Evening star., 1938-01-02

Mertco. entering Office three Years
ago, projected str-yedr plan for
socidltsdtton of industry Dhtch has
been carried torward against for
etgn capital, chiefly American and
British, long INFESTED in country.
Naturalization OF petroleum indus
try threatened in more to raise
Udges OF DOrkers. Labor board
recently ordered increases in pau
Uhich oil companies insisted they
could not meet.
BY the Associated Press.
MEXICO CITY, Jan. IA show
down in the bitter wage dispute be-
tween the Mexican government and
the 1000 900 oil industry was post
poned today when the Labor Board
suspended its order increasing the
wages Of $4,000 oil workers.
The suspension was ordered pending
q ruling by the Supreme Court on an
appeal taken by the Is American and
British companies concerned from an
arbitration boards wage award Of De-
cember 18.
Gustavo Corona, chairman of the
Labor Board, said conditions Of the
suspension were that the companies
must post a bond Of several mil
lion pesos and guarantee workers
rights
In effect the companies have chal-
lenged President Lazaro Cardenas to
compel them to pay the wage in
creases, which were to have gone into
effect last midnight.
Compromise Is Predicted.
Many oil men predicted a compro-
mise settlement would be reached.
One said that the governments "rea-
sonableness in the face Of a difhcult
situation gives us the opportunity for
re-examining the whole situation"
The whole knotty question Of Mex
ico's relations with foreign capital and
President Cardenas' program Of the
"Mexicanization Of industry" were in
volved. United States Ambassador
Josephus Daniels and British Minister
Owen St. Clair OMalley were keeping
in close touch with the situation.
An oil strike or shutdown would
mean appreciable losses of state rev.
enues, Of which II per cent comes
from the oil industry.
The Arbitration Board granted In
creases estimated by the companies at
$4,000 al. 1000, 900 pesos) annually
against their offer, made before a r.
day strike last May and June. to in
crease wages not more than about half
that amount.
The board said the increase would
amount to only s7,2o0,oo0 (2e,0o0, 900
pesos) a year.
Appealed to Supreme Court
The companies appealed to the su.
preme Court and notified their workers
that the old wage scale would be con-
tinued. Corona granted the com.
panies' request to await the court
decision
Informed persons believed that while
the court considers the case President
Cardenas might make one Of three
moves: A compromise on wages with
the companies: concessions to the
companie in leases or oil prices to
offset higher wages: placing Of govern
ment agents in the oil companies
nagements-perhaps temporarily
expropriating their properties-in or.
der to guarantee the wage benefits.
Most foreign oil men believed the
state would fail II 1t should attempt
to run the industry and produce the
same government revenues from 1t
as in the past.
Virtually all sources agreed that
such intervention would bring the
issue to the stage of diplomatic rep
resentations.
Suarez Negotiates in Z. s.
Some observers connected prevailing
rumors of compromise with negotia-
tions of Finance Minister Eduardo r.
Suarez in Washington. where he re-
ceived the United States promise to
help maintain the pesos exchange
rate of $50 to the dollar.
Suarez. they said. must have traded
something for that pledge, and the
likeliest trading stock" was consid-
cred to be an assurance Of better treat
ment Of United States capital In
Mexico.
There was one other dimculty. The
Labor Board ruled the companies must
pay wages Of 1,293,0 900 pesos (s357,-
0o0) for the period Of the 12-day
strike. Corona said rs per cent Of
that amount must be paid by Tuesday,
or he would requisition sufficient com.
pany property to cover it.