Friday, January 2, 2015

War of the Oil Worlds Take to the Airwaves


                                                © M.C.V. Egan /W. Hartzenberg 

Going against the Mexican Supreme Court ruling and Cabinet, on March 18th 1938, the then Mexican President Lazaro Cardenas took to all of the radio waves in his country and announced to the Mexican people the enactment of ‘Oil Expropriation’. The foreign countries affected fought hard in the Mexican courts to secure their very profitable oil interests. The case carried from court to court until reaching Mexico’s highest court.

Invoking Article 27 of the Mexican Constitution of 1917, President Cardenas bypassed all arguments and suggestions and took an enormous risk against large foreign interests. Up until then, only international companies drilled for oil in Mexico. The countries affected were primarily The United States, The United Kingdom and The Netherlands.

Mexican workers were well aware that they were being paid far less than their international counterparts and voiced their resentment by engaging in strike actions which disrupted production and caused widespread unrest. Mexicans in general felt that Mexico saw no real profit from its own national resource whilst other countries benefited from their oil and labor. The combination of these two facts emboldened Cardenas to embark on a path never before traveled.

The now famous radio broadcast on the evening of March 18th, 1938 was inadvertently interrupted and as the broadcasting problem was being resolved the airways carried a Mexican song with rather ironic lyrics asking to be forgiven for behaving with audacity or boldness. (Yo pido a la concurrencia que perdone mi osadía).

President Cardenas decision was as popular in Mexico as it was unpopular in other countries. Mexicans, it is reported arrived in droves and donated anything they could to help the government survive the transition from foreign owned oil fields to domestic ownership. Women gave their jewelry, anything and everything of value to help Mexico. This sense of unity and nationalism carried Mexico through the transition.

This was no easy feat as in retaliation an international boycott of Mexican oil was imposed. Mexico’s newly formed national company PEMEX (Petroleos Mexicanos) survived the international boycott, which in 1938 with the world not particularly united is rumored not to have been honored by the Germans. Understandably once WW II broke out any question of boycotting oil was forgotten, with recorded sinking of oil tankers by the Germans when Mexico sold to the allies.

To date Mexico’s oil industry, which has seen difficult times is owned by the Mexican government, but of late there seems to be the possibility of change and a welcoming of the foreign interests that were repudiated over seventy-five years ago.