Mexican Oil Peace?

As result of Mexico's claiming title to all mineral and other subsoil deposits by virtue of Article 27 of the 1917 Constitution (TIME, May 5,

1923), a feud has existed between the Mexican Government and foreign oil interests.

During the past week the Mexican Government issued a statement: "An agreement has been reached on the fundamental points in the long-standing controversy between the oil companies and the Government." At the same time, Messrs. Chester Swain (counsel for the Standard Oil Co. of New Jersey), General Avery De L. Andrews (U. S. representative of the Royal Dutch Petroleum Co. of Holland and Shell Trading and Transport Co. of London) and Dean Emery (counsel for the Pan-American Petroleum and Transport Co.) left Mexico City without issuing statements.

No official information concerning the new agreement was published, an authoritative source summed up the major points:

"1) Modification of the present taxation for the purpose of encouraging development and exploration of new fields where the quantity and quality of the petroleum deposits are uncertain.

"2) A mutually agreeable understanding for protection, in proposed oil legislation to regulate Constitutional Article 27, of rights to exploit petroleum deposits under lands acquired prior to the inception of the 1917 Constitution on which the owners or lessors had not previously undertaken or made contracts for petroleum exploration, nor manifested intention to do so."

Whether or not the agreement embraced a more sweeping settlement was not known. In Manhattan, Wall Street opined that the agreement, if ratified by President Obregon, or his successor, General Calles, and the oil companies, would pave the way for a rehabilitation of the oil industry in Mexico by making it possible, for the first time in seven years, for the investment of U. S. capital in the exploration and development of new fields.