Expropiación petrolera
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The Expropiación Petrolera ("Oil expropriation") is one of the Fiestas Patrias of Mexico when Mexicans celebrate the date when President of Mexico, General Lázaro Cárdenas, declared that oil reserves in Mexican soil belong to the nation, following the principle stated in the Article 27 of the Mexican Constitution.
This measure caused an international boycott of Mexican products in the following years, especially by the United States, Great Britain and the Netherlands.
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[edit] Background
In 1935 all companies in the extraction, processing and exporting of oil in Mexico were foreign companies with foreign capital. These companies attempted to block the creation of unions and used legal and illegal tactics to do so. However, the creation of individual unions within each company was made possible, but work conditions differed from one another.
On December 27th of the same year the Sindicato Único de Trabajadores Petroleros was created, in spite of legal opposition in the mexican states Tamaulipas and Veracruz. On January 29th 1936, this union joined the Comité de Defensa Proletaria ("Committee of Proletarian Defense") which would become in February the Confederation of Mexican Workers (CTM). On July 20th the union celebrated its first convention in which it was proposed a project of general contracts for each oil company and it was decided on a strike to push towards an agreement.
Lázaro Cárdenas intervened between the union and the oil companies in order to force an agreement on the contract. The strike was delayed for six months but the companies never agreed on the contract and on May 28 the strike took place. The entire country was paralyzed for 12 days with consumers unable to buy gasoline. Cárdenas convinced the union to end the strike until a decision by the companies was made, however, these companies declared themselves unable to meet demands because of financial problems. Cárdenas ordered an investigation and on August 3 the findings were that the Mexican oil industry produced higher returns than the American oil industry.
[edit] Legal conflicts
After the publication of the findings, the oil companies threatened to leave Mexico and take all of their capital with them. The government entity in charge of the conflict between these companies and the union, the Junta Federal de Conciliación y Arbitraje, was not able to make a decision yet and the union declared a 24-hour strike in protest on December 8.
On December 18, the Junta declared in favor of the union and the oil companies had to pay 26 million pesos of lost salaries during the strike but they appealed to the Supreme Court. The Supreme court then rejected the appeal and ordered to raise salaries and to improve working conditions for members of the union. The oil companies protested this decision and General Cárdenas mediated so the union would accept 26 million instead of the 40 million they were requesting. Cárdenas offered to end the strike if the oil companies paid the sum. According to witnesses of this meeting representatives of the oil companies asked the President "Who can guarantee that the strike will be over", to which the President replied "I, the President of the Republic". After the businessmen asked with sarcasm "You?" President Cárdenas ended the meeting saying "Sirs, we are finished!".
After this vote of distrust Cárdenas decided to end the conflict by expropriating the oil industry and creating a Mexican oil company.
[edit] March 18
On March 18 President Cárdenas embarked on the state-expropriation of all resources and facilities, nationalising the U.S. and Anglo-Dutch operating companies. Two hours before announcing his cabinet of his decision he made the announcement on radio to the rest of the country. Five days later, a crowd of 100,000 (according to the press) rallied in support of Cárdenas (see photo).
On April 12 another crowd, of thousands of women, gathered in front of the Palacio de Bellas Artes to make donations to pay the debt to foreign companies. Donations varied from chicken to jewelry, since the women that were present were part of all social classes.
On June 7 President Cárdenas issued a decree creating the company Petróleos Mexicanos with the rights of exploration, extraction, refining and commercialization of the oil in Mexico. On June 20 PEMEX started operations.
[edit] International opposition
In retaliation the oil companies initiated a negative public relations campaign against Mexico, they urged people to stop buying Mexican goods, to embargo US technology to Mexico. Many foreign governments closed their markets to Mexican oil hoping that PEMEX would drown in its own oil. Between 1938 and 1939 PEMEX survived trading oil for money and machinery to European countries with fascist governments. In spite of the boycott, PEMEX developed into one of the largest oil companies in the world and helped Mexico become the fifth largest oil exporter in the world.
During World War II, American and British governments blocked Mexican oil exports to their allies and dependencies. The US stopped buying Mexican silver for the Treasury. Oil companies lobbied for an invasion to Mexico.[citation needed]
[edit] Local opposition
Saturnino Cedillo, a cacique from San Luis Potosí and former Secretary of Agriculture showed the strongest opposition to Cárdenas' measures. Cedillo had in the past supported Cárdenas in a conflict with ex-President Plutarco Elías Calles but disagreed with him on his plan of reforms. On May 15 of the same year, the state congress of San Luis Potosí issued a decree where it unrecognized Cárdenas as President and declared that the expropiación petrolera did not benefit the economy of Mexico. Cárdenas did not consider this a serious threat and minimized efforts to suppress the rebellion and instead choose persuasion as a medium. The US government did not support the rebellion because it was more concerned that fascist and communist movements from Europe to be spread to Mexico.
The key to the success of Cárdenas measures did not just involve being able to control opposition to it but to be able to keep afloat an industry in the absence of qualified personnel. The government had to depend on the Sindicato de Trabajadores Petroleros de la República Mexicana (STPRM, Union of Oil Workers of the Mexican Republic) and disagreements over the control of oil resources. The government had to deal with threats of strikes and sabotages. In spite of these and technical challenges local workers, who replaced the foreign technicians, were successful in making the new nationalized oil industry work. Josephus Daniels, American ambassador in Mexico explained to Franklin D. Roosevelt President of the United States and Cordell Hull, Secretary of State, that Cárdenas reforms would not be undone since his position as president and the position of PEMEX were solid.
[edit] References
- (Spanish) Opposition to the Expropiación Petrolera at red escolar.
- (Spanish) History of the Expropiación Petrolera at the Instituto Mexicano del Petróleo ("Mexican Oil Institute").
- (Spanish) Presidential decree.
- The Cardenista Utopia: 1934-1940.
