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The Formation and Development of the International Bankers Committee on Mexico

Published online by Cambridge University Press:  03 February 2011

Robert Freeman Smith
Robert Freeman Smith
Affiliation:
University of Rhode Island
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Extract

The International Bankers Committee on Mexico has been generally ignored by American diplomatic historians, and those who have mentioned it have missed the basic significance of its organization and operation. The writer of the leading text dealing with the Latin American policy of the United States devotes less than a paragraph to the Committee and says, “The United States did not even demand arbitration. It left the bondholders to their own representations to the Mexican Government.” This statement can be compared to a description of an iceberg which deals only with that part showing above the surface of the water. The heart of this presentation will be the analysis of that part of the Committee's activities which lay beneath the surface—a study in the interaction of government, business, and revolution. The basic thesis involved is that the Committee was an unofficial instrument of the United States government, as it attempted to influence certain aspects of the Mexican Revolution.

Type
Issues in the Economic History of Latin America
Information
The Journal of Economic History , Volume 23 , Issue 4 , December 1963 , pp. 574 - 586
Copyright
Copyright © The Economic History Association 1963

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References

1 Bemis, Samuel Flagg, The Latin American Policy of the United States (New York: Harcourt, Brace and Company, 1943), pp. 215–16.Google Scholar A very general survey of the Committee can be found in Turlington's, EdgarMexico and Her Foreign Creditors (New York: Columbia University Press, 1930), pp. 276–317.Google Scholar Some information is also contained in Dulles', John W. F.Yesterday in Mexico, A Chronicle of the Revolution, 1919–1936 (Austin: University of Texas Press, 1961);Google Scholar and, Huerta, Adolfo de la, Memorias de don Adolfo de la Huerta, segun su proprio dictado: Transcripción y comentarios del Lic. Roberto Guzmán Esparza (Mexico, D. F.: Ediciones Guzmán, 1957).Google Scholar

2 The Fall Committee listed the following totals: Americans killed in Mexico and along the border (both military and civilian), 587; outraged or wounded, 198; approximate value of property destroyed, $487,481,133. U. S. Congress, Senate, Committee on Foreign Relations, Investigation of Mexican Affairs, 66th Cong., 2d Sess., 1919–1920, Senate Doc. No. 285, II, 3382–99.

3 Investors in France, Britain, and the United States held most of the Mexican bonds.

4 Robert Lansing to Edward N. Smith, March 3, 1917 (the Robert Lansing Papers, Library of Congress, Manuscript Division [hereafter, Lansing Papers]); Robert Lansing, Private Notes 1915–1916, entry of October 10, 1915 (Lansing Papers); Henry P. Fletcher to Robert Lansing, April 3, 1918 (the Henry P. Fletcher Papers, Library of Congress, Manuscript Division [hereafter, Fletcher Papers]). See also the discussions in Clendenen's, Clarence C.The United States and Pancho Villa: A Study in Unconventional Diplomacy (Ithaca, N. Y.: Cornell University Press, 1961), pp. 296–304;Google ScholarLink, Arthur S., Wilson, The Struggle for Neutrality, 1914–1915 (Princeton, N. J.: Princeton University Press, 1960), p. 636.Google Scholar

5 Lansing, Private Notes 1915–16, entry of October 10, 1915 (Lansing Papers).

6 ibid. Link discounts both the German factor in this decision and Lansing's role in making it, but I am convinced that both deserve more emphasis. As early as July 11, 1915, Lansing noted in his diary his great concern over German power and the necessity for recognizing the Carranza faction: Lansing, Private Diary 1915–16, and Lansing to Edward N. Smith, March 3, 1917 (Lansing Papers). Another factor was the opposition of an important body of public opinion to a war with Mexico. Numerous letters from churches and peace societies sent to Wilson in 1914–15 are indicative of this (Woodrow Wilson Papers, Library of Congress, Manuscript Division). See also: Link, Wilson, the Struggle for Neutrality, p. 642; and Editor of the Chicago Herald to Lansing, November 14, 1916 (Lansing Papers).

7 Lansing, Private Notes 1915–16, entry of October 10, 1915 (Lansing Papers).

8 Fletcher to Lansing, August 8, 1917 (Fletcher Papers); Lansing to J. C. O'Laughlin, August 10, 1917 (Lansing Papers); Turlington, Mexico and Her Foreign Creditors (see n. l), pp. 271–72.

9 Memorandum by Leon J. Canova, of the Division of Mexican Affairs, October 22, 1917 (National Archives, State Department Decimal Files, Record Group 59, 812.51/402 (cited hereafter by NA and file number).

10 Thomas R. Lill to Gordon Auchincloss (Assistant Secretary of State), July 31, 1918 (NA 812.51/537). A short time later, the company was taken over by the Alien Property Custodian.

11 “Memorandum of an Arrangement Between the United States and Mexico,” February 7, 1918 (NA 812.51/535). Lansing to Fletcher, March 15, 1918, Papers Relating to the Foreign Relations of the United States, 1918 (Washington: U. S. Government Printing Office, 1930), pp. 617–19; for additional correspondence see pp. 605–26. The U. S. trade policy also contributed to severe price increases in Mexico; see the testimony of Thomas Lill, Senate, Investigation of Mexican Affairs (cited in n.2), I, 619.Google Scholar

12 Lansing to Fletcher, April 25, 1918 (NA 812.51/429a); memorandum of a conversation between Boaz Long and W. H. Mealy (Pierce Oil Co.), June 1, 1918 (NA 812.51/536); Canova to Auchincloss, July 23, 1918 (NA 812.51/444).

13 Fletcher to Lansing, March 10, 1918 (NA 812.51/420).

14 Fletcher to Lansing, March 13, 1918 (Fletcher Papers).

15 Lill to Auchincloss, July 31, 1918 (NA 812.51/537).

16 Canova to Auchincloss, January 4, 1918 (NA 812.51/409); Canova to Frank Polk, January 5, 1918 (NA 812.51/409); distrust of British oil interests is brought out in a memorandum written by Leland Harrison, January 23, 1919 (Leland Harrison Papers, Library of Congress, Manuscript Division).

17 Memorandum from the British Embassy in Washington, December 31, 1917 (NA 812.51/409).

18 Auchincloss to Canova, January 10, 1918 (NA 812.51/409).

19 “Present Nature and Extent of the Monroe Doctrine, and Its Need of Restatement,” by Robert Lansing, June 11, 1914 (NA 710.ll/185½); memorandum of November 24, 1915 (NA 710.11/188½); Wilson to Lansing, November 29, 1915 (NA 710.11/189½).

20 “Memorandum and Arguments Relating to Constructive Steps Which Should be Taken in Central America Before the Close of the European War,” by Boaz Long, February 15, 1918 (NA 711.13/55).

21 Lansing to Bernard Baruch, September 10, 1918 (Lansing Papers). For correspondence on trade policy, see Foreign Relations, 1918 (cited in n.11), pp. 627–32.

22 Lill to Auchincloss, July 31, 1918 (NA 812.51/537); Fletcher to Lansing, May 30, 1918 (NA 812.51/434).

23 Auchincloss to President Wilson, August 1, 1918 (NA 812.51/539); Wilson to Polk, August 2, 1918 (ibid.); Henry Bruére to Frank Polk, August 15, 1918 (NA 812.51/542).

24 “Memorandum for President Wilson in Reference to Mexico,” by Thomas R. Lill and Henry Bruére (ibid.).

25 Morgan, J. P. and Co. to Morgan, Grenfell and Co. (London) and Morgan, Harjes and Co. (Paris), October 10, 1918Google Scholar (Na 812.51/544); Lamont to Polk, November 18, 1918 (NA 812.51/547); Lamont to Davis, Norman H., October 5, 1920Google Scholar (NA 812.51/600); Johnston, Charles M. (Division of Mexican Affairs) to Nerman H. Davis, September 30, 1920 (NA 812.51/5961/2).Google Scholar

26 Morgan, J. P. and Co. to Morgan, Grenfell and Co. and to Morgan, Harjes and Co., October 10, 1918 (NA 812.51/544).Google Scholar

27 Canova to Polk, January 5, 1918 (NA 812.51/409). The points in this paragraph are based on information in the following: Lamont to Polk, November 18, 1918 (NA 812.51/547); Lamont to Polk, December 13, 1918 (NA 812.51/549); Lamont to Davis, September 28, 1920 (NA 812.51/619); Fletcher to William Gibbs McAdoo, March 12, 1919 (Fletcher Papers).

28 Lamont to Auchincloss, October 21, 1918 (NA 812.51/545); three subcommittees were formed representing Public Debt, Railways, and Industries.

29 Lamont to Auchincloss, October 21, 1918 (NA 812.51/545).

30 Lamont to Davis, September 28, 1920 (NA 812.51/619).

31 Lamont to Fletcher, August 5, 1919 and Fletcher to Lamont, August 6, 1919 (NA 812.51/554); William Phillips to Lamont, November 5, 1919 (NA 812.51/557). In spite of some misgivings, the Department decided not to ask for two additional American members. Belgium was given a seat in 1921.

32 Henry Bruére to Frank Polk, February 7, 1919 (NA 812.51/497). See also, Lill's statement in Senate, Investigation of Mexican Affairs (cited in n.2), I, 637.

33 Lill to Fletcher, March 20, 1919 (Fletcher Papers); Fletcher to McAdoo, March 12, 1919 (ibid.).

34 Turlington, Mexico and Her Foreign Creditors (cited in n. l), p. 275.

35 Polk to President Wilson, March 1, 1919 (NA 711.12/187); Fletcher to President Wilson, March 1, 1919 (ibid.); Breckenridge Long Diary, entry of May 31, 1919 (Breckenridge Long Papers, Library of Congress, Manuscript Division); Harold Walker (Association of Producers of Oil in Mexico) to Fletcher, July 29, 1919 (Fletcher Papers).

36 The Mexican attitude was reported by the Chargé in Mexico, who cited a speech by Roberto Pesqueira in which the Mexican Minister of Finance was quoted, Summerlin to State Department, March 4, 1919, Papers Relating to the Foreign Relations of the United States, 1919 (Washington: U. S. Government Printing Office, 1934), IIGoogle Scholar, 593. For the feelings of Lansing and Fletcher see: Fletcher to President Wilson, August 20, 1919 (Lansing Papers); Josephus Daniels Diary, entry of November 28, 1919 (Josephus Daniels Papers, Library of Congress, Manuscript Division); Lansing, Private Notes 1919, entry of November 28, 1919 (Lansing Papers); Fletcher to Lansing, December 11, 1919 (Fletcher Papers).

37 Turlington, Mexico and Her Foreign Creditors (cited in n.l), p. 279.

38 Leo Rowe (Division of Latin American Affairs) to Secretary of State, June 15, 1920 (NA 711.12/319); “Report on the Political Situation in Mexico,” by Johnston, C. M., June 15, 1920 (Norman H. Davis Papers, Library of Congress, Manuscript Division); “Memorandum of Conversation with Señor Iglesias Calderón, Mexican Envoy,” July 9, 1920Google Scholar (ibid.).

39 “Minutes of a Meeting of the British Section of the International Committee, August 11, 1920,” sent to the Department by Thomas Lamont, September 28, 1920 (NA 812.51/619).

40 The minutes of the meeting of the French Section were enclosed in the note of Patchin, Ira H. to Davis, October 19, 1920 (NA 812.51/601).Google Scholar

41 Lamont to Davis, October 25, 1920 (Davis Papers).

42 Lamont to Davis, October 28, 1920 (ibid.); Davis to President Wilson, November 2, 1920 (NA 812.51/598a).

43 Woodrow Wilson to Davis, November 3, 1920 (Wilson Papers).

44 ibid.; Wilson to Bainbridge Colby, September 24, 1920 (Bainbridge Colby Papers, Library of Congress, Manuscript Division); Colby to Wilson, September 25, 1920 (ibid.); Wilson to Colby, November 5, 1920, and Colby to Wilson, November 6, 1920 (NA 812.00/26464); Dulles, Yesterday in Mexico (cited in n.l), p. 91.

45 Lamont to Davis, November 19, 1920 (Davis Papers).

46 Morgan, J. P. and Co. to Morgan, Grenfell and Co., December 14, 1920Google Scholar (ibid.); “Memorandum of Conversation between Secretary Colby, The French Ambassador, and Norman Davis, February 10, 1921 (ibid.).

47 Tellez, Manuel C. (Chargé d'Affaires for Mexico) to Lamont, February 7, 1921, and Lamont to Davis, February 8, 1921 (NA 812.51/614); Adolfo de la Huerta to William Wiseman, February 2, 1921, and Lamont to Davis, February 26, 1921 (NA 812.51/623).Google Scholar

48 Lamont to Charles Evans Hughes, March 29, 1921 (NA 812.51/724). A study of this phase is in preparation by this author.

49 ibid.; the quoted words were used by an official of the Guaranty Trust Company, cited in a memorandum sent by the Division of Mexican Affairs to Norman Davis, August 9, 1920 (NA 812.6363/716).

50 Fletcher to George T. Summerlin, September 9, 1921 (NA 812.00/25169a); Lamont to Hughes, March 29, 1921 (NA 812.51/724); the Committee also decided to drop most of their proposals for international supervision of Mexican finances.

51 Lamont to Hughes, October 31, 1922 (Charles Evans Hughes Papers, Library of Congress, Manuscript Division).