The Smaller the Better

The rumors began to surface as soon as the initial rebellion of the Mexican Revolution succeeded in sending President Díaz into exile and placing the green, white, and red sash of executive office across the torso of Francisco I. Madero. Reports appeared in London newspapers that Waters-Pierce had financed the rebellion in order to obtain important oil concessions from the victorious Madero. Mexican newspapers recounted the rumors. Along the northern border, conversations among Americans and Mexicans turned to the conspiracy of Standard Oil to provide Madero with a one-million-dollar loan. Again, important oil concessions from the Madero regime were to be the pay-off. Nearly everyone recounted stories to each other of the support of Lord Cowdray for the Diaz regime and how Doheny and Standard Oil desired and worked for the overthrow of the Anglophile porfiristas.^[3]

Perhaps historians will never be able to document who started which rumor, but little evidence exists that any company willingly gave money to any Mexican faction. Even the circumstantial evidence is very spurious. By the same token, there is no doubt that the oilmen themselves engaged in the rumor mongering because they half-believed the political malevolence of their rivals. As they had been involved in the politics of the Porfirian regime, so the oilmen became involved in the machinations of the Madero regime too. Perhaps a distinction should be made between involvement and intervention. To be involved in Mexican affairs, all the oilmen had to do was be present and be a source of income for Mexican politicians and revenues for the state. They had to depend to a degree on political support for obtaining licenses and economic privileges. Thus, the rumors were testimony to the involvement of the foreign oil companies in domestic Mexican

politics during the Revolution. To intervene in politics, however, the oilmen had to voluntarily direct their resources to influencing the outcome of disputes between Mexican politicians. Involvement was vastly more common among oilmen than intervention.

The rumor that the Standard Oil Company of New Jersey had financially supported the successful Madero rebellion would not die. As the story went, American oilmen resented the Diaz government for having supported the British oil interests of El Aguila. Everyone had heard some version of C. R. Troxel's alleged negotiations for Standard Oil (see chapter 1). Both Mexicans and Americans continued to repeat these rumors. They did so in newspapers and political proclamations and under oath in U.S. Senate hearings. Therefore, a Mexican attorney who once served some foreign oilmen could calmly testify to Standard Oil's financing of John Kenneth Turner's book Barbarous Mexico, which had vilified the Diaz regime for an otherwise adoring American public.^[4] An American agriculturalist in Mexico claimed that "a brother of my cashier" had seen a check from the Madero government made out to Waters-Pierce. The check had overpaid for a government purchase of kerosene in order to repay Pierce for his loan to the Madero rebellion. When erstwhile ally Gen. Pascual Orozco broke with the Madero government and condemned Don Francisco for having accepted "FOURTEEN MILLION dollars from Wall Street millionaires," Orozco pointed to the Waters-Pierce Oil Company, which had hoped to widen its petroleum sales to the Mexican National Railways. A second rumor immediately arose: Lord Cowdray was financing the Orozco revolt because Madero had revoked El Aguila's Díaz-era concessions. In fact, the concessions had not been revoked.^[5]

Lord Cowdray was convinced that Henry Clay Pierce was behind many of the malicious stories. When El Diario broke the news in 1912 that Standard Oil, "that great oil octopus," was about to purchase El Aguila, Cowdray suspected that the news items were the work of Pierce. "He employed Press men, unscrupulous but able, to attack us, day by day, in the American and Mexican Press," Cowdray wrote confidentially. "[Pierce] issued a pamphlet which was sold on the London bookstalls. He accused us of having bribed and corrupted the Díaz Government and of doing the same to each of the revolutionists that for the moment, were in disfavour. I was shadowed when in America."^[6]

One who did know rather more about the connections — or lack thereof — between Madero and the foreign interests was Madero's American consultant. Shelburne Hopkins was a confidant of the Ma-

deros, acting as their counsel on retainer for American affairs. He had even been in a position to know a bit about Waters-Pierce. The company employed Hopkins in 1912 to "get evidence" against the Standard Oil Company in Mexico. Hopkins claimed that Madero had received no money at all, whether from Standard Oil or Waters-Pierce. Although the American oil importer wanted to "make it hot" for El Aguila, Waters-Pierce obtained no advantages at all from the Madero rebellion. Hopkins claimed that much of Pierce's animosity derived not from the oil business but from the Porfirian consolidation of the railways. As principal stockholder of the Central Railways, he had approved of Limantour's railroad stock purchases and consolidation of the Mexican National Railways. What Pierce distrusted was those Mexican notables — Creel, Landa y Escandón, Pablo Macedo, Luis Elguera, and even Porfirio Díaz, Jr. — who subsequently joined Limantour's new board of directors of the National Railways. They were all Pearson men. Therefore, Pierce approved of Madero's removal of these porfiristas from the directorate of the National Railways although, said Hopkins, Madero had not consulted Pierce about these replacements.^[7] If Don Porfirio's economy had been politicized, so was Don Francisco's.

In 1913 and 1919, the United States convened public hearings into allegations of American interference in the affairs of Mexico, as well as to propose U.S. policy alternatives toward the Revolution. Senator Albert B. Fall had interviewed witnesses in El Paso and Los Angeles. He found that, although rumors abounded as to the American oil interests' financing of the Madero rebellion, "very few persons had any definite knowledge upon the subject." He concluded that the Maderos had supported themselves substantially from family funds. Other revolutionists "largely supported themselves by killing and rustling cattle and sheep, by looting stores, and by securing forced contributions." The American oil interests, therefore, "should be exculpated of the charge that they incited or promoted the revolution against the Díaz Government," Fall wrote in 1913.^[8] Fall's judgment may be trusted. His closest ties to American oilmen were not to Standard Oil or Pierce. They were to Doheny and Harry Sinclair, neither of whom were involved in the controversy. Nevertheless, few Mexicans and Americans along the border paid much attention to the conclusions of Senate hearings. The rumors persisted and were believed.

While Madero was in power, from 1911 to 1913, the actual relations between the oil company representatives and the government continued to be formally correct. Foreigners still needed political insiders in

order to accomplish official business, as in the old regime. Only one oilman's archive, that of Lord Cowdray, is extant to provide a glimpse of the important art of business diplomacy. The Pearson interests had the most arduous task with the Maderos. They had to quietly shed the image of having been cozy with the discredited Porfirians. It was not easy. Nasty little reminders always cropped up in newspapers in Mexico and the United States, thanks, said Cowdray, to his rival Henry Clay Pierce. The Pearson group also sensed the urgency of a rapprochement with the Maderos when Manuel Calero, described as Doheny's representative in Mexico City, joined the government as minister of development. Fortunately, J. B. Body knew Ernesto Madero, the uncle of the incoming president. But Ernesto admitted hostility toward the Pearsons, accusing them of attempting to influence American policy in favor of Díaz during the revolt.^[9]

Nonetheless, Francisco I. Madero and Lord Cowdray met in August 1911. Responding to Cowdray's primary concern, Madero said that he intended to respect all Díaz-era contracts and concessions. He also assured Cowdray that he had never had any ties to Standard Oil; all the money for the rebellion had been raised by Mexican donors. Madero's own father had raised $350,000, using his properties as collateral. Cowdray informed Madero that he believed Pierce to be behind the scurrilous press attacks. Cowdray said he had never meddled in Mexican politics. It appeared a frank meeting, based upon the notes of Body. Cowdray informed the future Mexican president that he needed funds to expand El Aguila's markets, perhaps combining with a larger oil company. Madero replied that he would "look with suspicion" on the sale of El Aguila to Standard Oil, and Cowdray quickly added that he was considering The Texas Company or Gulf.^[10] Perhaps the Madero government would not be so bad for the Pearson oil interests, after all.

At any rate, the early political breakdown of the Madero regime did not permit the Pearson group to develop a lasting, profitable relationship. El Aguila's pipeline permits for Bustos-Tancochín were held up in the secretariat of development by the influence of the Doheny interests, Body thought. Rising political tension may have been more at fault. When the battle between Madero's federal army and Orozco broke out at Torreón, Body wrote that it was becoming "most difficult to transact any business in the Government Departments, and I fear we shall be at a stand still until things change."^[11]

Still, Cowdray found himself working on behalf of the Madero government in March 1912. While in the United States, Cowdray spoke to

the brother of President William Howard Taft about the need to prevent the sale of arms across the border to Orozco's rebel forces. Eventually, the executives had to devise a code so that they could discuss the political turmoil in Mexico so that, if compromised, its correspondence "might [not] be viewed unfavourably by other parties."^[12] Despite the cordial relations, the British managers were ever suspicious that the Americans might have more influence with Madero.

Body in Mexico City thought that the Doheny representatives had obtained major political advantages with the Madero government. Near panic derived from two Porfirians still on El Aguila's staff, Enrique Creel and attorney Riba. "We must prepare action to counteract," Body cabled to Cowdray. Cowdray agreed.^[13] None of the documents reveal what issue concerned the Pearson group, whether pipeline rights-of-way or fuel oil sales. The crisis passed quickly — or at least was overwhelmed by Madero's mounting political problems. When he had to make a cabinet change in November 1912, Madero's foreign affairs secretary asked Lord Cowdray to wire a note of his "satisfaction" with the new appointees. The Pearson representatives were willing to comply, although privately they said they would have preferred it if the brief rebellion of Félix Díaz, nephew of Don Porfirio, had been successful.^[14]

As the fortunes of the regime sank, the Maderos turned to the foreign interests for money. Ernesto Madero devised a scheme to buy the opposition newspapers in Mexico City and asked J. B. Body to contribute $ 100,000 toward this end. Cowdray was put out. He felt obliged to contribute something so that Madero would not consider a refusal to be an "unfriendly act." "[W]e ought to subscribe whether we like it or not," he wrote Body, "of course, the smaller the better."^[15] The fall of Madero and his assassination within a month relieved the Pearsons of this obligation. Yet, they had succeeded in gaining a degree of cooperation from the Madero government despite the persistent rumors.