Evening star., 1938-05-14
ANCL0-MEX|CAN
ECONOMIC WAR
LOOMS IN BREAK
Cardenas' Recall of Envoy
Is Expected to Bring
ReprisaI.
ENGLISH MINISTER'S
WITHDRAWAL LIKELY
Claims Demand Leads to Rupture
After Long Battle Over Oil
appropriation.
BACKGROUND


BACKGROUND
Merico appropriated foreign
otDned oil industry, palued at $780,
100000, on March IS, and since
then has made no payment to the
dtspossessed companies British
made greatest interest in Me1scan
OIL industry. London has twice sent
notes demanding restoration of the
setsed properties and this tDeek
made an abrupt demand for pay
r1ent OF claims in default since
January /.
By the Associated Press.
MEXICO CITY. May l4.-Mexico
and Great Britain came to a diplo-
matte parting of the ways today for
the third time in two decades.
Offended at Britain's "unfriendly
attitude" arising from President Lazaro
Cardenas' appropriation March l9 of
British oil properties valued at $780,
100000, the Mexico government an
nounced withdrawal of its Minister
IN London, Primo Villa Michel, and
closing of its legation there.
1t was confidently expected that the
British Minister to Mexico, Owen st.
Clair O'Malley, who presented his
credentials only last November S,
would be recalled promptly as Britain's
first act.
Mr. OMalley himself said that such
, action as Mexico took was rarely
unilateral.
Economic Measures Expected.
Local quarters held it likely that
Great Britain, which already had an
nounced her intention to boycott
Mexican oil, would follow the sew
erance of diplomatic relations with
economic measures designed to bring
the Cardenas government to terms.
There was no indication, however,
as to what form these measures would
take.
Mexico bought from Great Britain
IN 1885 and 1886, respectively, goods
worth % 1000 and 23,70o, 900 pesos
and sold her goods worth 76,20O, 900
and 67,800,000 pesos, so that cessation
OF commercial interchange would
hurt this country most. (The peso
was quoted yesterday at from 4.28
to 4.32 to the United States dollar)
Britain's increasingly energetic pro-
tests against appropriation of Aguila
(Royal Dutch ShelD Oil Co., along
with 16 other British and United
States companies. prepared the way
Tor the diplomatic break.
Twice in recent weeks Mr.. O'Malley
presented demands for return of the
properties. asserting there had been
denial of justice" and political mo-
tivation in the seizure, and twice
Mexico fatty refused.
Claims Cause of Rupture.
A small bill for 370,962.7l pesos,
less than 100000, and Britains in
sistence that it be paid was the direct
cause Of the rupture, however
The bill was for the third of IL
annual installments on British claims
growing out of MeMco's civil wars.
Payment was due January l. Several
times recently Mr.. O'Malley had in
quired informally about the matter
and received no reply. Wednesday he
wrote formal note.
He told the Mexican government
that its attitude toward this bill and
toward government indebtedness gen.
orally was ''far from reassuring" and
'in itself rendered unjustified an ex-
preparation an essential condition of
which would be payment of full and
adequate compensation
Foreign Minister Eduardo Hay in
his reply yesterday sharply challenged
Britains right to "analyze the do
mestic situation of Mexico" He
added, apparently referring to war
debts. that "powerfuLstates having at
their command abundant resources"
were not paying all their bills and in
formed Mr.. O'Malley orally of the
withdrawal of the Mexican Minister
from London.
Text of Announcement.
The official announcement said:
"The Minister Of Great Britain was
advised that, in view of the
unfriendly attitude of the British
government toward Mexico, growing
out of the recent appropriation of the
oil companies, the Mexican government
considered it necessary to withdraw its
Minister in London and the personnel
Of its legation in that country, clos
ing it, and leaving the archives in
custody of the Consul General, Gus
tavo Luders Denegri."
In 1920, the British envoy was re-
called from Mexico as a result OF
British claims against the government
Three years later relations again were
severed after agrarians besieged and
killed an English woman who refused
to let her lands be appropriated.
Mexico has been at odds. too, with
the United States. Relations were
broken OF after the assassination OF
President Francisco MADEIRA, in 1913
not to be resumed until Carranza be-
came President in 1917. Carranza's &
assassination severed them again in
1920 and they were renewed again in
1928 after Obregon came to the presi-
dency.
There was some belief here that
Britain, facing the Mexican govern
ment's uuyielding attitude on the oil
issue. had moved deliberately toward
ending diplomatic relations, but this
could not be confirmed.
Commenting editorially on the Brit
ish note which resulted in the break,
the newspaper Ultimas Noticias said
yesterday:
I'VE do not remember having read in
the annals of diplomacy note sent
by one government to another with
which it cultivates friendly and peace
full relations so bitter. so malevolently
intended as that which the govern
ment Of his British Majesty has sent
to Mexico"
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