Oil Expropriation — Cárdenas Nationalizes Foreign Companies, Creates PEMEX

On March 18, 1938 — a date celebrated annually as Día de la Expropiación — President Cárdenas nationalized 17 US and British oil companies that had defied a labor dispute ruling by the Supreme Court. Cárdenas invoked Article 27 of the 1917 Constitution. Mexico's population spontaneously contributed jewelry, livestock, and savings to pay the $130 million compensation (in 1947 dollars). PEMEX (Petróleos Mexicanos) was created as the state oil monopoly. Britain broke diplomatic relations; the US accepted compensation after WWII.