Papers Relating to the Foreign Relations of the United States, 1918

File No. 812.512/2094

The committee representing the oil producers in Mexico to the Assistant Counselor for the Department of State ( Auchincloss)

[Telegram]

Houston, Tex., August 4, 1918.

Because of newspaper statements before referred to we think it proper to repeat to you a telegram which we are to-night sending to Honorable M. L. Requa, Chief of Oil Division of Fuel Administration, as follows:

The committee representing the producers of oil in Mexico which was charged with the duty to acquaint our Government with the imminent danger that the needs of the United States and its allies for oil from Mexico cannot be supplied deem it proper to advise you as the official directly interested in this important matter, and through you our Government, that the following is the present status:

1. There is no foundation for the newspaper statements emanating from Washington that an adjustment of the controversy has been reached with the Carranza Government by Garfield and Rhoades representing such producers. We have been in conference with these two gentlemen for several days. They have been at work for six or more weeks endeavoring to persuade the Carranza Government to adopt some plan under which our rights to oil lands would be preserved and our operations in Mexico could continue. No agreement has been reached; none can be reached and all negotiations have terminated.

2. Substantially all that Garfield and Rhoades have secured is a promise that Carranza will issue a new decree whereunder American and other foreign corporations can by renunciation of their citizenship and with abandonment of their present rights and titles to oil and gas secure to Mexico [Mexican] subsidiary corporations to be created petroleum mining claims just as individuals can upon their present properties. This decree has not yet issued.

3. If this decree shall issue we shall continue to be confronted with the same dilemma which presents under the present decree of July 8. This dilemma is that if we shall not file reports by August 15, our entire present rights to oil lands on that day will be annulled. On the other hand, if we shall file such reports by day stated all that we could get should be a mere license for the Mexican subsidiary to be formed to extract oil from our present properties. The advice of the best lawyers in Mexico is that Carranza has no lawful power to make this decree nor to extend such a mining license. Nevertheless they advise that it is hopeless to restrain the enforcement of this decree by any application to Mexican courts which are wholly under Carranza’s control. These lawyers further advise against presenting any protest with our reports if filed because such protest will be of no avail either practically or legally and will probably be the cause of the rejection of such reports.

4. It is our unanimous opinion that the filing of the reports will constitute an acquiescence in the confiscation of our property and that the only pretense of claim which this decree would give us is a mere license based solely on an illegal decree of Carranza and terminable at the will of an utterly irresponsible government. It is our further opinion that the same usurpatory power which Carranza exercises to confer such license can at any time be exercised to destroy it. Considering the matter from the viewpoint of our own interests it is our opinion that it would be folly to file these reports and thereby surrender our titles, lawfully acquired, in exchange for so precarious a mining license.

5. Considering the matter from the viewpoint of the need of our nation to get oil we think that our refusal to file such reports will place our Government in the best position to protect us; that in so doing it would exercise a right often availed of by the leading nations of the world; that a consequence merely of the exercise of this plain right to protect our property from confiscation will be to assure the continuance of these oil supplies. We further think that in the absence of an intimation that our Government wishes us to act otherwise we should refuse to file these reports, for to file same would be to acquire [acquiesce?] in a confiscation which our Government in the note of the State Department of April 4 [2] has said it would not permit. In brief, we concur in the ideas expressed by Proctor in letter to Doctor Garfield of July 26.

6. Further it is our conclusion that even if the imminent confiscation of our properties and ouster therefrom could be avoided still we cannot induce our essential American skilled laborers to remain under present conditions of utter lawlessness. Since this matter was first presented to Doctor Garfield one employee, an American of the Cortez Oil Company, has been murdered and another, a Mexican, seriously wounded and also an American cashier of the Texas Company has been murdered. Thursday last, an American paymaster of the Mexican Gulf was fired upon and robbed. Two of the managers at Tampico have sent us word by special messenger that the men will no longer remain unless protection to their lives can be accorded. We know of instances in which the bravest and most experienced of these employees are beginning to be transferred to this country.

7. We conceive it to be our duty as American citizens to say to you plainly that unless the United States can see its way clear immediately to protect us in the possession of our oil properties and to protect our employees against assassination and cruel treatment we consider it inevitable that oil importations from Mexico will quickly fall off and soon [there will be?] utter paralysis as to our operations there. We advise you of this situation so that our Government, if it can, may act in the exercise of its plain right to protect the lives and property of its citizens in Mexico, which act will result in the procuring of these needed oil supplies. Every producer with whom we have talked has expressed himself as being anxious to act as our Government wishes him to act. In our opinion this is the wish of every one of these producers. We are not appealing to the Government to advise us how to act in the protection of our own interests but we do appeal to it to tell us what it desires us to do in the best interests of the Government itself. We think we have the right to ask this. You may make any use of this telegram you see proper.

• F. C. Proctor
• J. W. Zevely
• A. L. Beaty
• F. N. Watriss
• Harold Walker
• A. E. Watts