While Mexico was only marginally involved in the Second World War militarily, it was heavily involved economically. The Mexican and U. S. governments worked closely to coordinate Mexican production for Allied war needs. Production rapidly increased as lead, iron, zinc, and copper mines operated twenty-four hours a day. Many non-working mines were reopened to meet soaring demand. Since mining was already largely under the control of U. S. corporations, it was easy to integrate mining into the U. S. war effort.2
The U. S. agricultural attache and the Mexican secretary of agriculture worked closely together to increase the production of fibers, vegetable oils, and other crops needed for military use. Between 1942 and 1943, 1.7 million acres were shifted from producing corn to crops such as cotton, henequen, and sesame. Corn production fell 23 percent. There was a concomitant shift in labor as agricultural workers accepted job openings in Mexican industry or departed for the United States. As a result of the decline in food-crop acreage and in the labor supply, there were severe food shortages.3
Wartime expansion of Mexican industry was limited not by a lack of demand or capital but by the lack of U. S.-produced machinery. Mexican industry was considered “low priority” by American war planners and thus it received limited allocations of scarce manufacturing equipment. Especially favored was industry that would aid the Allied war effort. In 1942, for example, the U. S. Export-Import Bank approved a $6 million loan for the construction of a steel mill in Monclova, Coahuila.4
A by-product of the war economy was inflation. Since production was directed to Allied military needs, consumers had less to buy. Even before Pearl Harbor, capital seeking a safe haven was flowing into Mexico at a rate of $40 million a year. Mexicans repatriated funds from the United States to escape war-time restrictions. Additional funds came from exports, U. S. tourists, Spaniards fleeing their civil war, and Mexicans working in the United States. As more money chased fewer goods, an inflationary spiral resulted. In 1944, inflation reached 33 percent.5
During the war, the government increased its role in the economy and changed economic priorities. An emphasis on industrialization regardless of social cost replaced Cardenas’s vision of prosperous peasants working their own land. To promote industrialization, the government tightened its control over labor, provided favored entrepreneurs with credits and other financial incentives, kept taxes low, and increased investment in infrastructure. Between 1941 and 1945, the government was responsible for 58 percent of all investment. Road building and irrigation projects absorbed 44 percent of this investment. Between 1940 and 1946, as a result of federal investment, the area irrigated increased from 293,200 acres to 882,300.6
Between 1940 and 1945, as a result of wartime demand and increased government economic support, the Mexican per capita gross national product increased by 4.6 percent a year, and exports increased at an annual rate of 11.7 percent. During the war years, there was an 850 percent increase in manufactured exports as Mexican textiles, chemicals, and processed food replaced production by the great powers, whose industrial capacity was diverted to military needs.7
Between 1940 and 1945, manufacturing production increased at an annual rate of 10 percent. Most of this expansion came from full utilization of installed industrial capacity rather than from new equipment. As additional shifts began working at existing plants, the number of manufacturing workers increased from 568,000 in 1940 to 938,000 in 1945.8
While these statistics pleased Mexican economists, the effect of these changes on the average Mexican was anything but pleasant. As agricultural production shifted to non-food crops, nutritional standards plummeted. Recognizing Mexico’s contribution to the war effort, the Allies supplied Mexico with what food they could. Military needs and transport shortages made this difficult. Grain was even shipped to Mexico from Australia, since it could be loaded on U. S. cargo ships that otherwise would have returned empty from the Pacific theater.9
High inflation, weak labor leadership, and a lack of government support for labor resulted in a 37 percent decline in workers’ buying power between 1940 and 1944. Wealth was quickly shifted to business owners.10
In 1943, a commentator noted:
To the great bulk of the Mexican people the world conflict is evident mainly in terms of eggs costing more this week than they did when laid by the same hen last week; of corn, the traditional mainstay of their simple lives, suddenly disappearing from the market and reappearing days later at undreamed-of prices. . . Banks, business firms, and industries are enjoying unprecedented prosperity, and speculators are thriving. Meanwhile the conditions of the masses steadily deteriorates, causing unrest and resentment.11
World History
