Pine Bluff daily graphic., 1919-03-26
OFFICIALS PROBE
 MEXICAN THREAT
 TO PUNISH OIL MEN
Recent Order Reope'ns Oil Question Which Courts
 Were To Decide.

Washington, Mar. 25.-Officials of the state department have begun a study of the order of the department of industry at Mexico City threaten ing to punish foreign companies and individuals for drilling wells or doing other petroleum development work without permission of the fed eral government, it was learned au- thoritatively today. The order made public by the state department yes-1 terday, reopens the Mexican oil ques- tion which was believed to have been left to the Mexican courts and the extra session of the Mexican con- gress to decide.
 British and French oil companies as well as American are interested in the recent developments.
 Ambassador Fletcher who has been in Washington for some months aid- ing Acting Secretary of State Polk during the absence of Secretary with representatives of the American Oil Companies and statement of the oil companies position was laid be- fore him.
 Ordered Work Stopped.
 The feature of the oil trouble in- volved is said to date back to January 1915, when Carranza was first chief and was beset with enemies on ev- cry side. At that time, he decreed that all development work should stop immediately and that no work should be undertaken. without per mission. Representatives of the French, British and American Oil Companies protested against this order but were assured by Carranza government officials and the diplo- States in Vera Cruz that the sole purpose of this decree was to exercise the proper police power of the state and to prevent unsafe drilling and !; building operations. The oil men of the three countries agreed to seek permission for the development work although it was pointed out here to- day they had bv this action bound | themselves to ask for licenses or per- mits to do what they had perfect right to do without permits because of their property rights.
 1 Refused Permits. l In 1917. when the constitution was put into effect, the Mexican gov ernment began to refuse permits for such work, according to -authorita tive information. An American com- panv was refused permit in De- cember, 1917 on the ground that it was a foreign corporation and !, as such had no right to receive con cession to develop oil. This was the first open attempt bv the Mexican government to establish the govern. ment ownership of all mineral de- posits as defined in the new constitu- tion On the company's protest that this ruling abridged it's legal rights the Mexican government granted 8 provisional permit to complete the operations in question.
 Suhseouent decrees were announ- ced. Each intended to put into effect article twenty seven of the main con. stitution which the governments ot Great Britain. France and the United States have declared "confiscatory.' 1 Refused Permits.
 Since August 18th, 1918, permits have been. refused to companies which have not filed manifesto. tions" or entered into contracts with the Mexican government. the terms of which contracts have not vet beer defined. As result drilling opera tions. building of pipe lines and oth CT development work has been stop lped.
 1 One American company immediate. Ilv began contest of the constitu- ltionality of this law by suit o1 amparo brought when the company was refused permission to drill ar oi'well The Mexican government ir this suit gave as one reason for re- fusing the permit that the company was foreign corporation and as such could receive no "concession" tc develop petroleum in Mexico. The point made bv the three governments interested has been consistently that the companies did not need permits to operate because they had acquir- ed their lands in good faith by pur' chase or lease in accordance with the existing laws of Mexico.
 Whether any action will be taker bv this government in the present case has not yet been decided, it was said today. but the feeling pre. vails in official circles that this i ordar of the department of industry in Mexico City is a means of forcing the companies to accept the confis- catory features of decrees which ,have been the subject of protests by this country, Great Britain and France.
 A. G. Kahn, the Jeweler. has returned from a four weeks business