The United States Rivals Britain
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managed to gain concessions for half of Mexico’s oil by the time of Wilson’s invasion. With clear expectations of a coming war with Germany, Britain decided tactfully to back away from Huerta’s regime, and General Venustiano Carranza’s government was immediately recognized as the legitimate one by President Wilson. Rockefeller’s Standard Oil ran guns and money to Carranza including $100,000 in cash and large fuel credits. U.S. oil had taken Mexico from British oil. Tampico’s wells at the time were the world’s envy, with one well, Cerro Azul, pumping a record 200,000 barrels of oil per day. When Carranza then proceeded to act to defend Mexican national economic interests rather than those of the American oil companies, he became the focus of an intense campaign in which, in 1916, Standard Oil financially backed the roving bandit, Pancho Villa, against Carranza. General Pershing, just prior to the U.S. entry into the European war, was sent with troops into Mexico for a brief but unsuccessful mission. With the imminent U.S. entry on the side of Britain into the European war, Britain and America mutually decided to boycott Mexico under Carranza. Fortunately for Mexico, the exigencies of war left the country with something of a respite from the Anglo-American oil wars. Carranza remained president until 1920, when, following Versailles, he was assassinated. But among the legacies left by Carranza was Mexico’s first national constitution, approved in 1917, which contained a special paragraph, number 27, vesting the nation with ‘direct ownership of all minerals, petroleum and all hydro-carbons—solid liquid or gaseous …’ The only ground on which non-Mexican nationals could obtain concessions to develop oil was to agree to the full sovereignty of Mexican law in their business affairs, without interference from foreign governments. Nonetheless, British and American oil interests continued a fierce behind-the-scenes battle for Mexico’s oil through the 1920s, lasting until the late 1930s, when a decisive nationalization of all foreign oil holdings by the Cardenas government led the British and American oil majors to boycott Mexico for the next 40 years. THE SECRET OF BRITISH OIL CONTROL During the time between the discovery of major oilfields in 1910 and the mid 1920s, the British company Mexican Eagle Petroleum Ltd., under chairman Weetman Pearson (Lord Cowdray), was able to
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