The End of U.S. Intervention in Mexico: Franklin Roosevelt and the Expropriation of American-Owned Agricultural Property

By Dwyer, John J. | Presidential Studies Quarterly, Summer 1998 | Go to article overview

The End of U.S. Intervention in Mexico: Franklin Roosevelt and the Expropriation of American-Owned Agricultural Property


Dwyer, John J., Presidential Studies Quarterly


The first test of President Franklin Roosevelt's Good Neighbor Policy in Mexico was not over the March 1938 nationalization of the foreign-owned oil industry but rather involved the expropriation of American-owned rural property during the preceding three years. As president of Mexico from 1934 to 1940, Lazaro Cardenas undertook a massive agrarian reform program that redistributed nearly forty-five million acres of land, more than double the amount redistributed over the previous seventeen years combined. Included was the expropriation of approximately three million acres of American-owned agricultural property, valued between $19 million and $102 million. More than three hundred American farmers and businesses lost plots of land, ranging from as few as six to as many as four hundred thousand acres. Few American property owners in Mexico during this period survived land redistribution unscathed as it affected individual American farmers, large multinational agribusinesses, and land speculation firms. The exchange of notes between the United States and Mexico in November 1938 ended a three-year dispute over the seizure of American-owned estates and Mexico's failure to compensate U.S. landowners.(1)

In light of the overt and heavy-handed role played by the United States in Mexico's internal affairs throughout the nation's history, it is difficult to understand how the Mexican government was able to appropriate vast tracts of American-owned property without inciting a hard-line U.S. response. In 1911, U.S. Ambassador Henry Lane Wilson conspired with Felix Diaz and General Victoriano Huerta to overthrow President Francisco Madero because Madero would not show special favors to U.S. economic interests. In 1914, U.S. Marines occupied the port city of Veracruz for nine months to prevent Huerta from receiving German arms shipments, while in 1916, more than ten thousand U.S. troops spent close to a year in northern Mexico pursuing rebel leader Francisco "Pancho" Villa. From 1913 to 1917, Washington would not officially recognize the Mexican government; from 1920 to 1923, the United States again broke off relations because American-owned property in Mexico was threatened by the possible enforcement of the expropriation decrees contained in the 1917 Mexican Constitution. Finally, in 1927 there was talk of war between the two countries when Mexican President Plutarco Elias Calles supported the anti-American uprising of Juan Sacasa in Nicaragua and implemented a new petroleum law that threatened to undermine the American-owned oil companies operating in Mexico.

Ambassador Dwight Morrow played an instrumental role in reducing the acrimony in U.S.-Mexican relations during the late 1920s by helping to negotiate a cease fire to Mexico's three-year-long Cristero uprising, ensuring U.S. support of the Mexican federal government during the 1929 Escobar Rebellion and persuading an already conservative Calles that his country would be better served if it did not enforce its nationalistic laws. Morrow, however, did not have to address a widespread attack on American economic interests or deal with a far-left administration in Mexico City, as did Roosevelt and Ambassador Josephus Daniels. Thus, when American-owned agricultural property was seized on a large scale just a few years later, it is surprising that the Roosevelt administration did not respond aggressively to protect American property owners from land redistribution. The change in U.S. policy toward Mexico stemmed primarily from Roosevelt's implementation of the Good Neighbor Policy, which was predicated on nonintervention and reciprocity. The effects of this policy have been lasting. Ever since the extensive expropriation of American-owned rural holdings in the 1930s, the United States has never sent troops below the Rio Grande, used nonrecognition as a diplomatic tool, or imposed crippling economic sanctions against Mexico. The amicable settlement of the agrarian dispute enhanced Mexican sovereignty and helped to produce a more mature relationship between the two countries by bringing the era of heavy-handed U. …

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