Montana labor news., 1938-03-31
Wages AS An International Question

The danger of wages and working condi-
lions in industry becoming ar international
issue through the investments made by
American capitalists in the natural resources
of foreign countries has appeared in connec-
ton with the action of President Lazarus
Cardenas of Mexico in taking over and oper-
ating as a government institution the prop
critics of 18 American and British owned oil
companies with an estimated value of be-
tween $400,000,000 and $500, 000, 900.
The controversy had its origin two years
ago when the Mexican trade unions in the
oil industry, speaking for $4,000 oil workers,
demanded a new contract. A number of
strikes in the oil industry followed. The dis
pute finally reached the Federal Labor Board,
which is authorized under statute law to
make awards in controversies between en-
ployees and employers. After a thorough
examination of the books of the oil COM
panies, the Labor Board issued an award
providing for wage increases Of about SILL
100000, the establishment of pension systems
and giving the workers a voice in the man
agement of the companies.
The oil companies appealed the Labor
Boards award to the Mexican Supreme
Court, which upheld the award and gave it
effect of Mexican statute law. The oil COM
panies refused to comply with the decision
of the Supreme Court, basing their action on
the claim that the increased cost of applying
the award would ruin their business.
Acting under a Mexican statute governing
such action on the part of employers, Presi-
dent Cardenas issued a decree eXpropriating
the oil properties and ordering their delivery
to the Department Of National Economy, the
Treasury, and the General Administration
for Petroleum Operation, to be operated as
government agencies, the price to be paid for
the properties to be fixed in the future, and
the oil workers becoming employees Of the
government with the Labor Board in full
effect.
Observers of the situation are unable to
explain the motive of the oil companies in
refusing to obey the decision of the Mexican
Supreme Court unless they expected the
government of the United States would in
tervene in their behalf. 1t is pointed out
that the Mexican law regarding the author
ity of the government to take over and oper-
ate the properties of companies under the
conditions precipiatted by the oil companies
is explicit, that the officials Of the companies
were familiar with these provisions Of the
law, and that they knew their refusal to
comply with the decisions of the Supreme
Court would make it imperative for Presi-
dent Cardenas to appropriate the oil prop
critics. Otherwise the authority Of the Fed
eral Labor Board, of the Supreme Court and
of the Mexican government itself would be
destroyed.
Following the appropriation Of their prop
critics, the American oil companies presented
the case to Secretary of State Hull, with the
suggestion of intervention in their behalf
by the government of the United States.
In the opinion of competent observers the
American government, if it intervenes at all,
will not take any drastic action. The Ameri-
can government, it was pointed out, could
not appropriately use any sort Of force to
assist American oil companies to apply wage
rates and working conditions to their en-
ployees in Mexico against both the award
of the Mexican Labor Board and the deci-
sion Of the Mexican Supreme Court.