The New York herald., 1921-06-10
MEXICO MAY DRIVE
OUT OIL CONCERNS
Producers Assert Proposed Tax
Would Add 60 to 85 P. c. to
Petroleum Value.

Oil men in New York are still very
much disturbed by and at loss to un-
derstand the action of the Obregon Gov
ernment in Mexico in decreeing an in
crease in taxes on oil produced there of
more than 100 per cent. Figures OBJ
tanned from representatives of leading
oil producers yesterday indicated that
the tax II permitted to stand may range
all the way from 60 to S5 per cent OF
the actual value Of the oil This is con-
sidered confiscatory and If insisted on. it
was said, would make necessary for
the oil companies to stop operations in
Maxico.
Figures compiled yesterday by the
Petroleum in Mexico indicate that the
tax, If applied, will amount to as much
as s5 per cent of the value at Mexican
ports Of light crude OIL In the case of
that particular product the total tax
will amount to 39 cents, against an ac-
tual price for the oil at Mexican ports
OF 40 cents q barrel. American coin.
Other taxes under the new decree will
be approximately as follows: Heavy
crude, 23 cents q barrel heavy fuel, 81
cents barrel; light fuel. 81 cents a
barrel; refined gasolene, cents a bar
rel; crude gasolene, cents barrel,
and refined kerosene, less than cent
barrel and crude kerosene about a cent
q barrel This, 1t was said. is the fifth
tax increase this year. The decree.
while promulgated, has not been pub
llshed in the official legal bulletin and
consequently has not become law.
Mexican oil men here are hoping that
before 1t is enacted into law the decree
may be modified, as has been the case
before when grossly inequitable charges
have been made.
Edward L. Doheny, head of the Mex
lean Petroleum Company and the Pan
American Petroleum and Transport
Company, two large producers OF petro-
leum In Mexico. had the following to
say yesterday with respect to the new
tax:
"The total of the proposed export
taxes on Mexican crude amounts to
about 80 cents a barrel. The export
tax Is 1916 cents. If the new decree
goes into effect this will be increased
to about 80 cents a barrel. The present
tax is over 80 per cent. and the pro-
posed additional tax will increase this
to 60 per cent. of the selling price Of
OIL
while the tax decree in effect has
been legalized by act Of Congress. the
valuations placed on the oil on which
taxes are calculated are Illegal because
they make the theoretical 10 per cent
tax an actual 80 per cent tax. The
proposed decree. IL issued by the Presi-
dent and not passed by Congress. is
unconstitution Both taxes are so ex-
cessive as to be confiscatory.
"This Is no new situation. A similar
situation developed in April. 1920. before
the death Of Carranza, when valuations
were imposed, raising taxes to the same
amount as the combined taxes proposed
now. At that time the companies pro-
tested against this injustice, and their
protest was granted. Again In Novem-
! Der, 1920 a similar increase was de-
cided on by means Of a decree. Proper
protests were again made, and the pro-
| posed increase was abandoned. Again
| in February. 1921. q similar increase
was proposed. protested and abandoned.
"rhe companies are confident that a
showing of the irregularity of the decree
and of its confiscatory nature will result
in It's being revoked or declared inopera-
tive as on the three former occasions"