MEXICAN OIL

New Zealand Herald, Volume LXXV, Issue 22995, 24 March 1938, Page 11

MEXICAN OIL

JAPAN'S INTEREST NEWS FROM TOKIO / - 'COMPANIES' APPEAL INTERVENTION ASKED UNITED STATES NOTE Jy.- Tf!?* r ' 1 P h ~ r ' r( ' J;s Association—Copyright (Received March 23, 7.10 p.m.) NEW YORK, March 23 The newspapers in Mexico City gire prominence to reports from Tokio that Japan is prepared to make oil contracts with Mexico, an d to an editorial in the Xichi Jfichi Shimbun praising Mexico's action in " liberating itself from British and American influence." The Mexican newspapers emphasise that Japan has enough tankers to transport her requirements of petroleum.,

Fonr of the American petroleum companies have asked the State Department a t Washington to intervene diplomatically in Mexico regarding the expropriation of the oil wells, "in support of the claim that there has been a manifest denial of justice."

. The United States Ambassador, Mr. Josephus Daniels, conferred with General Cardenas, President of Mexico, today, and handed him a Note from the Secretary of State, Mr. Cordell Hull. The / contents of the Note have not been disclosed. President Cardenas has issued a manifesto justifying the expropriation and blaming the foreign oil companies for breaking labour contracts and maintaining the workers in misery. He insists that the expropriation will be carried out even if it disrupts the country!s monetary system and results in the devaluation of the peso.

.Informed quarters point out that the prohibition of gold purchases and dealings, in foreign exchange were found necessary to prevent the flight of foreign capital frightened by the expropriation decree.

The financial editor of the New York Times,. in an ■ extensive article, calls the expropriation "one of the most flagrant violations of international property rights since modern commercial relationships were established among the nations." He says the action is further untenable under the ''good neighbour" policy of the Pan-American nations, and involves the friendly relationship of the United States with Britain, since tiie Monroe Doctrine precludes European nations from direct intervention in Mexico, making tho position increasingly awkward.

; POLICY IN MEXICO • v 11. DISLIKE OF FOREIGNERS BRITISH SHAREHOLDERS UNFORTUNATE POSITION That the oil companies operating in Mexico had expected for years that thoir oilfields, refineries and other properties wotdd inevitably be expropriated in some way by the Mexican Government was a statement made yesterday by Mr. R. W. F. Newton, a former executive of the Mexican Eagle Oil Company, who is visiting Auckland. : Mr. Newton explained that the Mexican Eagle Oil Company is the largest oil concern in the country, operating refineries at Tampico, Minatitlan and Vera Cruz, besides having a*terminal port. It is actually a registered Mexican company, but its capital is mostly British. One of its biggest (shareholders and its founder is Lord Con dray, formerly Weetman John Churchill Pearson, who is internationally known as the head of Samuel Pearson, Limited, builders of port facilities'.

Unfortunately for the British shareholders, the Mexican Government is in the position of being able to state that 8s the company is Mexican any action it has taken against it is purely a domestic matter. Moreover, direct intervention by the British Gove rnuient would he impossible under the Munroe Doctrine, without coming in conflict with the United States.

I imagine American action to protect the interests of its nationals will be ineffective.' 1 .said Mr. Newton. Opinion in the United States would never countenance direct intervention. No doubt a commission will lie appointed, but any thing it does or recommends will be frustrated by Mexican Ws - '-I he Mexicans are determined to oust foreign interests." Mr. Xewton said that strikes and Wage troubles were merely a weapon that had been used in an endeavour to crush the companies. Staggering increases had been put upon them nj order to achieve this objective, •foreign capital had done much to develop the resources of the country, but gradually the major industries that owed their creation to outside capital, Bu ch as the railways, had been taken over by Mexican Governments on their °Wn terms. In recent years the slogan Was ''Mexico for the Mexicans," and itaWas certain that the property of out--Blf'e mining interest would soon be absorbed/' • Mr. Newton expressed the view that Jvl®t has happened and is happening ,NVMexico with foreign..industries will of time bexepcated'in-Vene-*aela.