Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-08-07

ton Of 1917, but its realization has only
become fact during the present regime.
It is true that the alles-dominated era
Of the 1920's accomplished much, but 1t
was largely a work of pacification and con-
solidation Of governmental organization.
Through the extensive application of
the principle of land division, through the
sponsorship Of labor and the growing exer-
else Of state control the Cardenas admin
istration has converted ideals into realities.
Whether one approves of these principles is
beside the point They are Mexican politics
today, and 1t was in ignoring their force
and attempting to resist them that the
companies lost their fight.
Contrary to the often expressed wish Of
conservative opponents Of the government,
this program shows no sign OF weakening.
It is true that the country is in a depressed
economic state, that there is extreme DIS
content among certain groups and suffer-
ing from the high cost Of living among the
lower classes. However, the peon is able to
exist on very little, as past revolutions
have shown. the government has aroused a
fervent patriotism to support its policies,
and there is no visible indication of Car
denas losing his hold upon the masses,
wherein his strength lies.
An announcement by the governments
petroleum export department made re-
Gently reveals that since the appropriation
100000 barrels of oil and 1875 tons Of
asphalt and other petroleum products have
been shipped. Although this Is below the
normal exports of the companies for the
same length of time, it is considerably above
the original estimates of what the govern
ment would be able to ship when it took
over the industry.
Breaks Embargo without Money.
Add this unexpected success to the Davis
contract for the barter and sale of H.
100000 barrels Of oil within the next six
months, and to the possibility Of similar
negotiations following Immediately after,
and II becomes evident that the govern
ment management Of the properties is an
accomplished fact. Without money to sup
port it., the government has been able to
break the embargo on oil, imposed by the
companies. and find its own market.
This development places the companies
In much weaker position to make their
demands for the return of their properties
and places the government in an advan-
tageous spot to talk of compensation. It is
clearly apparent from the present trend
OF events that the companies must accept
some compromise offer for indemnity and,
when this is made that the more CO.
operative they are the less they will suffer.
1t Will be to their advantage to see the oil
industry prosper here for the more it pro-
duces the sooner they will be paid.
If they can alter their defiant attitude
to one of amicable settlement, general
feeling of good will may eventually be re-
stored, and it is not unreasonable to be-
lieve that a working agreement may he
made whereby they may in the future re-
cover at least partial control of the dis
tribution Of Mexican OIL If the present
antagonism between the opposing factors
Is not relieved it will only handicap both
government and companies
Meanwhile vast and important market
for American goods has been undermined
by the conflict through the introduction
OF the barter deals. Although left-wing
agitators would have us see sinister political
designs behind the trade alliances of Ger
many. italy and Sweden with the Mexican
government, there is nothing extraordinary
about the barter arrangements.
Preferred to Deal With Democracies.
Mexico's only hope of breaking the crisis
precipitated by the appropriations was to
sell her oil. When the embargo was placed
upon It by the United States and British
companies. she warned that she preferred
to sell to the democratic nations, but that
If they refused to buy she would sell where
she could. This was in conformity with her
international politics which have been out
spokenly anti Fascist. When 1t developed
that she could sell only to these nations she
did so.
The barter arrangement is q normal
trade outlet in view of the circumstances.
Mexico has raw materials to sell and needs
finished goods and machinery. Germany
and Italy can supply these products but
need Mexican oil. Sweden also needs oil
and has machinery to sell. The exchange
can therefore be made without damage to
the international trade of the contracting
parties but with the United States export
ers suffering from the loss Of their markets
to the European countries.
Many adverse factors affect American
trade with Mexico at the present time. We
do not make barter deals and we do not
need oil. The deprecated peso is a heavy
drawback to imports and there is, and
will probably continue to be for some time,
shortage Of Mexican money with which
to buy dollars.
However, the time will come when cash
will be more attractive to the Mexican
government than the exchange for goods.
Money will be needed for the maintain-
ance Of the oil industry. for replacement Of
machinery. exploration which has been
temporarily abandoned, and for innumer.
able activities Ia the public works program.
Generally, the Naxioan pgs4au - hsv
.