600.127/222a: Telegram
The Secretary of State to the Chargé in Mexico (Summerlin)
115. Referring to recent oil export tax decree.
Department is being pressed by American companies affected for relief on account of alleged unconstitutionality and confiscatory character of the tax mentioned. Department in the present circumstances is loath to make representations until efforts at adjustment shall have been found unavailing. It is thought settlement might be reached which would result in producing practically the same amount of revenue which was hoped to be raised by the taxes mentioned, and which would at the same time obviate the question of confiscatory character of the taxes. Informally ascertain whether Mexican authorities would be willing to enter into direct negotiations with representatives of American companies concerned, on the distinct understanding that no sacrifice of principle by either side would be involved. Make it clear that this suggestion is made in a friendly spirit, and with the hope of removing another possible cause of friction in our relations. If favorable reply received, Department will suggest this course to American companies concerned.