Hostname: page-component-7479d7b7d-t6hkb Total loading time: 0 Render date: 2024-07-10T21:50:21.912Z Has data issue: false hasContentIssue false
  • English
  • Français

Foreign Investment in Mexico, 1876-1910: A Case Study of the Role of Regional Elites

Published online by Cambridge University Press:  11 December 2015

Mark Wasserman
Mark Wasserman*
Affiliation:
Douglass College, Rutgers University, New Brunswick, New Jersey
Get access Rights & Permissions [Opens in a new window]

Extract

FOREIGN investment, mostly from the United States, fueled the rapid growth of the Mexican economy under the regime of Porfirio Díaz. By 1910, foreigners had invested well over a billion dollars in Mexico's railroads, mines, and a variety of other undertakings. At the core of the expansion and development of foreign investment was the connection between foreign entrepreneurs and the native elite. This association, worked out over three decades, greatly affected the economic, political, and social development of the nation.

The relationship between native elite and foreign entrepreneurs was based on three sets of factors. First, the native elite controlled both the government which in Mexico, on all levels, played an important role in the success or failure of any enterprise and, through their ownership of much of the nation's land and mines, the rich natural resources which foreign enterpreneurs sought to develop. Second, the native elite was willing to permit foreigners to develop the nation's resources, to participate in a wide range of economic activities, and to dominate certain sectors of the economy, such as mining. The native elite allowed this, because on one hand, one group within the elite, the cientificos, was ideologically committed to the modernization of the country and saw foreign investment as the quickest and most efficient method to modernize and, on the other hand, the traditional groups within the elite saw foreign investment as a means to increase their own incomes (through bribes, commissions, and the sale of their property) and to preserve their traditional privileges. The only conceivable alternative to the development of the nation's economy through foreign investment would have been through the expansion of direct government participation in the economy, but this would have required (apart from an implausible ideological reorientation towards the discredited conservatism of an earlier era or the exotic doctrines of European socialism) a considerable redistribution of the nation's wealth (through taxation and other means of “forced” savings) to the disadvantage of the elite. The development of Mexico's economy through foreign investment did not disturb the political status quo. Third and finally, foreign entrepreneurs had both the capital and technological know-how to develop the nation's resources, neither of which was present in Mexico.

Type
Research Article
Information
The Americas , Volume 36 , Issue 1 , July 1979 , pp. 3 - 21
Copyright
Copyright © Academy of American Franciscan History 1979

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 U.S., Department of Commerce and Labor, Bureau of Foreign and Domestic Commerce, Daily Consular and Trade Reports, July, 1912, p. 316.

2 U.S., Department of State, Bureau and Foreign Commerce, Commercial Relations of the United States with Foreign Countries during the Year 1902, 2 vols. (Washington, D.C.: Government Printing Office, 1903), 1: 500–503.

3 Wasserman, Mark, “Oligarchy and Foreign Enterprise in Porfirian Chihuahua, Mexico, 1876–1911” (Ph.D. dissertation, University of Chicago, 1975), pp. 177–186.Google Scholar

4 Ibid., pp. 187–193.

5 J.R. Robinson to William H. Brown, U.S. Consul, Chihuahua City, January 3 1, 1872; L. H. Scott, U.S. Consul, Chihuahua City, to Secretary of State, January 23, 1877; Scott to Assistant Secretary of State, November 7, 1879, United States, National Archives, Record Group 59, Consular Despatches, Chihuahua City, Mexico, 1830–1906. Hereafter Consular Despatches from Chihuahua City and Paso del Norte (Ciudad Juárez) will be referred to as NARG 59.

6 Ryan, Howard, “Selected Aspects of American Activities in Mexico, 1876–1910” (Ph.D. dissertation, University of Chicago, 1964), p. 53 Google Scholar; U.S., Department of State, Papers Relating to the Foreign Relations of the United States, 1878 (Washington, D.C.: Government Printing Office, 1878), p. 528; L. H. Scott, U.S. Consul, Chihuahua City, to Department of State, July 9, 1877, NARG 59.

7 Pletcher, David M., “Mexico, campo de inversiones norte-americana: 1867–1880,” Historia Mexicana 2 (abril-junio 1953): 564–574 Google Scholar; Chihuahua Enterprise, January 15, 1883, p. 23.

8 Eugene O. Fetchet, U.S. Consul, Paso del Norte, to Second Assistant Secretary of State William Hunter, May 13, 1884, NARG 59.

9 Romney, Thomas Cottam, The Mormon Colonies in Mexico (Salt Lake City: The Deseret Book Company, 1938), pp. 57–59 Google Scholar; Florence, C. and Lister, Robert H., Chihuahua: Storehouse of Storms (Albuquerque: University of New Mexico Press, 1966), pp. 92–93 Google Scholar; Johnson, Annie R., Heartbeats of Colonía Díaz (Mesa, Arizona: Annie R. Johnson, 1972), pp. 44–46.Google Scholar

10 Mexican Herald, January 11, 1896, p. 7. The other American that Diaz reportedly trusted was the railroad tycoon Huntington, Collis P.; Shepherd, Grant, The Silver Magnet: Fifty Years in a Mexican Silver Mine (New York: E. P. Dutton and Co., Inc., 1938), pp. 213–217 Google Scholar; Ryan, , “Selected Aspects,” p. 296 Google Scholar; Southworth, John R., The Official Directory of Mines and Estates of Mexico, Vol. 11 (Mexico, D.F.: John R. Southworth, 1910), p. 68.Google Scholar

11 Hoyt, Edwin P. Jr., The Guggenheims and the American Dream (New York: Funk and Wagnalls, 1967), pp. 80–81 Google Scholar; O’Connor, Harvey, The Guggenheims: The Making of an American Dynasty (New York: Covici-Friede Publishers, 1937), pp. 116,Google Scholar 92; Hammond, John Hays, The Autobiography of Jobn Hays Hammond, 2 vols. (New York: Farrar and Rinehart, Inc., 1935), pp. 506,Google Scholar 508.

l2 The Engineering and Mining Journal (hereafter EMJ) 80 (July 22, 1905): 131 and (October 7, 1905): 658; ASARCO reportedly offered $4,500,000 for the smelter, but the Maderos wanted five million dollars. The Maderos actually applied for a concession for a hacienda de metalúrgica for Santa Bárbara. Mexican Herald, February 11, 1906, p. 7; El Correo de Chihuahua, June 16, 1905, p. 1. After the ASARCO deal fell through, the Maderos did in fact embark on a vigorous expansion of their mining interests, especially in Chihuahua. Mexican Herald, March 2, 1908, p. 11, February 12, 1908, p. 11, December 11, 1908, p. 10, August 15, 1907, p. 11. The Maderos had a large stake in Chihuahuan mining, consistently ranking among the top producers, and owning one of the state's most important mines, the San Diego. EMJ 78 (September 8, 1904): 403.

13 Creel had owned the concession for a smelter in Chihuahua City since as early as 1896. Chihuahua, Mexico, Gobernador, , Memoria de la Administración Pública del Estado de Chihuahua, 1892–1896, presentada a la legislatura por el Governador Miguel Ahumada (Chihuahua: Imprenta del Govierno, 1896),p. 337 Google Scholar; Mexican Financier, June 27, 1896,p. 326; Hoyt, , Guggenheim, p. 159 Google Scholar; Almada, Francisco R., La Revolución en el Estado de Chihuahua, 2 vols. (Chihuahua: Biblioteca del Instituto Nacional de Estudios Históricos de la Revolución Mexicana, 1964), 1:73 Google Scholar; Lister, and Lister, , Storehouse, p. 181 Google Scholar; Mexican Investor, July 1, 1905, p. 16. The land was the Haciendas de Tabaloapa and Avalos. EMJ 80 (November 11, 1905): 900; Mexican Investor, November 18, 1905, p. 3.

14 Swanberg, W. A., Citizen Hearst: A Biography of William Randolph Hearst (New York: Charles Scribner’s Sons, 1961), p. 207 Google Scholar; Winkler, John K., William Randolph Hearst: A New Appraisal (New York: Hastings House, 1955), p. 34 Google Scholar; Mrs.Fremont, Older, William Randolph Hearst: American (New York: Appleton-Century Company, 1936), p. 65.Google Scholar

15 Mexican Herald, March 12, 1908, p. 10 and March 26, 1908, p. 5.

16 Almada, , La Revolución, 79 Google Scholar; Follansbee and Alberto Terrazas planned to build a racetrack in Ciudad Juárez.

17 W. W. Mills, U.S. Consul, Chihuahua City, to Robert Bacon, Assistant Secretary of State, January 1, 1906; W. W. Mills to Francis B. Loomis, Assistant Secretary of State, April 7, 1905; James I. Long to W. W. Mills, April 15, 1905, NARG 59.

18 Pletcher, David M., “American Capital and Technology in Northwest Mexico, 1876–1911” (Ph.D. dissertation, University of Chicago, 1946), p. 172 Google Scholar; El Correo de Chihuahua, January 25, 1905, p. 1; Mexican Herald, July 16, 1907, p. 11.

19 Mexican Herald, March 7, 1906, p. 5 and March 11, 1907, p. 11; El Correo de Chihuahua, March 1, 1906, p. 1 and February 9, 1905, p. 1.

20 El Correo de Chihuahua, May 13, 1903, p. 4; Mexican Herald, December 16, 1906, p. 6.

21 Fernando Rosenzweig, et al, El Porfiriato: La Vida Económica, 2 pts., vol. 7 of Historia Moderna de México, 9 vols. (México: Editorial Hermes, 1965), p. 582; Poor’s Manual of Railroads, 1909 (New York: Poor’s Railroad Manual Company, 1909), p. 813; EMJ 64 (July 10, 1899): 50.

22 Rosenzweig, , et. al., La Vida Económica, p. 586.Google Scholar

23 The Mexican Yearbook, 1908 (London: McCorquodale & Co., Limited, 1908), p. 392; Rosenzweig, , et.al, La Vida Económica, pp. 582–584 Google Scholar; Almada, Francisco R., Juárez y Terrazas: Aclaraciones Históricas (México, D.F.: Libros Mexicanos, 1958), pp. 346–347 Google Scholar; Pletcher, , “American Capital,” p. 106 Google Scholar; Powell, Fred W., The Railroads of Mexico (Boston: Stratford Company, 1921), p. 8.Google Scholar

24 Mexico North Western Railway Company, Directors’ Report and Accounts, First Annual Report, 1910.

25 Mexican Herald, January 21, 1896, p. 7; El Correo de Chihuahua, February 15, 1902, p. 2; Kerr, John Leeds, Destination Topolobampo: The Kansas City, Mexico, and Orient Railway (San Marino, California: Golden West Books, 1968), p. 96.Google Scholar

26 Mexican Herald, July 9, 1909, p. 3. McQuatterS and Juan A. Creel, the brother of Enrique C. Creel, were partners in several federal government contracts. Mexican Investor, March 10, 1906, pp. 7–8; Mexican Herald, February 19, 1906, p. 3, December 3, 1906, p. 11, September 25, 1907, p. 10.

27 Mexican Herald, February 2, 1906, p. 3, February 17, 1908, p. 9, June 28, 1908, p. 5.

28 Lister, and Lister, , Storehouse, p. 274.Google Scholar

29 El Correo de Chihuahua, May 31, 1907, p. 1.

30 Almada, , Juárez y Terrazas, p. 662 Google Scholar; Undated document discussing Callahan interests in Silvestre Terrazas Papers, Part II, reel 7, Silvestre Terrazas Collection, Bancroft Library, University of California, Berkeley; El Correo de Chihuahua, November 12, 1904, p. 1, January 18, 1905, p. 1; August 14; 1905, p. 1.

31 El Correo de Chihuahua, December 3, 1904, p. 1.

32 Mexican Herald, July 29, 1908, p. 10.

33 Federico Sisniega to José Verea, May 14, 1910, Silvestre Terrazas Papers, Part II, reel 11, STC.

34 EMJ 77 (February 4, 1902): 212.

35 Mexican Herald, October 6, 1895, p. 8; El Correo de Chihuahua, August 17, 1904, p. 3; Federico Sisniega to J. B. de Cologan, Minister of Spain, October 4, 1909, Silvestre Terrazas Papers, Part II, reel 11, STC: El Correo de Chihuahua, April 29, 1902, p. 2.

36 EMJ 89 (April 30, 1910): 939.

37 Mexican Herald, August 9, 1907, p. 11 and November 16, 1907, p. 11.

38 Ibid., August 9, 1908, pp. 2 and 4; Ryan, , “Selected Aspects,” pp. 278–279.Google Scholar

39 Mexican Herald, August 9, 1908, p. 4; U.S., Congress, Senate, Committee on Foreign Relations, Investigation of Mexican Affairs, Hearings before a subcommittee of the Committee on Foreign Relations, Senate, on S. Res. 106, 66th Cong., 2nd sess., 1919, p. 1463 (hereafter to be referred to as the Fall Committee). This is the testimony of Kirby Thomas.

40 Burr, G. A. and Cates, Louis E., “Minas Nuevas, Parral, Mexico,” EMJ 75 (March 14, 1903): 404–405 Google Scholar and (March 21, 1903): 440; EMJ 77 (May 12, 1904): 776.

41 EMJ 84 (October 5, 1907): 656 and 86 (August 8, 1908): 278.

42 Lewis Morgan and Hubert Blackart to Enrique C. Creel, December 2, 1896, Silvestre Terrazas Papers, Part II, reel 17, STC; Enrique C. Creel to Gran Fundición Central Mexicana, Aguascalientes, July 7, 1897, Silvestre Terrazas Papers, Part II, reel 17, STC; EMJ 72 (November 30, 1901): 698.

43 Bankers’ Magazine 80 (1910): 309. This was for 1909. The Terrazas did not seem to have any trouble raising capital for their banks among the local elite and resident foreigners, which indicates some of the elite reinvested their funds.

44 Mexican Herald, November 2, 1907, p. 11.

45 Lister, and Lister, , Storehouse, p. 182 Google Scholar; Mexican Herald, November 28, 1895, p. 7; El Correo de Chihuahua, September 19, 1906, p. 1.

46 Mexican Financier, August 22, 1891, p. 541; Mexican Herald, May 21, 1896, p. 8; EMJ 72 (November 30, 1901): 698.

47 Mexican Herald, February 10, 1908, p. 2 and April 19, 1908,p. 5; Griggs, Jorge, Mines of Chihuahua, 1907:Google Scholar History, Geology, Statistics, Mining Company Directory, n.p., n.d.

48 El Correo de Chihuahua, October 24, 1903, p. 1.

49 Ibid., August 14, 1905, p. 1.

50 El Correo de Chihuahua, August 25, 1903, p. 1 and January 20, 1903, p. 1.

51 Ibid., July 31, 1902, p. 3; Chihuahua Mail, December 3, 1883, p. 4.

52 El Correo de Chihuahua, February 5, 1903, p. 2.

53 Southworth, Directory, p. 68. The superintendent of the Corralitos Ranch was the jefe político (municipal?) of the district's local government. Mexican Financier, December 5, 1888, p. 157.

54 El Correo de Chihuahua, March 10, 1904, p. 2; Dueñes, Los Bancos, pp. 122, 119, 124.

55 Bankers’ Magazine 77 (October, 1908): 537–541.

56 Mexican Herald, May 5, 1907, p. 6.

57 El Correo de Chihuahua, December 28, 1907, p. 1; Mexican Herald, June 28, 1910, p. 6.

58 Walter M. Brodie to Enrique C. Creel, November.5, 1910; Ε. N. Schwabe, Cashier of Guaranty Trust, to W. E, D. Stokes, December 28, 1910; Schwabe to Juan A. Creel, December 29, 1910; two undated documents among the above correspondence concerning the affairs of the bank, Silvestre Terrazas Papers, Part II, reel 2, STC.

59 EMJ 76 (December 17, 1903): 918, 81 (March 3, 1906): 429-430, 73 (March 22, 1902): 428 and (April 12, 1902): 528, 78 (November 14, 1904): 950.

60 El Correo de Chihuahua, July 15, 1904, p. 1; Sandels, , “Silvestre Terrazas,” p. 79.Google Scholar

61 Pletcher, , “American Capital,” p. 163 Google Scholar; Sandels, , “Silvestre Terrazas,” p. 91 Google Scholar; El Correo de Chihuahua, from June, 1906 to July, 1907, June, July, and August, 1906, especially.

62 Mexican Herald, October 15, 1908, p. 1; Bernstein, Marvin, The Mexican Mining Industry, 1870–1950 (New York: State University at New York Press, 1964), pp. 78–83.Google Scholar

63 Mexican Investor, January 23, 1905; EMJ 77 (January 17, 1904): 21.

64 Mexican Herald, August 23, 1907, p. 11; El Correo de Chihuahua, March 5, 1907, p. 1; Mexican Herald, October 30, 1907, p. 4, December 10, 1907, p. 11, February 23, 1908, p. 15; EMJ 84 (December 21, 1907): 1191 and 85 (March 7, 1908): 526.

65 Mexican Financier, August 1, 1885, p. 285 and October 24,1891, p. 105; EMJ 40 (August 15, 1885): 116; 43 (February 5, 1887): 101, 47 (January 26, 1889): 98, 53 (April 2, 1892): 387.

66 Mexican Herald, August 19, 1907, p. 11.

67 Mexican Mining Journal 10(March, 1910): 34; Mexican Herald, June 16, 1907, p. 11.

68 Cockcroft, James D., Intellectual Precursors of the Mexican Revolution, 1900–1913 (Austin: University of Texas Press, 1968), pp. 13–34 Google Scholar; Katz, Friedrich, “El Sistema de Plantación y La Esclavitud: El Cultivo del Henequén en Yucatán hasta 1910,” Ciencias Políticas y Sociales 8 (enero-marzo, 1962): 103–136.Google Scholar