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The Harding Administration and Mexico: Diplomacy by Economic Persuasion

Published online by Cambridge University Press:  11 December 2015

George D. Beelen
George D. Beelen*
Affiliation:
Youngstown State University, Youngstown, Ohio
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Extract

During the decade beginning in 1910 the economic involvement of the United States in Mexico increased while diplomatic relations deteriorated. Between 1911 and 1920 United States' imports from Mexico increased from $57,000,000 to $179,000,000 and exports from $61,000,000 to $208,000,000. Much of this economic growth related to petroleum and to land where investments in each of these areas increased phenomenally. The new Mexican Constitution of 1917, however, forecast trouble for foreign investors, especially those who depended upon Mexico's unreplenishable subsoil resources. Concessionaires who mined the subsoil appeared to hold their title only at the will of the state. Additionally, the right of foreigners to hold property in Mexico was often restricted. Land on the shores or borders of Mexico, for example, could not be owned by foreigners. Such provisions were designed to limit the economic subservience of Mexico to the United States. Like other Latin Americans, the Mexicans wanted economic self-sufficiency. They resented the fact that their economy was tied to the fluctuating world demand for staple raw materials and that they were caught in an American vise which squeezed both their imports and their exports.

Type
Research Article
Information
The Americas , Volume 41 , Issue 2 , October 1984 , pp. 177 - 189
Copyright
Copyright © Academy of American Franciscan History 1984

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References

1 Statistical History of the United States from Colonial Times to the Present (Stamford: Fairfield Publishers, Inc., 1965), pp. 550–552.

2 Fall, then Senator from New Mexico, was conducting hearings off and on from August 8,1919 to May 28, 1920 in an attempt to build up a case against Mexico. He often had urged military intervention in Mexico. See Albert B. Fall to Colonel Myron Parker, October 7,1920 Warren G. Harding Papers, Ohio Historical Society, Microfilm edition, (hereafter referred to as HP), Roll 121 (frames 0665–0673) for an example of Fall’s belief in intervention of Mexico. For complete record of investigatin see U.S. Senate, Investigations of Mexican Affairs, Sen. Doc. No. 285,66th Cong., 2nd Sess., 2 vols. Also Astorino, Samuel J. “Senator Albert B. Fall and Wilson’s Last Crisis with Mexico,” XIII, Duquesne Review (Spring, 1968), 3–17 Google Scholar and Murray, Robert K. The Harding Era, (Minneapolis: University of Minnesota Press, 1969), pp. 328–331.Google Scholar

3 Werner, M.R. and Starr, John Teapot Dome (New York: The Viking Press, 1959), p. 27.Google Scholar Fall was considered by many as an expert on Mexican and South American Affairs. He also wrote the Mexican plank in the 1920 Republican platform. See Murray, , The Harding Era, pp. 105–106 for more discussion of Fall’s credentials.Google Scholar

4 George T. Summerlin to Hughes, June 18,1921, National Archives, State Department, Records Relating to Internal Affairs of Mexico, 1910–1929,812.000/25067. (Hereafter referred toas NA, IM). Enclosed is a clipping from the Mexican newspaper, El Universal. Also for Harding’s dependence upon Fall in Mexican affairs, see The New York Times, May 23, 1921, p. 1.

5 Summerlin to Hughes, February 25,1921, NA, IM, 812.00/ 24876. Enclosed is a clipping from El Heraldo de Mexico.

6 Until the early twentieth century, the United States had consistently followed the precedent set by Thomas Jefferson of de facto recognition, which considered only a government’s effective control of the state and its capacity to bind that state in its dealings in international affairs. For a discussion of Wilson's establishment and implementation of the policy of de jure recognition consult Hackworth, Green Haywood Digest of International Law, 1(Washington, D.C.: United States Government Printing Office, 1940), pp. 181–182.Google Scholar See also Fenwick, Charles G. International Law (New York: Appleton-Century Crofts, Inc., 1948), pp. 168–169.Google Scholar Fenwick points out the inconsistency of t he policy in regard to the Tampico incident in 1914: The American State Department demanded from President Victoriano Huerta an apology in the name of Mexico while still denying him a de jure official character. See also Foreign Relations of the United States, 1921, Vol. II, Department of State, Washington, D.C., 1936, pp. 406–407 and The New York Times, June 8,1921, pp. 1 & 3 among other sources.

7 Gaylord Marsh, American Consul in Progreso, Yucatan to Hughes, September 11, 1921, NA, IM. See also Summerlin to Hughes, September 13, 1920, NA, IM for an earlier expression of Obregon’s conciliatory attitude.

8 Article 27 was written as an attempt to undo all the evils of the Diaz regime with respect to the alienation of Mexican lands and resources. National ownership of mineral and subsoil rights, recognized from the colonial period, was reaffirmed and declared to be inalienable.

9 Summerlin to Hughes, January 27, 1922, NA, IM, 812.00/25337.

10 United States Department of Commerce, Bureau of Foreign and Domestic Commerce, Commerce Reports, May 31, 1921, p. 1225 (Hereafter referred to as CR). The Commerce Reports were published daily to September 1921, thereafter they were published weekly.

11 A. J. McComico, Consul at Guadalajara to American Embassy, December 22, 1920, NA, American Embassy, Vol. IX, File 610. See also CR, January 10, 1921, p. 157.

12 CR, June 24, 1921, p. 1737.

13 CR, January 10, 1921, p. 157.

14 CR, December 10, 1922, p. 670.

15 For discussion of these varied activities see CR, February 3, 1921, p. 657; Ferris to Hughes, February 12, 1921, NA, American Embassy, Vol. IX, File 610; CR September 5, 1921, p. 32; CR, September 26, 1921, p. 202; William J. Burns, Director of the Bureau of Investigation, to Harry M. Daugherty, Harding’s Attorney General, March 15, 1922, HP, Roll 182 (frame 0965); Claude I. Dawson, Consul-General in Mexico City to American Embassy, April 26, 1922, NA, Post Records, Vol. X, File 610; Burns to Daugherty, May 22, 1922, HP, Roll 182 (frame 1021); J. P. Bushnell, Acting Trade Commissioner, to Ralph H. Ackerman, Chief of the Latin American Division of the Bureau of Foreign and Domestic Commerce, May 26, 1922, NA, American Embassy, Vol. IX, File 610; CR, July 10, 1922, p. 96; CR October 2,1922, p. 37; CR, October 16, 1922, p. 164; CR, July 2, 1923, p. 28; CR, July 9, 1923, p. 90.

16 A. J. McComico to American Embassy, December 22,1920, NA, American Embassy, Vol. IX, File 610.

17 CR, May 17, 1921, p. 965.

18 Robert P. Skinner, American Consul General in London to Hughes, March 15,1923, NA, IM, 812.00/26271.

19 Ibid. Some Americans tried to discount the threat of European competition for Mexican markets by asserting that products from any part of Europe were inferior, that the United States could offer better service, and that, in fact, the competition was not so keen as some feared.

For discussion of such assertions see CR, February 3, 1921, p. 657; CR, October 3, 1921, p. 259; Dawson to Hughes, March 26,1923, NA, Post Records, Vol. IX, File 610, CR June 25,1923, p. 795; and CR, May 21, 1923, p. 528.

20 Matthew E. Hanna, Chief of the Division of Mexican Affairs, State Department to Hughes, May 28,1923, NA, IM, 812.00/ 26368. See also Brand Whitlock, Ambassador to Belgium, to Hughes, November 4, 1921, NA, IM, 812.00/25215 and Hugh Gibson, Ambassador to Poland, to Hughes, June 23, 1921, NA, IM, 812.00/25054. For discussion of England’s activities in regard to Mexican recognition of and trade with Mexico see Summerlin to Hughes, June 3,1921, NA, IM, 812.00/ 25040 (enclosed is clipping by J. K. Turner, “Why the Obregon Government Has Not Been Recognized”); Summerlin to Hughes, March 28, 1922, NA, IM, 812.00/25514.

21 Summerlin to Hughes, June 1, 1923, NA, IM, 812.00/26379. For discussion of England’s activities in regard to Mexican recognition see Summerlin to Hughes, June 3, 1921, NA, IM, 812.00/25040 and March 28, 1922, NA, IM, 812.00/25514. Summerlin sends clippings from local press also.

22 See Brandes, Joseph Herbert Hoover and Economic Diplomacy: Department of Commerce Policy, 1921–1928 (Pittsburgh: The University of Pittsburgh Press, 1962),Google Scholar for a good discussion of Hoover’s handling of the Commerce Department.

23 Ibid., p. 8. Domeratsky played an important part in publicizing the activities of the Commerce Department by writing articles for Foreign Affairs and other periodicals.

24 Hoover to Harding, June 9,1921, HP, Roll 131 (1163) for recommendation of appointment of Klein as Director of the Bureau of Foreign and Domestic Commerce at $6,000 per year. Recommendation concluded with: “He is a Republican.” See also Hoover to Harding, October 28, 1922, HP, Roll 131 (0932) for some indication of the high esteem Hoover had for Klein.

25 CR, January 1, 1923, p. 3.

26 CR, April 2, 1923, p. 3. In another issue of Commerce Reports, Hoover cites an example of a salesman who “took down a memorandum of the name of the patron saint of his various customers and as the saint’s day of each approached, he sent an appropriately worded card” extending best wishes. See CR November 19, 1923, p. 467.

27 CR, August 28, 1922, pp. 571–574. See also CR February 27, 1923, pp. 538–39, for an article entitled, “Constructive Policies in Foreign Trade,” and CR, June 11,1923, p. 675, “Selling Overseas Customers What They Want,” which focuses upon advertising to convince the world market of the worth of American mass produced goods.

28 Hoover to N.R.S. Russell, President of U.S. Cast Iron Pipe and Foundry Co., Philadelphia, Pennsylvania; Matthew Brush, President of American International Corp., New York, New York: William A. Saunders, Chairman, Board of Directors, Ingersoll-Rand Co., New York, New York; Alex Legge, International Harvester Co. of America, Chicago, Illinois; M. A. Oudin, Vice-President and General Manager, International General Electric Co., New York, New York; E. P. Thomas, President, U.S. Steel Products CQ., New York, New York; A. Osborne, President, Westinghouse Electric International Co., New York, New York, September 24,1923, NA Commerce Department, Record Group 40, Box 525.

29 CR, October 31, 1921, p. 501.

30 De Conde, Alexander Herbert Hoover’s Latin American Policy (Stanford: Stanford University Press, 1951), pp. 5–6.Google Scholar The Commission was first organized on the recommendation of the First Pan-American Financial Conference, held in Washington, May 24–29,1915. “Its purpose was to establish a degree of substantial uniformity in the commercial laws and administrative regulations then in effect in the American republics.”

31 For example see CR, March 3,1921, p. 1242; CR, April 2,1921, p. 48; and CR, April 7,1921, p. 965.

32 CR, January 16, 1922, p. 127. See also F. M. Bonnell, President-Director of the Automotive Trades Departments, El Paso, Chamber of Commerce, to Obregon, December 14, 1922, Alvaro Obregon-Plutarco Calles Papers, General Archivo Nacional, Mexico City, Mexico, PacqueteNo. 1, 101.-C-20, for status of automobile industry in Mexico.

33 CR, June 25, 1923, p. 818. See also CR, September 11, 1922, p. 709; CR., May 17,1921, p. 965; CR, March 3, 1921, p. 1242; and CR, April 2, 1921, p. 48 for a further suggestion of the unlimited economic opportunities that Mexico appeared to offer the United States.

34 Cumberland, Charles C. Mexico: The Struggle for Modernity (London: Oxford University Press, 1968), p. 247.Google Scholar

35 CR, October 23, 1922, p. 214.

36 CR, January 29, 1923, 278. '

37 Cong. Rec, Vol. LXii, 67th Cong., 2nd Session, p. 3020; and Cong. Rec., Vol. LXI1, 67th Cong., 2nd Session, p. 2976.

38 Summerlin to Hughes, July 28, 1923, NA, IM, 812.00/26421. That recognition was expected to enhance economic intercourse see “Mexican Recognition as a Spur to Business,” Literary Digest, LXXVIII (September 15, 1923), 13 and CR, November 5, 1923.

39 Weekly News Bulletin, published by the American Chamber of Commerce in Mexico, Vol. 437, October 29, 1921, NA, Post Records: Tampico; Summerlin to Secretary of State, March 3,1922, NA, IM, 812.00/25440; CR, July 10, 1922, p. 134.

40. Summerlin to Hughes, February 2, 1923, NA, IM, 812.00/26190; Summerlin to Hughes, February 9, 1923, NA, IM, 812.00/26200; Summerlin to Hughes, February 6, 1923, NA, IM, 812.00/26199; Summerlin to Hughes, June 12, 1922, NA, IM, 812.00/25714; and Summerlin to Hughes, January 25, 1923, NA, IM, 812.00/26183.

41 Cong. Rec, Vol. LXIV, 67th Cong., 4th session, pp. 3817 and 3931; Cong. Rec, Vol. LXIII, 67th Cong., 1st Session, pp. 4990, 4910, 4911; Cong. Rec, Vol. LXIII, 67th Cong., 1st Session, p. 3382 and 3452–3453; Senator Trasker L. Oddie of Nevada to Hughes, April 18, 1922, NA, Department of State; Cong. Rec, Vol. LXII, 67th Cong. 2nd Session, pp. 10417–10426; Cong. Rec, Vol. LXII, 67th Cong., 2nd Session, p. 3020; Cong. Rec, Vol. LXII, 67th Cong., 2nd Session, p. 2976.

42 The New York Times, March 9, 1923, p. 3.

43 Harding to Daugherty, March 29, 1922, HP, Roll 182 (0969).

44 The two most significant blunders were the Tampico incident of July, 1921 wherein the United States blatantly and unnecessarily despatched two naval vessels to Tampico and Summerlin’s attempt in November, 1922 to dictate Mexican internal petroleum policy.