Evening star., 1939-05-09
Curdenus
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for purchases in the United States.
AS a result American exports to
Mexico have fallen so per cent and
our left-wing neighbor is dependent
upon the economy of nations whose
theology it detests. I asked the
President, therefore, what Mexico
in this predicament would do if
war came in Europe.
II am a general who believes in
peace and I hope war will not come"
he said laughingly.
You are also politician who
knows how to turn question" I
said.
The President chuckled. Then his
face became grave.
Yes. you are right" he said.
The imminence of war in Europe
is the gravest problem that faces
this continent. If war comes Mexico
will do what it can for the Euro
pean democracies. 1t may be a
contribution of no value or it may
require a real effort. But there is
no doubt where we stand or where
we will stand. For those who share
with the Americas a common belief
in the democratic and h,manita-
rian ideals Mexico will do what it
can"
Americas to Be United.
The President then made it clear
that all of the Americas would be
united. He gave me the impression
that the measure of Mexicos activ-
ity on behalf of the European
democracies would depend, like that
of the other Latin American states,
upon the lead which they receive
from Washington. Meanwhile it
was the business of American gov
ernments to smooth away such diff
ferences as divide them. He was
confident the oil problem-most
serious of these differences-was on
the way to settlement.
I found this optimism shared by
Mr.. Richberg. He seemed i'm
pressed, as I was, by the sincerity of
the President, his incredible capac-
ity for work, the sense of humor
with which he relieves conversation
and, most important of course, his
very real desire to settle the oil and
other controversy which divides his
country and the United States.
The difficulties of an oil settle
ment are very real indeed and they
have not been improved either by
the demagoguery of certain Mexi-
cans or by the propaganda of the
oil companies. The right of Mexico
to appropriate the fields cannot be
challenged despite the arguments of
the companies. But appropriation
becomes confiScation where ade-
quate and prompt compensation is
not made. The Mexicans have pro-
tested their intention to pay but
argue that the oil companies have
refused to agree to a valuation of
the properties.
The truth is more brutal. Mex
leo has a billion dollars of foreign
debts and interest in default. Mex
leo has not got the money to pay for
the oil properties unless she pays
out of oil earnings, in the first place,
and she denies, in the second, that
the companies ought to be compen-
sated for anything but surface in
vestments since, according to Mex
ican law, the subsoil and petroleum
belong to the state. The companies
argue, however, that they will not
accept payment out of earnings of
their own properties and insist that
the subsoil and oil are theirs, despite
Mexican law, because they took the
financial risk involved in finding oil.
Formula Worked Out.
President Cardenas and Mr.. Rich
berg have worked out an ingenious
formula to cut through these dead
locks. They have agreed. I under
stand, to ignore both the question
of the legality of the appropriation
and the whole matter of disputed
valuation. They are working in
stead on a plan whereby Mexico will
give the companies a long-term con-
VI dSb 1Ol CliC plOOuCClOll VI MCAlS1il
oil. A percentage of the profits on
the sale of this oil abroad will so
to the companies and their share
holders so that past and future in
vestments will be fully paid and
Mexico in a few decades will own
her own oil.
This seems workable basis for
solution, but time, patience and good
will are required. Mr.. Richberg has
to keep his clients in line on the
argument that although they may
lose face they will be repaid this
way while the old-fashioned meth
ods of fomenting revolution or
armed invasion are likely to get
them nowhere. Equally important,
he has got to persuade them of the
good faith of the Mexicans whom
he has brought around to virtual
agreement, since investors need
something more than what they
have seen in the immediate past