Evening star., 1940-05-05
Tert OF Merican note on page A-10J
BY GARNETT ID. HORNER.

AAAAsA~S L 1HonINEHs
The Mexican government, hold.
Ing out for direct settlement of
claims for appropriated Americana
owned oil lands through installment
payments of indemnity determined
IN Mexico, turned down a United
States request for impartial arbi.
tration Of the two-year-old dispute
IN note made public last night.
The note presented views obviously
In sharp conflict with this Govern.
ment's position, but Acting Secre.
tary OF State Sumner Welles declined
to indicate the nature of our reply
pending careful study of the Mexi.
can contentious.
Gen. Eduardo Hay, Mexican Min
lister for Foreign Affairs, asserted
In the note that his government does
not consider arbitration of the oil
appropriation controversy compatible
with its principles, since the matter
is domestic in nature"
Arbitration must not be ad-
mitted," he added, except when the
nation has put into practice in full
Its rights of sovereignty through the
action OF its courts and the existence
OF denial Of justice can be proved
Hull Charged Justice Denied.
In proposing arbitration on April
3. Secretary Of State Hull charged
In effect that the American oil COM
panies whose properties were taken
over by Mexico on March 18, 1898.
had been denied justice because Mex.
leo Aad failed to make adequate,
ehective~pd prompt compensation"
He contendcd> that appropriation
without such conpeQsation was IL
legal conf1scation.
The Mexican note contain,d an
nouncement of private and direct
arrangement" with the Sinclair in
terests under which the American
company. accepting the expropria-
ton as deflnitive, will limit itself to
discussing the amount of the indem-
nifty and the conditions of payments
In reasonable installments, recog.
nizing the justification of the Mex.
ican point of view" It reiterated
willingness to make such agree.
ments with other companies In.
volved.
Previous efforts for direct settle.
ments have broken down because
Of inability Of the Mexican authori.
ties and the American companies to
agree on the value of the properties
and what would constitute prompt"
compensation-points that Secre.
tary Hull suggested be submitted to
impartial arbitration.
S2oe, e,o0o, 900 Estimated Value.
Sinclair interests, Gen. Hay said,
represent about 40 per cent Of the
American investment in Mexican oil
properties. However, estimates here
generally have placed total value of
the appropriated American prop
critics, including Standard Oil in.
terests, at about 5000, 900 900, with
Sinclair representing only about
SIG 0o0, 900 of this amount.
Harry F. Sinclair announced last
night, following day-long confer.
ence with the Mexican Ambassador,
Francisco Castillo Najera, that I'VE
have concluded an agreement with
the Mexican government providing
for a settlement" 1t was learned
authoritatively that the settlement
provided for the Sinclair interests
to accept 100000 barrels of oil
and $8,000,000 to $10,000,000, the
cash to be paid over three years,
for the properties.
Any evidence of delivery to Sim
clair or sale elsewhere of oil pro-
duced from appropriated properties
for which the companies had not
been compensated would cause new
complications, it was said. Mr..
Welles reiterated yesterday that this
Government would be concerned by
such development.
Gen. Hay referred bitterly In his
note to "the campaign undertaken
against Mexico by the oil companies,
with the aid Of certain governments,
using, among other means, the boy
colt to prevent all sales of our oil
in foreign countries or else restrict
ing it considerably by the adoption
(see OIL, Page Aid
IIfs n