Professional Documents
Culture Documents
http://lap.sagepub.com/
Published by:
http://www.sagepublications.com
On behalf of:
Latin American Perspectives, Inc.
Additional services and information for Latin American Perspectives can be found at:
Subscriptions: http://lap.sagepub.com/subscriptions
Reprints: http://www.sagepub.com/journalsReprints.nav
Permissions: http://www.sagepub.com/journalsPermissions.nav
Citations: http://lap.sagepub.com/content/9/4/31.refs.html
What is This?
government at various levels and the civil or military bureaucracy, or state apparatus) appears to
suggest a monolithic entity which in fact has rarely if ever existed. Ordinarily there are divisions
31
capital and the most powerful segment of national capital in a coalition which
dominates the Mexican economy. One of the effects of this domination is
concentration of industrial production by a relatively small number of capital-
intensive firms often using imported technology-a productive structure
unable to absorb Mexico’s large and growing labor force. This structure is an
important factor in Mexico’s regressive income distribution and the persistent
poverty of the Mexican people (an estimated 50 percent of the population un-
employed or underemployed).
How did such a structure emerge in a postrevolutionary context in which
the state apparently exercised considerable power to direct the economy
toward autonomous development? This study will focus on relations between
the state and the private sector in early postrevolutionary Mexico (1920-1940)
in an attempt to understand the conditions ultimately leading to the
emergence of the dominant coalition which has directly or indirectly helped
to shape Mexico’s pattern of dependent development.2
It is
2 recognized that the structure of production which has emerged in Mexico is in fact the con-
sequence of conflict among opposing forces rather than a linear progression toward a specific
historical outcome. Thus the focus on capital formation as a process involving interaction
between the state, foreign capital, and the national capitalist class (or its dominant segment)
excludes those struggles and forces which not only might have produced a different result but
also had a part in producing the existing structure. Unfortunately, an analysis of these forces is
beyond the scope of this article. Here it will simply be noted that the struggles of subordinate
groups have had a significant effect in shaping the present structure, but this effect has rarely
been what these groups intended. An example is the agrarian reform in response to peasant de-
mands for land; its effect was to destroy certain obstacles to capitalist agriculture which in the
long run has resulted in a reconcentration of the land and the continued exclusion of a
substantial proportion of the rural population from land ownership. Another example is
government response to working class mobilization in the 1930s, which ultimately resulted in
state control of the labor movement — an important element in its ability to assure conditions for
capital accumulation in the postwar period. In general, after the 1930s classes and groups
(including factions within the state) which have promoted — or might have promoted — an
alternative structure and development pattern have been systematically disoriented, coopted,
and/or repressed.
alists -
had been considerably weakened by the revolution, particularly by
the destruction of agricultural infrastructure and land takeovers during the
revolution and the liquidation of the Porfirian financial system. The dilemma
confronting the new government was to reestablish conditions for capital
accumulation as rapidly as possible while preventing the Porfirian bourgeoi-
sie from returning to its former position of preeminence. The government
attempted-at least initially-to establish conditions of Mexican sovereignty
in the context of foreign economic hegemony.3
The Mexican state was also constrained by demands for reform on the
part of the peasantry and the working class-groups which had been brought
into the Mexican political system by the revolution and could no longer be ig-
nored. Nevertheless, the weakness of previously dominant groups within
Mexico and the initial reluctance of foreign capital to finance state expendi-
tures (because of Mexico’s political and economic instability) permitted a
stronger state role in directing Mexico’s economic reconstruction than would
otherwise have been the case. Elements of this reconstruction included the in-
stitution of state organizations for the expansion of key industries (electricity
and petroleum) and infrastructure (particularly road building); the reconstitu-
tion of the banking system under state control; the establishment of official
banks to meet needs neglected by private finance; and the promotion of
private industry.
3
T he economic domination of foreign capital, and especially the political and economic power of
the United States, constituted important constraints on the actions of the Mexican state
throughout this period. The vicissitudes of U.S. - Mexican relations over the twenty-year period
cannot be developed here, but in general three distinct periods can be identified: (1) a period of
mutual distrust and intermittent conflict as the Mexican government sought to establish national
control over natural resources and was opposed by U.S. companies in Mexico, supported by the
U.S. government (1920-1927); (2) a period of mutual accommodation, resulting from a more
conciliatory policy by the U.S. government on the one hand and changes in the orientation of the
Mexican government to an increasing dependence on U.S. capital, on the other (1927-1935), and
(3) a period of nationalism under President Lázaro Cárdenas, culminating in the expropriation of
the foreign-owned petroleum companies in 1938. Two important sources on U.S. - Mexican
relations during this period are Meyer (1972) and Smith (1973).
26). Among government efforts to channel private bank funds to industry and
agriculture was the banking law of 1932 which in effect made banking
national by requiring that both foreign and national banks associate with the
Banco de Mexico and invest in businesses operating in Mexico. Private
industrialists urged legislation to free the capital and reserves of other
financial institutions, such as insurance companies, for investment in securi-
ties of Mexican firms (Rodrfguez, 1935). Legislation to regulate the insurance
industry, liberalizing stipulations with respect to the use of reserves and,
again, requiring companies to invest in Mexican firms, was passed in 1935.
Most of the foreign banks and insurance companies left the country, leaving
the field open for the establishment of domestic financial institutions which
proliferated in the 1930s.
In spite of the efforts of the state and certain industrialists, private banks
apparently had a very limited role in the process of capital formation in the
immediate postrevolutionary period. In part this can be attributed to the low
level of financial assets, which even 25 years after the revolution did not
reach their prerevolutionary level. Also the overriding concern of government
financial officials for liquidity limited the proportion of funds the banks could
invest or lend. But a major problem seems to have been an orientation toward
speculation and commercial loans on the part of the banks themselves
(Bennett, 1965: 45; Moore, 1963: 47, 72-74; CNB, 1928: 21). It was not for several
4
I n certain respects, establishment of a central bank followed precedent elsewhere: the Federal
Reserve Bank was established in the United States in 1913 (largely in response to the financial
crisis of 1907) and in 1920 the International Finance Conference, held under the auspices of the
League of Nations in Brussels, had recommended that central banks be established in all
countries. This was in part motivated by the anxiety of creditors having loans and investments in
Latin America and other regions to insure a mechanism for debt repayment and profit
repatriation (Tamagna, 1965: 39-90; Furtado, 1976: 96). In contrast to Mexico, central banks were
established in several Latin American countries through a U.S. commission which allegedly was
utilized by private New York banks to push unnecessary high cost loans on the governments of
these countries (Wood, 1961: 130).
Mexico provided a loan of $1.5 million-one half of the initial social capital
(Banco Algodonero Refaccionario, 1932). During the 1930s and 1940s, govern-
ment banks helped to finance several financieras, investment banks which
had been introduced in the banking legislation of 1932 and were oriented to
the development of a capital market. By 1940, a total of 29 financieras had
been established, in many cases with state support. In the late 1930s, in an ef-
fort to supplement government credit to agriculture, the government also
supported the establishment of private provincial banks, under the auspices
of the Banco de Mexico, which subscribed up to 15 percent of their capital.
It was several years before the investment banks and the provincial banks
began to provide substantial credit to industry and agriculture, but govern-
ment support to private banks is indicative of the government’s importance in
capital formation and of the linkages between the government and private
financial sectors. In fact, it was not uncommon for government financial
officials upon their retirement to become involved with private banks, as did
Luis Montes de Oca (who held the positions of secretary of finance and
director of the Banco de Mexico during part of this period and established the
Banco Internacional-until recently one of the largest private commercial
banks in Mexico-upon his retirement from the public sector in 1940), and
Eduardo Suarez (who was secretary of finance between 1935 and 1946 and
subsequently became president of the Banco Comercial Mexicano, another
major private bank).
The Banco Nacional de México
Within this general context, relations between the government and one
private bank, the Banco Nacional de Mexico (hereafter referred to as the
Banco Nacional) were particularly close. The Banco Nacional was one of the
few Porfirian banks to survive the revolution, and in the postrevolutionary
period it was by far the most important private bank in Mexico. It had been
formed in 1884 by the fusion of two existing banks and given special
prerogatives as the bank of the government. The majority of its capital was
French; it was controlled by the Banque de Paris et des Pays Bas and had a
governing board in Paris as well as Mexico. During the Porfiriato it had a role
somewhat analogous to the Morgan banks in the United States, channeling
European capital to Mexico and acting as an intermediary between foreign
capital and the Mexican government (Rosenzweig, 1965: 806-807; BNM, 1934:
9, 16, 93).
With the revolution, the Banco Nacional suffered a considerable reduc-
tion in its assets. But despite the animosity of postrevolutionary governments
toward the Porfirian banks, the Legorreta family (which has managed the
bank since the 1920s and still constitutes a major shareholder) was able to uti-
lize its international connections to reestablish the bank’s favored position
with the Mexican government. Its U.S. contacts included Morgan Guaranty
Trust as well as the New York investment house of Kuhn, Loeb which with
other financial institutions of New York and Germany had helped to finance
the reorganization and consolidation of the railroads during the Porfiriato. In
the early 1920s, the Legorretas took part in negotiations between the Mexican
government and the International Bankers Committee and were involved in
developing between private bankers and certain sectors of the state, particu-
larly the state financial sector. Indicative of this relationship was the pro-
banker orientation of Luis Montes de Oca, director of the Banco de Mexico
throughout most of the Cardenas regime. Despite the animosity of most
bankers toward the Cardenas government, they maintained good relations
with Montes de Oca, who engineered the 1937 legislation which defined the
relationship between the banks and their employees in paternalistic terms,
excluding the possibility of strikes against the banks, and placing banking
employees in a marginal position in relation to the Mexican labor movement.
The Banco Nacional, which was able to take advantage of its relationship
with the Mexican government and its U.S. connections, was one of the first
Mexican firms to systematically pursue the pattern of joint investments
which today characterizes the relations between foreign capital and certain
segments of domestic capital. With the elimination of European markets and
imports as a consequence of the Second World War, the Banco Nacional
advocated a policy orientation to a continental American economy, reinforc-
ing the trend of increasing economic dependence on the United States. In
1944 an investment society, Inversiones Latinas, was formed with 51 percent
Mexican capital (chiefly the Banco Nacional, but also including other private
financial institutions and the Banco de Mexico) and 49 percent U.S. capital
(chiefly Kuhn, Loeb, with smaller investments by Chase Bank and others).
Another example of joint investments was the establishment of Celanese
Mexicana, through the collaboration of Mexican private interests, including
groups associated with the Banco Nacional, and Celanese Corporation of
America, with a substantial loan from the government development bank,
Nacional Financiera (Busser, 1943; Suarez, 1977: 128-130).
In summary, during the postrevolutionary period the state established the
institutions and instruments which would facilitate its future direction of the
economy, including the orientation of financial resources to productive
investment. At the same time, collaboration between the private and state
financial sectors in drawing up banking legislation, investments, and loans by
official banks in private financial institutions, and the interlocking director-
ships between private and state banks, undoubtedly fostered a community of
interest between the state and private financial sectors. Such a community of
interest was exemplified by the relation between the Banco Nacional and
postrevolutionary governments, which also included foreign, especially U.S.
interests. This collaboration was further indicated by the support of state
financial officials, especially Luis Montes de Oca, for legislation favoring
bankers, as well as the recruitment of these officials to the private financial
sector upon their retirement from government.
control their own armies in various zones of the country, from where they
could easily lead them in revolt against the central government, as happened
on several occasions. One means utilized
by the government to control the
military was to provide high level officers with the incentive and material
means to go into business, with the hope that their
political ambitions might
be diverted to entrepreneurial channels. Government officials also took
advantage of these opportunities, and recruitment from the government into
the private sector became an accepted means of replenishing the ranks of the
capitalist class (Cordova, 1973: 30, 379).
A classic example of this process was the rapid transformation of Aaron
Saenz from revolutionary to government official to capitalist entrepreneur.
Saenz had served as a member of the general staff within the Constitutional-
ist Army during the revolution; subsequently he held a series of subcabinet
and cabinet posts in the governments of the 1920s and early 1930s. He was
considered a potential candidate for the Presidency in 1929 and had himself
apparently assumed that he would be chosen by the new Partido Nacional
Revolucionario (which he had helped to create); however his close association
with and open respect for the conservative businessmen of Monterrey (while
serving as governor of Nuevo Leon) precluded his consideration for candidate
of a &dquo;revolutionary&dquo; party (Hefley, 1970: 53, 60-70; Portes Gil, 1954: 150, 155-
157).
Saenz’ wealth apparently originated during his government career with
the establishment of a construction firm (in association with President Calles)
which benefited from government contracts. He and Calles (to whom he was
related by marriage-his sister having married Calles’ son) were also
associated in the construction of a major sugar refinery at El Mante, in the
state of Tamaulipas. Saenz, Calles, and other government officials obtained
the lands after a dam and irrigation system had been constructed at
government expense, and a modern sugar refinery was built with the
assistance of a substantial loan from the Banco de Mexico (Cordova, 1973:
376-377; Trevino Sillar, 1944: 22-23; Hefley, 1970: 85, 93).
Saenz also benefited directly and indirectly from government promotion
of the sugar industry. During the early postrevolutionary years the restoration
of prerevolutionary production levels in order to avoid sugar imports was a
major government preoccupation. The incorporation of a provision in the
agrarian code exempting property devoted to the production and processing
of sugar cane from agrarian reform was a factor in the resurgence of the sug-
ar industry.
The restoration of the sugar industry benefited some of the plantation and
refinery owners who survived the revolution, including the United Sugar
Companies, a U.S. company which controlled most of the arable land of
Sinaloa. New capitalists such as Saenz were also able to take advantage of
postrevolutionary conditions to enter the field; another who profited was
William Jenkins, a former U.S. consul who allegedly masterminded his own
kidnapping, obtaining a sizeable fortune in ransom money. Whether or not
this was the real source of his wealth, in the aftermath of the revolution Jen-
kins was in a position to provide loans to sugar plantation owners in Puebla
who confronted the expensive task of reconstructing sugar refineries and
other equipment destroyed or damaged by the revolution. When many
Lann AmerKan Perspechves Issue 35, Fall 1982, Vol IX, No 4
defaulted on their loans, Jenkins took over their properties, thus becoming the
owner of eleven haciendas containing the best crop lands of Matamoras
bank, the Banco Azucarero, was established in 1932 with the major mill
owners as well as the government agricultural credit bank as shareholders.
Additional financing for sugar production was provided through private
banks, the national railroads, the manufacturers of bags for sugar, and the pe-
troleum companies (Gomez Morin, 1932).
The new cartel was temporarily successful in stabilizing sugar production
and sales-so much so that Saenz projected it as a model for similar
arrangements in other industries (Saenz, 1932). But its success was apparently
short-lived, and overproduction was again a problem in the second half of the
1930s. At the instigation of the secretary of finance, Azucar S.A. was
reorganized as a semiofficial auxiliary credit organization, Union Nacional de
Productores de Azucar, S.A., in 1938. The government did not participate in
the capital of the new organization, but was represented on its board by the
secretaries of the economy, of agriculture, and of finance. However, the
directors have mainly been major refinery owners such as Saenz.
The close association between private refinery owners and the govern-
ment has continued to characterize the sugar industry, and until recently has
generally favored the private sector although the government has also
attempted to maintain relatively low prices. While Saenz himself expanded
his sugar holdings (with the assistance of loans from Nacional Financiera)
and diversified into other industries (airlines, hotels) he also gained control-
ling interest in the Banco Azucarero, now the Banco de Industria y Comercio.
Jenkins also expanded into other areas, including finance; at une point he
controlled the Banco de Comercio, one of the major banks of the country,
which continues to be 51 percent owned by one of his close associates.
The careers of Saenz and Jenkins were by no means unique. In the
chaotic period following the revolution fortunes were quickly made. An
example is provided by Ernesto Espinosa Porset, an official of the govern-
ment financial sector (Banco de Mexico) who made profits of 60 percent
through the purchase and resale of houses in the immediate postrevolutionary
period (Espinosa Porset, 1958: 41-42). Although on a small scale, these
operations illustrate the inherent possibilities of speculation in real estate
which, with the subsequent rapid growth of Mexico City (and of other urban,
suburban and resort areas), has continued to constitute a preferred invest-
The Garza and Sada families were also instrumental in the establishment
of the Confederacion Patronal de la Republica Mexicana (COPARMEX), the
employer association specifically created to defend the class interests of the
bourgeoisie. In general, they were in the forefront of efforts by conservative
businessmen of Monterrey to control the labor movement. In their own firms,
they attempted to exercise this control through repression of independent
labor organizations on the one hand and a paternalistic private welfare
system on the other.
By 1936 the holdings of the Garza Sada families and their associates had
been divided into two groups: the Cuauhtemoc (brewery) group and the
Vidriera (glass) group. While both sides of the family (descendents of Isaac
Garza of Francisco Sada) continued to hold shares within each group,
management of the Cuauhtemoc enterprises was largely the responsibility of
the Garza Sada family, particularly Eugenio Garza Sada and Roberto Garza
Sada (sons of Isaac Garza), while their cousins, the Sada brothers, Roberto G.
Sada and Andres G. Sada (sons of Francisco Sada), were in charge of the Vi-
driera group (Archivo MGM, Memo 21 September 1959, #105, Cuauhtemoc).
Until this time, the principal firms of both groups (Cerveceria Cuautemoc and
Vidriera Monterrey) had also constituted holding companies for other firms
of their groups. But this arrangement entailed certain problems. First, the
extent and expansion of family control was highly visible, exposing the firms
to accusations of concentration and monopoly. Second, problems of the
central firm in each group tended to spread to other firms. In the case of the
Cuauhtemoc group, the Garza Sada family had attempted with little success
to form a cartel with the two other major breweries of the country to
maintain price levels; it was now engaged in negotiations - also ultimately
unsuccessful to purchase the Moctezuma brewery, the second largest in
-
Mexico, which would have given it control over 70 percent of the beer
produced in the country. There was concern that the problems of the brewery
industry would have repercussions on the other firms of the group. At the
same time, Vidriera Monterrey had been the nucleus of an intensive labor
conflict (which had resulted in a one-day lockout by Monterrey businessmen
and a confrontation between them and President Cardenas in 1936). Its
owners were anxious to prevent labor militance from spreading to other firms
of this group (Gomez Morin, 1935b and 1935c; Good, 1972: 20-21). These
factors led to a reorganization of ownership structure by both groups.
With the Cuauhtemoc group reorganization, former departments of the
brewery and of FAMOSA - including the former packaging department -
became autonomous companies, and Valores Industriales (VISA) was created
as a holding company to hold the majority of shares of the firms formerly
held by Cuauhtemoc. VISA, in turn, was controlled by the group of
Cuauhtemoc shareholders and had the function of maintaining unified
direction of &dquo;autonomous&dquo; firms. &dquo;External&dquo; elements not directly linked with
the group would not participate in VISA but would simply continue to hold
shares of the individual companies (G6mez Morin, 1935a, 1936a). In 1938, two
years after the reorganization, the VISA group consisted of twelve companies,
including VISA itself, the holding company; FAMOSA; four breweries; a malt
company; a packaging company; a technical services firm; a distribution firm;
and two financial agencies (Cerveceria Cuauhtemoc, 1938).
Lohn Amencm Perspectives Issue 35, Fall 1982, Vol IX, No 4
The plan for the reorganization of the Vidriera group called for the
existing Vidriera Monterrey to become a holding company - Fomento de
Industria y Comercio (FIC) and its assets and name to be taken over by a
-
new organization. The holdings of FIC included the new Vidriera Monterrey,
Vidriera Mexico, and Vidrio Plano, another new company which began
operations in May 1936 to manufacture plate glass, with Andres G. Sada as
general manager (Sada, 1935). In August of that year, Cristaleria was
established as part of the Vidriera group to manufacture crystal.
The Garza Sada groups also began to expand their financial network. In
1932, investors linked with the Cuauhtemoc brewery formed the Banco
Industrial de Monterrey to finance their operations (Contreras Mendez, 1976:
26). The Cia. General de Aceptaciones was established in 1936 as part of the
reorganization of the Cuauhtemoc group to facilitate financial transactions
among its various firms by enabling companies having surpluses to transfer
their balances to companies having deficits and to facilitate or guarantee
credit operations of the Cuauhtemoc firms with other financial institutions or
in the market (G6mez Morin, 1936b). Subsequently, Aceptaciones expanded
its activities to members of the Vidriera group. In 1939, in conjunction with
other Monterrey interests and a group of associates in Mexico City, they
formed the Union Financiera, another holding company, for the purpose of
broadening Monterrey’s financial network; within the next two years four
new companies were established under its control: a life insurance company
(Monterrey, Cia. de Seguros sobre la Vida, today one of the largest life
insurance companies in Mexico), a capitalization bank (Banco Capitalizador
de Monterrey), a mortgage bank (Credito Provincial Hipotecario) and a
construction company (Construcciones, S.A.). They also bought controlling
interest in other financial institutions.
the oldest existing private bank in Mexico, having been established in the
1860s; by the end of the Porfiriato it had become linked with members of the
Barcelonnette group and a substantial proportion of its shares were controlled
by the French Banque de Paris. Following the revolution, its capital had been
reduced from 21.5 million pesos to 2.15 million. Furthermore it suffered a
severe internal crisis in 1934 when a shareholder sold a substantial number of
shares at one-third of their value, resulting in a massive withdrawal of
deposits, which would have resulted in bankruptcy had the Banco de Mexico
not intervened and, with the help of other government and private banks,
bought up shares on a temporary basis (Banco de Londres, 1964: 109-110, 114-
115).
In response to these crises and in an effort to secure Mexican control over
the bank, a group of shareholders was formed who jointly held a majority of
shares (Gomez Morin, 1933a and 1936b). Within this majority block, the Cia.
General de Aceptaciones held 28.09 percent and Enrique Sada Muguerza of
the Central Brewery held 1.87 percent, totalling just under 30 percent for the
Cuauhtemoc group. Other major shareholders included Maximino Michel of
the old Barcelonnette group, who was associated with the Puerto de Liverpool
(an important commercial house, established during the Porfiriato), and Angel
Urraza of Hulera Euzkadi, a major tire company in which B.F. Goodrich had
substantial interest. Following the insurance legislation of 1935, which had
resulted in the exodus of most foreign insurance companies, groups associat-
ed with the Banco de Londres joined with British insurance interests located
in Mexico to form a life insurance company, La Provincial, and an investment
bank, Sociedad Financiera Mexicana, or Sofimex, which became members of
the dominant shareholding group of the Banco de Londres (Woodrow 1936;
G6mez Morin, 1937). These groups were also involved in the unsuccessful
efforts of the Cuauhtemoc group to purchase the Moctezuma brewery as well
as more successful subsequent ventures, including the establishment of
Alcomex in association with Alcoa (Aluminum Company of America) in the
1950s. They also participated in the formation of the financial holding
company, Uni6n Financiera.
The relationship among interests associated through the Banco de
Londres network continued to be important at least for several decades. The
investment portfolio of the Puerto de Liverpool in 1952 included a significant
amount in mortgage obligations of companies associated with the Garza Sada
group. The major shareholders of Sofimex at the time of its founding in
1937-including the Williams family (associated with La Provincial), the
Puerto de Liverpool (M. Michel), the Urraza trust (Hulera Euzkadi) and the
Garza Sada interests (VISA)-continued to be important in the list of 1959
shareholders (Archivo MGM).
In contrast to the Garza Sada economic groups both predominantly -
beyond the resources of any one group, presumably again reflecting (at least
during this period) the shortage of available resources. The formation of
syndicates as well as the relationship within &dquo;associated groups&dquo; as that of
the Banco de Londres thus constituted a means of creating an informal capital
market among networks of individuals and institutions to provide financing
for firms within these networks.
Other Groups
Although the
two economic groups associated with the Garza Sada
investment group were undoubtedly among the most cohesive groups in
Mexico by the 1930s, other groups were also forming. The sugar companies,
bank, and other firms controlled by the Aaron Saenz family constitute a
major economic group today. During the 1930s, an investment bank and
insurance company were established which became part of the Banco
Nacional financial group. After 1940 the Banco Nacional and its associated fi-
nancial institutions contributed to the establishment of new industries, which
were often subsidiaries of U.S. companies.
period; on the other, the ability of the incipient economic groups to form their
own financial institutions enabled them to take disproportionate advantage of
state policies aiming to channel banking resources to industry. At the same
time the informal capital markets constituted through &dquo;associated groups&dquo;
and syndicates may have constituted an additional element in the concentra-
tion of financial resources to the extent that these were focused on a narrow
range of firms, excluding those outside of these markets.
lahn American Perspectives Issue 35, Fall 1982, Vol IX, No 4
CONCLUSIONS
By 1940 elements which would influence the future direction of the
Mexican economy were already evident. First, despite various internal and
external constraints, the role of the state in capital formation had been firmly
established, including legislation to provide tax incentives and tariff protec-
tion to industry, provision of infrastructure, and regulation of money and
banking - functions common to the state role in accumulation in all
capitalist societies as well as the formation of institutions permitting more
-
direct state intervention in the economy. Among the most important of these
were the government financial institutions through which private industries
and banks as well as government investments were financed. The govern-
ment had also established commissions for electric power, hydraulic works,
irrigation, mining and petroleum, and (with the expropriation of foreign
owned petroleum companies in 1938 and their incorporation in Petroleos
Mexicanos -
important element of this relationship was banking and finance. Private and
government financial officials were brought together by the reconstruction of
the banking system as well as investment by government banks in private fi-
nancial institutions, private bank investments (generally obligatory and/or
limited) in government banks, and consequent interlocking directorates. Top
officials in the state banking system often found positions in private banking
upon retirement from government, as did Eduardo Suarez and Luis Montes de
Oca.
Fourth, during this period both private groups and government officials
looked to foreign capital and technology as a means of accelerating Mexico’s
development. While the predominance of multinational corporations in
strategic sectors of Mexican industry has become evident only in recent
decades, even in the early postrevolutionary period some U.S. manufacturing
companies opened subsidiaries or (as in the case of B.F. Goodrich) undertook
joint investments with Mexican capital. And with the postwar expansion of
U.S. industry on the one hand, and the growth of the tariff-protected Mexican
market as well as Mexico’s increased political and economic stability (due
largely to state intervention) on the other, U.S. capital, and eventually that of
other countries, was increasingly attracted to Mexico. Already in the 1930s
negotiations were underway for investment projects combining foreign, state
and private national capital, a pattern which characterizes much of Mexican
investment today.
Thus while the strengthening of the state’s role in the economy apparent-
ly established conditions for state-directed autonomous development in
postrevolutionary Mexico, other trends identified during this period had the
opposite effect. The incipient emergence of a dominant fraction within the
national capitalist class, the development of various linkages between this
fraction and sectors within the state, and the encouragement given to foreign
capital, particularly in manufacturing, were trends which eventually contrib-
uted to capital concentration and the integration of the state in a development
project which disproportionately benefits dominant fractions of foreign and
domestic capital.
The emergence of these trends is not a sufficient explanation for Mexico’s
model of development: it does not take into account the struggles of
subordinate classes; nor the fact that the above-mentioned patterns were
strengthened while other, including contradictory, tendencies were weakened
in the post-1940 period. What the above analysis does show is that the
development of the national bourgeoisie in the immediate postrevolutionary
period and the state’s role in this process must be taken into account for an
understanding of class relations and productive structures characteristic of
Mexico today.
REFERENCES
Aguilar M., Alonso y Fernando Carmona
1967 México: riqueza y misería, Mexico City: Editorial Nuestro Tiempo, S.A.
Archivo MGM (Manuel Gómez Morín)
Private archive, Mexico City
Banco Algodonero Refaccionario
1932 Memo (November 15), Archivo MGM
Banco de Comercio
1942 Diez Años de Servicio: 1932-1942, Mexico City
Banco de Londres
1964 Cien Años de Banca en México: 1864-1964, Mexico City: Cia Impresora y Litográfica
"Juventud," S.A.
BNM (Banco Nacional de México)
1934 Quincuagesimo Aniversario de su Fundación, Mexico City: Editorial "Cultura"
1900-1975 Informes, Mexico City
1934-1940 Examen de la Situación Económico de México, Mexico City
Bennett, Robert L.
1965 The Financial Sector and Economic Development: The Mexican Case, Baltimore: Johns
Hopkins Press
Boletín Financiera y Mineral de México
1934 "III Convención Bancaria, celebrado en la ciudad de Guadalajara," Jalisco (April)
Lotm Amencon Perspechves Iswe 35, Foil 1982, Vol IX, No 4
Busser, W.F.
1943 Letter to Secretary of State (August 24), NAW, RG 59, 812.5034/158
Cardoso, Fernando Henrique and Enzo Faletto
1978 Dependency and Development in Latin America, Berkeley: University of California
Press
Cervecería Cuauhtémoc
1938 Estados financieros del mes de julio, Archivo MGM: Cervecería Cuauhtémoc General,
1937
CNB (Comisión Nacional Bancaria)
1928 Sexta Informe a la Secretaría de Hacienda y Crédito Público, Mexico City: Talleres
Gráficas de la Nación
Contreras Méndez, Enrique Arturo
1976 "El grupo industrial Monterrey," Tesis professional, Escuela Nacional de Economía,
Universidad Nacional Autónoma de México, Mexico City
Cordero, Salvador and Rafael Santin
1977 "Los grupos industriales: una nueva organización económica en México," Mexico City:
Colegio de México ( Cuadernos del CES 23)
Córdova, Arnaldo
1973 La ideología de la revolución mexicana: la formación del nuevo régimen, Mexico City:
Ediciones Era
D’Olwer, Luis Nicolau
1965, "Las inversiones extranjeras," in Daniel Cosio Villegas (ed.), Historia moderna de
México, Volume 8, Mexico City: Editorial Hermes
Eckstein, Susan
1982 "TheImpact of Revolution on Social Welfare in Latin America," Theory and Society,
forthcoming.
Espinosa Porset, Ernesto
1958 "54 Años de vida bancaria," Mexico City: Banxico (special edition)
Evans, Peter
1979 Dependent Development: The Alliance of Multinational, State, and Local Capital in
Brazil, Princeton: Princeton University Press
Furtado, Celso
1976 Economic Development of Latin America (2nd edition), Cambridge: Cambridge
University Press
García Díaz, María
1953 "La intervención del estado en la economía mexicana: Bases constitucionales y su
evolución desde 1925," Tesis, Licenciado en Economfa, UNAM, Escuela Nacional de
Economfa
Gerschenkron, Alexander
1962 Economic Backwardness in Historical Perspective, Cambridge: The Belknap Press of
Harvard University Press
Gómez Morín, Manuel
1932 Memo (January 9), Archivo MGM: Cia. Almacenadora de Azúcar, S.A.
1933a Letter to Mario M. Blásquez (Sept. 19), Archivo MGM: Banco Algodonera Refaccion-
ario
1933b Letter to Lic. Virgilio Garza (Sept. 19), Archivo MGM: Lic. Virgilio Garza, Jr. 1926-1942
1935a Letter to Francisco G. Sada (May 17), Archivo MGM: Francisco G. Sada
1935b Memo (May 21), Archivo MGM: Cervecería Cuauhtémoc (Asuntos Financieras)
1935c Letter to Francisco G. Sada (September 27), Archivo MGM: Francisco G. Sada
1936a Letter to Francisco G. Sada (January 2), Archivo MGM, Estudios diversos, Estatutos
1936b Letter to Francisco G. Sada (July 7), Archivo MGM, Cervecería Cuauhtemoc General
1937 Letter to I. Hornik (June 14), Archivo MGM: Cervecerfa Cuauhtemoc: (Asuntos
Financieras)