The Harding Administration and Mexico: Diplomacy by Economic Persuasion

Abstract

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.