MANUFACTURING

Postindependence political instability, civil violence, and foreign invasion did not provide an environment for good industrial policy.

Rafael Dobado Gonzalez, Aurora Gomez Galvarriato, and Jeffrey G. Williamson, 20082°

Manufacturing in the early post-independence period suffered from many of the same problems faced by the mining industry. In 1824, after visiting Queretaro, which formerly had been a major textile producer, the American consul in Veracruz reported: “I was much disappointed in visiting the manufacturing establishments at Queretaro. They have now fallen into ruin.” Entrepreneurs wishing to reestablish and expand their facilities faced capital shortages, political instability, and poor transport. In addition, manufacturers faced competition from imports, which caused a decline in Mexican textile production during the 1820s.21

After independence, the position of shop artisans and self-employed craftsmen became increasingly precarious. They faced competition from imports, obrajes, and the few mechanized factories established after independence. The guilds, which no longer enjoyed legal protection, declined. Even the strongest guilds, such as those of the gold - and silversmiths, passed out of existence before the middle of the century.22

The passing of the guilds decreased upward mobility for artisans. In 1842, the 11,229 artisans working in Mexico City represented 28 percent of the city’s workforce. The percentage of the workforce comprised by artisans had changed little since 1794, when they made up 29.3 percent of the workforce. By the middle of the nineteenth century, most artisans worked in the shops of others since they lacked the resources to open their own workshops.23

During the middle of the nineteenth century, due to the lack of modern factories and the high cost of shipping goods from Veracruz to central Mexico, production by artisans continued to dominate Mexico City manufacturing. Artisan shops failed to evolve into true factories since they lacked capital and the necessary political clout to obtain favorable tariff policies. Moreover, they relied heavily on family labor, which limited their size. As a result of this reliance on artisanal techniques, much of the labor force had a very low level of productivity.24

Mexican liberals felt that the country could rely on export revenue to purchase manufactured goods from abroad, and that, in any case, the market would resolve production problems. Conservatives, in contrast, favored deliberate government action to stimulate industry. In 1830, to further industrial development, the conservative Anastasio Bustamante administration founded a government-owned industrial development bank known as the Banco de Avio. Tariffs levied on imported cotton goods financed the bank. The government directed the bank to lend money to Mexican entrepreneurs so that they could establish factories, especially textile mills, improve technology, and make Mexico less dependent on imports.25

A $146,000 loan from the Banco de Avio partially financed the La Constancia Mexicana (Mexican Perseverance), a water-powered textile mill. The plant, located in Puebla, bore little resemblance to the colonial obraje. Fanny Calderon de la Barca described it:

It is beautifully situated, and at a distance has more the air of a summer palace than of a cotton factory. Its order and airiness are delightful, and in the middle of the court, in front of the building, is a large fountain of the purest water. A Scotchman, who has been there for some time, says he has never seen anything to compare with it, and he worked six years in the United States.26

La Constancia Mexicana’s progressive owner, Esteban de Antunano, built schools for workers’ children and established a medical fund to provide a doctor and an apothecary. He challenged conventional wisdom and allowed women to work alongside men in his factory. He published a pamphlet to justify his then-controversial decision to hire women to work in his factory. The pamphlet noted that modern machinery did not require great strength to operate. The main advantage claimed for female employment was increasing family income. Antunano argued that female morality would be better preserved in his well supervised factory than it would be by having young women idle and alone at home. Finally he noted that women worked in factories in industrially advanced countries such as England.27

The problems Antunano faced were typical of those facing manufacturers of the period. He had to employ “foreign workmen at exorbitant prices” to build his mill. A year after it was shipped from Philadelphia, textile machinery arrived for the mill, but it proved to be unworkable. Only after losing two subsequent shipments to shipwrecks and having had another shipment delayed by a French blockade could he begin operating his mill.28

Before its liquidation in 1842, the Banco de Avio had lent $509,000 for textile mills in Puebla, Veracruz, Queretaro, and the State of Mexico. It lent to thirty-one enterprises, of which twenty-one became operational, ginning cotton and producing lumber, honey, silk, paper, glass, earthenware, and textiles. Of the enterprises the bank financed, 65.8 percent produced cotton textiles and 14.3 percent produced iron and machinery.29

The problems of the Banco de Avio were representative of early nineteenth-century Mexico. Liberals opposed it, claiming it distorted the market. The government had so little cash that it ceased providing funds to the bank years before formally liquidating it. Its record keeping led one inspector to conclude that the bank “had never been staffed by employees even modestly trained in the principles of bookkeeping.” The bank also suffered from its being led by amateurs in a rapidly changing world, from its inability to rely on courts to recover from defaulting borrowers, and in some cases from political pressure determining who would receive loans. During coups, the seizure of funds and the halting of transport between Veracruz and Mexico City often delayed bank-financed projects.30

During the 1830s, thanks to tariffs and the introduction of mechanized mills, textile production rebounded. As a result of British investment, as well as that of the Banco de Avio, Mexico possessed the most highly developed textile industry in Latin America and became almost self-sufficient in cotton textiles. Between 1837 and 1845, the number of spindles in Mexican mills increased from

8,000 to 113,813. Due to high transport costs, foreign textiles could not compete with domestic

Production.31

In 1854, the 10,316 textile workers wove 5,482 tons of cotton into cloth. The cotton-textile industry produced $12 million worth of fabric, roughly equal in value to the mintage of precious metals—quite an accomplishment in a nation where mines were universally regarded as the principal source of wealth.32

Domestic cotton-textile producers suffered due to a political decision. They assumed that if they allied with domestic cotton growers, they would create a solid lobby for tariffs and import prohibitions on raw cotton, yarn, and cloth. However, in striking this deal, they saddled themselves with the very high costs of Mexican cotton. Speculators profited handsomely by buying the domestic crop and then selling it to textile producers.33

Labor relations in the newly established textile mills were smoother than in the mining industry, where miners had a much longer tradition of defending their interests. In the textile industry management could generally impose its will, which included ten - to sixteen-hour shifts. Numerous religious holidays relieved this tedium. Since as many as one day in five was designated as a religious holiday, the Mexican government obtained papal consent in 1836 to reduce the number of holidays. Pope Gregory XVI issued a brief allowing Mexicans to work on all days except Sundays and sixteen other specified days.34

A few foreigners invested in manufacturing outside the textile sector. Juan Corbiere established a brandy (aguardiente) factory, two Englishmen opened a felt-hat factory, and Aristeo Mainet established Mexico’s first beer factory. Most industrial activity involved construction, producing textiles and beverages, and processing food, tobacco, and leather. The median size of the workforce at the five foundries reported in the 1853 census was only fourteen.35

As in the rest of Latin America, extremely low manufacturing productivity increased the cost of goods at a time when the population had little buying power. At the same time, the high cost of transporting goods over poor roads created many small markets. State and local governments continued to impose regional trade taxes (the alcabala), which further reduced market size. This served to protect local producers and fill local government coffers, but made economies of scale impossible.36

Little capital remained to finance industry, since it had been dispersed, exported, or invested in government securities. Merchants did not consider manufacturing as a profitable activity to invest in, Church lending was under liberal attack, and past failures and political instability deterred foreign investors. Foreigners were also loath to finance Mexican production that would compete with their own operations. Neither the liberal model, based on international trade, nor the conservative model—tariff protection and government financing for industry—were maintained for a sufficiently long period to permit success.37