Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1921-06-19
'TreatyWith
Mexico at
Standstill.
Wisdom of U. S. Position on
Amity and Commerce Con.
firmed by Expressed At.
titude of Neighbor.
Deadlock May Continue
By ARTHUR SEARS HENN1NG.

BY ARTHUR SEARS HENNING.
Washington, d. c., June l8.-Ne-
0otiations between the United States
and Mexico on the basis of the pro-
posed treaty OF amity and COM
merce submitted by direction of Sec
rctary Of State Hughes cannot be
regarded as having reached a salts
factory stage and are virtually at a
standstill as result of President
Obregon's disinclination to enter
upon such treaty with the United
States government.
/. There is no indication that the viz
tual deadlock that has existed since
General Obregon replied TO the
American proposal OF such a treaty
is about to be broken. The door to
an eventual settlement and accom-
Tmodation has not been entirely
closed, but the status of the negotia-
tions is not such as to give encour-
agement to officials familiar with
the difficulties and intricacries of the
situation.
Wisdom of United States Stand.
Editorial comment in Mexico City
newspapers and speeches delivered
i'll the Mexican Chamber of Deputies
since the negotiations between
George T. Summerlin, the American
charge d'affaires, and General Obre-
gon began confirms the wisdom of
the American government stand,
according to the view taken among
officials in Washington. These
speeches and articles. it was en-
phasized. show that there are dis
tinct differences of opinion existing
among Mexican leaders themselves
as to whether Article d of the Mex
lean constitution of 1917 should be
interpreted as having a retroactive
effect.
There is also difference of opinion
among Mexican leaders on the ques-
tion whether the Mexican congress
or President Obregon has the au-
thority to put the provisions of the
Carranza constitution into effect.
When the Mexican leaders them
selves seem divided over the manner
in which the property rights OF
Americans and other foreigners in
Mexico are to be treated under the
constitution OF 1917, it was asserted
today. the United States government
should not be criticised for insisting
u6rpon having clear-cut statement OF
{pinding character from Mexico as to
What It intends to do; whether il in
tends to safeguard or to corfiscate
validly acquired American property
rights in Mexico, before recognition
is recorded.
Announcement Was Reply.
It became known for the first time
today that the announcement Of the
American governments position as
made public by the State department
on June 7 by Secretary Hughes was
in reality the reply of the United
States government to the communi-
cation from General Obregon which
reached Washington in June: 4
This statement has been delivered
to the Mexican government by the
American charge and constitutes the.
only reply of the United States to
the Obregon communication OF June
3. Since the delivery of the Hughes
statement to General Obregon the
only communication between the two
governments has been informal re-
ports by Mr.. Sumnlerlin OF conversa-
tons with Alberto PAM. the Mexican
minister of foreign affairs. Il
The Mexican embassy today issued
. statement in which it sought to ex-
plain the reasons taken into consider
alton by the Mexican government in
Increasing the tax on Mexican
petroleum. The cmbassy's statement
saws these reasons" are as follows:
81. That low cost of production
causes disturbances in the oil mar
kets of the world. injuring the ma
rional petroleum industry and bring
ing about an increase in the customs
tariffs of other countries OF Mexican
petroleum.
"2. The excess OF production is
against a we'll regulated exploitation
Of this national resource.
X IS, The necessity to protect the
country's fuel reserve in order to
safeguard the development OF Mexi-
can industries.
"a. The necessity of regulating the
cost OF production in relation with !
the average cost OF production in
other countries.
Profits Must Be Taxed.
IS. That largest profits obtained
by the petroleum companies must be !
taxed in order that said companies |
may fairly cintribute to Mexico's ex-
penditures.
"6. The Mexican government has
directed that the product of the new
tax be applied to the resumption OF
the service OF the external public debt
OF Mexico.
"7. The new tariff increases the
Ia sn a proportion less than 25 per
y Iof that now being collected.
AS in taxing the expectation
CMexican petroleum, the oil pro.
duced in the United States is placed
in a position to compete with the
imported product: the new Mexican
tax is considered favorable to the
American oil industry"