New-York tribune., 1919-12-11
Chairman Payne of Fed
eral Board Tells Wilson
Fuel Supply Depends on
Protection ofAInericans
Three Protests by
Lansing Ignored
Representative Could Al
leges Carranza Plots
Big Oil Famine Here

WASHINGTON. Dec. 10-Another
memorandum on the Mexican situation
was sent to-da- to President Wilson.
1t deals with interference by the Mex;-
can government with the operation Of
American owned oil properties in Mex
co and was prepared by Chairman
Payne. Of the Shipping Board. after
representatives of the Associated Mex
ican Oil Producers, headed by F. r..
Kellogg, of New York, had presented
he situation to h m.
At the same time Mr.. Payne pre-
pared and sent to Secretary Lansing a
letter urging the Importance If pro-
tecting the American supply of Mexi-
can fuel oil, rnon which the Shipping
Coard is almost so'elv dependent for
fuel for its 500 oil-burning passenger
and freight steamers.
u. S. Notes Igncred
1t developed that the State Depart
ment has been continun. to protest
10 the Mexican government ara 'nst de-
crcos forbidding the drilling Of new
wells ON privately owned property in
the Tampico fields and other DEGREES
sfYect:ng the oil interests of Americans
end other foreigners in Mexico.
Three notes have been dispatched
within six months. but it was said that
President Carranza had not replied to
any Of them. The first went forward
last June 18, the second on October
1 and the third on November IS. In
the first two the State Department spe-
clticaNy protested against the action
of the Mexican government in prevent
ing the drilling of rev wells on prop
crty owned by Americans and insisted
upon more adequate protection of
americans working in the Tampico oil!
REGIONS.
The note of November 1s was dis
patched after rece pit Of offica! info
nation that CarlAnza soldiers had
seized another American owned we'll
on November ~.
Drilling Operations Halted
1t was learned to-day that Mexican
military forces at various times dur
ing the last month have stopped drill
ing operations of American companies
on the pretcxt that permits" to drill
had not been obtained. To obtain ths
permits" foreign oil companies must
agree that such wells as may be drilled
can government. The United States
aaf repeatedly protested against these
dncroas in rarticu ar
Certain Amcrican-owned companies
desiring to increase oil production to
meet the present fuei oil shortage in
the United States, it was said, have
drilled wells without admitting the
loss of their property by sgch acts.
The State Department, both in
formal notes and in informal communi-
cations, was said to have informed the
Mexican government that this action
by the American companies was not
Il dcfiance of the Mexican authorities.
but only the exercising of rights ac-
quired under Mexican law.
Announcement that Chairman Payne
had communicated with the President
and Secretary Lansing regarding the
Mexican oil situation was made by
Representative Gould, Republican, OF
New York, who accompanied the oil
men to the Shipping Board. Mr.. Payne
would not discuss the matter explain
ing that it was now in the hands Of
he President and the State Depart
nent.
Oil Shortage Acute
1t is understood, however, that the
chairman Informed the President that
\ stoppagce Of oil production in Mexico
seemed threatened, and that should
this occur the board would be seriously
embarrassed in operating its vast fleet
of steamers. Reserve supplies now on
hand, the President was said to have
been told, would last only few weeks,
and with the Mexican supply cut off
of ko al 4
have to be laid up, as the companies
under contract to supply the board
with oil receive the bulk OF their sup
plies from Mexico.
The oil shortage has become so acute
it was said in official circles, that the
Shipping Board is withholding call
for bids until the companies are able
to increase their available supplies
The Navy Department and railroad i'd
ministration also were said to be fac
ing more or less serious situation.
In his statement on the situation,
Representative Gould said:
the seriousness Of which can hardly be
exaggerated, the country has been
brought face to face with further
curtai ,ment of its fuel supplies through
deliberately Planned and timed hos
tile act of the Mexican government.
"In an attempt to force American oil
companies to relinquish their legally
acquired Mexican properties. the Mexi-
can government. by force of arms. is
preventing all drilling for new wells on
these lands Existing wells, invo wing
approximately so per cent OF the total
Mexican production. recently have
started to 60 to water.
"The Slipping Board is so apprehen-
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