To arrest the progress of Pearson, the Standard sent an emissary to Mexico to demand a monopoly of oil exploitation. It offered, in return, the immediate conclusion of a loan of 200 million Mexican dollars. Rockefeller's envoy promised, moreover, that the revolution would die down as though by magic, while, in case of refusal, it would continue until General Huerta was replaced by a more tractable President who would submit to American requirements.
Like his predecessor, Porfirio Diaz, General Huerta refused to make Mexico the vassal of the great trust, and the insurrection redoubled in violence.[16]
Tired of the continual struggles which ravaged their country for the benefit of the two great Anglo-Saxon nations, the Mexicans resolved to profit by the European War to win their freedom for ever. According to the laws of the country (1884, 1892, 1910) the owner of the surface was also the owner of the subsoil. All that a company had to do was to buy the ground and it was at peace with God and man. The Constitution of 1917 disturbed this peace. "The subsoil," it declared, "belongs to the nation." To exploit petroleum deposits a Government permit was required. This permit is only to be granted to Mexicans or to foreigners who consent to submit to the laws of the country as natives, and thus renounce their privileges as foreigners.
As soon as they received word of these new arrangements the British and American newspapers thundered against the unhappy President Carranza, whose fall from power was not long delayed. Taught by his example, his successor attempted a policy of conciliation, but in vain. The present President, General Obregon, is faced with the same difficulties, but holds firm. The Mexican Government hopes to free itself for ever, by means of the Constitution of 1917, from the diplomatic interference which has poisoned its existence. But the Obregon Government, though moderate, is not strong. It is supported by the middle-classes, but has the army and the people against it. Now, for some time, unfortunate tendencies have been shown by the Mexican people. It has just indulged in a Communist Congress, with the object of "grouping all the forces of the proletariat."
If President Wilson always maintained a policy of non-intervention towards Mexico—a policy, moreover, which was severely criticized within the United States—his successor at the White House meant to make himself felt there as well as in other parts of the world. President Harding had among his ministers Mr. Fall[17] of New Mexico, who has always interested himself in this question, and who at one time made energetic protests. He demanded that American citizens should not be expelled from Mexico on the simple order of the President of the Republic, and that a Commission should assess, at the earliest moment, the damages suffered by Americans during the Revolution-requirements contrary to the Constitution.
Thus I was not particularly surprised to hear that the Committee of the United States Senate had undertaken to recognize the new Mexican Government only on the condition that the article of the Constitution of 1917 which forbids foreigners to hold mineral rights was not applied to United States citizens.
The Mexican Eagle, however, is undisturbed. Pearson was clever enough, at its formation, to place it under Mexican law. His borings have continued uninterruptedly, while American companies were obliged to suspend operations and wait for Government authority.
Pearson and the Mexican Eagle
The struggle between Pearson and the Standard Oil became at one time so acute that the United States Government acquiesced in the payment by American oil companies operating in Mexico of royalties to bandits and insurgents as though to the established Government.[18] The general insecurity was such that certain American companies paid 1,500 dollars a month to a bandit in the Tampico district on the understanding that he would guarantee not to cut their pipe-lines.
Such a state of affairs could not go on for ever. After many years of conflict the two companies came to a sort of understanding by which they shared the exploitation of oil deposits, and when faced by the hostility of General Carranza's Government they sent a common delegation to the Peace Conference to defend their interests against expropriation by the Mexican Government.