Evening star., 1926-11-25
BACKGROUND OF EVENTS
BY PAUL Y. COLLINS.

A billion dollars of American invest
the Mexican law which demands that
the foreign owners of stocks in any
corporation must sell all such stock
in excess of 40 per cent of the COM
foreign corporations which own in
fee the mining or oil rights of prop
erty In Mexico must before next
January l exchange that ownership
years, and the owners must waive
all right of protection by their native
governments against the Mexican
government. The Mexican govern
ment claims that that law is not
violation of international rights, that
it is not retroactive against investors
who bought fee simple ownership of
property prior to the new constitu-
ton of 1917 and the new law, or IT,
as even the Mexican Supreme Court
decides, it is retroactive and there
fore cOnf1ScatOry, no OtfenSe should
be taken by any foreign government
until some concrete case develops in
which the owner is wronged.
On October 80, Secretary of State
Kellogg wrote to Mexico a brief re-
statement of our claim, so concise
that it amounted to an ultimatum,
and since Mexico has made no fur
ther rejoinder it Is almost certain
that diplomatic relations VIII De
severed soon.
INV Government has not failed to
appreciate the gravity of the situa-
ton arising from the position taken
by the Mexican government" wrote
Secretary Kellogg. with respect to
the negotiations of 1923. AS my pre-
vious communications to Your Excel
lency have amply explained. the
declarations of the Mexican and
American commissioners on that
occasion, subsequently ratified by the
exchange Of notes between the two
governments, constituted, in the view
of nv Government. solemn and bind
ing understandings which formed the
basis and moving consideration for
the recognition of the Mexican gov
ernment by this Government
X y X X
President Gales bubbles that that
is not so, because that agreement was
not put in the form of a treaty. He
does not deny the facts as to the
agreement. However, since the agree
ment was the basis Of United States
recognition Of President Gales gov
ernment, and no power can limit our
withdrawal Of any recognition. the
significant part of the present ultt-
matum is that Secretary Kellogg, as
the mouthpiece Of President Coolidge's
administration, will act upon our in
depreciation, and not Mexico's Of the
inviolability of a pledge whether In
the form Of treaty or a conference
commission.
mo retreat by President Gales is
expected, and without it our recogni-
ton is almost certain to be with
drawn. When that happens, our con-
cession permitting the Mexican gov
ernment to import arms and ammunt-
ton across our border will cease.
although it does not follow that the
ports will then be open to opponents
against Gales to so import arms. 1t
is said to be more likely that all such
traffic will cease, so far as the United
States is concerned.
1t has been rumored that American
mining and oil companies have al
ready armed their own employees to
resist bandits who attack their hold
ings in force. The State Department
denies any knowledge of such action,
however.
X y
Mexico, under President Gales, is
given over to communistic influence
to such an extent that 1t appears TO
be following the experience of Soviet
Russia. with blinded eyes. The prole-
tariat has taken absolute possession
of affairs and property, and owners
have not been compensated. It is al
legged that. behind the opposition to
Gales and his communistic trend, are
not only the Catholic Church-CalleS
himself is a Catholic-but all the op-
portunist politicians and the Porf1rio
Diaz artstocrats, who veil their own