Eagle's Troubles

The Mexican Government pursues its so-called "Revolution" on a formula of feeling out how much it can get away with. Last week it turned from its efforts to find out just how serious Mexican Catholics are about their religion and lit on the internationally-owned Mexican Eagle Oil Co., a $35,000,000 affiliate of Royal Dutch Shell. For the past three years a Mexican company called Commercial Petroleum, whose chief asset is its story that it has the rights to a valuable Eagle oil field, has been suing Eagle with great success in the Mexican courts. Appealing last month to the Supreme Court, Eagle was obliged to put up a bond of approximately $10,000,000, winner take all. Eagle chose London's Midland Bank as a safe place for this huge stake, the largest cash bond in Mexican history. Last week the Mexican Supreme Court ruled that it must be deposited in a Mexican bank. To add to Eagle's woes, the Mexican Government abruptly issued a sweeping decree that all concessions of State lands to Eagle were "unconstitutional and against the best interests of the Republic." This looked like a body blow but it was in fact just another feeler. As Eagle's British President John Alexander Assheton promptly pointed out, all Eagle's oil comes not from conceded State lands but from land privately owned. However, according to the original concession, Eagle had the right to import supplies duty free. President Assheton was prepared last week to fight off any attempt to collect back duties on those imports. Nonetheless, the decree frightened every foreign businessman in Mexico, for, if the Government can cancel Eagle's ironclad concession, what contracts can it not cancel?

Eagle's troubles took on the quality of slapstick when at the same time Eagle workmen in the State of Veracruz presented the greediest set of labor demands in world history. Plainly hatched in the baroque imagination of some Mexico City politician, they threatened a strike unless Eagle gave its workers: 1) a 25% cut of the profits; 2) a workers' polo field and a stable of polo ponies; 3) an 18-hole golf course; 4) a swimming pool and complete athletic equipment; 5) a technical school; 6) a share in the management; 7) annual free round-trips to England; and 8) 1,000 acres apiece "in case the oil industry should collapse." As an afterthought, the workers appended 33 other things. Last week President Assheton had not made reply.

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