East Oregonian : E.O. (Pendleton, OR) 1888-current, 1920-04-06
OIL IS BONE OF u. S.
MEXICAN CONTENTION
BY RALPH H. TURNER

| Omitted Press Staff Correspondent.)
| TAMPICO, April 6.-Of all the dis
agreements which have arisen to
create friction between Mexico and
the United States. none has caused
more heated controversy that the oil
question, none is more vitality import
ant to both nations and none is more
involved in its interpretations.
| The hope is generally expressed to-
| day. however. that a settlement Is in
sight; that an agreement may be eff
fected by Carranza relinquishing some
of his more drastic contentious and
by the oil men. in turn. conceding
some ground. This view is based
upon President CarranZa's recent ac-
tion in granting provisional permits
for drilling and upon the interview
given the United Press in Mexico City
by Luis Cabrera. Minister of the Trea-
sury. in which Cabrera said he be-
lieved peace was possible IL the oil
men would get together with the
government and talk things over
Mexico Lays Claim
The genesis of the patroleum con-
troversy lies in the famous Article 81
of the new Mexican constitution.
which declares that in the nation is
vested direct ownership of all miner
ais or substances which in veins.
layers. masses or beds constitute de-
posits whose nature is different from
the components of the land. such as
petroleum and all hydro-carbons--
solid, liquid or gaseous" Mexico's
claim to the ownership. or her nation
alization, OF sub-surfaee rights, is the
crux of the oil debate.
Oil men, in their attitude today.
may be said to represent three classes
of opinion:
l. The "'Irreconsolables,' those who
insist that the policy of the Mexican
government. as predicted, confiscatory
and contrary to the principles Of in
ternational law.
.. Those who are willing to compro-
mise, possibly concedinG the principle
of national ownership. If they are al
lowed to operate under fair and prac-
teal conditions.
3. Those who agree whole e-heartedly
with the Carranza rulings and are
ready to abide by them without res
ervations. This class is greatly in the
minority, generally representing ope-
rators who are new in the field and
whose holdings are unaffected by any
features the law may pos
sess.
ConfiscatOry Is Claim
Those who are ready to compromise
however, are loath to agree to the
laws retroactive qualities. 1t Is un-
just and confiscatory, they say. that
lands which they acquired prior to
May. 1917, when the new constitution |
became effective, should be turned
over to the government. BY de-
process, anyone may ap-
ply for the right to develop oil lands.
may denounce their own
holdings. but the large interests gem
.raIly have refrained from so doing.
because such action is practically
,quivalent to recognition of the ma
principle and, in the
ase of companies with extensive
holdings, involves large outlays in the
orm of announcement fees.
The uncertainty of the present sit
Iation is due mainly to the fact that
Article q has not yet been finally IN
erpreted by the passage of an organ
: petroleum law. /
When the Carranza government
uspended drilling by companies
which had not agreed to the consti-
utional requirements, II was an
ounced that drilling might proceed
n the condition that the companies
gree to comply with any future legls-
ltion which might be enacted on the
il question. The majority Of the
ompanies declined to do this, al
nough a few. including FL Aguila. the
reat British concern. accepted the
proposal and received
riiling permits, although they reserv-
the right to enter court In connec-
on with any future rulings to which
ney might take exception.
But most Of the companies were
,rced to suspend operations until the
ecent presidential decree. which pro-
ided for the issuance of provisional
riIiing permits. subject TO the final
nactment OF the organic law inter-
feting Article %. 10