Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-08-07
Mexico's Oil Barter Pacts
Intensity Need for Settlement
Europe Grabs Valuable Market as U. S. Exports
Decline Under Deadlock of Petroleum
Companies and Cardenas.
WHAT i, ANOTHER ONE Z
BY BETTY KIRK.

=
- EX1CO CITY, Mexico-The i'm
M portance of finding an amicable
W. settlement to the controversy be-
tween United States and British
oil companies and the Mexican govern
ment has been emphasized by the con-
clusion of the contract between the gov
eminent and William R. Davis Enforce
ment Of this contract will result in the
displacement of $4,000, 900 worth of United
States goods by like amount of Ger
man. Italian and Swedish products, bar
tered for Mexican oil, within the next
six months.
This will follow the decline by $14,-
100000 of United States exports to Mex
leo during the first five months of this
year, as compared with 1897 exports for
the same period. Moreover the Davis deal,
although trial contract" may open the
way for the establishment of one of the
greatest barter systems in history in
which the United States will have no part.
Considering that Mexico is one of the
largest United States markets, and that
IS per cent of her imports come from the
United States, it is apparent that the
greatest sufferer from the oil dispute is
the United States manufacturer and ex-
porter. He is now facing a. set of cir
cumstances which are politically and eco
nomically involved and for which no i'm
mediate relief can be SEEN
Pre-Strike Prosperity Reigned.
That all Of this is directly linked to
the oil dispute becomes apparent in q
survey of Mexican affairs for the past
Is months. During the six months pre-
vious to the strike Of the petroleum work.
ers in June, 1887, every business index
revealed increasing prosperity in all fields
Exports of minerals and petroleum pro-
ducts were booming, agriculture was nor
NAL. big building program was under
way, an extensive public works program
was constructing dams. highways, railroads
and port improvements, and the tourist
traffic was breaking all records.
Then came the clash between capital
and labor over the latter's demands for
a collective contract, increased wages and
social benefits. Immediately following
decline began which increased in momen-
tum as the conflict grew more acute.
BY autumn capital was leaving the coun-
try in alarming amounts. which flight the
government spokesman attributed to propa-
ganda spread by the companies.
On the pretext Of curling this exodus
Of money, the Mexican government made
what is generally conceded to be its most
unwise move to date. On January 10 it
announced an increase in import duties
came only two weeks after the United
States Government had agreed to continue
buying Mexican silver and was in direct.
defiance of Secretary Hull's policy Of in
creasing trade by the lowering of tariffs.
1t is this tax which is principally respon-
sible for the decrease of United States
trade by $14 $500 900 in the first five months
OF 1898. However, it has been partially
lowered once, and legislation is now pending
to restore it to its 1887 levels. When it is
returned, it will do little to relieve the
situation now, for the drop of the peso to
an approximate five to the dollar has
added a handicap amounting to 80 per
cent to the importers costs. In other
words. the merchant who previously had
to pay $50 pesos to buy dollars worth
Of American goods must now pay pesos
Stool Pegging Sought.
The descent of the peso began i'm
mediately after the appropriation and has
continued progressively since. Attempts
are now being made to hold it around
to /, which, if successful, may be an in
ducement for some of the capital which
has left the country to return. A partial
stabilization will also be advantageous to
importers who have experienced great diff
Guilty in operating with fluctuating cur
Sency.
That the entire matter of trade has been
agitated by the bitterness attending the oil
controversy cannot be denied. This dead
lock, which has just been broken by the
Davis deal, is best described as an invincible
force-the oil ompanies-meeting an i'm
movable object-President Cardenas' ad-
nninistration and policies
When one seeks for the cause behind
the conflict, 1t becomes apparent that 1t
lies in the oil companies failure to recog-
nise the political and social realities in
Mexico. The administrations six-year plan,
which is credited to Cardenas but. was
adopted by his party before he came into
power, sets forth the governments policy
for the Specialization of the sources of pro-
duction. It was made public in 1884 and
forecast, as Hitler's "Mein Kampf" fore
cast his subsequent actions. the events
which have followed.
It is not an isolated program, but one
linked with the worldwide movement for
the strengthening of labor and the growth
Of governmental control, which may be
studied in many other nations today. In
this respect it is well to recognize that
events in Mexico are frequently not only
abreast Of general world trends, but often
In advance Of them. This may be at
tributed to many factors-to the conflict
Of feudal structure with q progressive,
modern program: to the nervousness of the
people made up Of mixed bloods, and even
to climatic conditions Of the country.
Mex1cos revolution began IN 1910; IT.