Evening star., 1939-12-04

question which David Lawrence.
Congress will decide in few weeks
now, when the whole Mexican con-
f1scation Of American oil properties
will be thoroughly aired.
The latest decision by the Su-
preme Court of Mexico denying
American citizens their constitu-
tional rights, as previously inter-
preted and as foreign investors un-
derstood them when they put their
capital in Mexico, is really of no
significance judicially because the
judges of the Mexican court are
political. They hold Office for the
four-year term of the incumbent
administration and are, in sense,
just another arm of the executive
branch of the Mexican government
1t was important, however, for
American citizens to pursue their
case in the Mexican courts so as to
exhaust all proper remedies. But
the problem is exactly where it was
many months ago, when the De-
partment of State was asked by the
oil Companies to use diplomatic
pressure to obtain redress for wrongs
being done.
The State Department hesitated
because of the general uncertainty
In the world situation, but now that
the war has broken out and an
effective blockade is on, the British
are just as anxious to prevent Mex
leo from selling confiscated oil as
are the American oil companies.
Payment by Law.
Mexico has right to seize prop
critics just as has any other SOW
ereign government, but the law OF
nations is that adequate payments
must be made This does not mean
that an empty pledge or promise
to pay in the indefinite future con-
stitutes payment. It means some
thing substantial to reimburse the
owners who have invested cash in
the properties. There may be DIFF
ferences of opinion as to valuation,
but there is no difference of opinion
on whether cash or promises can
be accepted as payment.
Mexico has been willing to let
the American companies operate
their properties subject to Mexican
management and control, but own
ership was to be Mexican and the
time and method of payment for
the seized properties was to be left
to the Mexican government to de-
termine. This is about all that has
been attained after months OF nego-
tiation, during which time all the
customary advice about dealing
quietly and courteously with the
Mexican authorities has been fol-
lowed by the oil companies. Ennis
saries, friendly lawyers and diplo-
matte approaches have all been tried
In vain. Mexico stands pat because
she is convinced the Roosevelt ad-
ministration itself believes in con-
hscation. The T. v. A. entered into
q competition with private utilities
and only after long battle did the
administration agree to buy certain
facilities, paying nothing for the
damage done the utility business by
Its policy of enforced sale or confis-
cation. Why should Mexico pay any
attention to the Department of
State of an administration which
has encouraged virtual confiscation
Of private investors properties in
side the United States?
Congress to Get Chance.
The only language Mexico will
respect now is that of the Congress
In Washington, which shortly will
have q chance to tell American in
vestors whether their interests will
be protected hereafter in countries
that violate the principles of inter-
national equity and good will. There
was time when the United States
Government sought to enforce its
views in drastic manner in Latin
America, but that has all disap-
peared now and the remedies have
taken on an economic flavor. At
the last session of Congress the pro-
posal to terminate all Treasury sales
OF foreign silver was up for consid-
Grafton and had it passed both
Houses, the Mexican government
would have felt the pinch of such
q withdrawal of what amounts to a
substantial subsidy. The drive to
end foreign silver purchases will be
resumed now that Mexico has for
feited her opportunity to deal fairly
with American investors. Enough
Independent or conservative Demo-
Gratis in both Houses are available
who, in combination with the Re-
publicans, would vote to end silver
subsidies.
This is one way to end the con-
troversy over Mexican oil and to
serve notice on all other countries
that disrespect for international
rights OF investors will lead to the
withdrawal Of financial and eco
nomic aid. The johnson Act is an
other. It was passed to forbid the
f1otation of loans by any govern
ments which defaulted on their
debts to the United States Govern
ment. A simple amendment can
bar the flotation of all loans to
governmental or private institutions
IN Mexico in the future, so long as
American property rights are disre-
garded by the government at Mex
leo City.
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