The New York herald., 1921-02-19
NEW MEXICAN OIL
RULES ENDANGER
AMERICAN FIRMS
Order by Obregon Alleged
to Show Purpose of FreeZ-
inc Out United States.
TO BRITISH ADVANTAGE
Prevents Drilling Wells
Unless Properties Have
Been Manifested.
IS HELD CONFISCAT0RY
Only Large Company Obeying
Is English, Thus Getting
Trade Advantage.
TO BRITISH ADVANTAGE
IS HELD CONFISCAT0RY
Speoiol DeSpotcb to THE Nuw York HesLD.
New York Herald Bureau.
Washington, ID. c., Feb. 1S.

Speciol DeSpotch to THE Nuw YORK HHsLD.
New York Herald Bureau.
Washington, ID. c., Feb. IL.
Disturbing information was received
here to-day by the state Department
concerning action by President Obre-
son of Mexico which threatens the in
dustrial oil supply OF. the United States
for 1921 and the oil supply for the
shipping Board and other American
naval requirements for the same year.
The order issued by Obregon also
indicates a clear working arrangement
between British concerns and the
Mexican Government for the purpose
OF Freezing" American oil interests
out of Mexico. The order in question
is addressed to the Secretary Of the
Department of Industry, Commerce
and Labor prohibiting the granting of
permits to drill oil unless the COM
panies drilling have manifested their
properties"
The process of "manifesting' enters
into the pending dispute between oil
companies and the Government of Mex
leo and is one OF the requirements
against which the State Department has
protested as being confiscatory in char
acter.
In order to manifest" its property
il is necessary for an oil company TO
make certain admissions concerning title.
SC. which are regarded by the United
States Government as prejudgng the
case of the oil company as against the
confiscatory claims of the Mexican Gov
crnment. Certain other provisions
against which the State Department has
protested have also been required.
The only large oil company in Mex
leo which has manifested" it's property
IS the Aguilar (the Eagle Oil Company
owned by the Cowdray interests the
big British concern. Tnasmuch as Presi-
dent Obregon's order DOES not require
the fulfilment of any other conditions
1t put the Aguilar company in the po-
sition OF being the only company which
can drill new wells.
owing to the condition OF oil proper
ties in Mexico II has been necessary for
the American concerns to do a great
deal OF intensive work in drilling new
properties or in reopening old ones which
had been neglected in order to fulfil the
requirements of American industrial and
naval consumers. Action by President
Obreeon is regarded here as not only
endsngering the oil supply of the United
States but as precipltatlng a crisis in
the relations Of the United States with
the Mexican Government with the fur
ther embarrassment of involving Brit
ish interests.
Action by the British company, which
seems on the point Of cornering the oil
supply OF Mexico through its preferred
treatment. is regarded as part of the
far reaching campaign which the British
Government and British commercial in
terests are making TO corner the oil
supply OF the world so far as II can
be done with special reference to Grip
pling competing merchant marines.
Under the Carranza regime American
oil companies had a gentlemen's agree
ment with Carranza by which IL was
made possible for them 10 drill for oil
without fulfilment Of the requirement
Of ''manifesting This was with the
understanding that the arrangement
would not prejudge the rights OF either
the oil companies or OF the Mexican Gov
ernment In the final settlement Of titles.