Lerdo law

The Lerdo Law (Spanish: Ley Lerdo) was the common name for the Reform law that was formally known as the Confiscation of Law and Urban Ruins of the Civil and Religious Corporations of Mexico. Drafted by Miguel Lerdo de Tejada, it was enacted on 25 June 1856 by President Ignacio Comonfort.
Its objectives were to create a rural middle class, promote development, improve public finances of the state, and revive the economy by eliminating restrictions on freedom of movement, the last of which was considered by Comonfort as one of the worst obstacles to Mexican prosperity.
The law provided for the confiscation of the lands held by the Catholic Church and civil corporations (the indigenous communities that held property as a corporation. Properties were to be sold to private individuals, which was expected to stimulate the real estate market and to generate government revenue by a sales tax.
However, the poor lacked the funds to buy the property, which meant that most purchasers were large landowners or foreign investors, which further concentrated land ownership. Religious groups and their civil corporations were prohibited from purchasing land sold under law unless for strictly-religious purposes.
It was one of the Reform Laws, which sought to establish the separation of church and state, the abolition of ecclesiastical privileges ("fueros"); and the secularization of registration of births, deaths, and marriages, which gave rise to the Civil Registry.
Background.
Nineteenth-century Mexican liberals were not the first to attack the Catholic Church's economic power. The Bourbon monarchy identified the Church's real estate holdings as a problem since they were permanently removed for the real estate market and considered unproductive, and they also granted to the Church considerable economic power. During the Bourbon Reforms, the Spanish monarchy sought to undermine the power of the Church, especially the Society of Jesus, and so it expelled the Jesuits, confiscated their highly-productive landed estates, and sold them to private individuals. During the colonial era, the Spanish crown had granted to indigenous communities a certain amount as corporations to ensure that they had sufficient land to maintain their subsistence.
After independence in 1821, the ecclesiastical rights to hold real estate were challenged in the 1830s during the vice-presidency of Valentín Gómez Farías, who implemented the secularization of Franciscan missions in California.
Excluded properties.
The law excluded properties that were used by the Church as a corporation for religious purposes. As stipulated in Article 8 of the law, the properties were exempt from the alienation if they buildings used immediately and directly to the service or the object of the institute's corporations, even if part was leased in them, such as convents, episcopal palaces, municipal schools, hospitals, hospices, markets, and houses of correction charities. Properties belonging to municipalities also exempted buildings, open lands and land used exclusively for the public service of their populations.
Fiscal consolidation.
All translations of rural and urban properties executed under the law had a 5% sales tax, which was to be paid in the corresponding general government offices. The tax contribution was to be in cash and debt bonds, depending on the time to verify the awards. By those policies, the Mexican government intended to increase its low level of tax revenue to improve the public finances.
Impact on native communities.
The law required that civil corporations to be stripped of their real estate and so seriously damaged the foundation of the economy of indigenous communities, which owned all of the land in their boundaries. The territories represented a significant income for communities, as most were leased to third parties to raise funds. Thus, their loss worsened the situation of many indigenous people who already lived in poverty.
Natives demanded Finance Minister Miguel Lerdo de Tejada to respect their property rights. However, according to the law, the rights of tenants were reserved to buy their own land before it was offered to foreign buyers.
To prevent their lands from being acquired by others, some indigenous peoples went before a judge to acquire the land as an individual, but the officials charged very high fees and sales taxes, which complicated the recovery process. In other cases, judges had fraudulent dealings with those interested in the territories to acquire land even before the natives learned of the existence of the law, which made it virtually impossible for communities to retain their territories.