Douglas daily dispatch., 1927-10-12
WASRilNGTON1H
LETTER.
)5aLE 81

WASHINGTON = When the Hon
Dwight Morrow arrives in Mexico as
our new ambassador the chief mat
tiers which will occupy his interest
will be:
1.-The Mexican oil land laws.
2-The payment Of interest on Mex
lean bonds held in this country and
abroad
3-The Mexican presidential cleo
ton.
All these problems are more or less
tied up with each other and are OF
considerable interest to the people Of
the United States.
The petroleum laws question, which
caused a nasty exchange of notes
and considerable talk of intervention
less than a year ago, has subsidized
to a diplomatic deadlock between
the two governments which is still
shot with possibilities
! If the Mexican supreme court de-
cides the laws are not constitutional,
the issue will be dead. But if it de-
cides the other way and the Gales
government Seizes American property,
it is still likely that the arms en-
barge will be lifted and that Mexico
will, by design, be plunged into
chaos The embargo remains this
countrys big club over Mexico.
The situation has been saved to
date by President Gales various con-
ceSsions and his failure to confiscate
any oil lands. Unless he commits
some unexpected overt act it may be
that, with Morrow in Mexico City,
the situation eventually will be solved
by arbitration as recommended so
Overwhelmingly by the United States
senate.
Incidentally, the big reason that
this government feels it can't allow
Mexico to enforce her oil land laws
is that a precedent would be estab-
liShed> for northern countries of South
America where we have huge oil
stakes. BY providing for the 50-year
concessions, the Gales government
has demonstrated that it doesn't in
tend to prevent our companies from
getting all the oil out.
The reader may recall one. or two
reports within the last year concern
ing the doubtful ability of Mexico to
make, her annual bond interest pay
ment, amounting to nearly $15,0O0,-
600. These reports we're not exag-
gerated.
Her internal religious troubles and
her row with foreign oil interests
have not left Mexico in excellent
financial condition. The oil corhpa-
MES have drastically curtailed Mexi-
can production, putting a crimp in
tax collections. This curtailment was
due either to a desire to retaliate
against Mexico or to the over-produc-
ton in this country-or both.
Mexico came through last year with
her first payment since the fall OF
Porfirio Diaz She has continued
just about to make the grade. The
Pani-Lamont agre e m emf calls for
monthly $5OOO00 payments, the bal
ance to be made up at the end OF
the year. President Gales, incident
ally, allowed only eight per cent for
oil taxes in his 1927 budget and on
his budget for next year has failed
to enter any credit for oil taxes
whatever!
Morrow's presence in Mexico City
will be so much added insurance for
continued payments. If Mexico falls
down on them, her credit is virtually
ruined throughout the world. Nor
row undoubtedly will be interested in
keeping Mexico in position where
she can pay and his financial mind
will also consider the possibilities for
eventual repayment of the bonds
100000 principal.
The Morrow appointment also seems
to improve Aware Obregon'S chances
for the presidency. In the first
place, Obregon would surely maintain
stronger government than any other
candidate now in the field. Secondly,
Obregon was the Mexican sponsor OF
the Payne-Warren and Pani-Lamont
agreements.
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