The New York herald., 1921-06-09
MEXICAN REPORTS
DISTURB OIL MEN
Producers Inclined to Doubt
Republics Intention TO Tax
Exports of Petroleum.
DECLARED TO BE UNWISE
Would Make Total Tax on
Mexican Oil Operations 30
Cents a Barrel.

Big oil producing interests in New
York were greatly disturbed yesterday
although inclined TO doubt. in the abb
sence of further information. the report
that the Mexican Government had by
decree established an export tax on oil
which practically would double the pres
ent ad valorem tax and make an almost
prohibitive total The report was that
the decree creating the export tax had
been promulgated by the Government
and that its operation would make the
total tax on Mexican oil operations
about 80 cents a barrel, which is con.
siderably more than 80 per cent OF pres
ent returns. The proceeds OF the new
tax, il was said, would be applied to the
liquidation of Mexico's foreign oblga-
tons
Herbert G. Wylie, general manager of
the Z. l. Doheny properties in Mexico.
admitted that he had received advices
from his represents tives In Mexico that
the decree had been promul ga ted, but he
was Inclined to believe that some mis-
Jake nau Deen nldue, particularly III NieW
of Mexico's present efforts to obtain
recognition from this country. To es-
tablish tax by decree In that manner,
he said. would be in direct violation of
the constitution of Mexico. under which
only Congress may make levies Of that
| sort and he expressed the opinion that
Mexico would not at this time do some
thing of that nature which might put an
end once and for all to the recognition
negotiations.
Mr.. Wylie admitted, however. that If
such tax were put on oil exports and
permitted to stand. It might mean the
absolute closing down Of oil operations
| in Mexico. He is conducting further
! Investigations to determine exactly what
has occurred In that country with refer
ence to the reported tax.
The National Association for the Pro-
lection of American Rights in Mexico.
which is made UP of some of the largest
industrial and banking institutions In
the country doing business in Mexico,
issued yesterday statement commend
ing the attitude taken by Secretary
Hughes In his note to the Obreson Gov
eminent regarding recognition by this
country. The Mexican Government hesi-
tated between radicalism and conserva-
tisin. the statement declared adding that
lllOSe WHO uTSeu uucOliulliofldl reCoS
strengthened the radicals by making
them think their propaganda In this
country had misled everyone and left
Secretary Hughes without the support
or the understanding of the American
public.
The statement condemned the ell con-
sidered resolutions Of some twenty
American Chambers OF Commerce and
four or five State Legislatures which
have asked for the immediate and un-
| conditional recognition Of the Obregon
| Government" It declares that the sup
| porters Of these resolutions are not IA
miiiar with the Mexican situation and
| do not understand the points at issue.
! It adds further that It would be simple
! matter and entirely just for the Amer
| lean Government TO state curtly that 1t
| cannot recognize any Government which
sets the seal Of official approval upon
! confiscaton of private property legally
| and honestly acquired in manner ia
miiiar to and recognized by every civil
lied Government on earth
1.-THE position of Secretary Hughes Is
not different from that OF Secretaries
Lansing and Colby" the statement goes
on. 'The only change In the situation
is that Secretary Hughes finds himself
confronted with Mexican crisis, for the
issue In Mexico to-day Is whether or not
any Government can survive the rising
tide of Bolshevism. We mean precisely
Bolshcvism, as Lenine and Trotsky
would mean II, for II comes from Rus
sia, and 1t is Of the same breed. In this
crisis there is nothing to arbitrate.'