New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-08-22
Mexico Orders
Oil Companies
Pay Back Tax
Threatening Legal Steps
Unless Foreign Corpora
tons Meet Levies Dat
ing Back to March l
Rate Is Cut 40 p. C.
Corporations Decline Offer,
Showdown Is Due Sept.
i: Up to Supreme Court
Special Gable to The Tribune

MEXICO CITY, Aug. 21.-Unless
certain foreign oil companies. operat-
ing in MEXICO pay taxes dating back
to March by the end of August. the
Mexican government is prepared to
take the necessary legal steps," c.
cording to q statement issued this
afternoon by Manuel Padres, acting
Minister OF Finance.
Senior Padres said that President de
la Huerta has .,ade wha' he considers
liberal concessions, agreeing to accept
GO per cent of the total taxes, but rep
resentatives of the oil companies, after
consultation with their higher officials,
have declined che offer.
Export taxes on Mexican oil are paid
bi-monthly under normal circum
stances, but many companies have paid
no taxes since March. Four months of
accumulated levies becal-e due on July
% and the time was extended until
August so pending discussions which
are now terminated.
These discussions arose over the
price OF oil on which the taxes are as
sessed- The Carranza government is
sued decree covering -Iarch and
April, and during the last days Of that
regime another decree was issued
nearly doubling the price for May and
June. The foreign companies, with
the exception of about five independent
concerns, refused to pay. These in
d, ndent concerns have paid their
taxes, including co per cent of the last
bl-monthly assessment, at the rate
hXed by the new government.
Fixes Rate of 81
The rate now O. rative fixes price
of - a barrel for crude oil with
"Panuco" crude as base. Senior
Padres to-day showed the Tribune
correspondent the original receipts for
crude OIL sales, covering the months
from February to August, for delivery
at the pipe line terminals at Tampico,
on Whlcn the government based its de-
clslon TO fix the rate at 81. These
prices range from 81 in February to
$50 for August. The receipts were
rom several companies at Tampico for
deliveries to steamships, and the re-
celpt OF the oil anC the payment there
Tor shoycd On the face Of the receints
Padres said that the oil companies
SuDml1ted vouchers to substantiate
CLAIMS that prices were set too HIGH
nut lnFestGatlon showed that many
OF these transactions were merely
transfers Of oil between subsidiary
ana parent companies, and CONSEQUENT
~ could not be taken as standard since
1hey merely represented "takinp
money out of one pocket and puttins
it in another" '''''s
General dacinto Trevino, Secretary
OF Commerce and Industry. comment,
ing on another phase of the oil con-
efoVersy, said that matters now rested
IN inc hands of the Supreme Court.
where more than seventy appeals were
80 against DEGREES ordering pay
i1e';c o. royalties ano rent under
article AANIl OF the Constitution.
First Case To Be Test
Irevino said that the government
would consider the first case tost
case and guide its action by it. Accrued
T0yS.iSes and rents amount to many
L'liAoHs OF dollars, and this is the main
oone of contention in the oil contro-
veIsy. Inc Secretary said that the
government had not Yet discussed
steps TO be taken in the event the
supreme Court upholds the govern
ment S rights to force the companies TO
pay, but added 81 there is no money
there is plenty of OIL" He said that
the government is not desirous Of
stopping the shipment of petroleum.
but lncimated that there Is posi-
bIlty that the government would allow
shipments in bond.
Both Trevino and Padres confirmed
reports that Pres dent de Ia Huerta is
disp-eased because representatives of
the oil companies here apparcntlv
have lacked authority from their com
p2nles 20 carry on serious negotiations
Padres evidently is pleased by the at
utude of five foreign companies which
complied with the laws, but he also
made it plain that Mexico intended to
have the money she believed due under
the tax DEGREES.
Huerta Not to Dictate
1t was announced to-day that Presi-
dent dc Ia Huerta does not intend to
dictate to Congress regarding organic
petroleum, which will be one of the
first subjects discussed when Con-
gress meets in September. The petro-
leum measures submitted by Carranza
already have passed the Mexican Sem
ate and viii come up in the House i'm
mediately. 1t is believed here that the
petroleum situation is rapidly reaching
crisis, and this is bringing relief to
government, diplomatic and business
circles who desire to see the long
standing controversy end.
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