The Overstretched Superpower
Does America Have More Rivals Than It Can Handle?
THE rumors of war which disturbed Europe in the summer of 1914 left Mexico unconcerned. She had too many troubles at home just then to be bothered by events overseas. Following the overthrow of the Diaz régime some years before, she had been shaken by revolution; and in April 1914, just a few months before the beginning of the World War, she had undergone the further experience of military intervention by the United States, culminating in the occupation of Vera Cruz by American forces. In mid-July, on the eve of the world conflict, her provisional President, General Victoriano Huerta, was forced from office by pressure from Washington, and the question of his successor precipitated further civil strife. In Mexican minds these matters naturally outweighed the assassination in far-off Sarajevo or the invasion of Belgium.
A quarter of a century rolled by, and when in the summer of 1939 war alarms again sounded across the Atlantic the Mexican nation was all ears. The passing years had brought great changes; the country was now tranquil, and it also had more at stake in Europe than in 1914. The Government of President Cárdenas had recently converted the petroleum industry into a state monopoly -- and petroleum was not only the nation's third most important industry, it was a necessity for the belligerents. In spite of the hostility to Nazism and Fascism avowed by the Cárdenas régime, Germany and Italy were taking approximately two thirds of Mexico's petroleum exports -- the Reich alone accounting for nearly one half of the total. It was evident that if a war should drive the tankers of either of these good customers off the seas Mexico would feel the pinch unless she could find other buyers; for petroleum exports are to that country what cotton exports are to our southern states.
It seemed probable, therefore, that the war would have a more immediate and direct effect on Mexico than on any other country of Latin America. To the United States this was a matter of much importance, for several reasons: Mexico is our nearest southern neighbor; she is the second largest, in population, of the Latin American republics; she has more questions at issue with the United States than any of these other republics, and the war may affect their settlement; and finally, all of Latin America regards the attitude of the United States Government toward Mexico as a test of the sincerity of its rôle of the Good Neighbor.
Oil is Problem Number One in the relations between Mexico and the United States; and it is also Problem Number One for Mexico in her necessary adjustment to the war situation in Europe. Before the nationalization of the foreign oil properties in March 1938, the bulk of the oil exported from Mexico had gone to Great Britain and the United States. After the expropriations only a small amount was shipped to the latter country, and most of this came in bond for refining and transshipment. The British completely suspended their purchases and persuaded some of their neighbors to do likewise. Britain had further denied the right of the Mexican Government to expropriate the British properties and had formally demanded their immediate restoration. After an exchange of sharp notes Mexico severed relations with London. The prospect that Great Britain or the United States would soon resume their places as buyers of Mexican petroleum seemed exceedingly remote. So long as the Cárdenas régime adhered to its program, nothing short of an acute national crisis was likely to induce the expropriated companies to abandon their boycott.
The outbreak of war, with the ensuing British blockade, abruptly ended the shipment of Mexican oil to Germany. During the first eight months of 1939 German purchases had been almost four times as great as in the corresponding period of 1937, when the Mexican oil business was mainly in the hands of British and American companies. These purchases by the Reich were the mainstay of the state monopoly, and their termination necessitated the finding of new export outlets if drastic curtailment of operations was to be avoided, with ensuing financial losses and unemployment.
Italy's decision to remain neutral was therefore good news to the Mexican authorities. If she too had been blockaded, the new Mexican program might have collapsed. The Mexican Government hoped that Italian purchases would increase under wartime demand and offset in some measure the loss of German orders. It also hoped that exports to other neutral nations would increase whenever these countries could serve as intermediaries for the belligerents. On the other hand, if Italy should finally enter the war on the side of Germany and succeed in preventing the movement of oil from Mosul and Persian Gulf fields to Great Britain through the Mediterranean, the British, or neutral agents acting in their behalf, might be obliged to turn to Mexico.
For these reasons the loss of Germany as an oil buyer was not regarded by Mexican officials as a permanent setback. They expressed confidence that other wartime developments would help to restore the country's prosperity after so many lean years. Even before the war began, business in Mexico was definitely changing for the better. During the latter half of August the price of silver had risen, and Mexican spirits with it. An alarming depreciation of the currency earlier in the month had brought the peso to a record low price, equivalent in United States currency to 16.38 cents. Before the oil expropriations the peso had been pegged at 27.8 cents (3.6 to the dollar). Immediately thereafter it had declined to approximately 20 cents and had fluctuated around this level until new weakness developed in June 1939. As its value receded during the summer, business activity slackened. Then came the upturn in the price of silver; by the end of September the peso had reached a new high for the year of 20.95 cents.
The fluctuations of the peso, following variations in the world price of silver, were due in some measure to political events in Washington. The low price reached early in August was a result of efforts by certain Senators and Representatives in the United States Congress to prohibit the further purchase of foreign silver by the Treasury. This move was linked with a drive for an increase in the price paid to domestic silver producers by the Federal Government. The political manœuvres in Washington and the peso's consequent sinking spell created considerable uneasiness in Mexico City, and there was great relief when the Roosevelt Administration finally persuaded Congress to drop its proposed ban on imported silver. With the removal of this threat the price of the metal rallied, and there was a still sharper rise a few weeks later when the advent of war stimulated silver hoarding in Europe because of fears that the paper currencies would depreciate.
Further hope of economic improvement was derived from the fact that, in addition to petroleum and silver, Mexico's other important industrial minerals -- copper, lead and zinc -- were also needed by the countries at war, and that increased sales of these commodities at higher prices seemed probable. Their production, except in the case of petroleum, was largely in the hands of foreign companies; nevertheless, an expansion in their output would mean increased employment and higher purchasing power for Mexicans. As these lines are written, however, this hope of a boom in the mineral industries still awaits realization. Some prices had risen during September, but these advances had been offset by increases of 100 percent or more in freight and insurance rates. In fact, during the first month of the war Mexico's exports were drastically curtailed. No lead was shipped to Europe, and only small quantities to the United States. The exports of gold, silver and copper were in about normal volume, but zinc exports were far below the average. The British Government, which was expected to be the principal buyer, had fixed maximum prices for lead and zinc at figures below those prevailing immediately before the war, and because of higher transportation and insurance charges they were not attractive to exporters. Copper was the only metal whose price was increased on the London market.
To overcome these obstacles, the Mexican Government undertook a revision of its export duties. On gold, lead, zinc and copper (and on silver also until August) there was an export tax of 12 percent, levied according to arbitrary valuations. In October the export duty on lead ore was repealed, and the official valuation of gold, lead and zinc was reduced. Since the London price of copper had been advanced 20 percent, the Mexican Government raised its valuation by 29 percent in the hope of cancelling some of the loss of revenue resulting from lower duties on the other metals.
Thus far Mexico's gains from war trade have not sufficed to compensate her for the loss of the German petroleum market. The British blockade is not only preventing oil from reaching Germany; it has hindered payment by that country for oil it has already obtained from Mexico. Though Germany bought most of this oil under a barter agreement, she had been importing it faster than she had been exporting manufactured goods in payment. From the time the barter arrangements went into effect until the imposition of the British blockade, oil exports to Germany amounted in value to approximately $8,000,000, while her payments to Mexico in goods and cash had amounted to only $3,000,000. The Mexican Government thus has debit items of $5,000,000 against the Reich, and its early hopes of obtaining payment, based on Germany's promises to use neutral vessels to ship goods on account, have been upset by subsequent British measures against German exports.
In the meantime oil continues to go to Italy, the next largest importer, though the shipments have fallen below the recent peacetime volume. In the first month of the war Italy took only 266,000 barrels, compared with an average of 407,000 barrels during the preceding eight months. Since the expropriations the Italian and Mexican Governments had negotiated three separate barter deals. Two of these provided for the exchange of petroleum for rayon yarn, and the other for the exchange of petroleum for three tankers to be built in Italian shipyards. Soon after the war began Mexico discovered that Italy was also "slow pay," because of the lack of transportation facilities. Shipments of rayon yarn have been so limited that Mexican textile mills have been compelled to curtail their operations. Moreover, the Italian Government has indicated no intention to act as an intermediary for Germany in obtaining Mexican oil. In this and various other ways Italy has revealed a desire to remain on good terms with Great Britain and France, who, after all, would be much better customers than the German Reich.
Late in August Petróleos Mexicanos, the oil monopoly, proudly announced that all available oil not required for domestic consumption had been sold and that it did not have another barrel to offer a foreign buyer. The war changed this situation almost overnight. Much of the oil contracted for could not be shipped, and within a few weeks existing storage facilities for surplus oil became inadequate. Three German tankers took refuge in Mexican ports after war was declared, and there they remained. Six other German vessels, including two passenger ships, were also anchored in Mexican waters; one of these, the Columbus, is the third largest liner flying the Nazi flag. Several newspapers and a number of politicians have been urging the seizure of these vessels in the event that the Reich fails to pay for the oil already received; and the German Minister in Mexico City is reported to have proposed that the ships be held by the Government as security for ultimate payment -- a procedure which would forestall seizure and probably reduce the expense of upkeep for the ships' owners. It has also been reported unofficially that the Mexican Government was attempting to negotiate for the purchase of two of the idle tankers, with the stipulation that the price be applied in part settlement of the oil account. Members of the Cárdenas Administration have often urged the development of a merchant marine as one of the instruments for freeing the country from dependence on foreign capital. The arrangement with Italy for building tankers in exchange for oil is one step toward the realization of such a program; but these vessels cannot be delivered until some time in 1940, and the need of an immediate oil outlet is urgent.
The sale of oil has become linked with the problem of Mexico's neutrality. The presence of so many German ships in her ports has given rise to rumors that they are secretly aiding U-boats operating in the Caribbean. Although the proximity of U-boats has never been confirmed, rumors have persisted. On September 29 the Mexican Congress enacted a Neutrality Law which prohibits the entry of belligerent submarines, armed ships, airplane carriers and airplanes into the country's ports; since then officials have kept a close watch for suspicious movements by the Nazi vessels. Something seemed to be brewing once when the Columbus left her anchorage at Vera Cruz and moved to an isolated bay nearby. Since the ship lay low in the water it was assumed that she had large stores on board; and since she seemed to be constantly taking on more provisions, it was suspected that some of her boats, always kept alongside, were sent to sea at night to replenish naval vessels with food and fuel. The fact that her crew of 600 men required a substantial quantity of food both for current consumption and for a reserve against the day when they might be suddenly ordered to sea seemed to be overlooked.
The tanker Emmy Friedrich at Tampico was also under suspicion after she had taken on a deck cargo of livestock as well as a cargo of oil. It was easy to imagine the livestock as furnishing fresh meat to the crews of U-boats. On October 20 this vessel put to sea, after clearing in regular order for Malmö, Sweden. There were doubts whether this was her real destination, since she was so old and slow that she seemed to have little chance of running the blockade. At any rate, the ship never proceeded far on her voyage, whatever its objective; for on the fourth day out of Tampico she suddenly encountered a British cruiser and was sunk by her own officers to avoid capture.
During the World War the German Navy took advantage of Mexico's preoccupation with her domestic troubles -- and Carranza's pro-German sympathies -- to establish a submarine base in her territorial waters. This fact has not been forgotten, and it may account for the many rumors of similar operations at present and for the keen vigil kept over the German merchant ships. But vigilance is also necessary within the country. There are numerous indications that German agents are active in the capital. Commercial radio stations are broadcasting much German propaganda, and these efforts are seconded by one section of the press. There is a widely prevalent belief that two daily newspapers in Mexico City enjoy a German subsidy. During the first weeks of the war the capital was mystified by reports that short-wave messages were being sent in code from widely separated sections of the city on successive days; the apparent ubiquity of the transmitting apparatus seemed to indicate that it was installed in a motor vehicle. The peripatetic station was alleged to be in communication with ships at sea and even with Berlin, but in spite of diligent search it has never been discovered. After the Soviet-Nazi entente became effective, even the Communists among the refugees from Loyalist Spain were suspected of establishing a liaison with Hitler's agents.
Vexatious incidents like these are the common experience of most neutrals. At various times in the past the Cárdenas Administration has indicated its aversion to the totalitarian régimes in Germany and Italy, and during the civil war in Spain it openly proclaimed its sympathies with the Loyalists. For this reason it is now believed to be favorably disposed toward the Allies in spite of the fact that for more than a year it has not been on diplomatic speaking terms with Great Britain and has in the interim developed close commercial relations with Germany and Italy. To maintain a strictly neutral and officially correct course under such conditions may at times have required a bit of dancing on eggs; but the Foreign Office has kept its record straight. On one occasion late in October the Government was at special pains to show both its own people and its neighbors that it was quite able to handle its neutrality problems without outside assistance. Shortly after the German freighter Havelland arrived in the Pacific port of Manzanillo, the United States gunboat Erie also steamed in and dropped anchor. The Erie's visit had been prearranged with the Mexican authorities and was in no way connected with the presence of the German ship. Nevertheless, the press reported that the gunboat was intruding in Mexican waters to watch the freighter's behavior. The story caused much excitement, especially among politicos always watching for an opportunity to uphold the nation's dignity and honor. A Mexican Senator called on the Foreign Office for an explanation and was assured that the visit of the American ship was in every way regular and was made with the previous approval of the Government. Shortly afterward a Mexican gunboat and two coast guard vessels arrived at Manzanillo and conducted a well-advertised and punctilious inspection of the German ship and its cargo without finding any objectionable items aboard. National prestige was saved; Mexico had made it abundantly plain that she alone had the right to supervise ships in her own waters and was fully able to safeguard her neutrality whenever the occasion demanded.
Although the Erie incident was a minor affair, it effectively revealed the sensitiveness of the Mexican people to any suggestion of pressure or interference by their northern neighbor. It also indicated that a prolonged war might have important effects on the relations between Mexico and the United States. In plain truth, for several years past Mexico's welfare has been more in the keeping of Washington than most people on either side of the border have realized. It is hardly conceivable that Mexican political leaders have relished this dependence, and Washington likewise has given signs that it does not enjoy its responsibility; but the situation is one which cannot be easily altered. As has already been indicated, the present prosperity of Mexico is closely linked with the price of silver. This metal usually holds first place among the country's exports, and in 1938 it comprised 20.4 percent of their total value. And 98.5 percent of the silver exported in that year went to the United States, where it was not really wanted. These shipments had a value more than double that of all the petroleum products exported in 1938 -- a year, however, in which oil production was subnormal because of interruptions incident to the expropriations.
The importance of Washington's silver purchases to the Mexican national economy is thus readily apparent. These purchases have increased the revenues of the Mexican Government; they have stimulated production and increased employment in the silver industry, and have made possible a stabilization of the currency. For many months the United States Government paid somewhat more than the world price for Mexican silver and thus subsidized a foreign industry, which was, however, largely under American ownership. Purchases at a price fixed above the world market were discontinued in April 1938, shortly after the oil expropriations; but the Treasury continued to buy the metal on a large scale in the open market and in this way absorbed virtually the entire amount shipped from Mexico, until attempts were made in Congress in the summer of 1939 to check these operations. Although these efforts were defeated, the Treasury in successive stages reduced its buying price from 43 cents an ounce to 35 cents. This sweeping reduction within a few weeks upset the peso and materially diminished the amount of dollar exchange obtainable from the export of silver. To stimulate sales of the metal the Mexican Government on August 16 removed the 12 percent export duty. The elimination of this tax was followed later, as already noted, by the removal or reduction of export levies on various other minerals. Washington had some interest in this procedure, for it was out of the revenue from the export taxes that payments finally began to be made in 1939 on certain long-standing claims of American citizens for small agricultural properties expropriated by the Mexican Government since 1927.
By closing the chief outlet for Mexico's petroleum and by necessitating a readjustment of her mineral taxes, the European war has thus had effects not wholly expected. It is still too early to judge whether that conflict will bring the United States and Mexico into closer relations or drive them farther apart. Certainly war conditions overseas have made the idea of Pan American solidarity more popular and of more immediate practical importance, and under such circumstances a prompt settlement of the issues long vexing the relations of two neighboring republics becomes all the more desirable.
These considerations are especially applicable to the oil controversy. The patience and persistence with which Secretary Hull labored for an adjustment of the smaller land claims was believed to indicate that he might be seeking in this way to establish a basis for negotiating with regard to oil. The land agreement was not in itself an outstanding achievement, but it did result in a modification by the Cárdenas Government of its dictum that the adjudication of claims based on expropriations was a matter for its sole determination -- both as to time and manner.
There has been no similar modification of his Government's position vis-à-vis the oil companies. In fact, when the Mexican Foreign Office accepted the compromise on the land question it expressly stipulated that this action was not to be construed as a precedent. It insisted that foreign property owners and holders of concessions should have no rights which were not also enjoyed by its own nationals; in other words, that foreigners should not appeal to their governments against the Mexican authorities but should seek redress under Mexican law and abide by the decisions of Mexican courts. This position would have been unassailable if there had been reasonable assurance that in these courts there would be equal justice for both aliens and nationals. But there is no such assurance. The Mexican judiciary is not independent of the political authorities. Under Cárdenas the Supreme Court has been completely reconstituted. Its members no longer hold office for life, and its present personnel was appointed by him for terms coinciding with his own. In selecting the twenty-one justices he was careful to "pack" the court with those whose minds ran along with his.
In view of the Government's attitude, it is not surprising that the various negotiations in Mexico City and Washington during 1939, in which diplomats, other government officials and representatives of the oil companies participated, have produced no tangible results. None the less, the state oil monopoly keenly desires to recapture its share of the American oil market since the war has spoiled its previous arrangements. In October its selling agency, the Distribuidora de Petróleos Mexicanos, opened an office in New York, and some significance was attached to the fact that this step was taken almost simultaneously with the conclusion of a trade agreement between the United States and Venezuela reducing the duty on a fixed amount of imported petroleum by 50 percent. Under the terms of the Trade Agreements Act of 1934, this reduction was automatically extended to Mexico and other oil-exporting countries. The state monopoly already had a considerable quantity of oil stored in bond on the Texas seaboard and was ready to benefit from the lower duty if buyers could be found.
While seeking to regain their lost export trade, the Mexican authorities are unwilling to yield on any vital point in their dispute with the companies. Restoration of the properties would probably mean political suicide for any administration that took such a step; approval of the expropriations is not confined to the Cárdenistas. On the other hand, Cárdenas himself has always admitted the right of the dispossessed corporations to some measure of compensation. Soon after their expropriation the sum of more than $400,000 was raised by popular subscription, apparently with the President's approval, as part of a reimbursement fund. And on September 1, 1939, in his address at the opening of the Mexican Congress, Cárdenas stated that "the Government, in the performance of its firm intention, has from the beginning reserved 20 percent of the value of the [oil] products exported towards payment of the indemnification, together with the sums contributed by the people for this purpose."
There is a wide discrepancy, however, between the ideas of the Mexican President and those of the oil companies as to what constitutes indemnification. Señor Cárdenas has maintained throughout that the ownership of subsoil rights is vested in the state and that the companies in consequence are not to be compensated for the loss of oil but only for such parts of their justified investment in physical equipment as have not yet been recovered through amortization. The determination of the amount of this unrecovered investment, moreover, must be exclusively in the hands of his Government. This view conflicts sharply with that which the United States Government has maintained for more than two decades. The Mexican Constitution of 1917 does give the nation "direct dominion" over all mineral wealth, including petroleum, and a few admirers of President Cárdenas in the United States have repeatedly cited this clause as proof that neither their own Government nor the oil companies have a leg to stand on in contesting the action of Mexico. Such a defense is based on less than a half-truth, for it ignores four pertinent facts: first, that the Constitution also says that "no law shall be given retroactive effect to the prejudice of any person whomsoever;" second, that the Mexican Supreme Court in a series of rulings in 1921, 1922 and 1927 explicitly denied that Article 27 was intended to be of retroactive effect; third, that the Executive branch of the Mexican Government, through the Payne-Warren negotiations and the Calles-Morrow Agreement, reconfirmed the action of the Court in upholding the validity of titles to oil lands acquired before the adoption of the new Constitution; and finally, that Congress, the legislative branch, did the same thing by statute in 1927.
The United States Government has never challenged Mexico's right of expropriation, as Great Britain did to her subsequent confusion in 1938; but it has insisted that expropriation be followed by "prompt, adequate and effective" payment. There is room for endless argument over the meaning of adequate payment. Cárdenas insists that what he proposes to pay will be adequate; but even if he were to do the unthinkable and agree to pay for oil still in the ground, the difficult problem of gauging the value of this unseen wealth would still remain. To avoid such obstacles and to save face all around, there have been suggestions from the American side that, in lieu of restoring the oil lands to their former holders or attempting to assess their value, the companies be reinstated as producers, but not as owners, and be authorized to operate under long-term contracts calling for the unconditional return of the properties to the Government when the contracts expire. No progress has been made with this proposal because of the Mexican Government's insistence on full control of the management under any plan devised for company operation.
By giving a new significance to the Good Neighbor policy, the European war has made it more necessary than ever for Washington to proceed cautiously in dealing with Mexico. The United States Government faces the double necessity of avoiding even the appearance of coercing a neighbor and at the same time of preventing the creation of an impression in other Latin American countries that it will not resist encroachments on the rights and property of its nationals by foreign governments. Meanwhile, the handling of this problem has not been made any easier for the American Government by the attitude of some of its nationals of extreme Leftist or Rightist views who are often to be encountered in Mexico. The Rightists call loudly for strong-arm methods. "We ought to get tough," they say, "instead of lying down and letting ourselves be robbed." The Leftists are elated over Mexico's Noble Experiment; to them it means the doom of capitalistic imperialism and the dawn of the Marxian millennium in the New World. This group seems to have some influence on the attitude of Mexican officialdom toward Washington; the other group apparently has none at all. Leftists have an advantage in being able to get the ear of Cárdenas and his advisers; what they say is what these folk want to hear, and whether so intended or not, their views tend to create an impression that the American people as a whole do not approve Secretary Hull's Mexican policy.[i]
What effect the war may ultimately have on the relations between Mexico and the United States will depend to a considerable degree on the political realignments which it may bring about in either or both of these countries. Mexico, like the United States, has a Presidential election in 1940. In Mexico the campaign has been under way since early in 1939, although the election does not take place until next July. The platform of the National Revolutionary Party, which for ten years has been the dominant political organization in the country, offers little hope for a settlement of the oil controversy in accordance with the principles enunciated by Washington. Under the Constitution President Cárdenas cannot succeed himself, and for its candidate his party has nominated General Manuel Avila Camacho, formerly Minister of National Defense in the Cárdenas Cabinet. The coming election will not be a one-party affair, as others have been in recent years. The leading opponent of Avila Camacho is General Juan Andreu Almazán, who heads a coalition of conservatives. Politically, both candidates are to the right of Cárdenas. Almazán is generally regarded as much the abler of the two, but his opponent at this time seems to have the better chance of election and is expected, if chosen, to be guided by those now in power and to carry on the Cárdenas policies.
Normally, the campaign would be fought on the single issue of the continuation of these policies; but the war has injected a number of uncertainties into the political situation which may affect the nature of the contest. The Mexican Revolutionary Party has derived its strength heretofore from three sources -- the army, the labor organizations and the farm workers (campesinos). The Confederation of Mexican Workers (C.T.M.), an organization often compared to the American C.I.O., is by far the most important element in this coalition. Its leader, Señor Vicente Lombardo Toledano, is regarded, after President Cárdenas himself, as the strongest man in Mexico. He once spent some time in Russia, and though not officially a Communist, he has been a "fellow traveller" and an avowed admirer of Stalin. He used his power to squelch the candidacy of General Francisco Mújica, who was regarded as a more ardent Cárdenista than Avila Camacho, because of Mújica's friendship for Trotsky, now a refugee in Mexico and Stalin's most unsparing critic. Heretofore Lombardo Toledano has been conspicuous for his denunciation of Nazism and Fascism, his characterization of Mexican conservatives as friends of Hitler and his portrayal of Soviet Russia as the champion of true progress and real democracy. But now that his good friend Stalin has left him out on a limb by teaming up with Hitler, he has become discreetly silent. After what has occurred in Eastern Europe, he may need all his conspicuous talents to prevent a rift in the ranks of his organization on the issue of Stalinism. Much may also depend on the final attitude of the army. Its leaders have no enthusiasm for the ultimate objectives of Señor Lombardo Toledano.
It is possible, therefore, that the European war, by its repercussion on domestic conditions in Mexico, may materially affect future relations of that country with the United States. A long war restricted to sporadic fighting by air and sea may cause economic stagnation in Mexico, or if it becomes more destructive, like the World War, it may have the opposite effect and create a huge demand for raw materials of military necessity. In either case it will be to Mexico's interest to cultivate closer ties with her northern neighbor. In depression she will need our friendly coöperation in various ways, and in prosperity she will need new capital and technical skill which the United States alone can supply. But there can be no inflow of American capital without an honest settlement of the outstanding questions at issue between the two countries. A long war will also give German propaganda a better opportunity to get in its work in Mexico, as in 1914-18. The World War had not been long in progress before the Carranza Government exhibited a pro-German bias. By 1917 the German Government was urging Mexico to join Japan in attacking the United States, with the promise that, as a reward for this cooperation, all the territory which Mexico had lost to the United States would be restored to her. That episode shows what may happen in the present conflict if strained relations between the two republics make Mexico a fertile soil for seed from the Reich or the Soviet Union.
[i] A concrete example of this type of activity came to the writer's attention during a visit to Mexico some months ago. The front page of a Mexico City newspaper carried a story to the effect that a visiting justice of the Supreme Court of an American state had conferred with leaders of the Mexican Revolutionary Party and had expressed his complete agreement with the policies of Cardenas, "en especial con la expropriación de los bienes de las compañias petroleras." The visitor was speaking not only for himself but for an organization to promote democracy in the Americas, characterized in the news account as "genuino representante de la sana opinión pública de los Estados Unidos."