 Acts of Individuals. 
 
 As a general rule a government is not liable for the acts of 
 individuals. "By the law of nations, if the citizens of one state 
 do an injury to the citizens of another, the government of the 
 offending subject ought to take every reasonable measure to 
 cause reparation to be made by the offended. But if the offender 
 is subject to the ordinary processes of law, it is believed this prin- 
 ciple does not generally extend to oblige the government to make 
 satisfaction in case of the inability of the offender."^ 'The Gov- 
 ernment of the United States is not liable to foreign governments 
 for misconduct of its private citizens within their jurisdiction, 
 such citizens not being in any sense its representatives."- 
 
 The well known case of the seven Mexican shepherds is im- 
 portant at this point. These seven shepherds were hung by pri- 
 vate persons in Texas near the Mexican border on November 8, 
 1875, after having been accused of cattle thefts. Mr. Mariscal, 
 the Mexican Minister to Washington, on January 30, 1875, ^^~ 
 dressed a note to Mr. Fish, then Secretary of State of the United 
 States, protesting against the inaction of the Texas and Federal 
 police agencies in making only a laconic and perfunctory investi- 
 gation of the affair, after the Mexican consuls at Brownsville and 
 San Antonio had brought the matter to the attention of the proper 
 officers of justice in Texas and had earnestly solicited an investi- 
 
 13 Mr. Marcy, Secretary of State, to Mr. Jackson, Apr. 6, 1856, 2 Moore's 
 Dig. 89, 6 ibid, 275. See also the illuminating opinions in In re Neely (1900, 
 C. C. S. E. N. Y.) 103 Fed. 626 and in Neely v. Henkel, (1901) 180 U. S. 109, 
 21 Sup. Ct. 302, by Justice Harlan. 
 
 1 Lincoln, At. Gen. 1802, 1 Op. 106, 107. 
 
 2 Mr. Forsyth, See. of State, to Mr. Calderon de la Barea, Sept. 17, 1839, 
 MS. Notes to Spain, VI, 39. Governments do not undertake to reimburse 
 persons for the criminal acts of individuals, such as theft. (Magoon's Re- 
 ports, 471.) 
 
119 
 
 gation and punishment of the guilty. The United States Gov- 
 ernment disclaimed any liability for the deaths. Mr. Fish, Sec- 
 retary of State, on Feb. 19, 1875, in reply to the representations 
 of Mr. Mariscal, said that it was the duty of a government to 
 prosecute the offenders according to law by all the means in its 
 power, but that if this duty were honestly and diligently fulfilled 
 the Government was discharged from further obligation. 
 "Though the crime," said Mr. Fish, "by which the Mexican 
 shepherds are alleged to have lost their lives may not be without 
 precedent, it seems obviously unreasonable, in view of the pe- 
 culiar condition of the quarter where it was perpetrated, to expect 
 that it would certainly be punished. * * * Mexicans in 
 Texas and Americans in Mexico who engage in business near the 
 border, must not at present or perhaps for some time to come 
 expect either government to insure them against all the risks in- 
 separable from such enterprises."^ Mr. Fish through this state- 
 ment placed the United States in the position of acquiescing in 
 a theory so often advanced by Latin-American nations, that an 
 alien entering a country or district in which normal conditions 
 of peace are disturbed or in which the normal state of affairs is 
 one of revolution and brigandage, cannot expect the same degree 
 of protection to which he would be entitled in a normal or peace- 
 ful community — that he is put on notice of the dangers involved 
 in residence or travel in such disturbed places and enters or re- 
 mains at his own risk. In this connection it should be noted that 
 the proclamation of President Wilson, quoted in Chapter V, Part 
 C, Sec. 10, is very much in the nature 'of an application of Mr. 
 Fish's rule to the residence or travel of citizens of the United 
 States in Mexico.* 
 
 The general rule that there is no responsibility for acts of 
 individuals applies equally to members of military forces.^ 
 
 Where by reasonable care, however, the injury could have 
 been avoided, the Government will be held responsible. "The 
 
 3 For. Rel. 1875, II, 973, 6 Moore's Dig. 788, 789. 
 
 4 For other cases where acts of Individuals were not held attributable 
 to the government, see the case of Jose D. Lamar, in Santo Domingo in 
 1886. 163 MS. Dom. Let. 306, 6 Moore's Dig. 780, also Mr. Sherman, Sec. of 
 Btate, to Mr. Hoshi, Japanese min., March 31, 1897, For. Rel. 1897, 368. 
 
 5 S. Ex. Doc. 35, 52 Cong. 2 Sess. 
 
120 
 
 government of a foreign state is liable not only for any injury 
 done by it, or with its permission, to citizens of the United States 
 or their property, but for any such injury which by the exercise 
 of reasonable care it could have averted."^ 
 
 The United States Government in the case of Frank Lenz 
 an American, murdered in 1894, by nationals in Turkey J success- 
 fully pressed a claim against the Turkish government on the 
 ground of negligence in punishing the offenders. 
 
 In the case of Caleb Abdullah, a Turkish subject, killed in 
 California, in 1891,^ that of Jos. N. Adir, an Ottoman, killed in 
 Washington in 1893,^ and that of "Harry the Turk" who disap- 
 peared in Portland, Maine, in 1896,^^ the United States dis- 
 claimed liability on the ground that no negligence could be at- 
 tributed to the government. 
 
 In regard to the United States claim for the murder of 
 Charles W. Renton, in Honduras in 1894, Moore in his Digest ,1^ 
 quotes United States Secretary of State, Mr. Hay, as follows: 
 ''While a state, said Mr. Hay, is not ordinarily respon'-.ible for 
 injuries done by private individuals to other private individuals 
 in its territory, it is the duty of the state diligently to prosecute 
 and properly to punish the offenders ; and 'for its refusal to do 
 so it may be held answerable in pecuniary damages.' " 
 
 3- 
 
 Mob Violence. 
 
 The sound rule of international law is undoubtedly that a 
 government should indemnify foreigners for injuries to persons 
 and property as the result of mob violence directed at them as 
 
 6 Report of Dr. Francis Wharton, Solicitor of Dept. of State, affirmed 
 by Mr, Bayard, Sec. of State, to Mr. Scruggs, min. to Colombia, May 19, 
 1885, For. Rel. 1885, 212. As to the difficulties between France and Santo 
 Domingo and the Caccavelli incident, see For. Rel. 1895, I, 235. The Caccavelli 
 incident related to the murder of a French merchant of that name at Samana. 
 
 7 See Doc. 33, 54th Cong. 1st Sess. For Rel. 1895, II, 1257; For. Rel. 
 1895, II, 1315, 1332. 6 Moore's Dig. 792; For. Rel. 1899, 766-7, 6 Moore's Dig. 
 794. New York Times, Jan. 8, 1902. 
 
 8 MS. Notes to Turkey, II, 115, id. 122, 6 Moore's Dig. 793. 
 
 9 MS. Notes to Turkey, II, 115. 
 
 10 MS. Notes to Turkey, II, 115, 122, 6 Moore's Dig. 793. 
 
 11 Vol. «, p. 798. 
 
121 
 
 foreigners, and where the local authorities were unwilling or 
 unable to prevent the injuries and the courts unable or unwilling 
 to punish the criminals.^ Where none of these elements are 
 present all that can fairly be expected is a prosecution of the 
 offenders according to law in good faith and to the extent of 
 the Government's power.^ 
 
 Elihu Root in an article, 'The Basis of Protection to Citizens 
 Residing Abroad,"^ discusses the subject with force and clarity. 
 
 "The foreigner is entitled to have the protection and redress 
 which the citizen is entitled to have, and the fact that the citizen 
 may not have insisted upon his rights, and may be content with 
 lax administration which fails to secure them to him, furnishes no 
 reason why the foreigner should not insist upon them and no 
 excuse for denying them to him. It is a practical standard and 
 has regard always to the possibilities of government under exist- 
 ing conditions. The rights of the foreigner vary as the rights 
 of the citizen vary between ordinary and peaceful times and 
 times of disturbance and tumult; between settled and ordinary 
 communities and frontier regions and mining camps. 
 
 'The diplomatic history of this country presents a long and 
 painful series of outrages on foreigners by mob violence. These 
 have uniformly been the subject of diplomatic claims and long- 
 continued discussion, and ultimately of the payment of indemnity. 
 An examination of these discussions will show that in every case 
 the indemnity was in fact paid because the United States had not 
 done in the particular case what it would have done for its own 
 citizens if our laws had been administered as our citizens were 
 entitled to have them administered. Of course, no government 
 can guarantee all the inhabitants of its territory against injury 
 inflicted by individual crime, and no government can guarantee 
 the certain punishment of crime; but every citizen is entitled to 
 have police protection accorded to him commensurate with the 
 exigency under which he may be placed. If he is able to give 
 notice to the government of intended violence against him he is 
 entitled to have due measures taken for its prevention, and he is 
 entitled always to have such vigorous prosecution and punish- 
 
 1 1 Am. Journ. Int. L. 34. 
 
 2 6 Moore's Dig. 115, 1 A. J. I. L., p. 6. 
 
 3 Vol. IV, A. J. I. L., p. 523 and 525, et seq. 
 
122 
 
 ment of those who are guilty of criminal violation of his rights 
 that it will be apparent to all the world that he cannot be mis- 
 used with impunity and that he will have the benefit of the de- 
 terrent effect of punishment." 
 
 Mr. Root discusses at some length cases of mob violence in 
 the United States and the several attempts of the United States 
 Government to avoid liability under the pretext that there ex- 
 isted no legal facilities for protecting aliens, and concludes his 
 discussion with these words: "It is to be hoped that our Gov- 
 ernment will never again attempt to shelter itself from respon- 
 sibility for the enforcement of its treaty obligations to protect 
 foreigners by alleging its own failure to enact the laws necessary 
 to the discharge of those obligations." 
 
 4. 
 
 Brigandage. 
 
 In the case of the murder of Knapp and Reynolds in the vil- 
 lage of Ghuorie, Turkey, by notorious brigands, the United 
 States Government did not rest until the brigands and the cul- 
 pable officials .who had previously neglected or refused to appre- 
 hend them had been punished.^ 
 
 In a discussion of brigandage, the case of Leo M. Baldwin, a 
 citizen of the United States killed by bandits in Mexico, is par- 
 ticularly valuable.^ Although settled without prejudice to the 
 contentions of either State, the case brings up clearly the issues 
 involved in a typical brigandage case. Baldwin, who was Su- 
 perintendent of the Valencia Mine in the State of Durango, 
 Mexico, was shot and killed by two alien outlaws in Ventanas on 
 August 19, 1887. This was only one of a series of violent acts 
 of bandits in this section. One of the bandits was supposed to 
 have been a native official of some prominence in Ventanas. The 
 Mexican Government it was alleged did nothing to make life 
 and property secure in this district and there was evidence that 
 the acts of the bandits had been partially inspired by race hatred. 
 Mr. Blaine, Secretary of State of the United States, in instruc- 
 
 4 For. Rel. 1883, 850, et seq.. For. Rel. 1884, 532, et seq., For. Rel. 1885, 
 827, et seq.. For. Rel. 1889, 725-728. 6 Moore's Dig. 800. 
 
 5 Discussed in 6 Moore's Digest, p. 801. 
 
123 
 
 tions to Mr. Dougherty, Charge,^ made the following comment on 
 the case, which it seems advisable to include here at some length : 
 
 "Mr. Mariscal, however, also refers to the rule laid down 
 by the United States on several occasions in respect to the 
 liability of a government for injuries caused by mob violence, 
 as an answer to the claim made in the present case. The lead- 
 ing instance cited by him in this relation is that of the outrages 
 upon the Chinese, in respect to which the Government of the 
 United States denied it legal liability to respond in damages, 
 although in reality it has paid more than half a million dol- 
 lars to the Chinese Government for the relief of the sufferers. 
 The attacks upon the Chinese and the killing of Mr. Baldwin, 
 possess, indeed, certain similar features. Both were directed 
 against foreigners ; both were actuated in a measure by preju- 
 dice growing out of differences in nationality; and both were 
 committed in wild and sparsely settled regions. But here the 
 parallelism ends. The Chinese outrages were* a sudden and 
 violent outbreak of one body of aliens against another. So that 
 this Government, replying, on the 18th of February, 1886, to 
 the representations of the Chinese minister, said: 'The attack 
 upon them [the Chinese], as your [the Chinese minister's] note 
 truly states, was made suddenly by a lawless band of about 150 
 armed men, who had given no previous intimation of their 
 criminal intent.' 
 
 "In the case of Mr. Baldwin, the amplest notice was given 
 both to the Federal and State authorities of Mexico of the law- 
 less proceedings of those who committed that crime. * * * 
 
 "To sustain this denial of redress Mr. Mariscal has invoked 
 the familiar rule that the measure of protection and of privilege 
 to which foreigners residing in a country are entitled is that 
 which the government of the country aflfords to its own citizens. 
 As a general proposition, this rule is undoubtedly acceptable ; but 
 its applicability is by no means universal. Where the question 
 to be determined is the measure of private rights and remedies 
 under the municipal law, the rule above stated may, with certain 
 well-settled exceptions, readily be adopted. But, where a gov- 
 
 6 No. 430, Jan. 5, 1891, MS. Inst. Mex. XXIII, 14, 21, 6 Moore's Dig., 
 p. 802. 
 
124 
 
 ernment asserts that its citizens in a foreign country have not 
 been duly protected, it is not competent for the government of 
 that country to answer that it has not protected its own citizens, 
 and thus to make the failure to perform one duty the excuse for 
 the neglect of another. 
 
 ''It is true that in this way foreigners may enjoy an advan- 
 tage over the citizens of a country. This, however, is not a mat- 
 ter for foreign governments to consider. They have no power 
 to regulate the relations of another government to its citizens ; 
 nevertheless, they are bound to ask that their own may be pro- 
 tected. 
 
 "* * * It is not, * * * rny purpose to enter into a dis- 
 quisition upon the utterances of publicists as found in their works. 
 I will, however, quote from the last edition of Calvo's exhaustive 
 treatise on international law the following pertinent passages: 
 
 " 'Section 127 1. Any person disturbing public tranquillity, 
 or violating the sovereign rights of a nation, or its laws, offends 
 the state, declares himself its enemy, and incurs just punishment. 
 His responsibility is not less when, instead of attacking the state, 
 the crime or offenses of which he has been guilty menace per- 
 sonal safety or the rights and property of individuals. In both 
 cases, the government would fail to perform its duty if it did not 
 repress the injury committed and cause the offender to feel the 
 weights of its penal legislation. The state is not only under obli- 
 gations to secure the reign of peace and justice among the differ- 
 ent members of the society whose organ it is; it must also see, 
 and that most carefully, that all who are under its authority 
 offend neither the government nor the citizens of other countries. 
 Nations are obliged to respect one another, to abstain from 
 offending or injuring each other in any way, and, in a word, from 
 doing anything that can impair each other's interests and disturb 
 the harmony which should govern their relations. A state that 
 permits its immediate subjects or citizens to offend a foreign 
 nation becomes a moral accomplice in their offenses and renders 
 itself personally responsible. 
 
 " 'As regards its enforcement, this principle has nothing ab- 
 solute, and admits of reservations inherent in the very nature of 
 things ; for there are private acts which the most vigilant author- 
 
125 
 
 ity can not prevent, and which the wisest and most complete legis- 
 lation can not always hinder or repress. All that other nations 
 can ask of a government is that it shall show that it is influenced 
 by a deep sense of justice and impartiality, that it shall admonish 
 its subjects by all the means in its power thai it is their duty to 
 respect their international obligations, that it shall not leave of- 
 fenses into which they may have been led unpunished; and fin- 
 ally, that it shall act in all respects in good faith and in accord- 
 ance with the precepts of natural law; to go beyond this would 
 be raising a private injury to the magnitude of a public offense, 
 and would be holding an entire nation responsible for a wrong 
 done by one of its members. * * * 
 
 " 'Section 1274. * * * When the Government has had 
 knowledge of the act from which the damage has resulted and 
 has not displayed due diligence in preventing it or in arresting its 
 consequences, either with the means at its disposal, or with those 
 which it might have asked from the law-making power, the State 
 will be responsible for willful neglect of diligence. In that case, 
 the degree of responsibility of the State will have for its basis 
 the facilities (whether greater or less) which it had for making 
 previous provision for the act, and the precautions (whether 
 greater or less) which it was in its power to take to prevent it.' 
 
 "The passages above cited are sustained by the learned author 
 with ample citations of authority and an exhaustive review of the 
 precedents. The United States asks nothing more than is due 
 to it under the rule laid down by the distinguished Argentine 
 publicist. 
 
 "Mr. Mariscal has also invoked the familiar rule that claim- 
 ants must pursue their remedies in the courts of the country be- 
 fore they can resort to diplomatic intervention. As a general 
 proposition this rule may be accepted as true. But it is obvious 
 that it is applicable only where adequate judicial remedies exist 
 for the redress of the grievance complained of. In the present 
 case no such remedies have been alleged to exist, and the sub- 
 ject-matter of the complaint is not, in reality, one of judicial cog- 
 nizance. This Government is not aware of any courts or of any 
 processes by which the issue could be tried and redress obtained 
 by the claimant in Mexico. Nor, where the question presented is 
 
126 
 
 whether the Government of a country has discharged Its duty in 
 rendering protection to the citizens of another nation, can it be 
 conceded that that government is to be the judge of its own con- 
 duct."" 
 
 When James H. Duvall, a citizen of the United States, was 
 killed by highwaymen, in Mexico, Mr. Gresham, Secretary of 
 State,^ said : "The Mexican authorities promptly apprehended the 
 murderers and the Department understand that they were tried, 
 convicted, and punished. Under these circumstances it Is not 
 believed that any claim for damages could be maintained." 
 
 In 1868 John Braniff was killed by a band of robbers while 
 at work on the Vera Cruz railroad. The American Charge re- 
 ported to the State Department that Mexico would Investigate 
 and make reparation. Secretary Seward replied : *'The engage- 
 ment which the Mexican Government has made to investigate 
 the case, and its assurance that upon such investigation the Gov- 
 ernment would direct what justice may require, is entirely satis- 
 factory."^ 
 
 In a case where injuries had been inflicted on United States 
 citizens by bandits in the interior of Persia, the United States 
 Government demanded merely the apprehension and punishment 
 of the offenders.!^ 
 
 The Rev. Benj. W. Labaree, an American missionary in 
 Persia, and his servant, were barbarously killed by a body of 
 religious fanatics. Upon the failure of the Persian government 
 to apprehend and punish the criminals the United States Govern- 
 ment made strong representations to Persia which resulted in the 
 settlement as follows: (i) $30,000 cash in gold; (2) effective 
 and swift punishment of all guilty persons; (3) no special tax 
 on the province or on Christians to cover the Indemnlty.^^ 
 
 Very strong representations were made by the United .States 
 in the Perdicaris case. "On the night of May 18, 1904, a band 
 of natives, headed by a 'bandit' named Raisuli, broke into the 
 
 7 Mr. Blaine, Sec. of State, to Mr. Dougherty, charge, No. 430, Jan. 5, 
 1891, MS. Inst. Mexico, XXITI, 14, 21. 
 
 8 In a message to Mrs. Robinson, Sept. 20, 1894, 198 MS. Dom. Let. 637, 
 6 Moore's Dig. 806. 
 
 9 U. S. For. Rel. 1868, p. 582, Amer. Journal of Int. Law, Vol. I, p. 8. 
 
 10 210 Sept. 5, 1899, MS. Inst. Persia, XVIII, 177, 6 Moore's Dig. 806. 
 
 11 For. Rel. 1904, 657-677, 835. 6 Moore's Dig. 807. 
 
127 
 
 country house of Ion Perdicaris, an American citizen, about three 
 miles from Tangier, and carried him away, tog-ether with his 
 stepson named Varley, a British subject. The consul-general of 
 the United States and the British minister informed the Sultan's 
 deputy that the Moorish authorities were to be held personally 
 responsible, and, in order to secure the release of the captives, 
 insisted that any terms demanded by Raisuli be immediately 
 granted. The South Atlantic Squadron of the United States was 
 ordered to Tangier. Long negotiations ensued between the 
 Moorish authorities and Raisuli for the payment of a ransom 
 and the release of the prisoners. On June 22, 1904, Mr. Hay 
 telegraphed to the American consul-general at Tangier that the 
 United States 'wants Perdicaris alive or Raisuli dead,' and that 
 further than this the least possible complication with Morocco 
 and other powers was desired. The consul-general was directed 
 not to arrange for landing marines or seizing custom houses 
 without specific instructions. The captives were released on the 
 24th of June. A British man-of-war, which had been at Tangier, 
 
 left on the 25th and the American squadron departed two days 
 later."i2 
 
 Indian depredations present cases where the responsibility of 
 the government, by reason of its laxity, must be very clearly 
 shown. "The Department of State, while declining to present a 
 claim to the Mexican Government for the murder of a citizen of 
 the United States >y Indians in Mexico, said : 'It is noticed, how- 
 ever, that you all'^ge that the Indians were incited to make their 
 attack on the person and property of your husband by the author- 
 ities of Yucatan, [f this can be shown the Mexican Government 
 may be held accountable therefor.' "^^ "The Canadian govern- 
 ment held that it was not liable to pay compensation for horses 
 stolen from a citizen of the United States by the Blood In- 
 dians."i4 
 
 12 For. Rel. 1904, 496-504. As to the action of France, see For. Rel, 1904, 
 307; and of Great Britain^ Id. 338; 6 Moore's Dig. 807. 
 
 13 Mr. Cadwalader, Act. Sec. of State, to Mrs. Stephens, Dec. 24, 1875, 
 111 MS. Dom. Let. 227; 6 Moore's Dig. 808. 
 
 14 Mr. Sherman, Sec. of State, to Mr. Hay, ambass, to England, No. 285, 
 Oct. 27, 1897, MS. Inst. Great Britain, XXXII, 276; Mr. Adee, Second Assist. Sec. 
 of State, to Mr. Walton, Oct. 27, 1897, 222 MS. Dom. Let. 51, enclosing copy of a 
 deapatch from Mr, Hay, No. 139, Oct. 8, 1897; 6 Moore's Dig. 808. 
 
128 
 
 To summarize the liability of the Mexican Government for 
 brigandage, it may be said that there is no liability unless the 
 Government has been negligent either in prevention or cure. 
 If the acts could have been prevented by reasonable vigilance, or 
 the perpetrators punished by reasonable diligence, and did escape 
 punishment because of the laxity of the Mexican Government, 
 there is liability. Where the district within which the brigandage 
 occurred was in a condition making it practically impossible for 
 the state to prevent brigandage or to punish the offenders, there 
 is no liability .1^ 
 
 15 Borchard Dip. Prot. Cit. Abr., p. 788. 
 
129 
 
 CHAPTER V. 
 
 OBSTACLES AND DEFENSES TO PRESENTATION 
 
 OF CLAIMS. 
 
 Certain conduct on the part of the claimant will have the 
 effect of vitiating even an undoubtedly just claim. Such con- 
 duct, if brought to the attention of the claimant's government, 
 should induce it to refuse diplomatic aid to the claimant. Such 
 conduct, if found to have been present, will result in the dismissal 
 of the claimant's case before a claim's commission or other body 
 organized to investigate and adjudicate international claims. 
 
 Conduct of this nature will be divided into three classes : 
 
 A. Expatriation. 
 
 B. Renunciation. 
 
 C. Censurable Conduct. 
 
I30 
 
 A. 
 
 EXPATRIATION. 
 
 Diplomatic protection may be forfeited by voluntary ex- 
 patriation. The United States, in the Act of Congress of March 
 2, 1907, named four methods of expatriation : ( i ) Foreign nat- 
 uralization; (2) Taking oath of allegiance to a foreign state; 
 (3) Marriage of an American woman to a foreigner; and (4) 
 Residence abroad for certain periods of time, of a naturalized 
 citizen. 
 
 But a citizen cannot expatriate himself during war.^ Nor can 
 a corporation expatriate itself.^ The expatriation laws of states 
 differ widely and the status of a citizen and the degree of pro- 
 tection accorded him in view of a possible expatriation law, de- 
 pend upon the laws of his home state. 
 
 The United States, during the great war, passed a statute 
 permitting repatriation by oath of citizens who had expatriated 
 themselves by enlisting in the military or naval forces of and 
 swearing allegiance to a state at war with the Central Powers. 
 This Act may be found in 191 8 Compiled Statutes Compact Edi- 
 tion, §4352 (12). 
 
 1 H. Doc. 326, 59th Congress, 2d Sess., 28. 
 
 2 Moore's Arbitration, 2319. 
 
131 
 
 B. 
 
 RENUNCIATION. 
 
 I. 
 
 Contractual Renunciation. 
 
 The Latin-American states have been the chief contenders for 
 the principle commonly called the Calvo Doctrine, after its great- 
 est enunciator, its theory being that renunciation by contract is 
 effectual. In Chapter I, Part B above, it has been shown that 
 the attempt to introduce renunciations through constitutional and 
 municipal provisions has been futile and that the provision of 
 the Mexican Constitution of 1917, providing that foreigners can- 
 not acquire lands, waters and concessions without renouncing 
 their citizenship and the right to appeal to their home govern- 
 ments for diplomatic aid in respect to such property, would not 
 be held in accord with international law. Renunciations made 
 because of this provision would not be binding upon aliens in 
 Mexico. Actual contractual renunciations have been denied ef- 
 fect by Great Britain, Germany and the United States; but the 
 Calvo Doctrine is firmly supported by the Latin-American 
 states, who refuse to recognize the opposing theory that such 
 contract terms are invalid internationally. 
 
 2. 
 
 Implied Renunciation. 
 
 Many acts of the citizen abroad imply a renunciation of pro- 
 tection. Among them are failure to register at his consulate; 
 protracted residence abroad; departure from the country soon 
 after naturalization with evident intent to return to domicile in 
 the country of origin or previous allegiance ; belligerent domicile ; 
 censurable conduct in certain instances (See Part C of this chap- 
 ter) ; accepting public office or employment abroad when an un- 
 qualified oath of allegiance is required or when the employment 
 is essential politically ; military service for a foreign nation (tem- 
 porary renunciation in most cases) ; the exercise of political 
 rights or participation in politics in a foreign country if such 
 participation involves identification with a foreign government.^ 
 
 3 See Borchard Dip. Pro. of at Abr'd., Sec. 379, 380. 
 
132 
 
 C 
 
 CENSURABLE CONDUCT.* 
 
 I. 
 
 In General. 
 
 Governments and Qaims Commissions have introduced a 
 variety of principles into the general rules of censurable conduct 
 which will be taken up in some detail later. These principles may 
 be summarized by the following- well-known maxims : 
 
 "No one can profit by his own wrong." 
 
 "He who comes into equity must come with clean hands." 
 
 "Ex dolo malo non oritur actio." 
 
 In his report to the President Jan. 20, 1887,^ Mr. Bayard, then 
 Secretary of State of the United States, said : " 'The principle of 
 public policy/ said Lord Mansfield, in Holman v. Johnson, Cow- 
 per's Rep., 343, *is this : Ex dolo malo non oritur actio. No 
 court will lend its aid to a man who founds his cause of action 
 upon an immoral or an illegal act.' Ex turpi causa non oritur 
 actio; by innumerable rulings under the Roman common law, as 
 held by nations holding Latin traditions, and under the common 
 law as held in England and the United States, has this principle 
 been applied. The lex fori determines the question of turpi- 
 tude. * * *." 
 
 Concealment and Denial of Citizenship. 
 
 Many countries, and among them Mexico, require foreigners 
 to register their nationality periodically before their respective 
 consulates. And, though failure to do so would not preclude 
 interposition by their home governments, such a failure might 
 operate to bring the case within the application of the principle 
 that a concealment or denial of citizenship will destroy, or de- 
 duct from, the protection accorded the citizen. 
 
 4 The classification of censurable conduct adopted in the discussion Is 
 largely that used by Borchard in his Diplomatic Protection of Citizens Abroad. 
 
 5 For. Rel. 1887, 592, 607, S. Ex. Doc. 64, 49 Cong. 2d Sess.; Moore's Int. 
 Arb. II, 1793-1800. 
 
133 
 
 Thornton & Lieber, Umpires of the United States-Mexico 
 Mixed Claims Commission of 1868, held that the failure of 
 Americans to comply with the provision of the Mexican Consti- 
 tution of 1857 demanding that foreigners acquiring land register 
 their desire to retain their foreign citizenship, or else become 
 automatically Mexican citizens, did not deprive them of their 
 United States citizenship and so of the protection of their home 
 government.^ The precedent would apply equally well to the Mexi- 
 can Constitution of 19 17, which contains a provision similar in 
 its effect to this one of the Constitution of 1857. And so with 
 the requirements of Chili and Mexico that foreigners must take 
 out a "carta de seguirdad."^ 
 
 These precedents are in accord with the principle (see Chap- 
 ter I, Part B) that an alien cannot be deprived of foreign citizen- 
 ship by municipal regulation. But the fact that the claimant has 
 failed to assert or has concealed his citizenship, may undoubtedly 
 be taken into account when considering the quantum of protec- 
 tion to be granted the claimant. Such conduct on the part of the 
 citizen might possibly be considered a breach of patriotic duty. 
 The United States Department of State has followed this pro- 
 cedure, notably in the case of naturalized Russians and Turks. 
 The principle was favored by the United States-Spanish Mixed 
 Claims Commission of 1871,^ in the case of La Coste before U. S. 
 Mex. Comm. of 1868;^ and in the case of Gautier (U. S.) v. Mex- 
 ico, July 4, 1868.10 
 
 3. 
 Fraudulent or Exorbitant Claims. 
 
 When fraud is discovered in advance, a Department of State 
 will not aid the claimant. This rule is admirably stated by Mr. 
 Seward, Secretary of State of the United States, in a note to 
 Lord Lyons, British Minister, May 30, 1862,11 and again by Mr. 
 Frelinghuysen, Sec. of Statei^ as follows: 
 
 6 Moore's Arbitration, 2480, 2481 and 2482. 
 
 7 Moore's Arbitration, 2482, 2543-2545. 
 
 8 Moore's Arbitration 2562, 
 
 9 Moore's Arb. 2561. 
 
 10 Moore's Arb. 2450. 
 
 11 MS. Notes to Great Britain, IX, 187. 
 
 12 To Mr. Suydam, Sept. 25, 1882, cited in report of Mr. Bayard. Sec. of 
 State, to the President, on the case of Antonio Pelletier, Jan. 20, 1887, For. 
 
 o^vi -loorr tu\a 
 
134 
 
 "It may be here observed that this Government exercises a 
 broad discretion in determining what claims it will diplomatically 
 present against other nations. It has not lent, and will not lend, 
 its influence in favor of fraudulent claims. And when in behalf 
 of an individual this Government demands of another power pay- 
 ment of money, it should not close its doors against an investi- 
 gation into the question whether the apparent title of the claim- 
 ant to the money is valid, or, because of his own fraud, is void. 
 Were the case reversed this Government would contend for that 
 right. Any other doctrine must impair the dignity and imperil 
 the rights of those who have honestly obtained American citizen- 
 ship." 
 
 If the fraud is only discovered after the awards have been 
 made, the claimant's government will, in accord with good inter- 
 national practice, set aside the awards and refund any moneys 
 received to the other government. All the awards that the United 
 States- Venezuelan Commission of 1866 received were set aside 
 on the ground of the fraud of the Arbitration Commission.^^ 
 
 It is believed that a claim which is on its face exorbitant 
 might well, in the interests of good international practice, be 
 placed in the same category as fraudulent claims and be denied 
 the support of the government of the claimant. 
 
 \J. 
 
 Malice and Negligence. 
 
 Malice and negligence, in their effect in international law, 
 are in the same class as fraud. "To international claims the rules 
 of general jurisprudence in this relation apply as follows: A 
 party to a malicious wrong cannot recover from another for dam- 
 ages therefrom resulting to himself. A person whose negligence 
 is the immediate cause of a negligent injury to himself cannot 
 recover from another damages for such injury."^* 
 
 13 Moore's Arb. 1659. For other cases In point see Moore's Arb. 1255- 
 1266; 13 Stat. L. 595; 16 Stat. L. 633; 15 Stat. L. 444; 20 Stat. L. 777; Moore's 
 Arb. 1342; 18 Stat. L. 70; S. Ex. Doe. 52, 43d Cong. 1st Sess. ; and Moore's 
 Arb. 1324-1340. 
 
 14 Wharton, Int. Law Digest, Sec. 243, II, 700. 
 
135 
 
 In judging of the effect of negligence the rule of comparative 
 negligence is applied. This is more in accord with the Civil Law 
 than the Anglo-Saxon Law. 
 
 5. 
 
 Evasion of National Duties, and Particularly of Military 
 
 Service. 
 
 Deserters from the army will, of course, lose the protection of 
 their home government. 
 
 As Halleck has said, "the right of voluntary expatriation ex- 
 ists only in time of peace and for lawful purposes," and the 
 United States would probably not recognize attempts of its 
 citizens to take on Mexican citizenship in order to avoid mili- 
 tary duty; but would, nevertheless, refuse diplomatic protection 
 to a citizen who had made such an unpatriotic attempt to avoid 
 his duties as a citizen in times of national peril. "The reflection 
 is a very obvious one, that in such a crisis a good and loyal 
 citizen might be expected to be at home in the United States and 
 co-operate with his fellow citizens in maintaining the government 
 against domestic enemies, rather than to be residing abroad and 
 evoking aid to protect claims of his own for redress of injuries 
 which he may have suffered when domiciled amid the perils of 
 foreign revolution. "^^ 
 
 The fact that the claimant is a naturalized citizen who has 
 maintained a permanent domicile in the foreign country for 
 years, should weigh heavily against him in seeking the aid of 
 the country of his naturalization. 
 
 6. 
 
 Breach of the Local Law. 
 
 The rule is universally accepted that an injury resulting from 
 a breach of the local law will result in a complete or partial for- 
 feiture of the protection of the home government. The alien 
 government usually insists only on a fair trial and the infliction 
 of no unusual or disproportionate punishments. 
 
 15 Mr. Seward, Sec'y. of State, to Mr. Marsh, May 7, 1863, For. ReL 1863, 
 Part II, p. 1067. 
 
136 
 
 Breach of International Law. 
 
 BoTchard claims that individuals, in a qualified sense, are 
 subjected to international duties, although international law is 
 generally considered to govern nations alone. 
 
 The carrying of contraband, resistance to the right of visit 
 and search, or similar violations of a belligerent right possible 
 only in time of war, are punishable by the aggrieved nation, and 
 the individual by his act forfeits the protection of his home state. 
 The penalty imposed is generally confiscation of the property 
 involved. 
 
 8. 
 Breach of National Law. 
 It is a general principle of international law that a citizen who 
 violates his national law must take the consequences, and is de- 
 prived of the diplomatic protection of his government when he is 
 abroad. But the decision whether or not the citizen shall have 
 forfeited his rights is entirely in the hands of his home govern- 
 ment; and if that government cares to protect him and further 
 his claim., it is no defense for the defendant government to as- 
 sert that the claimant has violated his national law.^^ 
 
 9. 
 
 Trading With the Enemy or Prohibited and Unlawful 
 
 Trading. 
 
 Citizens of the United States and of the other allied powers 
 who resided in Mexico during the Great War and engaged in trade 
 with the Central Powers, might very well be denied the diplomatic 
 protection of their home governments on the ground that their 
 conduct in so trading was a violation of law during time of na- 
 tional peril. As to citizens of the United States, it was not un- 
 lawful for them to trade with the Central Powers until war was 
 declared by the United States. 
 
 16 For cases see Borchard Dip. Prot. CIt. Abr., p. 747. 
 
137 
 
 lO. 
 
 The Effect of Declarations of President Taft and Presi- 
 dent Wilson on the Liability of the Mexican 
 Government. 
 
 It is a positive rule of international law, that the alien claim- 
 ant who seeks redress through his home government for injuries 
 occasioned him in a foreign country, though he may have been 
 greatly injured, and unquestionably treated with injustice, by 
 the government of domicile, may be deprived of his international 
 remedy through culpability and contributory negligence on his 
 own part. Acts of culpability are discussed elsewhere in this 
 chapter. Acts of negligence are governed, in general, by the 
 universally accepted rules of private law, but the rule of com- 
 parative negligence, a rule not applied by the private law of the 
 United States, has been applied in international law. There are 
 some acts of foreigners in Mexico which might be included under 
 the term "negligence" by reason of certain very definite declara- 
 tions issued, from time to time, by Presidents of the United States 
 pertinent to the Mexican situation. These declarations in their 
 rules regarding negligence might be questioned as binding coun- 
 tries other than the United States, but are undoubtedly very im- 
 portant in defining the negligence of United States citizens in 
 Mexico. 
 
 On March 2, 1912, William Howard Taft, President of the 
 United States, issued a proclamation, quoted in full below, which 
 admonished citizens of the United States not to participate in the 
 Mexican revolutionary turmoil, and which gave notice (this part 
 of the proclamation has been italicized) that such participation 
 would be at the peril of the participant, and that no protection 
 would be granted from "the appropriate legal consequences of 
 their acts," unless such consequences violate "equitable justice 
 and humanity and the enlightened principles on international 
 law." 
 
138 
 
 "Proclamation by the President of the United States 
 OF America Regarding Disturbances in Mexico. 
 March 2, 1912. 
 (No. 1184.) 
 
 Whereas serious disturbances and forcible resistance 
 to the authorities of the established Government exist in 
 certain portions of Mexico ; and 
 
 Whereas under these conditions it is the duty of all 
 persons within the jurisdiction of the United States to 
 refrain from the commission of acts prohibited by the 
 law thereto relating and subversive of the tranquillity of 
 a country with which the United States is at peace ; and 
 
 Whereas the laws of the United States prohibit under 
 such circumstances all persons within and subject to 
 their jurisdiction from taking- part contrary to said laws 
 in any such disturbances adversely to such established govern- 
 ment ; and 
 
 Whereas by express enactment if two or more persons 
 conspire to commit an offense against the United States 
 or any act of one conspirator to effect the object of such 
 conspiracy renders all the conspirators liable to fine and 
 imprisonment; and 
 
 Whereas there is reason to believe that citizens of 
 the United States and others within their jurisdiction fail 
 to apprehend the meaning and operation of the applicable 
 laws of the United States as authoritatively interpreted 
 and may be misled into participation in transactions 
 which are violations of said laws and which will render 
 them liable to the severe penalties provided for such 
 violations ; 
 
 Now, therefore, in recognition of the laws governing 
 and controlling in such matters as well as in discharge of 
 the obligations of the United States towards a friendly 
 country, and as a measure of precaution, and to the end 
 that citizens of the United States and all others within 
 their jurisdiction may be deterred from subjecting them- 
 selves to legal forfeitures and penalties; 
 
 I, William Howard Taft, President of the United 
 States of America, do hereby admonish all such citizens 
 and other persons to abstain from every violation of the 
 laws hereinbefore referred to, and do hereby warn them 
 that all violations of such laws will be rigorously prose- 
 cuted ; and I do hereby enjoin upon all officers of the 
 United States charged with the execution of such laws 
 
139 
 
 the utmost diligence in preventing violations thereof and 
 in bringing to trial and punishment any offenders against 
 the same ; and finally / do hereby give notice that all persons 
 owing allegiance to the United States who may take part in 
 the disturbances now existing in Mexico, unless in the neces- 
 sary defense of their persons or property, or who shall 
 otherwise engage in acts subversive of the tranquillity of that 
 country, will do so at their peril and tliat they can in no wise 
 obtain any protection from the Government of the United 
 States against the appropriate legal consequences of their 
 acts, in so far ens such consequences are in accord with 
 equitable justice and hunumity and the enlightened princi- 
 ples if international lawP 
 
 In Testimony Whereof, I have hereunto set my hand 
 and caused the seal of the United States to be affixed. 
 
 ■ Done at the City of Washington this 2nd day of 
 
 March, in the year of our Lord one thousand 
 nine hundred and tw^elve, and of the Inde- 
 pendence of the United States of America the 
 one hundred and thirty-sixth. 
 
 WM. H. TAFT. 
 
 By the President: : 
 
 Huntington Wilson, 
 
 Acting Secretary of State.''^* 
 
 This declaration clearly places participants or abettors in the 
 same category as the revolutionists, insurrectionists or brigands, 
 whom they have aided, and withdraws from them the protection 
 of the United States Government, provided they are treated in 
 accordance with the standards of treatment established interna- 
 tionally as proper for the particular group they have assisted. 
 
 In the following excerpt from an address on Mexican Affairs 
 delivered by President Woodrow Wilson before the Congress of 
 the United States, on August 2^, 191 3, the President seems to 
 have served notice on citizens of the United States who did at 
 that time, or intended during the continuance of the Mexican 
 turmoil to reside in or visit the Republic of Mexico, that al- 
 
 17 Italics not in the original. 
 
 18 May be found in Amer. Jour. Int. Law, Vol. VI, Supp. 1912, p. 146. 
 
I40 
 
 though the United States Government would protect such of its 
 citizens as could not avoid their presence in Mexico, those who 
 stayed or visited, when doing so could fairly have been avoided, 
 would be guilty of a variety of contributory negligence. 
 
 "While we wait, the contest of the rival forces will 
 undoubtedly for a little while be sharper than ever, just 
 because it will be plain that an end must be made of the 
 existing situation, and that very promptly; and with the 
 increased activity of the contending factions will come, 
 it is to be feared, increased danger to the noncombatants 
 in Mexico as well as to those actually in the field of bat- 
 tle. The position of outsiders is always particularly try- 
 ing and full of hazard where there is civil strife and a 
 whole country is upset. We should earnestly urge all 
 Americans to leave Mexico at once, and should assist 
 them to get away in every way possible — not because we 
 would mean to slacken in the least our efforts to safe- 
 guard their lives and their interests, but because it is im- 
 perative that they should take no unnecessary risks when 
 it is physically possible for them to leave the country. 
 We should let every one who assumes to exercise author- 
 ity in any part of Mexico know in the most unequivocal 
 way that we shall vigilantly watch the fortunes of those 
 Americans who can not get away, and shall hold those 
 responsible for their sufferings and losses to a definite 
 reckoning. That can be and will be made plain beyond 
 the possibility of a misunderstanding."^^ 
 
 Borchard, in his "Diplomatic Protection of Citizens Abroad," 
 page 740, in discussing proclamations of Presidents Taft and 
 Wilson, says : "We are not concerned with the various proclama- 
 tions of presidents, such as the recent proclamations of Presi- 
 dents Taft and Wilson prohibiting the exportation of anns into 
 Mexico, by which the obligations of neutrals have been increased 
 in the interests of public policy and the peace of contiguous neigh- 
 bors. Violation of such a proclamation would incur all the pen- 
 alties of a violation of national law together with a forfeiture of 
 diplomatic protection."20 
 
 19 From Address of President Wilson on Mexican Affairs before Congress, 
 August 27, 1913, Supplement Vol. VII, Amer. Jour. Int. Law, p. 283. 
 
 20 Page 740, ating U. S. v. Chaves, 228 U. S. 525. 
 
141 
 
 II. 
 
 Unneutral Conduct or Unfriendly Acts. 
 
 (a) Unlawful Expeditions. 
 
 On April 22, 1793, Washington issued his famous neutral 
 proclamation in which he declared that no citizen would be pro- 
 tected against punishments imposed under the law of nations by 
 "committing, aiding or abetting hostilities against any of the 
 state (belligerent) powers, or by carrying to any of them those 
 articles which are deemed contraband by the modern usage of 
 nations." 
 
 The U.'S. Revised Statutes, sees. 5281 -5291, now make it a 
 Federal offense to aid belligerents in specified ways.^i 
 
 (b) Unneutral Military and other Acts of Service to 
 Foreign Countries or Belligerents. 
 
 Most states do not prohibit their citizens from taking on mili- 
 tary service in foreign countries ; but in such cases they impose 
 the penalty of an almost complete loss of the right to protection. 
 Great Britain has made punishable by fine and imprisonment en- 
 listments of its citizens for military service against a nation "at 
 peace with Her Majesty." 
 
 The measure of protection which an enlisting citizen will re- 
 tain, provided he has not by oath completely expatriated himself, 
 will generally be as follows : ( i ) his treatment must not be in- 
 human; (2) the rules of war must not be violated to his preju- 
 dice if he is captured in a foreign army; (3) he must not be dis- 
 criminated against as compared with other aliens on account of 
 his nationality. "American citizens who implicate themselves in 
 foreign revolutions have a very weak title to national protection, 
 available only to prevent a flagrant or harsh violation of their per- 
 sons through unusual forms of punishment."^ 
 
 The Mexican law, which puts Mexican citizenship upon a 
 foreigner who enlists in the Mexican army, has been interpreted 
 
 21 For cases of expeditions started or organized In the United States 
 and held to be Illegal and relieving the participants of the protection of 
 the United States Government, see Borchard Dip. Prot. CIt. Abr. Sees. 361, 
 362, 363. 
 
 22 Borchard Dip. Prot. Cit. Abr., p. 769; see also, Sec. 364. 
 
V. 
 
 142 
 
 by the United States as depriving a citizen of the United States 
 of his previous citizenship pro tempo and until he re-establishes 
 his United States citizenship by returning to the United States.--^ 
 
 As witnessed by the statute mentioned above some countries, 
 notably Great Britain, have at times favored a harsh interpreta- 
 tion of this rule. But Great Britain successfully pressed the claim 
 of one of her citizens for military services rendered Brazil.-* 
 The practice, however, of pressing claims for military services 
 rendered abroad is exceptional and apparently not good inter- 
 national procedure.^^ 
 
 JOther services rendered during a war in which the country 
 of domicile is engaged might be such as to deprive tlie foreigner 
 of his home government's protection. Shipbuilding, under such 
 circumstances, barred a claim against Peru,^^ as did engineering 
 projects in Mexico,^'^ acting as agent for a confederate state,-^ 
 and the giving of other services to the confederacy.^^ *Too great 
 a degree of political activity in a foreign country often entails a 
 waiver of national protection ; and when it involves identification 
 with armed factions, forfeits neutral protection. "^^ 
 
 Unfriendly acts against a foreign government, generally in- 
 fringements of the local law of the country of residence, usually 
 lead to repressive measures by that state, and the foreigner who 
 has committed such acts will not be protected if no unusual 
 cruelty or harshness becomes apparent. Such unfriendly acts 
 might include, among others, offensive publications, inciting na- 
 tives, obnoxious inter-mixture in local politics, and sympathizing 
 too actively with bandits and insurgents. 
 
 Furnishing combatants with supplies and other aid is a viola- 
 tion of neutrality operating to forfeit neutral position.^! The 
 
 23 See Moore's Arb. 2753, 2390, 2467 and 2756. 
 
 24 Moore's Arb. 2107, 2108. "* 
 
 25 See Mr. Blaine, Sec. of State to Mr. Patterson, April 7, 1890, 177 MS. 
 Dom. Let. 180 and Mr. Sherman, Sec. of State, to Mr. Rodriquez, No, 14, April 
 20, 1897, For. Rel. 1897, 331; and same to Mr. Coxe, No. 71, April 21, 1897, 
 id. 332. 
 
 26 Heuver v. Peru, Moore's Arb. 1650. 
 
 27 Fitch (U. S.) v. Mexico, Moore's Arb. 3476. 
 
 28 Whity (Gr. Br.) v. U. S., Moore's Arb. 2823, 
 
 29 Eakin (Gr. Br.) v. U. S., Moore's Arb. 2819. 
 
 30 Borchard Dip. Prot. Cit. Abr, 779. 
 
 31 See Kennett v. Chambers, 14 How. 38; Hargous (U. S.) v. Mexico, 
 Moore's Arb. 1280-83;. Sturm t. Mexico, Moore's .Arb. 2756, 2757, eases in Moore's 
 Arb. 2756-2757, and Mr. Fish, Sec. of State to Mr. Murray, Dec. 7, 1869, 82 MS. 
 Dom. Let. 453. 
 
143 
 
 furnishing of money and arms is clearly such unneutral con- 
 duct.^2 But If these were furnished under duress the rule would 
 not apply. Many foreigners in Mexico were forced by Palaez 
 and other bandit or revolutionary leaders to furnish money and 
 payment under the physical or moral duress present in most of 
 these cases would not constitute unneutral conduct. 
 
 "In several cases [before the Spanish Treaty Claims Com- 
 mission] there was testimony tending to show that the claim- 
 ants had sympathized with the insurgents in their struggle against 
 Spain ; but it was difficult to prove positive acts of hostility to the 
 Spanish Government. In the case of Caldwell, No. 283, the 
 claimant admitted voluntary enlistment and service with the Cu- 
 ban forces ; and his claim for property losses was dismissed on 
 final hearing. Likewise one of the claimants in Jova, No. 122, 
 admitted service in the Cuban Army; and redress for property 
 losses was denied him. In Iznaga, No. iii, the claimant, with 
 the consent of the Spanish authorities, paid to the insurgents cer- 
 tain amounts for permission to remove his cattle from his estates. 
 The evidence showed that he was. unable without this permission 
 or without the protection of the Spanish troops to remove his 
 cattle. He was not for these payments denied a standing before 
 the Commission. The claimant in Bauriedel, No. 239, likewise 
 received an award, although the evidence showed a contribution 
 by him of $2,500 to the Cuban Junta for permission to remove 
 lumber from the interior of the island. According to the testi- 
 mony of the claimant this payment was made only after advis- 
 ing with the American Consul-General and solely in order to 
 save the lumber which the insurgents had prevented him from 
 
 '33 
 
 (c) Acts "In Aid and Comfort." 
 
 Such acts forfeit the protection of the home government. 
 Borchard^^ summarized acts which constitute giving "aid and 
 comfort" getting his material from the decisions of commissions 
 
 32 RIvas y Llamar (U. S.) v. Spain, Moore's Arb. 2781. See also Moore's 
 Arb. 2931, 1613-14, 2771, 2780 and 3305. 
 
 33 Samuel B. Crandall, "Law Applied by Spanish Treaty Claims Com- 
 mission." Vol. IV. Amer. .Tourn. Int. Law, p. 822. 
 
 34 Dip Prot. Cit. Abr., pp. 788-791. 
 
144 
 
 and other tribunals, sitting on international law questions. 
 Among other acts cited as "aid and comfort" are the following: 
 Standing guard over prisoners for the enemy; aiding the enemy 
 in defense; commercial transactions with the confederacy; deal- 
 ing in blockaded goods; subscription to a confederate loan; sell- 
 ing saltpetre to the enemy, and selling munitions to the confed- 
 eracy. 
 
 In view of the World War situation, the rules of this subject 
 are very important when claims of the United States and other 
 recently allied citizens are being considered. It is, of course, en- 
 tirely in the hands of the home government to decide whether or 
 not its citizens have given **aid and comfort" to the enemy and 
 so deprived themselves of the right to protection. 
 
 The "aid and comfort" must be voluntary, of course. 
 
 12. 
 
 Acts Against Public Policy. 
 
 A diplomatic claim will not be made which is based on an act 
 against public policy. "Diplomatic aid will not be rendered to 
 press on a foreign government a claim which is based on an act 
 against public pK>licy.^ 
 
 35 Mr. Seward, Sec. of State, to Mr. Whitney, July 24, 1868, 79 MS. Dom. 
 Let. 119. 
 
145 
 
 CHAPTER VI. 
 THE MEASURE OF DAMAGES. 
 
 The rules regarding the measure of damages which apply in 
 private law, do not entirely govern international claims. In in- 
 ternational law the important factors in measuring damage are 
 whether they are proximate or remote, and whether they are 
 reasonably certain and direct or speculative and consequential. 
 The arbitrators of the Alabama claims refused to allow damages 
 arising out of ( i ) the loss due to the transfer of the British Flag 
 to the American Merchant Marine, (2) the enhanced payment of 
 insurance and (3) the prolongation of the war and the addition to 
 the cost of war of the suppression of the revolution. "Pro- 
 spective earnings cannot properly be made the subject of compen- 
 sation, inasmuch as they depend in their nature on future and 
 uncertain contingencies," said the arbitrators.^ This precedent 
 has been followed in cases too numerous to list, and undoubtedly 
 fixed a rule of International Law.^ 
 
 The rule has been followed by Acts of Congress of the United 
 States in organizing commissions to make international damage 
 awards. International commissions have consistently denied 
 speculative, conjectural and remote damages.^ 
 
 Claims for indirect damages are sometimes allowed when it is 
 fairly clear that they are certain and not speculative, imaginative 
 and incapable of computation.^ 
 
 Future profits will be allowed in computing the value of a 
 franchise or concession which has been arbitrarily or unlawfully 
 cancelled.^ 
 
 Expenses incurred in presenting and prosecuting claims are 
 often, though not always, allowed as elements of damage.^ 
 
 In some instances damages incidental to the presentation of 
 
 1 Moore's Dig. Vol. VI, p. 999. 
 
 2 See Borchard's Diplomatic Protection of Citizens Abroad, p. 414, note 2. 
 
 3 For authority see: Borchard 415, Notes 1, 2, 3 and 4, and p. 416, Notes 
 1 and 2. 
 
 4 For cases see: Borchard, p. 416, Note 3 and p. 417, Note 1. 
 
 5 Borchard, p. 417, Note 2. 
 
 6 Borchard, p. 418, Note 1. 
 
146 
 
 a claim have been disallowed on the theory that civil courts do not 
 allow more than the regular court costsJ 
 
 Generally costs and expenses are considered from an equit- 
 able, rather than from a technical point of view. 
 
 On the question of general damages, International Law does 
 not follow the theory of Municipal Law which tries to make the 
 injured party entirely ''whole." 
 
 Punitive or exemplary damages have been demanded by the 
 United States and Great Britain in numerous instances where 
 the injury consisted of a violent and inexcusable attack on the 
 lives and property of citizens, where there has been a criminal 
 governmental delinquency, or where the assault was on a consul 
 or some other person with official or semi-official status. How- 
 ever, these cases were almost always ones in which the outrages 
 occurred in undeveloped countries, as in China, Turkey and 
 Persia, and cases warranting a claim for, or the granting of, 
 punitive damages are not very likely to arise against any but such 
 undelevoped nations. 
 
 Contract and Tart Claims. The loss of probable profits is 
 more generally compensated in the case of contract claims than 
 in the case of tort claims, on the theory that business profits are 
 within the contemplation of the parties. This theory was ex- 
 pressed by the United States Supreme Court in the frequently 
 internationally cited case of Howard v. Stillwell Tool Manufac- 
 turing Company.^ 
 
 In cases of breaches of concession contracts the reasonable 
 value of the expected profits of the concession is allowed, to- 
 gether with the amount spent in the construction of the works.^ 
 
 The good-will of a business is not generally estimated by the 
 average annual profits. 
 
 In tort cases arbitrators have used a wide discretion in esti- 
 mating and assessing damages. 
 
 Personal Injuries. The commission passing upon alien claims 
 against China arising out of the revolution of 191 1 recommended 
 that the rules adopted by the Crown Advocate of the British Gov- 
 
 7 Borchard, p. 418, Note 2. 
 
 8 139 IT. S. 199. 
 
 9 May v. Guatemala, Feb. 23, 1900, For. Rel. 1900, 648, 654. 
 
M7 
 
 emment in adjudicating the Boxer claims be followed, namely: 
 in case of partial disablement, there should be obtained, wherever 
 possible, "evidence as to the extent to which the life of the claim- 
 ant was, from an insurance point of view, damaged ; that is to 
 say, the amount of extra premium which an insurance office would 
 demand of the claimant, if otherwise sound, applying for a policy 
 on his life, the extent to which they would 'load' the policy. 
 The sum on which (his) calculation was based being that in 
 which the claimant would naturally, from his position in life, take 
 out a policy if about to marry, (he) then allowed the capitalized 
 value of these extra premia as compensation for the injury re- 
 ceived." 
 
 In cases of arrest or imprisonment, a wide range of estimate 
 has been employed by arbitrators. Umpire Plumley in the case 
 of Topaze, before the British- Venezuelan commission of 1903, 
 after an examination of some sixteen cases, concluded that $100 
 per day for unlawful detention seemed the sum most generally 
 acceptable to arbitral tribunals. 
 
 Elements that have been considered in determining awards for 
 unjust arrest and imprisonment have been the physical and moral 
 suffering, duration, official character or station in life, the neces- 
 sary consequences of the detention and such factors. 
 
 In cases of tortious injuries resulting in death, varying ele- 
 ments have been considered in measuring damages.^^ 
 
 Interest. No general rule appears regarding the award of in- 
 terest. It is usually demanded, and sometimes granted.^^ 
 
 10 See Borohard p. 424 and 425. 
 
 11 Borchard p. 428, 429. 
 
148 
 CONCLUSION. 
 
 President Obregon has repeatedly and publicly stated that 
 Mexico will pay her national debts, that payments on the 
 external debt would soon be resumed, and that his Govern- 
 ment is prepared to deal fairly with the claims of foreigners 
 for damages sustained during the revolutions. While there 
 exists some doubt in the minds of many persons in the United 
 States and other countries regarding the good faith and the 
 strength of Obregon's Government, the writer is convinced 
 that the United States and the other great nations can well 
 afford to have faith in the promises of the present Mexican 
 regime. 
 
 Mexico has passed through a decade of internal strife that 
 has sapped the liquid resources[]o|jthe country and exhausted 
 the people. The business men and the peons, who form the 
 overwhelming majority of the people, are tired of revolution. 
 There is no revolutionary disposition left. There may in the 
 near future occur local disturbances or even a sudden change 
 in the personnel of the administration, but there cannot come 
 about another great conflagration. 
 
 The revolution that began with the overthrow of Diaz 
 found sympathy in the hearts of the Mexican masses. Leaders 
 had no difficulty in drawing to their standards the peons who 
 were landless, propertyless and neglected by the Government. 
 The ten years of revolution really represented one continuous 
 struggle, the upheaval of the peasantry and the masses against 
 the ruling classes. The purpose of the revolution has been 
 accomplished. The Obregon Government purports to be a 
 government not for the privileged few but one of and for the 
 peons. The landed estates of the old regimes are being 
 divided with astonishing rapidity, popular education is being 
 expanded and the peons are coming into their own. The 
 people are revolution weary and are in general satisfied that 
 their present government is not an exploiting government 
 but one which has the interest of the masses at heart. 
 
 The writer is personally acquainted with the men who 
 constitute the Mexican Executive group and believes that 
 their sincerity, honesty and good faith is beyond question; 
 that the promises of the Obregon Administration are not idle. 
 
149 
 
 However, despite the good intentions and the integrity 
 of the Mexican Government, Mexico is finding and will find 
 the problems of readjustment exceedingly difficult to solve. 
 She will need the co-operation of her sister nations to satis- 
 factorily solve these problems and an antagonistic attitude 
 on the part of the United States and the other great powers 
 will make readjustment well-nigh impossible and will precipi- 
 tate whatever revolution Mexico is still capable of supporting. 
 On the other hand, if these nations assume toward Mexico 
 an attitude of friendly assistance, the day will be hastened 
 when Mexico can emerge from her trying condition and can 
 take that place among the nations which her wonderful 
 resources warrant. Mexico's immediate problem is purely 
 an economic one and not, as is so commonly believed, a 
 political one. 
 
 One of the lessons of the Great War is that the strong 
 nations cannot isolate themselves and observe with indiffer- 
 ence and disinterest an unsettled condition in some foreign 
 part of the world. Modem means of communication are 
 drawing the nations of the earth closer together and at the 
 present time no nation can afford to hold itself aloof from 
 world affairs. It is not only to the self-interest of every state 
 to do its utmost to induce and maintain a condition of sta- 
 bility all over the world, but it has become a duty of the 
 enlightened nations to lend a helping hand to a sister nation 
 in difficulty. 
 
 It is submitted that if the United States and the other 
 
 nations will adopt a course of friendly co-operation toward 
 
 Mexico at this time, Mexico will quickly respond, perform 
 
 her just obligations with the maximum despatch and enter 
 
 into a new phase of national prosperity in which the world 
 
 will profit. 
 
 ****** 
 
 On May 27th, 192 1, President Obregon issued a statement to 
 the United Press relative to recognition of the Mexican Govern- 
 ment by the United States. 
 
 This statement confirms the expressed opinion of the writer 
 that Mexico acknowledges and intends to perform all of the 
 obligations imposed upon her by International Law. 
 
150 
 
 The statement follows: 
 
 "Replying to your telegram of yesterday relative to a 
 story published by the press to the effect that the Government 
 of your country may demand signature of a protocol pre- 
 liminary to granting recognition to the Mexican Government, 
 it is my opinion that a trcaiy should not exist previous to 
 recognition, since the rights and obligations of Mexico, like 
 those of all other countries, are established with all regard 
 for international law, and that there is no necessity for a 
 treaty in order that Mexico should recognize those obliga- 
 tions, establishing them anew. 
 
 ''Mexico believes that she has the right to be considered 
 as any other of the nations which are subject to the rules of 
 international law. The United States of America, like any 
 ' other country, may ask for its nationals all the guarantees 
 and prerogatives that international law confers, without the 
 necessity that they should he ratified in a protocol, and 
 Mexico neither evades nor will evade in any way zvhatsoever 
 any of the obligations which are hers as an independent 
 nation. 
 
 "Moreover, Mexico does not demand renewal of friendly 
 relations with those nations which still doubt the stability 
 of her Government and her firm resolve to comply with all 
 her obligations ; and those countries may take all the time 
 that their foresight and interests warrant for the renewal of 
 relations when they may believe it convenient. 
 
 "I am certain that the high personalities who now admin- 
 ister your country, interpreting the noble desires for harmony 
 which are being strengthened with the passing of each day, 
 will avoid renewal of relations between both nations on a 
 basis which in any way affects the rights and sovereignty 
 of the Mexican people. This is the only condition under 
 which the Government of this Republic desires renewal of 
 relations with those countries where they are at present in- 
 terrupted." 
 
 This book has been an effort, as far as claims of foreigners 
 against Mexico are concerned, to define "the rights and obliga- 
 tions of Mexico" as "established with all regard for International 
 Law."