The Lerdo Law, officially the Law of Confiscation of Rustic and Urban Properties Property of Civil and Religious Corporations, was promulgated in Mexico on June 25, 1856. At that time the substitute President Ignacio Comonfort ruled and the Minister of Finance was Miguel Lerdo de Tejada.
One of the characteristics of property in the country, since colonial times, was the accumulation of land in the hands of the Church. Many of these lands were known as Bienes de Manos Muertas, which did not produce anything.
The main purpose of the Law was to disentail those properties. In this way, it was decreed that real estate held by the Church or corporations should be sold to individuals. It was, according to the legislators, to revive the economy and make it more modern.
Framed within the laws issued by the liberals, it generated much opposition among the affected sectors. In the short term, apart from the economic consequences, this legislative set was one of the reasons why the Reform War would break out.
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Since colonial times, congregations belonging to the Church, in addition to some individuals, accumulated a lot of real estate. The legislation of the Crown favored the clergy, but that concentration of possessions harmed the economy of the Viceroyalty.
One of the first attempts to change the situation came before Mexico declared itself independent. It was in 1782, in the Yucatan, when a law was promulgated to confiscate ecclesiastical property.
Within this attempt, the authorization granted to the authorities to sell the Church's possessions in favor of the public treasury stood out..
Already during the War of Independence, in Mexico there had been two totally different sides in all ideological issues..
On the one hand, there were the conservative sectors, those who had opted to maintain a monarchy and had been against any liberal legislation.
In the other faction were the Liberals. They had positioned themselves in favor of creating a federal republic. They had clear influences from the Enlightenment and liberal ideas that ran through Europe confronting absolutisms.
The last time that Antonio López de Santa Anna took power, it had been at the instigation of the conservatives. Faced with his dictatorship, which almost became a monarchy, the liberal sectors of the population rose.
In this way, Plan de Ayutla was born, a political declaration whose objective was to bring down Santa Anna. The Plan established the need to convene a Constituent Congress to provide the country with a modern Magna Carta and advanced ideas..
When the Ayutla signatories were successful in their confrontation with Santa Anna, they appointed an interim president, Ignacio Comonfort. On October 16, 1856, Congress began to draft the promised Constitution.
There is no doubt that one of the most important actors in Mexican history up to that date had been the Catholic Church..
Protected by favorable legislation and unquestionable social influence, she had achieved great wealth. In fact, in the mid-nineteenth century he was the largest landowner and rentier in the country..
When supporters of the Ayutla Plan come to power, the Church feels threatened. One of the declared claims of the victors was to end the privileges of the ecclesiastical institution, in addition to those of other social sectors.
In this way, the enactment of laws to achieve that end did not wait, starting with the so-called Lerdo Law..
The legislators considered that the accumulation of assets in a few hands, especially when it was underutilized land, had been a great historical error. The economy was very static and industries related to property had not developed.
Before the Lerdo Law was developed, the Church and civil corporations owned most of the properties in the country. The people, meanwhile, could only, in the best of cases, pay rents to work on those lands.
One of the bases of the liberal thought was the confiscation of ecclesiastical property. They considered that the economy would improve, since the old tenants would try to give better returns to the land. In addition, they thought that investments were going to grow.
The intention was for a middle class of owners to emerge, as had happened in many European countries. According to their calculations, those who wanted to buy the disentailed land would have a discount of more than 16%.
Despite these intentions, the liberals did not intend to do too much harm to the Church. The legislation they were preparing included a fair payment for their goods.
The State, for its part, would collect the corresponding taxes. Thus, theoretically, all the sectors involved gained.
The Lerdo Law, promulgated by President Comonfort and prepared by Minister Lerdo de Tejada, marked a great social change in the Mexican economy.
The first prominent measure was the prohibition of the Church and civil corporations from owning real estate. Only those properties destined for worship were exempt.
All the real estate of the clergy would be sold, preferably, to their tenants. The Law established the price of said transaction, calculating its value for the rent at 6 percent per year..
If, for whatever reasons, the tenants did not request the sale within three months, any other interested party could buy it. If no one claimed it, the property would be put up for auction.
To try to make other economic sectors grow, the Law gave the clergy permission to reinvest the profits obtained in agricultural or industrial companies..
The Law did not intend for the Church and corporations to lose all their property. The exceptions were reflected in article 8, indicating those assets that would not be subject to any change of ownership.
In general, all those buildings that were intended for the specific purpose of the corporations would not be susceptible to being disposed of. Among them, convents, episcopal or municipal palaces, schools, hospitals or markets.
Among the assets belonging to the municipalities, those not affected by the Law were those dedicated to public service, whether they were ejidos, buildings or land..
Although the main objective of the Law was to revitalize the economy at the cost of offering goods to the private sector, there was also an article that favored the State.
In this way, each sale made had a tax of 5%. With this, it was intended to increase the collection, improving the country's accounts.
Lawmakers also took into account the possibility of government-hostile tenants who refused to buy the property offered. For this reason, as mentioned before, specific deadlines were established.
First, in the event that the tenant does not claim the purchase in the following three months, anyone else could do so and buy it. If no one was interested, the property in question would go up to public auction.
One of the groups that were harmed, in addition to the Church, was the indigenous peoples. These, traditionally, had organized their lands into ejidos or community communities and had, for legal purposes, the category of corporations. Therefore, the Lerdo Law forced its confiscation.
Most of the wealth of the indigenous communities was based precisely on these lands, which greatly affected their economy. Normally, they had them rented to third parties who, automatically, had the option to buy them.
The representatives of the indigenous peoples tried to negotiate with Miguel Lerdo de Tejada, requesting that an exception be made. However, the government did not respond to their requests.
On occasions, the communities went to court to avoid the alienation of assets, trying to buy them individually.
Most of the time the strategy did not work. It was an expensive process and not everyone could follow it to the end and, in addition, there were many cases of corruption to favor third parties interested in those lands.
The Lerdo Law had an unexpected effect and contrary to the spirit in which it had been promulgated. The main reason was that small owners appeared to take over the lands they already worked, taking ownership of the Church. However, it ended up causing the appearance of large estates.
The reason was that, in most cases, the lands were auctioned to the highest bidder, since the original tenants could not bear the expense of acquiring them. Thus, the auctions were used by investors, Mexicans and foreigners, to create large estates or large estates.
In the end, the tenants kept working, but instead of doing it for the Church or the corporations, they did it for those entrepreneurs
This hoarding, which was intended to be avoided, was one of the causes of the emergence of many revolutionary groups in the following years. The request for an agrarian reform was constant in the country until the Mexican Revolution.
The Lerdo Law, along with others enacted in the same period, was very poorly received by the affected groups. The Church, the conservatives and some of the military, soon began to conspire against the government.
The 1857 Constitution further aggravated the tension in the country. The most radical liberals in Congress imposed their ideas, even above the moderation proclaimed by Comonfort..
The most immediate consequence of all this tension was the proclamation of the Plan of Tacubaya, by which the conservatives called for the withdrawal of the Constitution and a new Constituent Congress. Finally, that would be the beginning of the War of Reform, between liberals and conservatives..
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