america buys mexico -- 6/26/18
Today's selection -- from Villa and Zapata: A History of the Mexican Revolution by Frank McLynn. In the early 1900s, under the policies of longtime Mexican president Porfirio Díaz, Americans owned three quarters of the mines and more than half of the oil fields in Mexico
"[Porfirio Díaz led] a hard-driven programme of industrialisation. Iron and steel works were constructed in Nuevo León, textile mills in Veracruz, and there was a massive mining boom, especially of lead and copper, stimulated by new technologies for refining precious metals. Most of all there was oil, the black gold of the twentieth century. The first geological discoveries and drillings took place on the coast of the Gulf of Mexico at the turn of the century, making Tampico the new boom town. Oilwells were spudded in and production began in 1901. By 1910 Mexico was one of the world's leading producers and by 1918 was second only to the United States. Such was Díaz's myopia, however, that his 1884 mining code vested the ownership of subsoil rights in the proprietor of the surface land. Those who had acquired public lands at a giveaway price now found they had a second and much more lucrative bite of the cherry when petroleum was found on their territories.
|"The porfirista policy according Pineda"|
"This was the context in which foreign capital, already a leech on the Mexican economy, became a veritable octopus. It is doubtful if Díaz ever did say: 'Poor Mexico, so far from God, so near to the United States' -- it sounds too witty for him -- but he was aware of the truth contained in the remark. Viewing the Mexico stabilised at gunpoint by Díaz as an investment cornucopia, American capitalists flooded across the border. Among the famous names with substantial holdings south of the Rio Grande were Hearst, Guggenheim, McCormick and Doheny; Mexicans became familiar with the corporate identities of Standard Oil, Anaconda, United States Steel, and many others. Soon the Americans owned threequarters of the mines and more than half the oil fields and they also diversified into sugar, coffee, cotton, rubber, orchilla, maguey and, in the northern provinces of Sonora and Chihuahua, cattle. Out of a total foreign investment of nearly three billion dollars in Mexico by 1910, the American share was 38 per cent, or over one billion dollars, more than the
total capital owned by native Mexicans. In 1900 Edward L. Doheny acquired huge swathes of oil-rich Tamaulipas, near Tampico, complete with subsoil rights, for less than a dollar an acre. Once oilwells were installed, Doheny's plant could literally suck Mexican national treasure out of the ground, to the tune of 50,000 barrels a day, all completely taxfree except for an infinitesimal stamp duty.
"The Americans were not the only economic predators. The British (who still held 55 per cent of all foreign investment in Latin America as a whole), were well represented with 29 per cent of foreign investment in Mexico, mainly in mines, banks and oilwells. The great English entrepreneur in Mexico was Weetman Pearson, later Lord Cowdray, whose construction firm, Pearson & Son, had built the Blackwall Tunnel in London, the East River tunnel in New York and a number of railway bridges in Mexico. As a personal friend of Díaz, Pearson was able to cash in on the oil bonanza and obtained the rights to the Tuxpan fields in 1909; Díaz thought it a good idea to build up Pearson's oil company, Mexican Eagle, as a counterweight to Doheny and Rockefeller's Standard Oil. Eventually, Lord Cowdray (as he became in 1910) extended his business ambitions into Ecuador, Colombia and Costa Rica, exacerbating pre-existing Anglo-American tensions in Latin America and leading Washington to invoke the Monroe Doctrine.
"The Anglo-Saxon nations, though by far the biggest foreign investors, were not the only ones. The French, forgiven for their sins of the 1860s, were allowed to control the textile industry while the widely hated Spanish or gachupines dominated the retail trade and the tobacco plantations. All foreign capitalists were secretly resented to greater or lesser degrees -- the Spanish sometimes openly -- but Díaz rigged his judiciary so that in any dispute involving foreign companies and Mexican nationals, the foreigners would always get a favourable judgement. It was a standing joke that only gringos and bullfighters (another of Díaz's favourite groups) could get justice from a Mexican court. Nor did the foreigners endear themselves to the locals by their lifestyle and obvious contempt for Mexico and Mexicans. Disdaining to acquire Mexican citizenship, the expatriate community lived in splendid and luxurious isolation, repatriating profits and making sure their own nationals rode the privileged managerial gravy-trains. To all complaints about the exploiters in their midst Díaz returned the same answer: the foreigners were needed to make Mexico a modern nation, since the Mexicans themselves lacked the know-how."
<< prev - comments page 1 of 1 - next >>