For Mexicans Only

For months Mexican Nationalist Representatives and Senators have been swelling out their chests in Parliament and announcing to the world in general that Mexico is a Sovereign State and can make what laws she pleases. They added that they were at work upon certain laws which would displease most foreigners a great deal. At Washington, President Coolidge and Secretary Kellogg have maintained a portentous silence. The present Mexican regime was recognized a short time after the death of President Harding only after a U.S.-Mexican Commission had arrived at the distinct understanding that there would be no enforcement of the fourth clause in Article 27 of the Mexican constitution, under which it was believed that Mexican property and oil rights then appertaining (1923) to U.S. citizens might later be seized from them by the Mexican Government. While this understanding leaves Mexico indisputably free to pass whatever confiscatory legislation she pleases with regard to the future, it has been construed by investors in Mexican land and oil concessions all over the world as binding Mexico not to pass retroactive confiscatory legislation.

Last week it was understood that President Calles was about to set his hand to an alien land and petroleum law which would violate the U.S.-Mexican understanding. It was even rumored that President Calles had already signed these bills. At Washington the situation was considered not only grave but exceedingly awkward.

The measures in question are ambiguously worded. They must be construed by the Mexican courts before it can be positively said that they are or are not retroactive. It is possible that the Mexican Supreme Court may declare them unconstitutional. Therefore President Coolidge has restricted himself to throwing out unofficial hints from the White House that he is sure Mexico will live up to her treaties (TIME, Jan. 18, PRESIDENCY); and the State Department has taken no further action than to have Ambassador Sheffield substantially repeat the President's hints at Mexico City in the form of diplomatic protests.

Late in the week, Foreign Minister Saenez of Mexico made what was considered a very unsatisfactory reply. Despatches reported that he conveyed to Ambassador Sheffield the Mexican Government's assurance that the laws in question had not yet been officially promulgated, and that therefore the protests of the U.S. were considered premature. Attention was called to the scarcely consoling fact that foreign nationals may apply to the Mexican courts if they consider themselves discriminated against. Finally many a honeyed word was poured out to cement the friendly relations between the U.S. and Mexico.

The Significance. Foreign nationals noted that, setting aside all question of "retroactiveness," the new laws are designed very nearly to annul the future possibility of an alien's acquiring in Mexico any of the luscious "rights of exploitation" upon which many a non-Mexican purse fattened in the past. Most land-owning corporations will have to be organized with at least 51% of their stock in Mexican banks. Those within 25 miles of the frontier of Mexico must be 100% Mexican. "All natural mixtures of the carbons of hydrogen (i. e., "petroleum," etc.) are vested in the nation," and their transference to foreigners is so restricted as to leave most of the profit in Mexican hands. In short, if the laws come into effect and are held to be constitutional and retroactive, hundreds of millions of dollars worth of "foreign owned property" will dwindle in value before the prospect of endless expensive litigation in the Mexican courts.

Presumably the nations of the world would not take such a state of affairs lying down. Since the U.S. vigorously discourages European nations from intervening on the American continent under the Monroe Doctrine, it might well become highly expedient for the U.S. to intervene in Mexico in the interests of the Great Powers, even were the Administration loath to intervene on behalf of U.S. nationals alone.