The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-08-23
CONFERENCE ON OIL
With MEXICO SOON
Heads of American Companies
and Mexican Officials to
Discuss Differences.
EXPORT TAX DECREE CRUX
Wall Street Regards Plan as
Constructive and Expects
Amicable Arrangement.

Walter Clark Teagle. president or
the Standard OIL Company OF New
Jersey. yesterday announced that
committee composed Of Ave OF the
leading men In the oil industry VIII
leave soon for Mexico, where they VIII
discuss and adjust. II possible, their
controversies with the Mexican Gov
eminent over the tax decree promul-
gated recently by President Obregon.
The statement issued by Mr.. Teagle
was as follows:
THE Government officials Of Mexico
have indicated a willingness to confer
with representatives Of the oil compa-
MES with a view of discussing and. II
possible. adjusting the differences grow
ing out Of recent tax DEGREES. and the
oil companies have appointed commit
on this mission. The committee is COM
posed Of w. c. Teagle. president Stand
ard OH Company OF New Jersey; Ed
ward L. Doheny. president Mexican Pc
troleum Company: J. w. Van Dyke,
president Atlantic Refining Company !;
H. F. Sinclair. chairman. Sinclair Con-
solidated OIL Corporation; Amos l.
Beatty. president Texas Company"
That announcement came as COM
plete surprise to the financial district
and was regarded as one OF the most
constructive pieces OF news on the Mexi-
can oil situation which has come to
light In considerable time. Special sig
nificance was attached to the statement
/ that the Government officials Of Mexico
have indicated n willingness to confer"
| and to the personnel of the committee
named to represent the American In
terests. 1t was pointed out that such
| men as those composing the committee
scarcely would give their time to such q
Journey unless they had definite assur-
ance from at least semi-offlcial sources
| that they would be able to effect a
definite settlement with Mexican officials
which would be eminently satisfactory to
American interests.
The fact that the Mexican Govern
ment had expressed n willingness to en-
ter into such negotiations was taken to
indicate that the Government below the
titude was bound to react on Its own
finances, and that. having seen the re-
suits OF oil operations In that country
stree July /, when the controversial tax
DEGREES became effective, II was willing
to confer with the American producers
with the view Of reviving the industry
In Mexico.
The chief bone Of contention between
the American producers OF oil In Mexico
and the Mexican Government Is the tax
decree made by President Obregon sew
eral weeks ago and assessing an export
tax of 26 per cent. against all oil
shipped out OF Mexico. That tax was
imposed In addition to the ad valorem
taxes In effect. The result OF the tax
was the almost complete shutdown OF
American owned Mexican oil properties.
| as It brought the cost of producing petro-
leum by the American companies up to a
figure which they called confscatory
This new tax, according to statements
Of the American producers. brought the
total taxation on oil to as high as IS per
| cent. Of its value in certain cases.
When the decree became effective on
July l practically all American produc-
ers Immediately stopped shipments Of oil
from Mexico except such an were neces-
sary to meet contract requirements. The
effect OF that action was to reduce Mex
ico's revenue to large degree, and 1t IL
believed that that loss Of revenue, which
| has continued since the decree was ef-
| fective. is largely responsible for her
| willingness to discuss the situation with
| the American interests In an effort to
bring about revival of the industry.