Evening star. [volume] (Washington, D.C.) 1854-1972, 1941-10-24
Britain and Mexico Make Up

bIltOIII OIiu iNtCAISO NlONS w
The official announcement that
Mexico and Great Britain have re-
Sumed full diplomatic relations ends
| the diplomatic rift between the two
countries which had lasted more
than three years. Much obviously
has been going on behind the
scenes to account for what appears
to be a sudden reversal of British
policy. Less than three weeks ago,
the British government was under
stood to be disturbed over the terms
OF the proposed oil agreement be-
tween Mexico and the United States.
Now, London has switched from
diplomatic pressure to Cancellation,
although no mention of the Oil con-
troversy was made by the Mexican
Foreign Office when it announced
that normal diplomatic relations be-
tween London and Mexico City had
been re-eStabliShed.
In Mexico, oil certainly has not
played its proverbial soothing role,
because it has troubled that coun-
try's relations with both Britain
and the United States for many
years. Mexico's rich oil deposits were
developed almost exclusively by Brit
ish and American capital, in about
equal proportions. The trouble goes
back to the social revolutionary con-
Stitution of 1917 which declared
Mexico'S petroleum deposits the
property of the nation. However, the
constitution also declared that pri-
vate property should not be expro-
priated without decentralization.
The foreign-oWned oil companies
contended that their concessions,
obtained before 1917, could not be
conflScated with the attendant loss
of legitimately invested foreign cap
ltal. This was the attitude of both
the American and British govern
mentS in the lengthy negotiations
which ensued. The estimates of the
stakes involved range between $780,
100000 and $3.50, 100000, according to
whether the valuation is restricted
to the working plant or includes the
oil deposits themselves.
Despite temporary arrangements,
the revolutionary temper of a series
of Mexican administrations con-
tinued hostile to foreign capital and
DESTROYS Of wrestling control of the
countrys natural resources from
foreign hands. The climax to the
tWenty-year-old controversy came
early in 1888, when a dispute be-
tween the labor unions and the for
eign oil companies gave the signal
for the government to intervene and
take over the properties. Although
the Mexican government made a
gesture of indemnifying the COM
panieS, it was clearly unable to do
so in any adequate way. For all
practical purposes, the properties
had been confiscated.
Although Washington repeated its
objections to appropriation without
compensation, its diplomatic attitude
was conciliatory in conformity with
the so-called good neighbor" policy
toward Latin America. BY contrast,
the British attitude was strongly
condemnatory, the Mexican reply
was equally stiff, and the diplomatic
controversy that ensued soon cul-
minated in breach of diplomatic
relations. Thereafter, with the ap-
proval of the British government,
the oil companies practically en-
bargoed Mexican petroleum products
from foreign markets under their
control. This drove Mexico to at
tempt deals with Germany, Italy
and Japan, largely on a barter basis.
The outbreak of the war in Europe
closed the German market, owing to
the British blockade, and the Mex
lean oil industry was in a most I'M
happy state. On the other hand, as
the war has progressed with attend
ant threats to Britains vital oil
holdings in the Near, Middle and Far
East, the Mexican oil fields become
potentially more important to Brit
ain than ever before.
Add to this such factors as the
growing understanding between
Mexico and the United States, Mexi-
can disputes with Germany and the
German invasion of Russia, which
offends Mexican revolutionary senti-
ment, and we get a glimpse of the
complex trends which have produced
Anglo-Mexican diplomatic reconcile
alton. What will follow this first
gesture Is as yet too early to say.
Tom Harmon (O1d Ninetv-eipht tn