Evening star., 1939-08-27

State Sumner Welles sent to Mexico
City on the oil controversy the other
day marked the beginning of a new
| phase in the relationship between the
two countries. 1t is phase that
threatens at the outset at least to be
more troubled, more uncertain, than
any period in recent history.
An immovable object which is the
claim of the oil companies on the
Mexicon economy, has met an irresist-
ible force, which is the rising tide of
Mexican nationalism. And the result
may we'll be a crash Of major propor-
tions.
Welles in his note rebuked the oil
companies for their rejection of a COM
promise proposal that the State Depart
ment had put forward. At the same
time he reminded Mexico of the neces-
sity for prompt, adequate and effec-
tive compensation" for the oil proper
ties
There is no way, Of course, to compel
the oil companies to accept any negoti-
ations or arbitration. Having made
proffers of pay, the Mexican govern
ment Is able to say that the companies
will not consider their alternative pro-
posals. In fact that is exactly what
Ambassador Castillo Najera is saying
today. In the light of existing circum-
stances this attitude is, of course, cor
rect. 1t overlooks, however, certain
dangerous potentialities in future that
may not be too distant.
Intervention Cry May Roar.
First, should Mexico's situation be-
come worse, there is the possibility
that the Cardenas regime might en-
counter revolutionary violence. An out
break would raise an immediate de-
mand for American intervention. Amer
ican lives and American property would
be jeopardized The outcry for pro
lection" has arisen often in the past.
Second, the outbreak of European
war might raise a similar demand, par
ticularly if Mexican oil should continue
to go to Germany. At the moment this
sounds slightly fantastic. But Eu-
ropean war would raise many issues in
Latin America. Already there are reports
that the Germans intend to try to take
the French island of Martinique in the
Caribbean in the event of war. There
would be provocative rumors of German
operations south of Rio Grande.
Third, the Mexican official attitude
ignores the possibility of conservative
administration in Washington in 1910.
A Republican regime could be expected
to take an entirely different attitude.
Hard-boiled demands might result in
an embarrassing situation that would
create demand for intervention.
These are all, it must be repeated,
merely potentialities. American public
opinion has been for the most part on
the Mexican side in the present con-
troversy. No one regards intervention
as present possibility. Even among oil
executives only a few rabid partisans
talk today in terms of intervention. But
changes can come very fast in the
present day world. And it must not be
forgotten that American oil companies
chiefly Standard Of New Jersey, have
financed for year or more a constant
barrage of propaganda.
w. r. Davis in Picture.
In a larger sense, Of course, the Mexi-
can controversy is merely a part of the
worldwide fight for oil and that fight
is in turn factor in the present con-
f1ict between the have and the have-not
nations Germany has obtained oil from
Mexican wells when all other sources
were closed, thanks to the good offices
Nf w Davis narhorc ha
traordinary figure in the present oil
drama. The Germans now appear to
have great confidence in Davis because
he has moved oil in crisis and out of
crisis. So far as volume is concerned,
of course, greater quantities have come
from Standard and Dutch Shell, but the
Germans have not had the same conf
dence in these sources.
Now, however, it is apparent that Davis
himself is having difficulty in obtaining
enough oil to fill the contracts he has
made with Germany and other countries.
The reason, according to those familiar
with Davis activities, is the unsettled
labor conditions in the Mexican oil fields.
Workers are dissatisfied with what they
6oo ouV Va SAPA OPAAoCAOlA dllu lCpOl Us nave
come to Davis that their discomfort has
gone so far as to lead to sabotage While
Davis is believed to be getting consider
ably more than half of the oil he con-
tracted for with the Mexican govern
ment, his company is a long way short
of obtaining the full amount.
Davis had approached the government
with an offer to drill new wells at a
cost of about 100000 pesos (slightly
more than $1,000,0O0 at the present rate
of exchange. The government took this
offer up with the heads of the oil work.
ers' union, which is really the controlling
force. The union leaders, determined to
restrain foreign ''exploiters," imperial
ists," and not only the old line COM
panies but Davis as well, objected They
said there was something like 100000
pesos in the union treasury and they
would turn over half of it to drill the
new wells. Davis offer has not been
accepted.
There are indications that Davis would
like to see settlement if it would mean
verification Of his claim to part of the
holdings Of the Mexican Aguila (Eagle>