Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1928-01-21
TEXAS DAILY PRESS LEAGUE
Foreign Advertising Representatives


Mexico has been quick 20 avail herself of the i'm
proved relations with the United States. Her finan-
cial situation is far from good, and she has turned to
Ambassador Morrow for advice and assistance. What
Mr.. Morrow can do to untangle Mexican finances is
-problematicai, an will require all the skill of that ex-
perienced financier.
According to the official report of the Mexican
government the income this year viii be approximate
ly 100000, 900 pesos. The cost of government will abb
serb 2so.0O0,00O pesos. and in addition she owes ap-
proximately 177,O00,O 900 pesos on her foreign obiga-
tions. This does not include the various undetermined
obligations which will aggregate a considerable sum.
Mexico has turned 70 Ambassador Morrow with
the request that he ten1er his advice on how to make
up this deficit, which will be 100000, 900 pesos at least.
Mexico does not know where she will secure the
loan, if it could be floated, would carry a heavy inter-
est rate, and would only add TO the country's finan-
cial burden. If Mr.. Morrow can. through the wizardry
of finance, solve the problem without a foreign loan,
Mexico would soon be upon a sound foundation finan-
cially and economically.
The oil controversy sinks into insignificance
compared to the larger issue OF economic and financial
reconstruction in Mexico. A contributing factor to the
financial situation has been the decline in oil produc-
tion, due to the policy the government has maintained
toward the producers. The oil output, once the main
stay Of government finances, has fallen to hardly more
than half its previous volume, and the yield from oil
taxes has been lowered in proportion. Agriculture and
industry carry very little of the burden, and in fact
would be unable to carry more than has already been
imposed. Oil and other minerals are practically the
only sources of government revenue. and the decline
in this field is the direct result of efforts to make
them bear an unjust burden.
A new policy toward the oil and mineral industry
will help some, and Ambassador Morrow will doubtless
include this in any recommendation he may tender.
However, the present state of the world oil market, a
market which Mexican oil at one time virtually con-
troiled, is not such as will tend TO rapid rehabilita-
tion of the industry, and immediate revenues from
that source cannot be hoped for.
Present conditions in Mexico indicate there is
substantial ground for hope that a decade of SQUAD
bling with that country over various minor issues will
give place to a new era of close cooperation between
Mexico and the United States. Mexican financial
leaders are now fully cognizant of the effects of the
governmental policies in regard to oil and other min
erals. They realize that the attitude taken by the
Mexican government is largely responsible for the
present financial embarrassment Of that government,
and they will be. practically a unit in opposing any
similar move in the future. Political as well as fl
nancial leaders in that country place great confidence
in Ambassador Morrow's ability to solve the problem,
and assert that il he succeeds, Mexico will hereafter
show better judgment in dealing with those industries
which are virtually her only source Of governmental
revenue.