The New York herald., 1921-02-06
Text of Article XVIII.

tanned in tracts claimed by Americans.
Text of Article XXvII.
Article XXVII. says in part
THE ownership of lands and waters
comprised within the limits of the ma
tional territory Is vested originally in
the nation, which has had, and has, the
right to transmit title thereof to private
persons, thereby constituting. private
property.
"In the nation is vested direct owner
ship of all minerals or substances. which
in veins, layers. masses, or beds con-
stitute deposits whose nature is diff
ferent from the components of the land.
such as minerals from which metals
and metaloids used for Industrial pur-
poses are extracted; beds of precious
stones. rock salt and salt lakes formed
directly by marine waters. products de-
rived from the decomposition of rocks,
when their exploitation requires under
ground work. phosphates which may
be used for fertilizers: solid mineral
fuels, petroleum and all hydrocarbons
solid. liquid or gaseous.
"Only Mexicans by birth or naturali-
zation and Mexican companies have the
right to acquire ownership in lands,
waters and their appurtenances, or to
obtain concessions to develop mines,
waters or mineral fuels in the Republic
of Mexico. The nation may grant the
same right to foreigners, provided they
agree before the Department of For
eign Affairs to be considered Mexicans
in respect to such property and accord
ingly not to invoke the protection of
their Governments in respect to the
same. under penalty. in case Of breach.
90 Nf txr
so acquired. E.
"All contracts and concessions made
by former Governments from and after
the year 1876, which shall have re-
suited In the monopoly of lands, waters
and natural resources Of the nation by
a single individual or corporation, are
declared subject to revision, and the
Executive is authorized to declare those
null and void which seriously prejudice
the public interest"
The American Position.
The American oil operators contended
that their lands were acquired at a
period in the history of Mexico when
title to subsoil properties accompanied
the purchase of surface rights, and they
argued that to put Article XXVII. in
force with regard to their holding was
to make the law retroactive and confis-
catory. They refused to recognize the
Carranza principle or to pay additional
sums for subsoil concessions even If II
had been permitted
In February. 1918. President Car
rama. acting under authority conferred
by the Mexican Congress, issued a de-
cree designed to carry out the provisions
of that article of the constitution. The
decree was subsequently amended and
revised by other decrees.
The United States Government in its
note of April 2, 1918. pointed out to
the Mexican Government its objection to
that procedure. and the American oil
companies operating in Mexico resorted
to the Mexican courts and asked for a
writ of injunction against the enforce
ment of the decrees on the ground that
they constituted seizure OF their property
without due process of law.
Perhaps the most Objectionable OF the
DEGREES. from the American oil mans
point of view, were those pertaining to
the so-called federal zone." and to the
"denouncement" system. Under an old
Mexican law, the beds OF all lakes, rivers
and navigable streams were declared to
be the property OF the national govern
ment and a strip ten meters wide on
either shore was reserved for use as a
tow path.
Extension by Carranxa.
Carranza made this law apply to
gullies and arroyos, dry the greater
part OF the year, and soon rich hold
ings OF Americans were honeycombed
with federal zones" The Government
then proceeded to grant concessions TO
Mexicans and others to drill for oil on
these federal zones" Under the de
nouncement" system, American land
holders were required to "denounce"
their title to mineral rights before a
date fixed by decree, and upon their
failure to do so. the land was subject
to jumping" by outsiders.
AS all American oil operators In
Mexico hold their lands not by con-
cession," but by outright purchase or
lease. they have consistently opposed
the Carranza theory as confiscatory'
and they refused to obey the "denounce-
ment" order. with the result that much
OF their property is said 20 have been
Jumped"
with the death Of Caranza and the
selection OF Adolfo de la Huerta as
Provisional President. II was thought
that the difficulties growing out OF
On r-ranza's DEGREES had been ended but
on the day before he left office. De Ia
Huerta is reported to have made up
for lost time"
since President Obregon came into
nower there have been a few complaints
from American oil men. but on nothing
like the previous scale. An energetic
nro,eEt was lodged with the state De-
pnrtment recently by the American
Metals Company. however. through It's
attorney. Frank l.. Polk. former Under
secretary OF state. when the Mexican
supreme Court decided adversely TO the
American interests In the case or the
Naica mining properties which had been
in litigation for some years. According
To the American claimants, the Judges
by n gross perversion of Justice handed
over the property 10 Mexican claimants.
The state Department ordered an In
vestigation OF facts but no reply has
been received as yet. IL Is reported,
however, that movement has been
started in the Mexican Chamber Of
Deputies 10 bring about the impeach-
ment OF the six Supreme Court judges
who rendered the decision.
on top OF that disturbing episode there
comes a report that President Obregon
has announced that the Mexican Govern
ment should not be liable for damages
incident TO the various revolutions The
general was quoted MS saying however,
that inasmuch as Carranza had 'set
contrary example" by assuming respon-
sibility for damages incurred by the
Carranza federal troops. "a law should