The Acting Secretary of State to the Ambassador in Mexico (Morrow)

No. 2

Sir: The subject matter of the Department’s instruction 1485 of October 25, 1927, has today been discussed with Mr. Harold Walker.3 Mr. Walker confirmed the statement made by the British principals in the case through the Foreign Office to the British Embassy in Washington. It appears that the agreement among members of the Association of Oil Producers in Mexico not to apply for concessions under the Petroleum Law covers only lands owned by members of the Association, and that in so far as lands owned by ‘non-members of the Association are concerned, members have regarded themselves as entirely free to apply for any concessions they might desire. Mr. Walker is of the opinion that this is a situation which should be remedied, and in view of the assurance contained in the informal communication from the British Embassy, dated October 20, 1927, which was quoted to you in the Department’s instruction 1485, he will raise with the Association the question of extending the agreement so as to include all lands except those owned by Mexicans. [Page 172]Mr. Walker will also communicate informally with Mr. Burton W. Wilson in New York suggesting that the latter get in touch with General Andrews, representing the Aguila Company, with a view to arranging for the withdrawal of the application for the exploration concession filed by Mr. Hallatt.

In these circumstances the Department is of the opinion that it would be undesirable to make any representations to the Mexican Foreign Office in the matter at this time. You may, however, inform Mr. Ingalsbee of the steps which have been taken and suggest that he keep in touch with developments in the matter through Mr. Wilson.

I am [etc.]

Robert E. Olds
  1. Representative of the Mexican Petroleum Company.