File No. 812.6363/328
The Acting Secretary of State to the Chargé in Mexico ( Summerlin)
716. Department informed that in consequence of opinions of Attorney General and of consulting lawyers of different Secretaries of State of Mexico that under Article 27 of Constitution, foreign companies cannot in any manner exploit natural riches of country, American oil companies have recently been refused permits to drill for oil on lands owned by them, although such permits were theretofore uniformly granted.
Take matter up with appropriate authorities and urge that pending consideration and promulgation of new laws relative to subject, administrative authorities take no action of character indicated, since this involves such serious consequences to oil companies as to amount to crisis in their affairs. In this connection invite attention to assurances given Ambassador by President Carranza on August 2, 1917, and reported in Embassy’s 351, August 2, 7 p.m.,2 that it was not intention of Mexican Government to take over American oil and mining properties now in exploitation and that there would be no confiscation of these properties. Point out that present action of administrative authorities appears in contradiction of the spirit of those assurances, and report immediately by cable result representations.
- Op. cit., p. 1072.↩