812.5045/611: Telegram

The Ambassador in Mexico ( Daniels ) to the Secretary of State

328. President Cardenas has instructed the special committee that reported the oil companies could pay increased wages of $26,000,000 and the Labor Board, to confer with representatives of the oil companies to go over the figures. There is hope such conference will result in a willingness to reach an agreement as to what increase in wages can be paid.

The Government under pressure from Washington in view of financial situation agrees to postpone the whole question until the Supreme Court which has the power to modify the amounts in dispute passes upon the application of the oil companies. It is willing that the bond should be indeterminate and not burdensome on the companies. These concessions are conditioned upon the payment of 1,300,000 pesos in wages. Under the law they say they cannot waive this payment now. Inasmuch as the Government is ready to make the above concessions which it believes is going very far it expects the oil companies to agree to this arrangement. Mr. Beteta tells me the Government cannot and will not go further. Even so there is no certainty there [Page 676] will not be a strike. He says “our Government cannot and will not recede from the obligations it owes as a Government. If it should do so it would no longer be a Government”. I talked with him after he had attended a meeting with the President and other public officials. He did not disguise his feeling that his Government is acting under pressure applied by our Government at a time when Mexican finances compels Mexican officials to accept what they believe to be hard terms.

Daniels