Evening star., 1926-11-28
u. S. BUSINESS UNDERSTANDING
STRAINED MEXICAN RELATIONS
Diplomatic Situation Due to Jeopardy in Which
Money Was Placed, and Break Would Not
Entirely Wipe Out Investment.

Business WithstoOd very we'll the
lations between the United States and
Mexico.
/ Perhaps revelation Of the somewhat
acute status Of diplomatic affairs be-
tween the two nations was not unlike
hearing that a friend who had been
an invalid for many months was
weaker.
American investments in Mexico ag-
gregating more than billion dollars
and, through corporation stock owner
ship, affecting directly probably a mil
lion citizens of this country, would
be placed in more or less jeopardy
were diplomatic relations between the
republics severed. But it is exactly
because q large part of these same
investments already are threatened
that the present situation has arisen.
Mexicos 100000 inhabitants-
about equally the population of Penn
sylvania and Ohio combined-are scat.
tered over it's $50. 900 square miles OF
area, a territory almost nine times
as great as that OF these two States.
Seventy per cent of it's population
is rural 1t is a, country of extremes;
wealth confronts haggard poverty; re-
nowned universities are contrasted
with a high percentage of illiteracy.
Outside Money Poured In.
Under such circumstances. 1t is not
surprising that much of the develop
ment of the great wealth of natural
resources of Mexico has been the re-
suit Of foreign capital While Amerl-
can money has heen poured into the
Southern republic. especially in the
last 25 years British, Dutch and Ger
man investors also have large stake
there.
Mexico welcomed foreign invest
ments, which gave opportunities Tor
the labor of the country, and pro-
duced a heavy revenue from taxation
while at the same time setting an
example for her own monied people.
The present strained relations be-
! tween the United States and the sister
republic are not due to a desire by
| the United States to protect any OF lts
nationals who are exploiting Mexico
illegally. but are the result of what
! the State Department considers failure
to execute an agreement reached by
mixed commission in 1928 and which
led to recognition Of the government
! Of President Obregon. Under this
agreement it was made plain that the
provisions Of article q Of the Mexican
constitution Of 1917, concerning prop
| erty rights for foreigners in Mexico.
! should not be considered retroactive,
! and the United States reserved all OF
its rights under international law with
respect to its own nationals.
! Article - of MeXico's new constitu-
| ton declares that the title to mineral
and other deposits is vested" in the
people of that nation, and that only
| Mexicans and Mexican corporations
/ have the right to concessions to de-
velop oil. The article stipulateS that
! a foreigner. may secure such a right
only if he renounces the privilege of
appealing to his government for re
dress through diplomatic channels.
| Foreign corporations have felt that
the intent of this part of the constitu-
ton and its Interpretation by the Mex
! lean authorities amounted to confisca-
| ton.
Resources Scarcely Scratched.
Mexico has a wealth of minerals
which have been mined for centuries
by friend and foe. with her resources
| still being scarcely scratched. She
produces now about one-third of all
! the silver in the world. About $780,,
! 900 900 of American capital is invested
! in mining alone in the Southern re-
public. While oil production at pres
| ent is the center of attention, appar-
entity because oil intrigueS the public
! IMAGINATION more than ore, il is only
/ in comparatively recent years that
Mexico has been a heavy producer
of petroleum. For the last five years