In a Box

U.S. oilmen went into mourning last week. In the agreement signed between the State Department and Mexico (see p. 15) was the expropriated oil settlement which they had shuddered at, railed at, twice turned down.

But the companies were in a box. When the State Department signed the deal (providing a $9,000,000 "token payment" by Mexico, other compensation to be determined if possible by one U.S. and one Mexican appraiser) it left them no effective out. They could hardly appeal again to the State Department. Said one oilman: "We'd be like a woman raped by a policeman calling the cop."

Chief worry of the U.S. companies has been that Mexico, if permitted to get away with its expropriation, might set an example for other countries where they have even greater investments. But even the State Department's deal would not be much inducement for expropriation elsewhere. For one thing, the oil companies had battled for nearly four years, had proved that they were full of fight. Moreover, Mexico's victory had a hollow economic ring: running the oil fields itself, Mexico has lost millions of pesos in operation--not counting an appalling depreciation of equipment.

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