A DIPLOMATIC BREACH

Otago Daily Times, Issue 23501, 16 May 1938, Page 9

A DIPLOMATIC BREACH

MEXICAN GOVERNMENT’S ACTION SEQUEL TO OIL EXPROPRIATION MINISTER RECALLED FROM LONDON REPLY TO RECENT BRITISH NOTE {British Official Wireless) (United Press Association) (By Electric Telegraph—Copyright) RUGBY, May 14. (Received May 15, at 5.5 p.m.) Press reports state that, as a sequel to the dispute on the expropriation of properties of British oil firms in Mexico, the Mexican Government has decided to recall its Minister and the staff of the legation from London. The Mexican Foreign Minister, General Eduardo Hay, notified the British Minister in Mexico, Mr Owen St. Clair O’Malley, when last night he handed him the reply to the British Note of May 11. British official quarters in London received the Mexican Note this morning, and are giving it consideration. Diplomatic relations with Mexico have been suspended on many occasions in the past. It is pointed out in London financial circles that the Mexican policy has had the effect of terminating or excessively hampering practically all British - enterprise in Mexico.

INSTRUCTED TO LEAVE BRITISH MINISTER IN MEXICO NEW YORK, May 14. (Received May 15, at 9 p.m.) The Mexico City correspondent of the United Press says suspension of British and Mexican diplomatic relations was completed when Mr Owen St. Clair O’Malley and the legation personnel were instructed to leave Mexico. Mr O’Malley will leave for London from the United States in a few days. Washington is gravely concerned over the British and Mexican breach, says the New York Times. Apprehension is felt ilest coolness might develop between Britain and the United States because their different policies have increased the difficulties they may occasion in the adjustment of the expropriation dispute. Great reserve is manifested, however, in studying this possibility, for there had been some indication recently that, if Mexico failed soqn to submit an adequate proposal for compensating British and American oil companies, the United States might seriously consider abandoning its softer policy and moving over to the British position with a demand fbr the return of the properties. There have even ben tentative conjectures whether there was a tacit understanding between Washington and London in this regard. In the background stand ( the questions whether the Monroe Doctrine might become directly involved and whether the! good-neighbour policy will be subjected to a severe strain. CHEQUE HANDED TO BRITAIN CLAIMS FOR ANNUITY NEW YORK, May 14. (Received May 15, at 9.45 p.m.) The suspension of diplomatic relations and the closing of the legation in London were announced in a Note handed to the British Minister, Mr O’Malley, by the Foreign Minister. Edouardo Hay Simultaneously the latter handed Mr O’Malley a cheque for 361.837 pesos covering claims for the annuity due to January 1, 1938, plus interest. Mr O’Malley was notified that in view of the not very friendly attitude of the British Government toward the Mexican Government in connection with the repent expropriation of oil companies, the Mexican Government “feels it is necessary to withdraw its Minister in London and the legation personnel in that country. It is closing the legation and leaving the archives in the custody of the Mexican Consul-general.’’ Mr O’Malley told the New York Times that he had not received a time limit in which to leave Mexico. “ I have informed my Government and am awaiting instructions.” Text of the Reply The text of the Mexican reply to the British Note demanding the payment of special claims maintains that the agreement of December 31 1935, recognises Mexico’s right to defer payment by delivering interest on unliquidated annuities, which therefore does not make them demandable. “In view, nevertheless, of your Government’s attitude in the matter I have pleasure l in attaching a cheque for 361,737 pesos. It has been necessary to rectify the figure of 370,962 mentioned by your legation, since the latter figure was erroneous. As the object of the Note, which is hereby answered, is to require the above-mentioned payment. I refrain from taking into consideration the diverse reference which the Note contains regarding the state of the internal and external debt of Mexico. These references do not take into account on the one hand that your Government lacks any right to analyse the interior situation of Mexico, or on the other hand the complex circumstances involved which explain.' even justify, the attitude of my Government. These references do not halt at the limits that might be expected. Allow me, only because I consider it pertinent, to call the attention of your Excellency that even the most powerful Spates and those which have at their disposal abundant resources cannot boast that they are up to date in the payment of all their pecuniary obligations.”

AMERICAN PRESS COMMENT •'AN UNPLEASANT SITUATION ” NEW YORK, May 14. (Received May 15, at 10 p.m.) The Mexico City correspondent of the New York Times says: “ Mexico’s unprecedented act, carrying with it serious international complications, was' the direct outcome of three British Notes to Mexico between April 8 and May 11. Mexico _is counting upon the Monroe Doctrine to protect it from Britain’s wrath, and an unpleasant situation is laid at the doorstep of Washington. It was strongly rumoured to-night that Britain has been leading up to a break of relations by Notes. Mr O’Malley, however, denied this * emphatically.’ ” Baring Move by President The Mexico City correspondent of the New York Times says; “ Widespread opinion here attributes the diplomatic breach with Britain to a daring move by President Cardenas to strengthen public support at a time of economic strain, due to the boycott of Mexican oil. There has been a collapse of business, and Labour leaders threaten widespread strikes because of the consequent reduction in wages. The newspaper Novedades says, leaders of the Confederation of Mexican Workers charged many industrial firms with attempting to take advantage of Labour’s restraint to impose wage reductions and readjust their personnel. The confederation warns them that it will resort to the strike weapon if necessary.” CHARGE AGAINST BRITAIN AN “UNFRIENDLY ATTITUDE” MEXICO CITY, May 14. (Received May 15, at 11 p.m.) The Mexican Government has recalled its Minister from London, Primo Vellamichel, in view of Britain’s “ unfriendly attitude.” A message from San Antonia, Texas, states that Vicente Vortes Herrera, manager of the Mexican Petroleum Commission, told the correspondent of the United Press that Britain and American oil companies must accept payment for the expropriated properties in oil or funds derived from the sale of oil to other nations. Mexico was already selling oil in certain countries, including Germany, France and South America.