New-York tribune., 1918-12-10
Oil Men Break Off
Negotiations With
Carranza Govt
Producers Association AS.
serts Proposed Mexican
Law Would Mean Con.
fiscation of Properties

Negotiations between the Association
or Petroleum Producers in Mexico. rep
resentlng thirtythree American and
foreign companies, and the Carranza
government, conducted with view to
obtaining important notifications ~
certain contiscatory features of a bill
no" before the Mexican Congress- nro.
vlding for the naturalization of the o;y
industry of that country, have been
broken off. If the bill is enacted into
law and made effective in its present
1orm' 1T is asserted that title to reservo
OIL properties in which are invested
about S3OO,O00,000 of American can;ts,
and perhaps as much more foreign can.
ltai' Will revert to the Mexican govern
ment.
announcement of the ending of the
negotiations was made yesterday af+er
lengthy session of the association
held at the Offices of the Mexican Pc
troleum Company, the holder of ex-
eehs'Ve properties in the Tampico dis
trlct. Nelson Rhoades. the assoc;a+;oa,u
representative in Mexico City. who ba 9
Deen conducting the negotiations bo.
been ordered to return home No+hi,~
iurther IS to be done by the assoc;a.
"on' 1t was stated. pending the action
OF OF the Mexican Congress on the hill,
mere IS, it is believed, chance 80 s'.
SATISFACTORY notifications NAV vet he
May Call on State Department
Officers of the association would ro.
say what the next stsp wou]d ha ~. ~.
the event that the bill is passed and , ;s
mace effective. 1t is certain howauar
mat II that should happen the Stata
department at Washington would ha
advised of the situation. NC
statement issued by the association
reads IN part as follows: ''0' II
wi5nout dissent the producers detsr-
satista sa,'ieH .nat tne Petroleum Code" was u--
satisfactory .a from every point of view ~,
1nac 1t purports to put into effect tba ~. go
nscatory features regarding petroluen, oxvn-
ershp en,1p IN Article q of the constitution Of
eo,,a. .or uilaef which the present Mexican
government is operating
The proposed code provides tb,+ oil
troieum in Mexico is the property of ~
nation, that the property of the nation -
ilaienaple and not subject to prescrin.
tion: and that this law provides for con-
cessions OF limited rights to produce tho
nations petroleum. which are in easanne we
revocabe licenses :" essence
The only provisions of the pronoa.d ..s.
"hich in any way recognize netro,s,'.1s
titles and<rights acquired honestly ma ~. o-.
Vaiue under the recognized laws OF Msx;oi
are IN certain additional articles 49,
provide only that lands of an undataI
mineu area on which wells have hear
drilled may be, retained by their nress,t
owners ana operators, VINO will, however
enjoy only such rights as they yyouid 49,,
acquired BY taking out concessinra nave
licenses. or
As 10 lands honestly acquired hy 49,
enase and lease which haze nor go
drilled upon. which hav, beo1 80, So
upon after May !. 1917 (the date wbcn +,'.
ne" constitution went into effectl s,,.t, ,s.s
amos are open TO the filing OF min;rr.
cttaims ana 70 the issuance of licenses foS
third parties 'iiAeht 10
The fact that the transitorv ar+;.1.
the proposed code provide that tho go ot
owners and lessees Of petroleum, land. 80
d certain preferential right to oh+.;, ~
cesslons ahead of the general onhi;n =!
negH9lole. and the provision is nuoaTor,,
IN view OF the provisions OF the coHst;,,,
,loh OF Mexico prohibiting any corporatian
~. a mexican corporation from securing
peefoieun @ concessions or licenses The
IA" would operate to absolutely and 80.
manently confscate all such proner.S, l,si.- per-
heid by American. British or Dutch coTo
panies. Nu'en COM
Expect Government Backing
Mem mbers of the association believe
'n@e ehey Will have the backing of the