Cárdenas had had dealings with the oil industry in the Huasteca in his capacity as military commander there. Ongoing issues with the foreign-owned companies and the Mexican petroleum workers' organization became increasingly tense. Early in his presidency, he declared that a previous agreement between companies and the government "was not in harmony with the basic principle of Article 27 of the Constitution." In 1936, the 18,000 member oil workers' union forced oil companies to sign the first-ever collective bargaining agreement. The union demanded 26 million pesos, the companies offered 12 million. Giving more force to Mexican workers' demands, Cárdenas set up the National Oil Administration and the government's Council of Conciliation and Arbitration took jurisdiction over the wage dispute. The Council supported the workers' demands and the companies refused to pay. To put even more force into the government's position, it cancelled oil concessions dating to the Porfirato. This move was unprecedented in the history of foreign oil in Mexico. Management and high level skilled workers were all foreigners, so the companies thought that nationalization would be a rash move for Mexico. The companies appealed the government's decision to force companies to pay the wages to the Mexican Supreme Court, which ruled against them on March 1, 1938. Cárdenas was ready to act. Cárdenas tasked his old comrade Francisco J. Múgica with writing the declaration to the nation about expropriation. On March 18, 1938, Cárdenas nationalized Mexico's petroleum reserves and expropriated the equipment of the foreign oil companies in Mexico. The announcement inspired a spontaneous six-hour parade in Mexico City; it was followed by a national fund-raising campaign to compensate the private companies.