Peso Diplomacy

The flight of a young man to Mexico City lost none of its pristine glamour, last week; but from his lone, receding plane the deft hand of U. S. Ambassador Dwight Whitney Morrow conjured an achievement in statecraft. Under his suave persuasion the President of Mexico embarked on a new policy of "peso diplomacy"--a policy which could scarcely have been launched had not Ambassador Morrow given Mexicans the emotional treat of "going Lindbergh."

What President Plutarco Elias Calles did was to scrap the first of two ideals which were originally envisioned in the Mexican Constitution of 1857 and later militantly transfused into the present Constitution of 1917.

Ideals: I. Foreign investors in Mexico should be divested of the extensive rights of exploitation which they bought "legally but unjustly" (say many Mexicans) from previous corrupt Mexican regimes.

II. Roman Catholicism should be shorn of whatever remains of that dominance which it exercised in Mexico for so long after the Catholic Spaniards came, conquered and colonized.

No president of Mexico ever dared to try to realize these constitutional ideals until the rise of Senor Calles. His bold, perhaps rash, leadership spurred the Mexican Congress to enforce the Constitution of 1917 for the first time (TIME, Jan. 25, 1926), by passing laws which foreign interests in Mexico found "retroactively confiscatory" of their titles to Mexican lands and oil. Equally bold to the point of rashness has been Senor Calles' enforcement of the anti-religious clauses of the Constitution (TIME, Feb. 22, 1926, et seq.). Indeed, for the past two years foreign investors and Roman Catholics in Mexico have almost continuously shrieked their wrongs. . .

Pivot Point. Roman Catholics still loudly protest the injustices done to their brethren in Mexico, but U. S. financial interests there became quietly expectant, recently, when it was found that Mexican tax revenues were falling below a point at which Senor Calles could meet the payments due to Manhattan bankers on the Mexican national debt.

That point--money, dollars, pesos--is the pivot around which President Calles has swung away from Mexican ideals of retroactive confiscation and toward U. S. ideals of justice for U. S. interests in Mexico. Once justice was done, once Lower Manhattan was appeased, it would be possible to tide over the Mexican debt payments.

Flip Flop. Because Manhattan bankers are ready to follow the nod of Dwight W. Morrow, who was a partner of J. P. Morgan before he became Ambassador to Mexico, it was prudent, nay a pleasure, for Senor Calles to flip flop from one set of ideals to another. He flipped and he flopped, last week, to such good purpose that the Mexican Chamber and Senate took two vital steps:

1.) Adopted a legal rider submitted by Senor Calles which amends the land and oil laws so that they are no longer "retroactively confiscatory." Specifically, land and oil rights obtained by U. S. citizens in Mexico prior to May 1, 1917, are to be "confirmed without limitation of time," whereas 50 years had been the limit after which such rights would revert to the State.

2.) Conferred upon Senor Calles virtually dictatorial power to legislate by executive decree during 1928 all matters affecting the national debt of the republic.

Beatitude. With the passage of these measures last week, beatitude seemed to settle upon U. S.-Mexican relations. However, the National Council of Catholic Women sent an open letter to President Coolidge, protesting "against the un-Christian and the uncivilized persecution carried on in Mexico by the Calles Government."

Added they: "The visit of the idol of the American people, Colonel Lindbergh, is widely interpreted as condoning, if not approving, the method by which the Calles Government seeks to destroy liberty of religion, liberty of the press and liberty of education. . . ."

Executive Message. So content was President Calles with his "peso diplomacy" of last week that he issued a gloating executive message: "I send a most cordial greeting to the great Mexican family. . . . I see in Mexicans of every condition an undeniable love for the prosperity of their country. . . . Fortunately . . . there has been ushered in an era of most cordial and intelligent relations between Mexico and all nations [i e. the U. S.]. This obviously must contribute to the easier development and progress of our national life. . . ."

Since Senor Calles is now convinced that the U. S. is not interested in what happens to Roman Catholics in Mexico, he contentedly declared: "I can announce to the country the pacification of those groups rebelling on account of religious motives. . . . There remain but a few insignificant groups, which will be exterminated in a very short time. . . ."