MEXICO SEIZES FOREIGN PROPERTY.

Auckland Star, Volume LXIX, Issue 67, 21 March 1938, Page 7

MEXICO SEIZES FOREIGN PROPERTY.

OIL FIELDS TAKEN. Expropriation Follows Workers' Action. WAGE DISPUTE OUTCOME. United Press Association.—Copyright. MEXICO CITY. March 20. Eighteen thousand workers yesterday seized control of the properties of the American and British petroleum companies, representing; an investment of £. 112,500,000, after the Federal Labour Board had cancelled the companies' labour contracts on the ground that they did not comply with the Supreme Court's wage ruling. Later the President, General Lazaro Cardenas, expropriated all the oil companies.

Under the wages ruling the companies were ordered to pay £10,000,000 compensation for wages, which the companies contended was impossible. The Government was expected to place an. embargo on the companies and assume management as soon as the unions, which ordered the seizure, petitioned it to do so. President Cardenas, explaining his expropriation of the companies, said an embargo would be too slow. Simultaneously the Bank of Mexico announced that it was suspending indefinitely dealings in foreign exchange, presumably to halt a flight of capital from ] Mexico and maintain the price of the peso, although the latter is certain to drop through private dealings. The foreign mining industry, which is of equal importance to petroleum, fears similar nationalisation, due to strikes and the action of the mine unions in telegraphing President Cardenas in praise of the petroleum expropriation and hinting that they would welcome similar action in their industry. It was indicated that Washington would find it difficult to ignore the situation when the workers seized the offices and ejected British. American and Dutch officials and employees of th,e Mexican Eagle company, which is controlled by the Shell Company. Diplomats are keeping London and Washington informed. The American Ambassador to Mexico, Mr. Josephus Daniels, expressed concern at the possible effect the situation would have on President Roosevelt's "good neighbour" policy. BRITISH INVESTORS. £40,000,000 LOSS LIKELY. LONDOX, March 20. The "Sunday Times"' says the Mexican expropriation of the oil fields will cause £40,000,000 loss to British investors.