812.6363/1926: Telegram

The Chargé in Mexico ( Lane ) to the Secretary of State


348. Ambassador’s No. 329, August 6, and despatch No. 2554, July 20.70 The Secretary of Industry has now indicated to the representatives of the Oil Producers Association that he is disposed to modify [Page 683] the order of June 8 so far as the amount of the bond is concerned, but that he will not change his position with regard to those provisions of the administrative order to which the companies seriously object, namely, paragraphs 3 and 4, since such action, in view of our two notes on the subject, would be “derogatory to Mexican sovereignty”. From a confidential source I understand that the reply to our note will state that the modified order meets with the approval of the petroleum companies. Representatives of Aguila, Huasteca, and Standard Oil state that if it is modified only as regards the amount of the bond, they will not accept it.

The Huasteca Company, which had over 125 drilling permits held up because they refused to accept permits under the provisions of the order of June 8, have, since the clauses [sic] of the Ambassador’s note of July 21, received over 70 permits, none of which were issued under the conditions of the order. …

I think we should wait another two or three weeks before we again request a reply to the Ambassador’s note of June 22, since, in my opinion, the Government will shortly make known its decision in the matter.

  1. Latter not printed.