Courtesy Reuters

Mexican Oil in World Politics

THE seizure by Mexico of the properties of American oil companies in that country has done much more than subject the Good Neighbor policy to a strain. It has precipitated a train of unforeseen developments which may drastically alter the position hitherto occupied by the United States in Mexican international relations; and many believe that it may even open wide the doors of Mexico to influences generally regarded as alien to the professed ideals of all American republics. These possibilities appear at the moment to be causing nearly as much concern in some quarters as the expropriation of the oil properties.

The unexpected by-products of Mexican policy are due in part to the economic condition of the country and in part to inexperience and disregard of realities on the part of its leaders. The oil seizures of last March could hardly have been made at a more unpropitious time. The severe crop failure of the previous autumn had made it necessary to import unusually large quantities of foodstuffs. This alone would indicate the need of proceeding cautiously with economic innovations. The situation had been further complicated by a speeding up, during the past two years, of the agrarian reforms and by an ambitious public-works program. Both of these undertakings had been a heavy drain on the Treasury. Irrigation projects had been inaugurated in order to convert arid lands into fertile farms for the peons. Modern highways had been built to stimulate domestic business and attract the tourist trade. Millions of acres from expropriated haciendas had been divided among more than a million peon families, and millions of pesos in government funds had been spent in placing agricultural workers on the soil and equipping their farms. The confiscated farm lands, however, no longer paid taxes, and the Government was badly in need of money. Tariff duties were raised and a progressive sales tax was imposed on the business of certain types of foreign concerns, but these new imposts tended further to restrict

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