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.S. diplomacy to an end. Based on U.S. and Mexican archival material, this article examines why President Roosevelt pursued a negotiated settlement of the agrarian dispute.
The scholarship on Roosevelt's Mexican policy during the mid- to late 1930s provides little insight into what tempered U.S. policy over agrarian issues because it focuses primarily on the nationalization of the foreign-owned petroleum industry in March 1938. By emphasizing the oil crisis, both traditional and revisionist historians of Roosevelt's Good Neighbor Policy have reduced a complicated bilateral relationship down to the influence that one issue, namely World War II, had on U.S.-Mexican relations. They argue that FDR refrained from taking any aggressive measures against Mexico because the United States was in search of Latin American military bases, needed Mexican raw materials, and did not want to jeopardize its drive toward collective hemispheric security.(2) Concern for national security was one reason why the United States accommodated Mexico in 1938 and 1939. This interpretation, though, does not explain why President Roosevelt endorsed an even-handed approach when Mexico expropriated millions of acres of American-owned land between 1935 and 1938. Had Roosevelt taken a hard line against Mexico during this period, it is very unlikely Cardenas would later have nationalized the oil industry. Unknowingly, FDR's refusal to respond in a hostile manner to the seizure of American-owned agricultural property, as well as his reliance on normal diplomatic channels to settle the agrarian dispute, emboldened Cardenas to appropriate the petroleum industry; it also set the stage for Roosevelt's acquiescence when the oil fields were taken over by the Mexican government.
No scholar has demonstrated the precedents that were set during the agrarian dispute, even though the response of both the hard-liners and accommodators within the Roosevelt administration to the oil nationalization mirrored their earlier reaction to the expropriation of American-owned land. In addition, the method of settling the oil claims, a bilateral commission, followed the method first devised to settle the agrarian claims. More important, Roosevelt's conciliatory policy toward the Cardenas administration had been developing within a domestic context for more than three years, irrespective of the military developments in Europe and Asia. To balance earlier security-oriented interpretations, as well as previous revisionist accounts that tend to overstate the economic motives behind Roosevelt's Good Neighbor Policy, this article will argue that FDR did not employ any aggressive measures during the agrarian dispute for personal, economic, and political reasons. Roosevelt's sympathy for Mexican land reform, his management style, the economic benefits of increased U.S. exports to Mexico, the political gains made by FDR from Mexican repatriation, the lack of a viable alternative to the Cardenas regime, and FDR's use of symbolic politics all helped to temper Roosevelt's response to the loss of millions of acres of American-owned land south of the border.
Common Ideological Convictions
Roosevelt and Ambassador Daniels were sympathetic to Cardenas's attempt to improve the living conditions of the Mexican peasantry through land redistribution. Holding idealized Jeffersonian values, both FDR and Daniels subscribed to what Fredrick Pike calls the "agrarian myth," a belief in the "redeeming and uplifting effect of proximity to, and intimacy with, the land."(3) Roosevelt's quixotic notion of transforming rural America was, in some ways, similar to the goals behind Cardenas's agrarian reform program. According to Frank Freidel, "Roosevelt was keenly interested in rural planning and conservation, and in romantic Jeffersonian terms talked of the necessity to move millions of permanently unemployed city dwellers back onto the land, where they could produce their own food on small plots."(4) A 1937 article in Harpers Magazine illustrated Daniels's like-minded philosophy with regard to Mexican land redistribution. According to the popular monthly journal, "Mexico now likes Daniels and Daniels likes Mexico. His Jeffersonian nerve centers tingle with pleasure as he sees the land cut up into little squares and parceled out to the people."(5) These beliefs, which were the ideological inspiration behind such New Deal projects as the Tennessee Valley Authority, the Agricultural Adjustment Act, and the Rural Resettlement Administration, made FDR supportive of Mexican land reform.(6) In fact, throughout the 1930s, Roosevelt often expressed his admiration for President Cardenas and his socioeconomic reform program to Mexican Ambassador Dr. Francisco Castillo Najera.(7)
Just as New Deal legislation was designed to transform the American countryside, Roosevelt believed the bold changes under way in rural Mexico were integral to Mexico's future. In a letter to Texas Governor James Allred, the president wrote
The settlement of Mexican farmers on arable lands of the Republic is a very urgent need, the accomplishment of which ... has been long delayed.... Unless the people can find places for themselves on the soil, with their own fields to till and with the growing sense of responsibility which comes from individual and family application to the daily problems of the farm, I am convinced that [Mexico's] progress will be further postponed. As a sincere friend of Mexico I have therefore a profound sympathy with the basic objectives of the agrarian program.(8) Daniels concurred with Roosevelt's assessment. After eight years as U.S. ambassador, he concluded Mexico was "cursed with over-grown haciendas" (large estates) and "absentee ownership." Writing to the White House in late 1934, Daniels stated, "the future of Mexico rests upon giving the Indians...