Evening star., 1938-03-06
Growing Friction Disturbing
American>MeXican Relations
Pressure Upon u S. Oil Companies and Drastic
Elevation of Tariffs, Hitting Trade Heavily
Are Sources of Ill Feeline

g. AahPAoAco IoncS OI mineral reserves
will be established to guarantee the future
supply of the nation.
"3 An official exploration service will be
instituted to orient the establishment Of re-
serves, direct the opening of new min
eral explorations and study the zones
where private persons are not to undertake
this type of work for technical reasons of
defense.
4. The monopolization of lands will be
avoided and the national zones of petroleum
reserves will be enlarged in order that in
| due time Mexico may count upon fixed
reserve of oil lands which may cover the
future needs of our country"
| Other parts of the plan declared against
| the continued monopolization of mineral
deposits by foreign enterprises, promised
intervention to achieve economic balance
| in the oil industry projected semi-offcial
organ of assistance and regulation and pro-
| posed modification of the present system Of
concessions, reducing the area of the con-
| cessions in the future.
| Accordingly national petroleum admin
ferred the national oil reserves and ma
tionalization Of oil lands held by foreigners
was begun.
| Royalty Move Dates From 1917.
| The movement for oil royalties, revived
last year. in 1917 met the refusal of the
| American, French, British and Dutch
| governments to permit the imposition Of
| such charges. The oil companies, 1t was
contended, had paid for their lands In
| purchases from private owners and in
leases on which they were then already
paying royalties.
When the British-Dutch Aguila Co. de-
| sired to extend its workings in the Poza
| Rica fields it was forced to agree to
| pay royalties ranging from Is to IS per
| cent. President Cardenas emphasized the
importance of this victory in his message
to Congress- January l, this year. The
agreement, he said, for the first time
factually recognized the nations perfect
right over subsoil petroleum and the power
to fix every kind of concessions, including
those of confirmatory nature.
Negotiations are continuing in Mexico
City between the American interests and
the government in an effort to reach a set
tlement, but the American companies will
find the Aguila precedent difficult to over
come.
Labor Attack Less Direct.
In labor relations the foreign companies
are being subjected to less direct, but more
severe, attack. The decision OF the Mex
lean Supreme Court last week. upholding
the award by the Federal Board of Con-
clliation and Arbitration of $500 900
annual increase in pay for oil workers
brings the controversy close to the stage
OF diplomatic negotiations, for the COM
panies have exhausted their legal remedies
in Mexico. Whether the State Depart
ment will make the decision a cause for
Intervention has not been officially indi-
Gated, but precedents under the good
neighbor" policy are against it.
The oil industry was crippled for 13 days
last May by strike of its $4,000 workers
on demands for wage increases, reduction
IN hours and medical and other social serv-
ices The unions called of the strike upon
VAN NAASSAoooAAaAAA6 tAAdC ChHCI " Va llc 1GOs
eral Labor Board should investigate the
companies books. They reported that the
II American and British-Dutch companies
involved were able to give annual pay in
creases of $7,500000. Previously the COM
panies had offered boosts amounting, with
more than $5.0O0,000.
The Federal Board Of Arbitration and
Cancellation next upheld the $500 900
increase in wages, and the companies took
the case to the Supreme Court after the
Labor Board ordered the companies to
make effective Immediately the provision
of the arbitral award.
On the one side the companies have in
sisted that they cannot pay the increases
decreed and will cease operations if they
are forced to do so. On the other, the
Mexicon government is obviously willing
to have the companies abandon their oper-
ations President Cardenas at Monterrey
in February, 1896, in the course of con-
ciliating glass dispute, invited employers
throughout Mexico who feel weary of the
social struggle to deliver their industries
to the workers or to the government Such
move would be patriotic, he said: lockouts
are not.
Tariffs Raised Sharply.
Thus the necessity for conserving Mexi-
can capital in order to carry forward the
agrarian program, coupled with an aggres-
sive labor policy, has brought the prospect
OF renewed diplomatic controversy be-
tween the United States and Mexico. Ag-
gravating the tension further was the an
nouncement six weeks ago of increases
in Mexican tariffs by as much as 400 per
cent in some classifications.
Two months operation of the new rates
they were made effective December 81,
1887, although proclaimed january 1s-
has failed to improve materially the reserve
position of the Bank Of Mexico and the
likelihood is that they will be continued,
If not raised, after May unless marked
improvement occurs in the country's finan-
cjo ,>osj<ior