In 1917, Mexico adopted a new constitution that signaled a radical change in its relationship with other nations, the United States in particular. The new regime in Mexico was pledged to a program of social reform and the ending of foreign ownership of the nation's natural resources. Acting to accomplish the latter aim, the government of President Venustiano Carranza in February 1918 revoked foreign-held titles to Mexican oil wells.
Carranza died in 1920. U.S. President Woodrow Wilson withheld recognition of the incoming Mexican leader, Alvaro Obregón, fearing that the prohibition on foreign natural resource ownership would be applied retroactively.
During the Harding administration, the normally measured Secretary of State Charles Evans Hughes publicly voiced concerns about continued instability in Mexico and the threatened status of American holdings there.
In the Bucareli Agreements of August 1923, Mexico promised to honor foreign ownership rights that were in place before 1917 as long as a "positive act" had been performed to improve such holdings; mere documentary ownership was not sufficient to preserve title. The Coolidge administration responded to this concession by extending formal diplomatic relations to Mexico.
The year 1924 found the United States deepening its involvement in Latin America, exercising some form of financial control in 10 neighboring nations. Plutarco Calles became president of Mexico in that year and announced his intention to advance national interests on a variety of fronts. He supported land reforms to benefit landless Mexican peons, anticlerical legislation to loosen Roman Catholic influence and the retroactive enforcement of laws governing the nationalization of the country's natural resources.
Reaction in the U.S. was immediate. Catholic officials and business operators, particularly the oil interests, voiced heated opposition to Calles' announcement. Secretary of State Kellogg warned Mexico to protect American lives and property at all costs.
Understandably, Mexican leaders were outraged by the undue interest the U.S. was showing in their affairs. The Mexican Congress enacted two laws that expressed their self-interest:
Anti-Mexican feeling grew in the United States and Secretary Kellogg added fuel to the fire in January 1927 by suggesting the Bolshevik influence was at work in Mexico. Loose talk of war was heard on both sides of the border, but the Senate responsibly passed a resolution endorsing arbitration between the quarreling neighbors.
- A Petroleum Law that limited foreign "concessions," a government-granted alternative to ownership, to 50 years and an additional provision that prohibited foreigners from appealing ownership issues to the Mexican government.
- A Land Law that both broke up large landed estates of wealthy Mexicans and placed limitations on land ownership by foreigners.
In the fall, Dwight W. Morrow, a former college classmate of Coolidge, was sent to Mexico City as the president's personal representative. Many were skeptical of Morrow's selection because of his partnership in the House of Morgan, the seat of much of America's capitalistic power. Morrow, however, surprised his critics and was amazingly effective in smoothing relations.
In November, the Mexican Supreme Court struck down the provision in the Petroleum Law that placed time limits on foreign concessions and the following month the Congress extended recognition to foreign concessions on which the concessionaires had made "positive acts" toward improvement prior to 1917.
Morrow capped his triumph by arranging a visit to Mexico City by Charles Lindbergh, who had made a dramatic crossing of the Atlantic in a single-engine plane seven months earlier. The hero was greeted by a tumultuous crowd on this goodwill stop and later visited several capitals in Central America. (It was on this trip that Lindbergh met the ambassador's daughter, Anne Morrow; the two were married in 1929.)
An anticipated further strengthening of relations between the Mexico and the U.S. was curtailed by the assassination of recently re-elected Obregón in July 1928.
The Coolidge administration drew to a close on a generally high note. Relations with many Latin American states had been improved, but there remained the nagging issue of the presence of U.S. troops in Nicaragua.
See other diplomatic activity during the Coolidge administration.