The Department of State to the British Embassy


The Secretary of State has given most careful consideration to the British Ambassador’s aide-mémoire of December 12, 193938 regarding the Mexican oil controversy.

It is regrettably true that the negotiations between the Mexican Government and the American oil companies have failed of accomplishing the desired adjustment of the controversy existing between them as a result of the expropriation by the Government of the companies’ properties and that there seems to be no immediate prospect of any betterment of this situation. Likewise, no solution of the problem has been found through diplomatic negotiation between the American and Mexican Governments.

In this view of the matter, the Government of the United States is considering proposing to the Government of Mexico that, so far as American interests are concerned the controversy be submitted to arbitration. Such a proposal would envisage conferring upon the arbitrators the power of instituting a practical method for the fulfillment of their decision.

In such a situation, comprising in the language of the treaty a difference which it has not been possible to adjust by diplomacy, it would appear that the two Governments should properly take recourse to the process of arbitration provided for in the Inter-American Arbitration Treaty concluded January 5, 1929,39 to which both Governments are parties.