Diplomacy of expropriation : American and British reactions to Mexico's expropriation of foreign oil properties, 1937-1943
On 18 March 1938 Mexican labour problems in the oil industry culminated in Mexican President Lazaro Cardenas' decision to expropriate the holdings of 17 American, Dutch and British oil companies.1 The purpose of this thesis is to fill the gaps in the literature on the Mexican oil nationalisation by analyzing the policies of the oil companies, and comparing and analyzing in detail how policy was determined in both Britain and the United States at a time when Britain was trying to win US cooperation in the face of increasing hostilities in Europe and the Far East. While Whitehall wanted US cooperation in taking a firm stance against Mexico, Washington refused. Washington's failure to cooperate with London is consistent with its resentment of Britain's still extensive trade relations with several South American countries and its attempts to form preferential trade agreements at the Ottawa conference of 1932 and subsequently an exclusive sterling bloc. Also, Washington's pursuit of the Good Neighbor policy precluded any association with 1 The companies included Mexican Eagle, which was managed and partly owned by the British and Dutch Royal/Dutch Shell, as well as subsidiaries of the American companies Standard Oil of California, Standard Oil of New Jersey and Sinclair Oil. the tough policy adopted by Britain. Despite its refusal to be associated with Britain on this matter, Washington ended up taking a hard line towards Mexico, but American officials went to great lengths to make policy appear consistent with the Good Neighbor policy. Totally reliant on overseas oil at a time when war seemed imminent, policy-makers in Britain immediately decided to prevent other countries from following Mexico's example by showing Mexico's policy to be a failure. Officials in Whitehall responsible for oil policy believed that secure access to foreign oil necessitated British ownership and control of oil supplies abroad whenever possible. Not only did Whitehall's concern about oil supplies in war focus policymakers, but the governmental machinery for formation of oil policy allowed for a consistent policy towards Mexico. Washington on the other hand lacked such machinery, and American officials displayed inconsistency in their policy toward Mexico. Also, the United States had plentiful indigenous supplies of oil, and Washington's main concern, to the disappointment of Whitehall, was increased trade with Mexico and other nations, rather than defending the more specific interests of the oil companies whose properties had been expropriated in Mexico.