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 Zapatistas, whose agrarian program Carranza refused to consider, came up from the south. Villa and the Zapatistas took turns in occupying Mexico City while Carranza retreated to Vera Cruz. He was supported by Obregon with a following of the Yarquis and other revolutionary elements of Sonora, by Alvarado of Yucatan, and by organized labor.

This period of chaos was of great value to the Mexican revolution. With the central government non-existent and the attention of the great powers somewhat diverted by the world war, the various agrarian elements and the leaders of organized labor were able to do some constructive work.

The Zapatistas established a provisional government in Morelos with a secretary of agriculture who appointed in each of the districts controlled an agrarian commision to make surveys and recommended steps for the reconstruction of the ejidos. This proving a difficult task, in 1915–1916, provisional distribution of land was made and an agricultural co-operative system centered about an agricultural loan bank was established. Under this regime, "the state of Morelos achieved comparative prosperity." The main points of the plan, modelled on the Raiffeison co-operative system, were as follows:—local credit associations were formed of the farmers in each village which jointly determined methods of applying loans; these local associations united to form larger credit associations which had charge of larger districts and the prevention of general crop failures by means of concentrating resources upon certain localities; the directive head of the system was the rural loan bank of the state of Morelos; the local associations guaranteed loans from the bank for the purpose of buying seed, tools,