Ambassador to Mexico
Morrow was appointed United States Ambassador to Mexico by Coolidge from 1927 to 1930. Upon learning the news, the Mexican press had expected that the appointment of a partner of the financial firm J.P. Morgan was "a return to Dollar Diplomacy." However, the Coolidge administration planned on changing relations between Mexico and the U.S., which Morrow was to implement. One of Morrow's first acts in Mexico was to change the sign identifying the embassy from "American Embassy" to "United States Embassy"; the appropriation of the words "America" and "American" to refer solely to the United States had long rankled other countries in the hemisphere, including Mexico.
Morrow was widely hailed as a brilliant ambassador, mixing popular appeal with sound economic and financial advice to the Mexican government. In 1927, he invited popular humorist-actor Will Rogers and famed aviator Charles Lindbergh for a goodwill tour of Mexico. His daughter, Anne Morrow, was introduced to Lindbergh, and the two were soon engaged. To thank the town of Cuernavaca, where Morrow owned a vacation home, Morrow hired the Mexican artist Diego Rivera to paint murals in the Palace of Cortez, which are a chronicle of Mexican history from a post-Mexican Revolution point of view.
Morrow initiated a series of breakfast meetings with President Plutarco Elías Calles (1924–1928), at which the two would discuss a range of issues, from oil and irrigation to a religious uprising in Mexico. This earned Morrow the nickname "ham and eggs diplomat" in U.S. newspapers. Morrow also invited Rogers to accompany him and Calles on a tour of Mexico, with Rogers sending favorable human-interest stories about Mexico and Mexicans back to U.S. newspapers, helping to change U.S. perceptions of Mexico.
In a dispute about Mexican petroleum, with U.S. and other foreign oil companies demanding protection of their interests in Mexico, Morrow reaffirmed the rights of American oil companies through the Calles-Morrow Agreement and helped prevent Mexican nationalization of the oilfields. The nationalization did, however, occur ten years later in 1938.
Morrow's best known accomplishment was his mediation of the conflict between the Mexican government and the Catholic Church in Mexico which had escalated into a violent armed revolt, known as the Cristero rebellion. It was not in the security interests of the United States for such internal disorder to be occurring in its neighbor to the south, not least because of the flight of Mexican refugees to the U.S. from the regions of conflict. Morrow's efforts at mediation were successful, and he was aided by Father John J. Burke of the National Catholic Welfare Conference. The Vatican was also actively seeking peace in Mexico.
After the assassination in 1928 of the newly re-elected President Álvaro Obregón, former president Calles was ineligible to serve again due to term limits, and the Mexican Congress named Emilio Portes Gil as president. In practice, Calles remained in power during a period known as the Maximato. As interim president in December 1928, Portes Gil permitted Morrow and Burke to revitalize their peace initiative. Portes Gil told a foreign correspondent on May 1 that "the Catholic clergy, when they wish, may renew the exercise of their rites with only one obligation, that they respect the laws of the land."
Morrow managed to bring the war parties to agreement on June 21, 1929. His office drafted a pact called the arreglos (agreement) that permitted worship to resume in Mexico and granted three concessions to the Catholics: only priests who were named by hierarchical superiors would be required to register; religious instruction in the churches (but not in the schools) would be permitted; and all citizens, including the clergy, would be allowed to make petitions to reform the laws. The anticlerical articles of the Constitution of 1917 remained in place but were not systematically enforced.