ACTION BY MEXICO

Wairarapa Times-Age, 16 May 1938, Page 7

ACTION BY MEXICO

MINISTER WITHDRAWN FROM LONDON DIPLOMATIC RELATIONS SUSPENDED THE OIL EXPROPRIATION DISPUTE. BRITISH ATTITUDE THOUGHT UNFRIENDLY. By Telegraph —Press Association. Copyright. MEXICO CITY, May 14. As a sequel to the dispute over the expropriation of the properties .of British oil firms in Mexico, the Mexican Government has recalled its Minister in London, Senor Primo Vellamichel, in view of Britain’s “unfriendly attitude.” The suspension of diplomatic relations and the closing of the Legation in London were announced in a Note handed to the British Minister, Mr O. St. C. O’Malley, by the Foreign Minister, General Edouardo Hay. Simultaneously General Hay handed Mr O’Malley a cheque for 361,737 pesos, covering the claims for the annuity due on January 1, 1938, together with interest, which was the subject of Britain’s last Note to Mexico. A Mexican Press communique stated that Mr O'Malley was notified that, in view of-the not very friendly attitude of the British Government towards the Mexican Government in connection with the recent expropriation of the oil companies, the Mexican Government “feels it is necessary to withdraw its Minister in London and the Legation personnel in that country. It is closing the Legation and leaving the archives in the custody of the Mexican Consul-General.” Mr O’Malley told the “New York Times” that he had not received a time limit in which to leave Mexico. “I have informed my Government and am awaiting instructions,” he said. The text of the Mexican reply to the British Note demanding payment of the special claims maintains that the agreement of December 31, 1935, recognises Mexico’s right to defer payment by delivering interest on unliquidated annuities, which therefore does not make them demandable. “In view nevertheless of your Government’s attitude in the matter,” the Note continued, “I have pleasure in attaching a cheque for 361,737_ pesos, it having been necessary to rectify the figure of 370,962 mentioned by your Legation -since the latter figure is erroneous.

“As the object of the Note which is hereby answered is to require the above-mentioned payment, I refrain from taking into consideration the diverse reference which the Note contains regarding the state of the internal and external debt of Mexico. These references do not take into account on the one hand that your Government lacks any right to analyse the interior situation of Mexico, or, on the other hand, the complex circumstances involved, which explain and even justify the attitude of my Government.

“These references do not halt at the limits that might be expected. Allow me, only because I consider it pertinent, to call to the attention of your Excellency that even the most powerful States and those which have at their disposal abundant resources cannot boast that they are up-to-date in payment of all their pecuniary obligations.” The Mexican currency is stabilised at an exchange rate of 3.60 pesos to the United States dollar.

NOTE RECEIVED. CONSIDERATION IN LONDON. (British Official Wireless.) RUGBY, May 14. British official quarters in London received the Mexican Note this morning and are giving it consideration. Diplomatic relations with Mexico have been suspended on many occasions in the past. It is pointed out in London financial circles that the Mexican policy has had the effect of terminating or excessively hampering practically all British enterprise in Mexico. PAYMENT IN OIL. STATEMENT BY MANAGER OF COMMISSION. SAN ANTONIO (Texas), May 14. Senor Vincente Cortes Herrera, manager of the Mexican Petroleum Commission, told the correspondent of the United Press that the British and American oil companies must accept payment for the expropriated properties in oil or funds derived from the sale of oil to other nations. Mexico was already selling oil in countries including Germany, France, and the South Americas. OPPINION IN U.S.A. POSSIBILITY OF SERIOUS COMPLICATIONS. PRESIDENT CARDERAS BIDDING FOR SUPPORT. NEW YORK. May 14. The Mexico City correspondent of the “New York Times” says Mexico's unprecedented act, carrying with it serious international complications, was the direct outcome of the three British Notes to Mexico between April

8 and May 11. Mexico is counting upon the Monroe Doctrine to protect it from Britain’s wrath, and an unpleasant situation is laid at the doorstep of Washington. It was strongly rumoured tonight that Britain had been leading to a break in relations by the Notes. Mr O’Malley, however, denied this “emphatically.” The correspondent added that widespread opinion in Mexico City attributes the diplomatic breach with Britain to a daring move by the President, General Cardenas, to strengthen public support at a time of economic strain due to the boycott of Mexican oil. There has been a collapse of business, and labour leaders threaten widespread strikes because of the consequent reduction in wages. The newspaper “Novedades” says the leaders of the Confederation of Mexican Workers charged many industrial firms with attempting to take advantage of labour’s restraint to impose wage reductions and readjust their personnel. The confederation warns them that it will resort to the

strike weapon if necessary. The Mexico City correspondent of the United Press says the suspension of British and Mexican deplomatic relations was completed when Mr O'Malley and the Legation personnel were instructed to leave Mexico. Mr O'Malley will leave for London from the United States in a few days. CONCERN IN WASHINGTON.

Washington is gravely concerned over the breach, says the “New York Times.” Apprehension is felt lest coolness might develop between Britain and the United States, because their different policies have increaseci the difficulties of the expropriation dispute.

Great reserve is manifested, however, in studying this possibility, for there had been some indication recently that if Mexico failed soon to submit an adequate proposal for compensating the British and American oil companies, the United States might seriously consider abandoning its softer policy and moving over to the British position with a demand for the return of the properties. There have even been tentative conjectures whether there were a tacit understanding between Washington and London in this

regard. In the background stand the questions whether the Monroe Doctrine might become directly involved and whether the good neighbour policy will be subjected to a severe strain.