Producers for Export: The Western Hemisphere
A ll kinds of governments, this book has argued, are nowadays intervening in the oil business; but when you say 'the governments' to any oilman, he thinks of one kind first -- the 'host governments' of the countries from which his industry exports oil. The oil industry is more important to these governments than to any others, and its relations with them are centrally important to it. These relations are always formally governed by legal contract: but even the most binding contract cannot guarantee goodwill, and more than once in the history of this industry the contracts themselves have not turned out in the long run to be binding either.
In its effect, the oil concession can be almost a revolutionary instrument, quite transforming the economy of any country where really rich deposits are found and developed. And the social pressures that this economic development can generate in turn may bear upon the whole structure of established relationships in such a country -- including, ultimately, the concession agreement itself. An oil concession, until recently, at least, has generally been designed to hold one economic and social relationship in such a country stable for usually very long periods -- yet success in its fulfilment necessarily implies accelerated change. This paradox is not always amusing to either party to the agreement.
Some of the nations into which this international industry took the idea of developing oil commercially already possessed established legal systems governing the exploitation of their mineral resources. The first mining law covering Venezuela, for example, was a decree of 1784, making over to the Spanish crown 'whatever fossils, juices or bituminous substances from earth' were found, regardless of who owned the surface, and the same principle was retained after Venezuela attained its independence in 1811. One or two countries where foreign capital