812.6363/581: Telegram
The Secretary of State to the Chargé in Mexico (Summerlin)
2299. Address Foreign Office substantially as follows:
The Government of the United States has been informed that drilling has been stopped by military forces under orders of Petroleum Inspector on lot 162, in Chinampa, of the Island Oil and Transport Company, although application had been made for a permit, and that drilling operations have been stopped pursuant to orders of President Carranza on following lots because of lack of permits: 96, Chinampa, of the Island Oil and Transport Company; 115, Chinampa, of the Compania Transcontinental de Petroleo S.A.; 114 and 153, Chinampa, of the Texas Company of Mexico, S.A.; 162, Chinampa, “of the Union” (so stated by Consul Tampico); 114, Chinampa, “of the Buckley interests” (so stated by Consul Tampico); 250, Chinampa, of the Freeport and Mexican Fuel Oil Corporation; 251, Amatlan, of the Sinclair Gulf Corporation; 162, Chinampa, of the Mexican Investment Company; 240, Amatlan, of the Cortez Oil Corporation; also that permit granted provisionally to the Cia. Petrolera “Capuchinas”, S.A., a subsidiary of the Island Oil and Transport Company, to drill a well on property known as “Comales”, Canton of Tantoyuca, State of Vera Cruz, has been cancelled because of non-conformity with Circular 9 of August 1, 1919.97
[Page 613]The Government of the United States exceedingly regrets the action of the Mexican authorities in requiring, as a condition of developing their properties, that American concerns obligate themselves in advance to conform to the provisions of prospective petroleum legislation, which, in the opinion of the Americans concerned and of this Government, would entail acquiescence in advance in possible infringements of their rights as owners or lessees of oil properties under the laws and Constitution of Mexico and under international law, and a waiver of remedies which might exist to enforce those rights if it should prove that they are infringed.
This Government has already indicated that it regards the course which the Mexican Government is now pursuing as threatening confiscation and must emphatically deny the right of the Mexican Government to impose the conditions of Circular No. 9, on the basis of which it is understood the Mexican authorities are now acting.
The views of my Government regarding the requirements of Circular No. 9 have been fully stated to the Mexican Government (refer to your representations pursuant to Department’s telegram 2228, October 1), along with the expression of the United States Government’s confident hope that, pending the general settlement of the petroleum question, the vested rights of Americans will be respected, and these views were recalled to your attention in my note No. 1492 of October 3198 relative to the cancellation of the permit of the Compañía Transcontinental de Petroleo, S.A. to drill well on lot 97, Chinampa. My Government views with no less surprise and regret, than concern, the practical answer to these representations which has come in the form of renewed rigor in the stopping of drilling operations.
In conclusion, I am instructed to ask whether or not in view of complications which this Government fears will arise from these acts and orders of the Mexican Government, that Government will be disposed to rescind and recall such orders and to issue orders to the appropriate officials permitting the Americans concerned to continue or to resume, as the case may be, the development and lawful enjoyment of their properties; and in view of the possibly irreparable loss which may result from the enforcement of these orders, I am further instructed to request that a prompt reply be made to this inquiry.