Evening star., 1938-03-19
Cardenas Expropriates Oil Firms.

Cardenas Expropriates Oil Firms.
MEXICO CITY, March 10 (P.-
President Lazaro Cardenas expropriat-
ed American and British oil properties
valued at more than 100000, 900 today
in bold stroke designed to end two
year conflict between labor and for
eign capital.
simultaneously. the Central Bank of
Mexico suspended dealings in foreign
currency and the president indicated
devaluation of the peso was under off,
cial consideration.
An extraordinary session of the
Chamber OF Deputies was called for
II am. (noon. E. S. T.) today to vote
additional budget appropriations to
tide the government over the crisis.
Operations were suspended in the
oil industry at ! minute after mid
night last night as union oil workers,
going ahead with threatened folded
arms strike" forced a shutdown.
1t was believed, however, that union
headquarters would order the syndi-
Gates $4,000 members back to work
promptly in an effort to help Presi-
dent Cardenas while he tussles with
the admittedly difficult situation.
A bulletin from the press bureau
early today said the Mexican cabinet
had decided upon means to prevent
damage to the financial activities of
the country"
These included provisional opera
tions of the petroleum industry by the
Department of National Economy and
the General Petroleum Administration
Another step was representations by
the government to all labor unoins
urging them to refrain from strikes
and public manifestations
Broadcasts Explanation.
President Cardenas, broadcasting an
explanation of his act said the foreign
oil companies had carried on "sordid
and skillful campaign" against the
government, which has had the result
that these same companies sought
to injure seriously the economic in
terests of the nation, attempting by
this means to nullify the legal DISPOSE
tions dictated by the Mexican au-
thorities."
The fact that the industry has sent
out of the country all its cash vitiated
ordinary procedure in in the case, the
President said, while ordinary pro-
cedure in any case would mean "con.
tinuance of a situation that for the
sake of decorum ought to be settled
forthwith"
Mexican and foreign business men
this morning found virtual paralysis
threatening commercial operations in
the wake of the fast-moving events.
President Cardenas, long noted for
advanced social and labor tendencies,
invoked the radical appropriation law
of November, 1896, to declare the
holdings of II British and American
petroleum companies properties of the
government.
This drastic move was described by
the President as essential for the "eco-
nomic liberation" Of Mexico.
The companies, he charged, had
def1ed the courts of the land in refusing
to accept an arbitral verdict Of the
Federal Labor Board handed down
December 18. increasing their labor
costs by approximately 1920. 900 year.
Iy and giving the workers other bene-
fits.
Boosts Held Confiscatory.
In fatty refusing to pay the in
creased wages, the companies con-
tended the increases were "confisca-
tory" and SO high as to force suspen-
sion of operations if imposed.
An eleventh-hour offer by the COM
panies to pay the sum stipulated in
the award, if they could interpret
as they chose the administrative clause
OF the new collective labor contract
imposed upon them, was swept aside
by the President, palace sources said,
with the statement:
1T Is too late now"
The Bank Of Mexico's "suspension