Cool Water on Oil

One day last week U. S. Secretary of State Cordell Hull invited Mexican Ambassador Dr. Francisco Najera to his office and handed him a note. Dr. Najera read the note, then tucked it into a diplomatic pouch and sent it by airplane to Mexico City. There the Ministry of Foreign Affairs read it, made a careful copy for study, forwarded the original to the State of Oaxaca, where President Lazaro Cardenas was on a tour of inspection. Soulful Senior Cardenas read it, said nothing but that he would "answer at an opportune time."

It was a mild little note. It called attention to the strained relations existing between the Mexican Government and certain U. S. oil companies growing out of Mexico's 1938 expropriation of foreign oil and mining concessions (TIME, March 28, 1938, et seq.). While it took notice of President Cardenas' contention that the issue was purely domestic, it respectfully pointed out precedents to the contrary. With no suggestion of bringing pressure to bear, it requested that the controversy be submitted to arbitration.

This dash of cool water on the boiling oil of Mexican politics made the political cauldron crackle and hiss. President Cardenas' dominant Party of the Mexican Revolution sent its chief a long telegram urging him to stand by his guns, organized demonstrations in all of Mexico's 28 States. Vicente Lombardo Toledano's Confederation of Mexican Labor called on all its subsidiary labor organizations to make a fuss against "Yankee imperialism." Even supporters of the anti-Cardenas Presidential candidate, General Juan Andreu Almazan, declared for publication they would not oppose whatever decision the President made. U. S. Ambassador Josephus Daniels got angry telephone calls denouncing the State Department.

And after all these sputterings were over, the Mexican political temperature cooled to a degree lower than it had enjoyed for many months. Whatever Mr. Hull's intention, his little note proved that: 1) all Mexico's political factions are united on oil; 2) Cardenas' grip on the country is still strong. Mexico's political and economic unrest is heightened by the fact that after nearly six years of revolutionary social experimentation Lazaro Cardenas must let go. On July 7, according to the Constitution, Mexico must elect a new President. And there is no man like Cardenas to succeed him.

Unplayed New Deal. Into his six years of power President Cardenas has tried to cram 50 years' worth of reforms. Most spectacular was the nationalization of oil production, which Cardenas himself has admitted must be revamped to bring slumping production back. He has turned the railroads over to the workers--and bloody accidents have occurred. Land has been confiscated for peons, but the Government keeps title to it and many peons work only enough for subsistence. Mexico has a beautiful new highway system through its lofty, beautiful mountains and tourists last week flocked to Mexico City as once they did to Paris in springtime, but the peso has dropped to six to the dollar and the possibility that the U. S. may stop buying silver has every Mexican businessman in a sweat.

Lazaro Cardenas, when he chooses to play the dictator, can pull the country out of a crisis, but he is an idealist and his ideal is the Constitution. The Constitution says that the President may not succeed himself, and so Cardenas will not run. He will not even endorse a candidate. "The people must choose," says he.

War of Succession. In the field are two candidates and a potential Putschist. Unofficial candidate of the Government is General Avila Camacho, who is not much of a general and not much of a strong man. Mexicans say he would probably be a stooge for Cardenas, which Cardenas refused to be for Strong Man Plutarco Elias Calles. Backed by Lombardo Toledano, the John L. Lewis of Mexico, General Avila is getting a big buildup. His stenciled name and face are on every available wall and sidewalk. Supported mostly by the Left, Candidate Avila talks Right.

Against him stands honest-to-goodness General Juan Andreu Almazan, who is supported by the Right and talks Left. He claims the backing of the Mexican Revolutionary Party (which supports Cardenas) and has promised peasant ownership of the land in place of the present collectivist system. He also has the backing of many business interests, would probably play ball with foreign business. A favorite game of the Almazanistas is to rip down Avila Camacho posters during the night, replace them with Almazan posters, which are in turn ripped down the next night and replaced by Avila Camacho posters. Camachistas and Almazanistas between them have accounted for an estimated 300 pre-election killings to date.

General Almazan has announced that he does not expect the election to be honest. Therefore he intends to have all his voters cast ballots for him in a private election, either before or on the same day as the general election. If his private votes do not tally with the official returns, General Almazan promises trouble.

Troublesome already is General Joaquin Amaro, who made himself unpopular with the Army by putting it to work and now talks like a fascist. Nazi agents, who immigrated as refugees, help to spread his ideas. Though General Amaro's followers are few, his nuisance value is great. Among rumors floating around Mexico last week was one that backers of Cardenas would persuade him to "oppress" General Amaro, thereby driving him to insurrection. If a "state of unrest" exists at election time, the election can be postponed.

Eyes Abroad. Few people believe that Lazaro Cardenas would stoop to such a device. He could insure a peaceful election by throwing his support to Almazan, but that would probably mean the end of Mexico's New Deal. The future of the Cardenas revolution depends to a large extent upon paradoxical international relations. Although politically aligned with the democracies, Mexico's economic mess has driven the country into closer economic relations with Japan, Germany and South American countries. Mexico still mortally fears gringo imperialism, whose representatives are again taking advantage of internal conditions to exploit the tour ist trade and mineral industries on the strength of the falling peso. And the Government will slap gringo wrists when it can get away with it. Last fortnight it ordered nationalized thousands of acres of U. S.-owned chicle lands.

Closest ideological friend of the Cardenas New Deal is the Roosevelt New Deal. The few cool heads in Mexico last week suspected that Cordell Hull's note was a good-neighborly act, that since for political reasons President Cardenas could not make a gesture toward ending the oil row, Mr. Hull was doing it for him. If the political temperature of his country will let him, President Cardenas may now propose, instead of arbitration, a joint commission to assess the expropriated properties. Less than two months ago he said: "Before my period of Government is ended the oil question will be resolved satisfactorily for the nation." With that question so resolved, Lazaro Cardenas could retire with some of his revolution fulfilled, and his solution might carry Mexico through a peaceful election.

If his solution were not satisfactory to the nation, it might have the opposite effect. If oil and politics continue to boil, the election may be decided by bloodshed.

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