The Modernization of Mexico 1850-1900

Category: History 104 Week 3
Published on Saturday, 29 December 2012 06:21
Written by Dr. Eric Mayer
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The Beginning of Modernization: 1867-1876


The beginnings of modern Mexico starts with the liberal victory of 1867. Juarez and his liberals would try for 10 years to consolidate their rule by fully implementing the constitution of 1857.


Juarez and the liberals would also try to modernize Mexico or at the very least set Mexico on a path of social, and economic modernization. The goal of the liberals was to create a new era of peace and material progress.


In July of 1867 Juarez was once again the president of Mexico and he immediately called for elections and announced that he was interested in a third term. Many Mexicans thought that a 3rd term would be excessive. But the first two terms of Juarez were spent on the run, for the most part and he accomplished little of his liberal agenda.


Before the elections Juarez carried several important political reforms and more importantly reduced the size of the Mexican military from 60,000 to 20,000. In October of 1867 Juarez won the election. Juarez adopted a much more conciliatory policy towards the conservatives who had aided the French and set free many political prisoners who had collaborated with the French.




Juarez immediately set about reforming education and restructuring the economy. Matías Romero became secretary of the treasury and Romero came up with a far-reaching plan.


Romero's plan for economic development called for the improvement of the transportation infrastructure and for the exploitation of natural resources, by attracting foreign capital to invest in mines, plantations and agriculture.


Mexico's economic future rested largely on the resurrection of the mining economy rather than on industrialization. This was classic David Ricardo liberal theory for economic development. In retrospect it may have been shortsighted to base the economic development of a country on the export of raw materials.


Romero saw the key to increased mineral production was the revision of Mexico's tax and tariff structure, and both were lowered in order to attract foreign investment and loans.


But there were other factors that discouraged potential investors. Mexico had an image of political instability, rebellions, caudillos, corruption and lawlessness and all these stereotypes discouraged foreign investors from placing their funds in Mexico.


Mexico's roads were hazardous to say the least and Juarez then concentrated on the problem of public security. Juarez's congress in 1869 authorized an increased budget for rurales, or a rural police force and placed them under the jurisdiction of the Department of the Interior.


With adequate funding the rurales began to make a difference in patrolling roads,assisting the army, policing local elections and in general making Mexico a safer and more stable place.


But the most important economic development in the early part of the Restoration was the construction of the Mexico city-Veracruz railroad. Railroads were the deciding factor in the economic development of countries in the 1800's. Those countries with denser rail grids would be the countries that would successfully modernize and industrialize in the 20th century.


During the period of the empire the railroad concession rights were held by the Imperial Mexican Railway Company which was a British corporation. And British engineers during the age of Maximilian made great progress in laying portions of the track, but by 1866 the company was almost bankrupt.


Juarez supported the company and paid it an annual government subsidy of 560,000 pesos for 25 years. The Mexican owners were by and large conservatives who had collaborated under Max.


In an attempt to calm criticism the company was renamed Ferrocarril Mexicano and the line was officially opened in 1873. The successful completion of the Mexico city - Veracruz railroad inspired other railroad building projects.


Education would also be reformed in the Fall of 1867 Juarez appointed a commission to study and reform the entire educational structure of Mexico. The committee was headed by Gabino Barreda who was a positivist.


The committee recommended a curriculum that stressed math, physics, chemistry. But the liberal arts were largely ignored. But even more important primary education in Mexico was to be free and mandatory for the first time. All towns over 500 were to have a school for boys and one for girls.


Juarez also sought to smooth out foreign relations. His secretary of foreign relations was Sebastián Lerdo de Tejada cultivated good relations with the US, other countries of Latin America and Europe. Juarez constantly sought to improve US/Mexican relations and in 1869 William Seward the US secretary of state visited Mexico on a good will mission and to straighten out the problem of unpaid claims that had occurred over the Treaty of Guadalupe Hidalgo.




Juarez's third term would be his most productive and in the elections of 1871 he decided to run again and seek a fourth term.


The election of 1871 was one of the most hotly contested elections of the 19th century. Two former supporters of Juarez ran against him. They were Porfirio Diaz and Sebastian Lerdo de Tejada.


The election thus split the liberal party into three factions-the Juaristas, the Porfiristas, and the Lerdistas. Juarez had a wide base of support and had the bureaucracy behind him. Lerdo had the support of the middle class and upper classes as well as the professional classes. While Diaz was supported by the military and other outcasts from the conservative party.


Also the Lerdistas and Porfiristas attacked the concept of constant reelection as a violation of republicanism.


When the ballots were counted none had received a majority. This threw the election to the congress. Juarez had good support in the congress and won the election. Lerdo was graceful in the defeat, but Diaz in early November of 1871 proclaimed himself in revolt against Juarez.


Diaz proclaimed the Plan de la Noria was stated that the indefinite re-election of the president conflicted with the principles of the Revolution of Ayutla. Diaz though had little support for his plan.


Most Mexicans were not ready for another armed revolt and the army that he fielded was quickly defeated by federal troops.


Diaz's revolt was in total disarray when in July of 1892 Juarez died of a heart attack. Lerdo who was the chief justice of the supreme court became acting president and scheduled new elections in the Fall.


Lerdo decided to run in the elections and defeated Diaz easily and Diaz had no choice but to accept the outcome of the election.


Lerdo made a rather good president and he believed that Mexico's future progress depended on the establishment of social and civil peace. Material progress would be impossible without order and order would be impossible without a firm executive office.


Mexican liberalism had undergone a transformation and was becoming increasingly elitist, centralist, and authoritarian.


Lerdo retained many Juaristas in his government. He also used the rurales to patrol and protect the Mexico city - Veracruz railroad. Lerdo also began the development of railroads in the north. A US firm was allowed to build a rail line across the Isthmus of Tehuantepect. Lerdo also wished to connect every state capital to Mexico city by telegraph.


Lerdo was also very pro-education and school construction grew faster than enrollment. The Lerdo administration also made great gains in foreign policy. Lerdo himself broke new ground by ending a unicameral legislature.


The president proposed that a second house be created and the legislative branch responded in 1875. A senate was added to the chamber of deputies. Lerdo felt that with a second, more elitist house this would aid in the centralization of political power.


But as Lerdo carried out these reforms enemies emerged, the press began to attack him and prominent politicians of both parties spoke out against his policies.


When Lerdo announced that he would seek reelection in 1876 Diaz swung into action and in March of 1876 Diaz issued his plan de Tuxtepec which charged that Lerdo had violated the sovereignty of the states, had sacrificed Mexico's best interests to railroad building and had squandered public funds. But most importantly Lerdo had violated the principle of no reelection.


The Revolution of Tuxtepec was decided in one battle at Tecoac where Diaz's forces were triumphant. Porfirio Diaz occupied Mexico city on November 21, 1876 and would control the country for the next 30 years.


The restored republic was an important juncture in Mexican history for it was the transition between imperial Mexico and the dictatorship of Diaz. For the first time in its history administrations seemed to bring Mexicans together and consolidate the country rather than divide it.




Mexico was still a rural country between 1850 and 1870 and for the average Mexican very little had changed. Indians continued to live like they had for hundreds of years and what little modernization that had occurred so far in Mexico had by and large passed them by.


Also the gap between rich and poor and white and brown had gotten wider. Highways were still dangerous due to bandits and the social consequences of the war with the French left tens of thousands of former soldiers unemployed and roaming the countryside. Many took up banditry to support themselves.


The population of Mexico grew very slowly throughout the 19th century and some of the state capitals even lost population and northern Mexico continued to be sparsely populated.


War casualties, a high infant mortality rate and a high mortality in rate in general had the tendency to depress population growth. The problem of low population growth was that it impeded the development of frontier areas.


Because of the slow rate of population growth European immigration was thought to be the answer. It was also thought by some that what Mexico needed was more white blood in their racial mixture. This was an age of social darwinism and it was thought by many Mexican elites that Mexico needed to be whitened in order for it to be progressive and productive. Many blamed Mexico's problems and lack of development on the Indian masses.


Despite the goal to increase European immigration few actually immigrated to Mexico. Mexico had not yet lived down its reputation as a violent, lawless, and unstable country.


Many Mexicans in this period actually immigrated to the US in order to escape the chaos that had plagued Mexico.


During the restoration Mexico City's population had grown to 200,000 and with the increase began to experience social problems. Due to the growing gap between rich and poor, prostitution became prevalent.


Prostitution had long been accepted in Mexico, but prostitutes became increasingly bold, even to solicit on the steps of the main cathedral and outside of other churches. This led to a growing demand for a crackdown and many of the critics pointed to the escalating numbers who suffered from venereal disease.


Defenders of the trade counter argued that the chastity of good women would be threatened if the state eradicated prostitution and it would encourage the rape of women on the streets to the machismo that existed. The solution to the problem was to keep prostitutes in a well-defined red light zone and that there would be periodic inspections to prevent the spread of venereal disease.


Mexico city as also plagued with a growing army of homeless and beggars known as Leperos who moved door to door begging. The government tried to curb begging by supporting charities for the poor and building hospitals. But these had little effect since the real reason was lack of employment and a stagnant economy and wage.




The lot of the working classes was in some respects worse than that of the beggars. Labor was heavily exploited by the upper and investing classes and the government did nothing to ease the exploitation.


Mexico still had not gone through an industrial revolution or even a process of national modernization, but there were light manufacturing enterprises in the capital. Thousands of workers languished in these industries with little or no legal protection from injury or exploitation.


Slightly better off were those who worked for themselves. The ambulantes and vendors. But one of the best jobs one could attain was that of a domestic servant who worked for room and board.


The middle class was still tiny composed of merchants and small shop keepers and other white collar professions. Water service was not adequate so public bath houses were common. People usually bathed once a week or not at all, so the middle class spent much on perfumes and colognes.


The elite families had palatial mansions that were usually furnished with good from Europe and in particular from France. The houses had private baths and private chapels.


In terms of amusements in the cities and towns cock fighting was and is still very popular among the lowers classes. There religious fairs, circuses and the bull fights were cultural institutions. Gambling was common.


High culture also developed in the 19th century. In literature the romantic novel changed to the romantic historical novel. All the tumult of the 19th century with foreign armies invading towns and burning, looting and raping became the standard theme of Mexican novels.


The writers of the time such as Vicente Riva Palacio sought compassion in their audiences by depicting poor Indians and mestizos as victims, not because of their ethnicity or class, but because they were Mexicans and subject abuse.


The greatest literary figure of the period was Ignacio Manuel Altimirano who was of Indian ethnicity and wrote much on social and national themes.


Mexican art after 1850 was dominated by two artists, Pelegrín Clavé and Juan Cordero. Cordero was Mexico's first great muralists who moved from painting the walls and ceilings of churches to public walls. Cordero was concerned with national and social themes. His murals depicted Mexican progress in terms of science, industry and commerce. These would be the saviors of the Mexican people.


In the field of Mexican philosophy the figure of Gabino Barreda loomed large and developed the school of Mexican positivism. Barreda was an optimist and believed that Mexico's material development could be achieved through the application of scientific knowledge and the scientific method..


The slogan for new Mexico would be liberty, order and progress. But shortly Mexican liberals, like liberals everywhere would sacrifice liberty in the name of order and the goal of economic progress.




Porfirio Diaz would control Mexico's destiny for nearly 30 years. It was an important era in Mexican history when modernization would occur under increasingly authoritarian politics.


Diaz followed a decidedly Ricardian strategy for modernization and economic growth. Mexico would be modernized. The Porfiriato would see an emphasis on technology, innovative political and economic systems.


Diaz's strategy for economic development was to invite in foreign capital to develop Mexico. US and British investors got great deals in Mexico. Americans could own lands and the subsoil rights under those Mexican lands and pay practically nothing in return to the Mexican state.


Under Diaz Mexico would prosper like never before, but it was economic growth at the expense of economic development and political liberalization. US and British monies were used to build a modern infrastructure for Mexico. The railroads, mines, factories, telegraph, telephone exchanges, water and gas works were all owned and operated by foreigners.


Under Diaz Mexicans were no longer masters in their own lands. Mexican agriculture developed rapidly in this period, but it was for export to US markets. Under Diaz agriculture became agri-business and Mexico for the first time would have to import food to feed its own people. Mexico had become dependent on the US market, dependent on US investment capital, and dependent on US technology. In many aspects Diaz modernization strategy would be emulated in many other parts of the world with various results.


The problem for the Porfiriato would be as more and more Mexican middle class was created where would be the economic opportunities and political power come from in order to placate this new class and its sons and daughters.


When Diaz assumed control of Mexico in 1876 the country was hopelessly underdeveloped. Due to its political and economic problems Mexico had been unable to benefit or import the technologies spawned by the Industrial, scientific and material revolutions of the 19th century.


In 1876 Diaz inherited an empty treasury, a long list of foreign debts, and huge bureaucratic corps who had not been paid in some time. Mexico's credit rating was so poor that it became a popular joke in Europe and metaphor for poverty.


Foreign investment capital had forsaken and fled Mexico and mining had never really recovered from the wars for independence.


Agriculture was also in a dismal state. No green revolution had touched Mexico. The technology of agriculture had not changed since the colonial period. Modern reapers, bailers, and threshers were just pictures in catalogs from the US. Even metal tools were a luxury.


in 1876 railroads had just begun and were for the most part in the hands of foreigners. There was no telegraph grid, port facilities were antiquated, bandits controlled the countryside. No cities had modern sanitation or health facilities, infant morality was high and disease plagued the lowland tropical areas of Mexico.




Diaz decided that if Mexico were to emerge from this it would be necessary to change Mexico's image and get rid of the stereotype of Mexican politics. The task meant that Diaz must establish law and order. And he bought into the positivist dictum order and progress.


Diaz had been a liberal despite his military posturing and during his first term which lasted until 1880 he was forced to face a number of rebellions.


Peasant revolts flared up many states as villagers protested the seizure of their lands by haciendas that engaged in cash-crop agriculture that would be exported to markets in the US.


The most serious insurrections were those that were launched along the US border in support of the exiled president Lerdo de Tejada. These military revolts threatened the success of Diaz's pacification program and also threatened Diaz's attempts to cultivate friendly relations with the US.


But Diaz knew how to use force. Rebels and their leaders would be shot on the spot if captured by government troops. In a famous telegram a state governor asked Diaz what he should do with the captured insurgents and Diaz replied Mátalos en caliente.


To stem banditry Diaz added over 800 men to the rurales and order was gradually coming and Diaz would see to it that progress was also on its way


Diaz also had border problems with the US Indians and bandits would strike in the US from Mexico, rustle cattle and drive them back across the border to Mexico. In 1877 the border problem almost brought the two nations to war. Diaz would not permit US troops on Mexican soil.


Instead Diaz order his own troops to deal with the matter and beefed up patrols along the border.


In his first term Diaz began to concentrate on resurrecting the Mexican economy. In a symbolic move he reduced his salary and those of other government employees and thousands of bureaucrats were fired.


To bring up customs revenues he decreed a stiff sentence for smuggling goods in and out of Mexico. As Diaz's first term drew to a close several governors were in favor of amending the no-reelection law so that Diaz could serve another term. But Diaz would allow this.


As Diaz term ended he threw his support behind Manuel González.


The Gonzalez presidency was controversial and he followed in the policy footpath that Diaz had created. And Diaz was not out of the picture. Under Gonzalez he served as the head of the Department of Development.


Modernization was expensive. Railroad construction grew, but so to did the government subsidies to railroad companies. New steamship lines were created and the first cable service began.


The problem was that all these infrastructural improvements needed money and the government was running a deficit. To slow the deficit Gonzalez stopped paying many government salaries.


There was tremendous outcry over this and over allegations of graft and corruption in the Gonzalez regime.


In the mean time, Diaz used his four years out of office to build a new political machine. In the 1884 elections Diaz would be a sure winner and liberals and conservatives rallied around him. And in September he won the presidency. In 1884 Diaz was ready to transform Mexico and put it on the path to modernization.




After 1884, Mexico entered a period of sustained economic growth the likes of which Mexico had not experienced and still hasn't since. Mexico would enter the modern age. Water and chemical power began to replace animals and humans.


Electrical generating stations were built, telephone exchanges were built, a mass transit system for Mexico city was built. Wireless telegraph and submarine cables were constructed. The recurring flooding problem of Mexico city was solved by the construction of flood control system. And a public building spree changed the face of Mexico.


Mexico's adaptation of positivism provided the philosophical underpinnings of the new regime. The cientificos or technocrats were the ones who ran Mexico in the Porfiriato. The new technocrats or cientificos realized that the Mexican economy needed to be structurally reformed and José Ives Limantour would be the one to do it.


As Secretary of the Treasury Limantour lowered or eliminated duties on many imports and negotiated a series of foreign loans at good rates of interest and he shifted Mexico from the Silver to the Gold standard.


Limantour also realized that the Mexican bureaucracy would have to be overhauled in order to implement and carry out the reforms so desperately needed for economic regeneration.


The results of this were positive. In 1890 the last installment of the debt to the US was paid and Mexico had not only balanced its budget for the first time in history, but revenues were actually running ahead of expenditures.


By the 1880's and 1890's Mexico's image began to change and no longer was the country the butt of popular jokes in Europe and the US.




Diaz was now prepared to take advantage of Mexico's new reputation and healthy economy and he embarked on a program to attract foreign capital to improve the transportation and mining sectors of the economy.


The Mexican Central Railroad Company owned by a group of Boston investors received the concession to construct the major line north from Mexico city to El Paso.


The Sonora Railroad Company owned by Thomas Nickerson built the line between Guaymas and Nogales. But efforts to connect the country from east to west did not proceed so smoothly but eventually various lines were built by foreign firms.


The rail lines would contributed greatly to the tremendous economic transformation of Mexico. Cities were linked to the outlying areas. Raw materials could be shipped to industrial zones and finished goods could return back via rail.


When the railroad arrived in Morelos the sugar planters began importing new machinery and setting up new mills to expand production. Communities isolated by geography and tradition were brought into greater contact with one another, breaking down the idea of patria chica.




Railroads also led to an renewed expansion in resurrecting the depressed mining economies. RRs allowed for the mass transportation of ores. A new mining code was decreed in 1884 that lowered tariffs and allowed for foreign ownership of subsoil rights.


US and European investors rightly saw that the potential for profits was great and in the 1880's and 1890's entered into mine investments and ownership. They also introduced new mining technologies and new chemical processes of extracting the metal from the ore. And mining did recover under foreign ownership, especially those mines near the US border.


Much of the foreign investment and ownership came from huge monopolies such as the Guggenheim monopoly which owned mines, smelters, refining centers, railroads, and mineral speculating companies all over northern Mexico.


In 1898 Col. William Greene came to Sonora with nothing but business sense and became the copper king of Sonora. Within a few years Greene had turned the Cananea Consolidated Copper Company into one of the largest copper producers in the world.




US and British investors developed the Mexican oil fields. American investors were led by Edward L. Doheny who developed 600,000 acres of oil fields around Tampico and Tuxpan. Quickly Doheny's Mexican Petroleum Company hit a gusher which led to Mexico's first commercially feasible gusher known as el ebano.


The British not to be out done by the Americans, were allowed to drill for wells in Veracruz, San Luis Potosi, Tamulipas and Tabasco. Pearson, the owner formed the El Aguila oil company. Both El Aguila and Doheny's Mexican Petroleum Company dominated the petroleum industry and within a few years Mexico became a world class oil producer.


The problem was that the oil flowed north almost duty free to the US where all the profits stayed in the US.


Doheny was notorious in underpaying his Mexican labor force and he made a fortune off Mexican oil in the US market.


Under Diaz Mexico did undergo some Industrial development and by 1902 there were 5500 manufacturing industries. Guggenheim and other American, French, German and British investors backed iron and steel works in Monterrey.


In 1890 the Cervecería Cuauhtémoc quickly became the largest and most important brewery. Its key product was Carta Blanca. Mexican manufacturing also engaged in all types of light manufacturing such as cement, textiles, cigarettes, cigars, soap, bricks, and hemp.


Harbor and port facilities were improved in these years as well and this opened up Mexico to world commerce to a greater extent than ever before.


In the first decade of the 20th century, Mexico was a far cry from what it had been in 1876. The country had modernized at a phenomenal rate, though in the process it had been a dependent form of development. But perhaps the most key benefit was the way urban Mexicans began to view themselves. Self-confidence had replaced embarrassment.


Mexico had experienced a productive restructuring in the thirty years between 1876 and 1906. Mexico through railroads and copper mines consolidated its northern frontier and defined its incorporation into the world economy.


As a consequence foreign investment had surged from 110 million pesos in 1884 to 3,400 million in 1910 and a third of this was plowed into railroad construction. 25% of the investment went into mining. In 1893 Mexican mines produced 40 million pesos of ore and in 1906 320 million pesos.


Between 1877 and 1911 the population grew at an annual rate of 1.4%, while the economy grew at 2.7%. The chronic bankruptcy of public finances ended in 1895 when for the first time, there was a surplus of money in the treasury. Mexico could finally sell its bonds in the international markets.


But these are just some of the figures of Porfirian progress, but it is necessary to understand that the revolution of 1910 would not be born out of misery and stagnation, but rather of the disorder brought forth by boom and change.


During the Porfiriato foreign investment developed cities and established productive empires, but it also generated inflation that affected the real wages of workers and the middle class; (2) the link with the North American market opened job opportunities and increased exports (600% between 1880 and 1910), but made the Mexican economy dependent on and vulnerable to the fluctuations of the US economy.


The US recession of 1907 led to the repatriation of thousands of Mexican workers who had been fired from the mines and factories in the US and this impacted the Mexican economy as well.


(3) the mining boom created cities and paid high wages, but altered entire regions, created floating, unstable, and restless populations, and sowed the seeds of an explosive nationalism, due to the anti-Mexican job discrimination.


(4) the railroads shortened distances, reduced transportation costs, and unified markets, but it also multiplied the price of fallow land that enabled its dispossession from peasants by the Mexican hacendados, caciques and rural oligarchy.


(5) The agricultural modernization that had occurred was for cash-crops for export to the US market. Modern export-agriculture represented a dynamic sector of the economy, but it led to great dislocations in the rural sector. It contributed to the destruction of the peasant economy.


It stole the rights of the rural towns and communities and destroyed their independence. The peasants and rural workers were thrown to the uncertainties of the international market and the dislocations led to hunger, peonage and rural to urban migration.


By 1910 despite the great modernization of agriculture for export, Mexico for the first time could not even feed itself and became dependent on foodstuffs from the US.]


With the opening of the railroads by 1895 there occurred a great wave of land theft by rural elite. Between 1895 and 1910 the Mexican per capita consumption of corn fell by 20 lbs. The average life span fell from 31 to 30 years of age and rural infant mortality soared.


The Porfirian elite had established an alliance with the large landowners and modernization of agriculture meant the theft of Indian and peasant lands. The land conflict that had been going on for over 100 years finally had a name and a leader.


The men of Anenecuilco in the state of Morelos on September 12, 1909 elected a new leader to represent their plight as the sugar growers stole their lands. The leader's name was Emiliano Zapata.


There were also other problems that would lead to a revolutionary explosion. Between 1900 and 1910 the middle class and working class suffered from high inflation, high taxes and diminished job and career opportunities for their sons.


The revolution of 1910 for the middle class would be a revolution of rising and unmet expectations. But it would be in the copper mines of the north that the spark would be struck that would lit the fire of revolution all over Mexico.