Evening star., 1938-03-19
U. S. Companies to Use All
Legal Means to Fight
appropriation.
BRIEFS WILL BE SENT
TO STATE Department
Standard Oil Head Says Interests
Won't Idly Watch $3.50, 900, 900
Capital Confscated.
BACKGROUND

p""teS HuUe Oeen engaged IN otter
controversy with Mertcan labor
ouer demands for increased uaoes
and social Improvements. Supreme
Court recently upheld award OF
$7.200.00O increase in conversation
tor Uorkers, but enforcement has
been delayed pending possible CON-
promise
By the Associated Press.
NEW YORK. March l9.-The
United States Oil companies affected
by the Mexican threat Of appropriation
said today through spokesman they
would use every legal means" to re-
slst the action Of the Mexican gov
ernment
Thls explanation was given in con-
nection with statement from w. S.
Parish, president of the Standard Oil
Co. of New Jersey, in which he said.
We are not disposed to stand idly
by and see that capital (s45O 900 ,OoO)
conflscated." The sum is the foreign
investment in the Mexican oil in
dustry.
the United States oil companies af-
fected with submit briefs to Secretary
OF State Cordell Hull early next week,
IL was said, but this action is not
expected to be speedy enough to fore
stall the formal appropriation order
scheduled for Monday.
Hopes to Resume Operations.
Tn, -, -
cluded:
I sincerely hope that before the
economic consequences of this begin
10 hurt the Mexican nation the au-
thorities will realize the injustice of
their position and permit us to restore
normal activities on the terms offered
which were fair to all interests con-
cerned"
BY the phrase terms offered" the
spokesman said was meant a previous
oher, now being reafirmed. by which
the United States and British oil
companies would agree to pay a sum
TOR wage increases equivalent to
23,O0O,0o0 pesos a year. three-year
average net annual earnings of the
companies IN Mexico. providing objec-
tionable administrative features of the
Mexican order would be eliminated.
The estimated cost Of the increases
ordered by the Mexican Supreme
Court were given by Mr.. Parish as
4l,0O0.OO0 pesos per annum-l8,000, 900
more than the compromise offer.
Denies Withdrawal Planned.
Mr. Parish denied foreign oil COM
panies have been awaiting an oppor-
tunity to withdraw from Mexican busi-
ness
I'VE are ready to undertake further
development Of Mexico's oil resources
as soon as We have reasonable assur-
ance that the required investments will
be accorded freedom from the Grip
pling governmental restrictions and
labor troubles of the past several
years.
The administrator who has taken
over the properties can no more op-
crate them at profit under the ex-
treme conditions laid down for the
companies than could the owners.
Nor can he successfully surrender
administrative control of operations to
workmen inexperienced in business
management This is recognized in
Mexico. The Mexican press reports
that the oil workers now in possession
have decided as first step to reduce
the personnel by so per cent and to
withhold Is per cent of the wages of
those retained to indemnify their COM
rades."
Bankruptcy Feared.
It was said in the oil industry that
appropriation might mean bankruptcy
for the IA American and British
owned companies or might result m
outright conf1scation, which would
compel the companies to sell out to
the Mexican government for a frac-
ton of the value of their holdings.
Mexico once was in the front rank
OF world oil producers, second only to
the United States, but today ranks
sixth. Its production is about one
fortieth of the world output, but she
fCno arr n.-> 1O\