Carranza's administration as first president under the new Con stitution was disappointing. Little was realized in the way of effective agrarian reforms. Decrees, charged with being confis catory in character, by which Carranza sought to enforce the constitutional provisions relating to the national ownership of subsoil deposits in which foreigners were interested, involved him in diplomatic controversies with foreign powers. In the United States intervention was loudly demanded, danger of which was augmented prior to the close of the World War by Carranza's anti-American and pro-German attitude. Finally, through threats of curtailing production, the petroleum companies forced Car ranza (Jan. 1920) to suspend his objectionable decrees, but with out prejudice to the final adjudication of the dispute. During 1919 Carranza's hold on the country weakened. Rebel activities were wide-spread, corruption prevailed in the army and banditry was general. This situation, together with the non-enforcement of the Constitution and the avowed intention of Carranza, in conformity with his pledge, to impose a civilian, I. Bonillas, as his successor in the presidency, inspired an armed rebellion that was soon dominated by the so-called Sonora triumvirate, com posed of De la Huerta, Obregon and Calles. The rebel movement got under way in Sonora early in April 1920 and on May 8 Obre On entered Mexico City on the heels of the fleeing Carranza who was assassinated 13 days later. Following De la Huerta's pro visional presidency, Obregon was installed Dec. 1, 1920.
The agrarian and petroleum policies of the Obregon Govern ment were responsible for strained relations with the United States. Secretary of State Hughes, who was interested in the general problem of protecting American property rights in Mex ico, first endeavoured to negotiate with Obregon a treaty of amity and commerce that would adequately guarantee such protection. Failing in this, Charles B. Warren and John B. Payne, as mem bers of a joint commission, were sent to Mexico with instruc tions to secure the restoration or proper reparation for the taking of lands owned by Americans, to obtain satisfactory assurances against confiscation of subsoil interests owned by Americans prior to the promulgation of the Constitution on May 1, 1917, and to negotiate appropriate claims conventions. Hughes wished also to raise the question of religious liberty in Mexico; this issue was dropped, by the wish of Mexico, as a purely domestic concern. The joint commission (in session from May 14 to Aug. 15, 1923) reached satisfactory understandings on the most important ques tions at issue. Under certain conditions American owners of lands expropriated by the Mexican Government for ejidos for villages were obligated to accept 20 year 5% bonds for a maximum of 1755 hectares and a just value, paid in cash, for any excess taken. At the same time the Mexican Government recognized the un qualified right of owners who were U.S. citizens, and had suffered losses or damage because of acts resulting in injustice in carrying out the agrarian policy of the Mexican Government, to have re course to a general claims commission. On the theory that the mining laws of the Diaz regime, through the reversal of an his toric principle, had in reality conferred a gift of the subsoil on surface owners, and on the argument that under Napoleonic and Mexican law a gift was not a gift until the donee had performed some positive act indicative of his intention to accept the gift, the Mexican Government recognized the right to the subsoil of all surface owners who, before May 1, 1917, had performed some positive act indicating their intention to exploit the deposits be neath their surface lands. It refused, however, to do more than grant preferential rights to the oil in the subsoil to surface owners who before May 1, 1917, had not performed the afore-described positive act. Nevertheless, because the U.S. Government refused to admit the above distinction, the Mexican Government recog nized the former's right "to make any reservation of or in behalf of its citizens." On the basis of the above understandings, as mutually approved by Presidents Obregon and Coolidge, the Obregon Government was recognized by that of the United States on Aug. 31, 1923. A special claims commission whose report was signed on Sept. io, provided for the adjudication of all claims against Mexico of citizens of the United States suffered "through revolutionary acts" between Nov. 20, 1910, and May 31, 1920. A general claims convention signed on Sept. 8, provided for the ad judication of all other claims of the citizens of either country that originated between July 4, 1868, and the date of the termination of the commission. ObregOn had the support of the Agrarians: President Calles, who was a strong supporter of the programme of 1917, came into power pledged to maintain order, to practice economy, and to promote the economic and social welfare of the Mexican people. He was supported by the Labour Party. A heavy hand was promptly laid on trouble makers, but the pro gramme of economic and social development was impeded by the deplorable financial condition of the Government and by its inability to obtain a loan. Accordingly, President Calles adopted
a drastic policy of retrenchment, and in less than eight months an actual saving of over 6o,000,000 pesos had been effected. In Oct. 1925 the debt agreement of 1922 was modified to Mexico's ad vantage—chiefly by the separation of the debt of the national railways, which were returned to private ownership, from the national debt—and arrangements were made for the resumption of interest payments beginning Jan. 1, 1926. Toward labour, which had steadily grown more aggressive and radical, President Calles adopted a firm attitude. The railway service was federal ized, thereby reducing the likelihood of strikes, and in the spring of 1925 presidential action prevented a national sympathetic strike called by the Tampico Federation of Labour Unions. Upon the recommendation of President Calles the Mexican Congress, in Dec. 1925, passed the alien land and petroleum laws. The first was an enabling act designed to put into operation the theretofore unfulfilled constitutional provisions relating to the limitation of the acquisition by foreigners of agricultural land in Mexico ; the second law was designed to put into operation by legislative action, as opposed to presidential decrees, the constitutional provisions relating to the national ownership of subsoil deposits. Early in Jan. 1926, just as a spirited diplomatic controversy with the United States concerning these laws reached an apparent crisis, the Mex ican Catholic episcopate took a positive stand against the there tofore almost wholly unenforced religious and educational pro visions of the Constitution and thus precipitated a conflict between church and State. An apostolic letter of Pope Pius XI. (Feb. 2, 1926) which voiced sympathy for the Mexican clergy because of the "wicked . . . regulations and laws . . . against the Catholic citizens of Mexico," intensified the uncompromising attitude of both the Government and the episcopate. The conflict reached a crisis on July 31, at which time the clergy, in preference to sub mitting to an executive decree designed to enforce the religious and educational provisions of the Constitution, which they re garded as imposing impossible conditions for the practice of their ministry, withdrew from the churches, and thus suspended reli gious exercises requiring the services of priests. The Government maintained its position. Churches, as well as all other church property, which had been nationalized, were taken in charge by Government agents, but the churches in most cases were kept open for individual worship. The Government expressed a willing ness to transfer the custody of the churches to the clergy if they agreed to recognize the law. Opposition to the law resulted in several outbreaks. which were suppressed. In addition, many members of the episcopate were deported (since April 1927) on the ground that they had encouraged the Catholic uprisings. Despite international and internal troubles the Calles Govern ment made notable progress in developing irrigation projects, in building roads and in promoting education, particularly among the rural classes. In 1926 a total of 46,000,000 pesos was spent on education. This sum was equivalent to 82% of the Federal budget plus about 4o% of the total budgets of all the States. A politico military rebellion late in 1927, headed by two presidential can didates, Generals Gomez and Serrano, was suppressed with rigour. The alien land and petroleum laws were vigorously protested against by the U.S. Government, chiefly because of their alleged retroactive and confiscatory character. The controversy appar ently reached a crisis with the official promulgation of both laws early in 1926. The diplomatic exchanges yielded no agreements but the tension was relieved in March. At that time, Secretary of State Kellogg, in answer to various questions concerning the proposed application of specific provisions of the alien land law, received apparently satisfactory replies from the Mexican Gov ernment ; at the same time Kellogg apparently indicated a willing ness to be content with the petroleum law provided American owners who had performed an above-described positive act before May 1, 1917, were confirmed in their rights to the subsoil. The second phase of the diplomatic controversy was opened by Kel logg on July 31, 1926. Vigorous complaints against specific pro visions of both land and petroleum laws were Made and when the Mexican replies showed that the two Governments differed fundamentally on all specific points raised by Kellogg, the United. States in a virtual ultimatum (Oct. 30) warned Mexico not to de prive American owners in Mexico of any of their property rights. The Mexican Government countered by requesting that violations of recognized principles of international law be indicated. Since then neither law has been the subject of public diplomatic repre sentations. The petroleum law in theory went into effect on Jan. I, and the alien land law on Jan. 21, 1927. The latter, apparently, was quite generally accepted by aliens in Mexico. Articles 14 and 15 of the petroleum law, which were among those vigorously pro tested against by Kellogg, required owners of the surface who acquired their titles prior to May 1, 1917, to exchange them for "confirmatory concessions," good for so years, and, under certain conditions, renewable. Property of owners not complying with the law before Jan. 1, 1927, was to revert to the Mexican nation. On the latter date, however, the Mexican Government made no move to take over such property, and, instead, merely cancelled drilling permits of non-conforming companies on the ground that they had not complied with articles 14 and 15. This made possible a test of the constitutionality of the two articles, and a decision of the Mexican Supreme Court (Nov. 17, 1927) declared that they were unconstitutional. The decision was at once accepted by the Mexican Government and before adjournment in December the Mexican Congress re-enacted the petroleum law with the two controverted articles amended so as to conform with the Supreme Court decision. Authorized executive regulations governing the new law promptly met with the approval of the United States Government when they were issued on March 27, 1928. Thus two, but only two, of the various provisions of the law that are objectionable to the American interests upheld by Kellogg have been eliminated by the Supreme Court decision. Relations be tween the United States and Mexico showed marked improvement on the arrival (Oct. 1927) of Dwight W. Morrow as United States Ambassador. Evidence of this better feeling was shown again in 1936 in the opening of the Pan-American Highway from Texas into Mexico City. This was built at a cost of $17,000,000.