President Diaz and His Controversial Economic Development - Part 2

With President Porfirio Diaz committed in financial reforms while attracting foreign investment, development in Mexico’s infrastructure and industries began. However, its development went unfelt by majority of Mexicans.

Viaduct of Metlac

Infrastructure Development

The influx of foreign investment led to improvements in Mexico’s infrastructure. Mostly from American investments, Mexico saw the spread of railroad networks and telegraph lines. Communication and postal services expanded in staggering rate. Mines and oil fields altered the countryside.

Railroad development had been the signal of industrialization and Mexico committed in its growth. In 1876, Mexico only had 1,000 kilometers of railroad tracks with lines between the capital Mexico City, Veracruz and Querataro. Under Presidents Diaz and Gonzales, railroad network expanded by 11,000 km. Much of the funding for this undertaking, about 2/3, came from American investors that amounted to $ 300 million. Nonetheless, in fear of a railroad monopoly and its influence led the Mexican government to highly involve in the industry owning much of the strategic lines that crossed the country. Many of the railroad tracks connected mines and port cities.

Here are Old Mexico and New Mexico face to face by Percy Cox

On the matter of ports, Diaz’s government also improved the ports of Tampico, Veracruz, Coatzalcoalcos, Manzanillo, and Salina Cruz. The dredging to deepen ports and improvements in its loading and unloading capacities cost around $ 120 million.  This developments contributed to Mexico in meeting the needs of its growing global trade.

Alongside ports and railroad development, telegraph line networks also expanded. From the initial length of 7,135 km of line in 1876, it grew to 50,324 by 1903.

Postal service as well saw improvements, with the Rurales containing banditry that disrupted its service. Post offices worked more efficiently and its numbers rose from a mere hundred offices to around 2,200 by the end of the Porfiriato.

Industrial Development

Industrial development had been viewed by President Diaz as a means of increasing the country’s income. Its industrial development focused in the primary industry with a modest manufacturing industries growing.

Mining had been a major element of the Mexican economy even during the days of Spanish colonialism. During Diaz’s rule, mines only number around 8,970 in 1888, but with foreign investment encouraged by government support, it rose to 23,191. About 5,561 of this mines had been for silver, which composed the bulk of exports. Iron mining had been also practiced in modesty with the biggest located in Cerro del Mercado. Companies also mined coal in Sabinas and Coahuila with a production of 300 million tons of low grade coal.

Edward L. Doheny

Oil fields also began to appear in Mexico in 1901. Californian prospector Edward Doheny struck oil in his 600,000 acre of Mexican land and sold rights to Standard Oil. Soon oil fields scattered in the lands of Tampico and Tuxpan.

Small manufacturing had also been reported in Mexico during Diaz’s regime. Its facilities focussed for the production of sugar, tobacco, and textile. In the textile industry cotton, broadcloths, and cashmeres composed much of its production. Steel and iron plants also existed numbering at 7 with the largest in Monterey. 90 smelters had also been operating and processing metals produced by nearby mines.

Industrial development had been growing with the support of the government. Local markets expanded as President Diaz abolished internal customs called alcabalas. Foreign investors provided technical skills while Diaz’s regime gave tax breaks and customs free import of machineries and raw material. Manufacturing grew also at the back of cheap labor that Mexicans provided as a result of difficulties in the agricultural sector.

Agriculture and Land Reform

Among the downside of President Diaz’s regime included its indifference to the peasantry. His regime allowed survey companies to take lands that they surveyed and had no legal owners in form of titles. Most farmers in the country farmed lands that had no title, thus many suffered from land grabbing by the survey company. Many land grab victims either faced the prospects of becoming debt peons or workers in sweatshop factories in the cities.

In addition, Diaz’s government also abolished the ejido or communal lands to incentivize farming. This, however, led to poor farmers incapable of managing huge tracts of lands.

Under Diaz’s rule, owners of haciendas gain dominance over rural society. The government relied on them for political and material support in exchange for freedom in conducting their affairs, thus conditions for indebted farmers and workers worsen.

Nature of Development

Diaz’s government improvements towards the economy had a liberal nature. He welcomed foreign investment and promoted trade. However, when it comes to local manufacturing he showed his government’s support by providing tariff protections.

For social welfare, the new found wealth led to increase in number of schools. Education became a priority for the government. Also, Diaz supported the establishment of numerous orphanages and shelters for the homeless as well as asylums.

Few developments in social welfare and education, nonetheless, went overshadowed by the economic inequality resulting from the economic development. In agriculture, only 2% of the population had land titles and 10% of Indian communities held lands. Much of those who owned lands belonged to the hacienda owning class. Peonage and debt rose among the peasants.

The plight of the Indian peasants went unnoticed as a result of the racism of the Cientificos around Diaz. They perceived Indians as inferior and lazy as well as a hindrance to the progress of the country. With this view, the Indian population shoved into marginalization.

"Here you have an ordinary scene at a Mexian railway station" in Pearson Magazine

For Mexican workers, their plight never fared better than poor Mexican farmers. They toiled in factories under atrocious conditions and at long hours. Safety never became a priority for factories. For all their suffering, they received little. Any voice for change went into deaf ears as factory owners had the option of firing local workers knowing countless unemployed waiting for job openings.

Accordingly, the Mexican economic miracle under Diaz only benefited the few rich hacienderos and factory owners. Moreover, foreign business and investors also flourished under Diaz. Foreign influence rose as with reliance to them. The government allowed the entry of foreign business and permitted them to remit their profits back to their country rather than giving back to their Mexican workers. Foreigners also enjoyed protection from Mexican laws. Unofficially, foreigner in Mexico had extraterritoriality that made them virtually untouchable. Thus, foreigners abused Mexicans with impunity.

In politics, President Diaz used government funds to pay the army and the rurales well. In turn they cracked down on the President’s opponents and quelled peasant uprisings and worker strikes. President Diaz tightened his grip to power removing limits in terms. His brutal authoritarian regime endured as he brought to his side wealthy capitalist, foreigners, and hacienderos.

End of the Porfiriato

The Porfiriato saw its descent after an economic depression hit Mexico in 1907. Commodity prices stumbled and the economy began to overheat causing inflation to spike. Moreover, cost of living overwhelmingly outpaced wages. Thus, economic difficulty caused many to question Diaz’s regime.

In 1908, Diaz had an interview with James Creelman of Pearson’s Magazine and he announced his retirement and his thoughts that Mexico was finally ready for democracy. The statements made for the interview meant only to show a good picture of his government abroad, but the interview was translated and spread throughout Mexico. People then looked forward to Mexico’s return to democracy that finally sparked in 1910 the Mexican Revolution that toppled Porfirio Diaz’s government.

Read Part 1  

See also:

What was the Great Spurt? 

Bibliography:

Websites:

“Diaz and the Porfiriato 1876-1910.” In MexicanHistory.org. Accessed on April 29, 2018. URL: http://mexicanhistory.org/Diaz.htm 

Evens, Travis. “The Porfiriato: The Stability and Growth Mexico Needed.” In Studies by Undergraduate Researchers at Guelph. Accessed on April 29, 2018. URL: https://journal.lib.uoguelph.ca/index.php/surg/index

Books:

Mallen, Bernardo. Mexico Yesterday and To-day, 1876-1904. N.P., N.P.: N.P., 1904.

Creelman, James. Diaz, Master of Mexico. New York, New York: D. Appleton and Company, 1911.

Kirkwood, Burton. The History of Mexico. Westport, Connecticut: Greenwood Press, 2000.

Tweedie, Alex. Porfirio Diaz, Seven Times President of Mexico. London: Hurst and Blackett Limited, 1906.