812.6363/3042: Telegram
The Ambassador in Mexico (Daniels) to the Secretary of State
[Received 9:15 p.m.]
300. My despatch 5669, November 13, 1937.69 American oil companies here feel that Aguila Company and British Government have been cognizant of dealings of Corey Brothers, Stevins and Hardy, and Lambert and Bend all of London and that united front of oil companies with regard to labor difficulties is probably broken. Indications from Foreign Office and other sources are that American companies [Page 675] may be faced with difficult situation since as a result of Aguila deal the Government’s attitude with regard to having Labor Board confirm experts’ decision seems to have stiffened. There are indications that the Government may be preparing to discuss with Richmond and other companies confirmation of their concession and contracts on the basis of a participation in the oil produced.
The Aguila’s arrangement with the Government provides for 12,580 barrels daily to the Government beginning 11 months from now. Presumably the 30 or 40 wells to be drilled by the British independent oil group are to be over the territory reserved by the Government for drilling in the arrangement with the Aguila. The independent group agrees to lend $5,000,000 [to] build 3 refineries and 10 coastwise vessels, all funds advanced to be paid from petroleum produced.
Local Aguila officials deny all connection with the British independent oil group.
There are indications, however, that the British Legation was cognizant of the negotiations both of the Aguila and of the independent oil group.
Particulars were forwarded to the Department by air mail this morning.
- Not printed.↩