OIL COMPANIES

Otago Daily Times, Issue 23463, 30 March 1938, Page 9

OIL COMPANIES

EXPROPRIATION BY MEXICO; AMERICA TAKES ACTION EFFORT TO FORCE SETTLEMENT (United Press Association) (By Electric Telegraph—Copyright) WASHINGTON, Mar. 29. (Received Mar, 30, at 1 a.m.) Despite the State Department’* 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 45 to 44 cents an ounce, apparently in order to make it unprofitable for Mexico to dump silver on the world market. In the meantime Mexico City banks have refused to sell large sums of dollars. The heavy demand on 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. Operation of many expropriated oil wells has been suspended, due to full storage tanks and lack of a market. The Washington correspondent of the United Press claimed that the State Department, in further retaliation, has suspended negotiations with, Mexico with regard to floodcontrol projects, debt adjustments, indemnity claims, borderland claims, fishing rights, etc., meaning that the good neighbour policy is abandoned until a settlement is reached. Mexico at present is demanding that expropriated petroleum interests pay 2,100,000 pesos in back taxes, although the companies insist that all taxes have been paid.