812.6363/433: Telegram

The Acting Secretary of State to the Chargé in Mexico (Summerlin)

1963. Your 2021, March 22, noon.

Address Foreign Office substantially as follows:

The Government of the United States has been informed that on dates mentioned following American petroleum concerns have been denied permission to undertake or continue upon lands owned or leased by them new work specified:

  • Huasteca Petroleum Company, August 21, 1918, to drill Chinampa well No. 4;
  • Transcontinental Petroleum Company, August 24, 1918, to drill well;
  • International Petroleum Company, October 21, 1918, to continue drilling well;
  • New England Fuel Company, January 9, 1919, to continue work on tank;
  • International Petroleum Company, January 17, 1919, to drill well;
  • New England Fuel Company, January 19, 1919, to build tank;
  • Huasteca Petroleum Company, March 1, 1919, to drill Chinampa well No. 5.

Information has also come to the Government of the United States that on January 3 and 23, 1919, the Texas Company and the New England Fuel Company, respectively, were advised by Chief Petroleum Inspector at Tampico of existence of order against issuing to company permits for new work.

Reasons assigned for this prohibition against new work appear substantially to be that interested companies have not recognized alleged right of Mexican Government as asserted in Article 27 of the Constitution and decrees thereafter issued by Mexican Government, to confiscate existing legally acquired property rights in petroleum deposits.

In connection with the denial of the permits referred to, the Government of the United States is informed of the publication by Department of Industry of the Mexican Government, March 22, 1919, of circular76 threatening with punishment petroleum interests which shall drill wells without permission of the Federal Executive, as prescribed in the Decree issued January 7, 1915.

With reference to last mentioned Decree the Government of the United States is advised that until recently, Decree has been interpreted as an exercise of police power of state designed to insure safety of lives and property. With a Decree issued and enforced for such a purpose, the Government of the United States would be thoroughly in accord, and would expect interested American citizens to yield full compliance.

However, this Government must protest strongly against any efforts by Mexican Government so to construe or apply provisions of this Decree as to bring pressure to bear upon American citizens to recognize any right in the Mexican Government to confiscate legally acquired petroleum interests, either by constitutional provision, or executive decree, or otherwise, and the Government of the United States takes this occasion to renew the protests it has hitherto made to the Mexican Government against the assertion and application of such alleged right and to affirm that it continues to stand upon the terms of those protests, intended for the protection of American citizens.

In this relation the Government of the United States desires to call to the attention of the Mexican Government the right, generally recognized among the nations of the world, of property owners, subject to the reasonable police power of the state, to develop their properties as they may deem appropriate. Applying this rule to the present situation American citizens owning petroleum interests in Mexico in all cases where lives and property of others are not endangered thereby should be granted permission to develop their interests, and it is hoped that this view of the matter will commend itself to the Mexican Government.

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Confidential: It is suggested that you may be able to bring about issuance to American citizens of provisional permits to develop their property pending settlement of questions in dispute, which it is hoped will be satisfactorily provided for by future legislation.

  1. Dated Mar. 20.