PRESSURE ON MEXICO

Nelson Evening Mail, Volume LXXI, 30 March 1938, Page 7

PRESSURE ON MEXICO

ACTION BY UNITED STATES EFFORT TO FORCE SETTLEMENT OIL EXPROPRIATION SITUATION (Uuited Press Association—By Electrlo Telegraph—Copy righ 11 (Received 30th March, 9 a.m.) WASHINGTON. 29th March. Despite the State Department's public denials of any such intention, it is increasingly evident that the United States is exerting growing pressure against Mexico, amounting almost to economic sanctions, in order not only to force a satisfactory settlement of the oil expropriation situation, but to prevent the sale of oil to Japan in exchange for coast concessions, and impress Mexico generally with the value of American friendship. The Treasury has reduced the New York purchase price of foreign silver from forty-five to forty-four cents an ounce, apparently in order to make it unprofitable for Mexico to dump silver on the world market. In the meantime the Mexico City banks have refused to sell large sums of dollars. The heavy demand for dollars drove the peso to 4.65, compared with the opening rate of 4.25.

American-owned motor-car plants have reduced operations, thus increasing fears of widespread unemployment. The operation of many expropriated oil wells has been suspended because of full storage tanks and the lack of a market.

The Washington correspondent of the United Press claims that the State Department in further retaliation has suspended negotiations with Mexico regarding flood control projects, debt adjustments, indemnity claims, borderland claims, and fishing rights, etc., meaning that the good neighbour policy is abandoned until a settlement is reached.

Mexico at present is demanding that the expropriated petroleum interests pay 2,100,000 in back taxes, although the companies insist that all taxes have been paid.