The Ambassador in Mexico (Morrow) to the Secretary of State
[Received March 13.]
Sir: I have the honor herewith to enclose for the Department’s confidential information a draft of proposed amendments14 to the Regulations of the Mexican Petroleum Law necessitated by the amendment of the Law itself passed by the Mexican Congress in December, last, and published in the Diario Oficial of January 10, 1928.
These amended articles are the result of informal conferences held on behalf of myself by Mr. J. Reuben Clark, Jr., with Señor Paredes, of the Department of Industry acting on behalf of Señor Morones. I understand that Mr. Paredes will recommend the adoption of these amended Regulations to Señor Morones, Minister of Industry.
It will be recalled that an informal understanding existed between the Department of Industry and the petroleum companies with a view to a formal hearing of representatives of the latter. Two hearings were given the representatives of the companies. A draft of amended Regulations was submitted to the Department of Industry by the companies. It was considered unsatisfactory so far as the Department of Industry was concerned. In a personal way I was given by Señor Morones a copy of Regulations drafted in the Department of Industry which were on the point of promulgation about three weeks ago. Upon examination of this draft, it seemed to fail in some respects to meet the position of the Department of State in the diplomatic correspondence on the subject. I secured suspension of the publication of the Department of Industry’s draft Regulations. Subsequently, I arranged for consultation between Mr. Clark on my behalf and Señor Paredes, on behalf of the Secretary of Industry, with the result, as above stated, that Señor Paredes has expressed conformity with the draft Regulations herewith enclosed. [Page 299] Mr. Clark feels that these Regulations are drawn with strict regard to the terms of the amendments to the Petroleum Law promulgated January 10, 1928, and to the decision of the Supreme Court in the Mexican Petroleum Company case, dated November 17, 1927, as well as to the minutes of the negotiations between the American and the Mexican Commissioners in the summer of 1923.15
The language of the diplomatic correspondence exchanged between the two Governments on the subject has also been kept in mind.
I also enclose the text of the proposed transitory articles16 in the Regulations of the Petroleum Law. These have been submitted to Señor Paredes today and the latter has indicated that he would recommend the amendment to Article 3 and the first amendment in Article 4 but that he did not see his way clear to recommend the amendment forming the last half of Article 4 or the amendment to Article 9.
I invite attention to the marginal comments in the draft Regulations, both permanent and transitory, as enclosed herewith. These marginal comments explain substantially the origin in each case of the changes made.
As the result of a conversation today between Secretary Morones, Mr. Clark and myself, it has been arranged that the Department of Industry will comment on the proposed amendments to the regulations, both permanent and transitory, and that we shall have an early meeting for the purpose of discussing the matter further.
I have [etc.]