Chapter 2

Villages, Landlords and Businessmen

At the base of this predominantly rural society were the villages and small towns, where most inhabitants lived. The total population, estimated at around 6 million inhabitants at the end of the colonial era, rose to 7.5 million by the 1860s, and to 9 million by the end of the century. The cholera outbreaks of 1832–3 and 1850, and the on-going problems of typhoid, typhus, malaria and yellow fever, did not reverse overall demographic expansion.¹

Mexico City, whether under federalism or centralism, continued to be the economic pivot, as it had been in the colonial era, despite the rise of provincial centres. By 1850, the capital city had an estimated population of 170,000, far exceeding Puebla with over 70,000 inhabitants and 63,000 in Guadalajara. The infrastructure remained inadequate, although the six-day journey by stagecoach from Guadalajara to Mexico City – operated regularly from 1794 via Lagos, Guanajuato and Querétaro – might well have been considered rapid for the time.²

Low productivity and a questionable capacity for growth throughout the economy were central issues during the first fifty years following Independence in 1821. Furthermore, the problem of why growth, when it took place, did not lead to development remained unresolved.³ Agricultural wages continued to be low, a factor that reduced domestic purchasing power. Workers were often paid in merchandise rather than cash. Mineworkers, the most highly paid of the labour force, received part of the ore as part payment. The key position in the economy was held not by landowners as such, but by merchants, despite the Insurgency of the 1810s and the expulsion of the remaining Spaniards in 1829. Merchants often became landowners, partly for prestige and social status, and partly to diversify their investments. Similarly, they also invested in mining operations and manufacturing.⁴

Colonial legislation had sought to balance the interests of villagers, especially where they were of Indian descent, with those of the Hispanic landowners. As the population recovered and estates acquired increasing numbers of workers, the question of whether these workers had the right to apply for constitution as a pueblo arose. Hacienda owners thereby treated with caution the number of persons congregating on their properties. That explained the decree of Santa Anna’s last regime, on 30 July1853, prohibiting the foundation of pueblos on hacienda land without prior permission from the landowner.⁵

Private Properties

Landholding itself frequently proved to be a disillusioning and costly experience. Many landowners found themselves unable to cover their operating costs and fell heavily into debt.

The War of Independence hit the Bajío estates at the centre of the fighting. Between the 1820s and 1850s, the overall population of the Department of Querétaro, nevertheless, rose from 105,460 to 184,161 inhabitants. Of these, the Indian component was said to be 50 per cent. Material damage and shortage of capital led several of the established families of Querétaro that were confronting indebtedness to put their estates up for public auction during the lean decades of the 1830s and 1840s. These included the ‘Haciendas of Jacal Grande’ and ‘Lodecasas’, which belonged to General Julián Juvera, Governor of the Department of Querétaro in 1842–4. The principal beneficiaries of these sales were estate tenants or those leasing ecclesiastical or municipal lands. By so doing, they moved up a social rung. This proved to be the case in the districts of Cadereyta, Tolimán and Jalpan. The ‘Hacienda de Esperanza’ in the Tolimán district in the Sierra Gorda could not raise war levies in 1847 and owed debts to the sales-tax office between 1840 and 1846. In the San Juan del Río cereal district, the ‘Hacienda de Amascala’ faced repeated raids on its livestock by bandit groups, which had robbed a mule train lodging on its land. The ‘Hacienda de Balvareno’, owned by Doña Ana María Septién, of the famous city of Querétaro family, had failed to pay a sum of 2,000 pesos owing in tax for 1846 and 1847 on the grounds of severe flooding of the house, granaries and seed deposits late in 1846. The number of haciendas fell from ninety-five to seventy-nine, while the ranchos increased from forty-three to sixty-three between 1844 and 1855. Being an estate owner in those years had become a risky business.⁶

Yet, several proprietors could make substantial improvements to their properties. The ‘Hacienda de Bledos’, for instance, located south-west of the city of San Luis Potosí, illustrated this in the 1840s and 1850s. Even so, the estate remained burdened by mortgages to ecclesiastical foundations.⁷

The case of the ‘Hacienda de Bocas,’ in the same province, illustrated how further problems might arise. At mid-century, the owner of this estate was Francisca Pérez Gálvez de Obregón, who came from the celebrated silver-mining family of late eighteenth-century Guanajuato. The sister of the second Conde de Pérez Gálvez, she also owned the contiguous ‘Hacienda de Cruces’. Her brother had purchased these two estates in October 1844 for $182,868 and $178,863, respectively. Bocas totalled 73,000 hectares and had an estimated resident population (including wives and children) of between 5,000 and 5,500, of which the labouring population consisted of 1,514 adults, divided between resident and temporary labourers (‘peones’) and tenant farmers, including sharecroppers. The peones generally earned a daily wage of 1.5 reales.⁸ In the Liberal-dominated Constituent Congress of 1856, the San Luis deputy, Arriaga, secured the abolition of Santa Anna’s 1853 law on 30 May 1856. This opened the way for rural workers to appeal to the authorities for their formal constitution as pueblos with the concession of tracts of land taken from the haciendas. The legal representative of the Pérez Gálvez interest protested on 17 December 1857 that the request of some inhabitants on the lands of this state to form a villa or pueblo with a municipal council should be resisted as illegal. The Arriaga measure, however, was never published by the Governor of San Luis. After the Conservative seizure of power in January 1858, the government ordered all copies of the Liberal decree to be seized on the grounds that it undermined respect for private property. The San Luis Potosí State government’s decree of 7 April 1858 denied the attempt any legal effect.⁹ The matter did not end there, but continued to be rife, well after the restoration of peace in 1867.

A Society of ‘ Pueblos’

Each pueblo had internal hierarchies of authority and function, wealth differentiation and religious organisation. Differentiation between officeholders (‘principales’) and ordinary cultivators within the pueblos could sharpen into conflict, as could hostilities between dependent pueblos and chief towns (cabeceras). In the late colonial period and for part of the nineteenth century, community properties were the mainstay of the Indian pueblos. They provided funds for bad years and the means of paying for civil and religious functions. Many communities rented plots of land to private individuals under legally stipulated rental agreements. In the Mixteca zone of western Oaxaca, for instance, an increasing element of private ownership could be seen during the late colonial period, which helped to explain a more marked social stratification within the pueblos. In the district of Tlaxiaco, Spanish peninsular businessmen rented land for sugar plantation from communities in need of income to pay taxes.¹⁰

The official Liberal response to indigenous community identities can be seen in the Oaxaca Chamber of Deputies’ acerbic condemnation in September 1850 during the first period of Juárez’s governorship of the State (1847–52). This focused on the Zapotec village of Zaachila in the central Valley of Oaxaca, not far from the provincial capital, but the sentiments could apply generally. The deputies’ irritation at the persistence of the villagers in clinging to traditional ethnic and communitarian identities was evident. Reformers placed their hopes in the future efficacy of secular education in the Spanish language. The ‘sad condition’ of Zaachila resulted from lack of education and adherence to traditional customs.

The deputies asked themselves how it might be possible to ‘destroy these old and pernicious habits’.¹¹

Although this barrage of words did not presage immediate action, it did reveal the discrepancy between villagers’ perspectives and reformers’ objectives. The latter aimed to create citizens, subject to laws agreed in elected bodies, in a republican and liberal representative system. Education by lay teachers in primary schools in the rural areas was their chosen instrument. That, in turn, would depend on the State government’s ability to find skilled teachers fluent in Indian languages, and then pay them a living wage. They would be teaching not only basic literacy and skills but also imparting the Liberal ideology. A scale of resistance might be expected, not the least because children would be required by their parents and the community to play their part in the labours of the fields.

Liberal hostility towards indigenous institutions derived from their overall objective of creating one Mexican nation. The Liberals regarded Indian identities as serious obstacles. Such views carried right through the 1860s as well. Francisco Pimentel, Mexico City’s prefect in 1865–66 under the Second Empire, expressed this very well:

While the naturales remain in their present condition, Mexico cannot aspire to the level of a nation in the proper sense. A nation is a union of men who profess common beliefs, motivated by the same idea and with the same objective.

According to Pimentel, ‘the system of community and isolation needs to be totally abolished’. In his view, Indian villages spoke Spanish only when they were obliged to – nearly three-and-a-half centuries after the arrival of the Conquerors.¹²

Villages usually had their own type of religious organisation in the form of lay brotherhoods known as cofradías, officered by an elected mayordomo. Edgar Mendoza suggests a synthesis of European Christian practice and Indian traditions in these bodies. In the Mixteca, the predominant Dominican Order organised cofradías dedicated to Our Lady of the Rosary. Acquisition of properties of different kinds acted as a guarantee of access to funds in times of scarcity in the community. Later cofradías often originated from sums of money set aside by Indians on their death for ‘pious works’, that is prayers and worship for their souls in the afterlife. Sometimes, such capital took the form of cattle possessed by the cofradía.¹³ On 20 October 1859, when Liberal State Governor, Miguel Castro, ally of Juárez, ordered that cofradía lands and livestock should be transferred from community ownership (henceforth illegal under the Reform Laws) to the residents of each pueblo, he met with resistance. Nevertheless, on 13 February 1861 and 25 March 1862 he reiterated the order that all property still held in common should be converted into private plots.¹⁴

Karen Caplan compares and contrasts indigenous society in Oaxaca and Yucatán, stressing that in the former State, indigenous and non-indigenous society shared a common culture, whereas this was not the case in the latter. She argues that the impact of Liberal measures in each of them differed radically. The elimination of the legal distinction between Indians and the other components of the population after Independence had a greater impact in Yucatán than in Oaxaca, where there was considerably less Hispanic pressure on land. In Oaxaca, the State authorities were prepared to compromise with the Indian majority over basic Liberal principles, despite the Liberals’ belief that indigenous communal institutions conflicted with their idea of progress.¹⁵ Even so, private business interests sometimes supported by the Liberal authorities in the city of Oaxaca did on occasion sharply conflict with communities, in the case of the Zapotecs of the southern Isthmus of Tehuantepec (see Chapter 9).

In Yucatán, between 1821 and 1839, creole Liberals sought to reshape the new State in their own interests virtually independent of the weak, divided and unstable governments in Mexico City. The State Constitution of 1825 reflected these objectives by putting land under private ownership and to commercial use. In those early decades, the basic obstacle continued to be the absence of a marketable product to sell. The possible exception was sugar, developing from the 1820s and 1830s on the plantations of the south and east, which were becoming new areas of demographic growth. The 1825 State Constitution declared terrenos baldíos (‘unused lands’) to be ‘public’ property, not community property. The proceeds of sale would accrue to the State not to the individual community, which might be making regular use of them. Who actually owned these theoretically unoccupied lands had already become an issue in the late colonial era. There were few buyers, however, in the early post-Independence period.¹⁶

Provincial Business Groups

Many local beneficiaries of the colonial order were able to preserve and extend their positions and interests through access to elective office. This proved to be the case in the State of Querétaro, for instance, where the landed and business families – such as the Septién, Samaniego and the López de Ecala, prospering during the eighteenth century through woollen manufacture linked to northern livestock estates – maintained their social position after Independence.¹⁷

The two principal nexuses attracting business investment in the mid-nineteenth century were the traditional Puebla-Veracruz nexus and the Guadalajara nexus. The Puebla-Veracruz nexus enabled the city of Puebla, dominating a largely Indian region and also the focus of a separate ecclesiastical establishment, to assert its distinctiveness from Mexico City. While Puebla estates fell into debt to ecclesiastical sources of credit and, in the late colonial era, lost their grain market in Havana to rival suppliers in the United States, the city of Puebla flourished as an industrial centre. From around 1740, Puebla became one of New Spain’s principal manufacturing cities, with cotton supplied from the Gulf and Pacific coasts. In the mid-nineteenth century Puebla produced around half of Mexico’s cotton textiles. The business elite of Puebla was led by dominant family circles, such as the Haro and the Furlong, already evident in the later colonial era. After Independence, their members also moved into leading administrative, ecclesiastical and military positions. Constitutional systems facilitated access to national and State congresses and the Puebla city council. From such ‘family power groups’, Antonio Haro became Secretary of Finance on three occasions, as we shall see. The mill and bakery-owner Patricio Furlong and his brother, Brigadier General Cosme Furlong were Governors of Puebla in 1829–30, and 1834 and 1854, respectively, regardless of the differing orientation of regimes.¹⁸

Cottons and other manufacturing attracted business immigration from Spain and internal migration from the Veracruz hinterland, which had always been closely linked to Puebla, particularly in the case of Orizaba and Córdoba. The Garmendia family, for example, had their business interests in Córdoba, a centre of tobacco production. They were connected to the main estate owners and military-politicians in the State of Veracruz and were related to the Escandón family. Pablo Escandón, originating from Asturias, took up residence in Orizaba and married into the Garmendia family. He then transferred his main business interests to Puebla, where he became a member of the city’s Consular Deputation in 1818. The Garmendia owned the ‘Hacienda de San Antonio’ in the Tepeaca village of Chalchicomula.¹⁹ Another merchant of Spanish origin, José Domingo Velasco, began as a Veracruz importer and thence moved into Puebla industry. In collaboration with Andrés Vallarino and Ciriaco Marrón, who specialised in securing cotton from the growers mainly in the Veracruz district of Tlacotalpan. Velasco’s ‘El Patriotismo Mexicano’ mill became the largest in the State, which marketed throughout the Republic. It continued to make profits throughout the 1850s and was still operating in the 1870s.²⁰

The most celebrated of the businessmen operating in the mid-nineteenth century was Pablo’s son, Manuel Escandón (1808–62). With his brother, Antonio, a native of Puebla, he owned textile manufactories, two sugar estates at lower altitudes, and in the 1830s and 1840s became the most famous of the agiotistas, who dominated financial negotiations during the centralist regime. We shall encounter him in this context in the following chapter. Escandón owned both a textile workshop in Guadalajara and also Mexico’s largest factory, the Cocolapam in Orizaba, bought in 1848. When the centralist regime re-established the colonial Tobacco Monopoly in 1837, he became one of the partners of the company, and in 1849 he took over management in Mexico City in association with Nicanor Béistegui, Miguel Bringas (another agiotista) and the Manning and Mackintosh Company. In the same year, a consortium consisting of Escandón, Béistegui, Edward Mackintosh and two others took over the Real del Monte Mining Company from the British owners. One of Escandón’s sisters married Ignacio Amor, a Spanish merchant, investor and landowner, who had arrived in Veracruz after the expulsions of 1829. Amor owned the ‘Haciendas de Monte Blanco’ and ‘Potrero’ in Córdoba and acted as agent for the tobacco growers of Córdoba and Orizaba. Between 1849 and 1857, Escandón, who had operated a stagecoach line from Veracruz to Mexico City in 1833, promoted more up-to-date methods of transport, including the railways. Antonio Escandón saw the completion of the Veracruz to Mexico City railway. The brothers stood out as the most enterprising and well-placed merchant-financiers in Mexico. Their political preference was for centralism – we usually find them supporting Santa Anna during the 1840s and 1850s and, in Antonio’s case, the Second Mexican Empire in the mid-1860s, in alliance with other businessmen in Mexico City and Puebla.²¹

In Puebla, Estéban de Antuñano took the leading part in the promotion of entrepreneurial spirit, advocating the protection of Mexican industries and abandoning the free-trade liberalism of Zavala and his predecessors of the freer-trade years 1824–37. Antuñano, born in 1792, also originated from Veracruz. We may describe him as an ‘economic nationalist’. In concert with Alamán, Antuñano envisaged a mechanised textile industry, rather than the old, prison-like woollen workshops (obrajes) of the colonial era or the diffuse home-industries of cotton textile artisans. He joined with other owners of water-powered factory looms to press for the prohibition of the import of foreign-grown cotton and cotton textiles into Mexico, in order to stimulate national production. Between 1836 and 1846, Antuñano published some fifty pamphlets disseminating these ideas. In 1843 alone, he exchanged twelve letters on the subject with Santa Anna – at that time nominally president – arguing that economic development depended upon political stability, perhaps hoping that Santa Anna might provide it. Antuñano correctly argued throughout his career that Mexico’s fundamental problem remained the disarray of its finances. In 1846, he called for an ‘industrial insurrection’ to complement political Independence. Antuñano’s ‘La Constancia Mexicana’ factory in Puebla expanded from June 1837 until late 1842. During this time, it produced a total of 1.2 million pieces of cloth (‘mantas’), valued at 9.5 million pesos.²²

Many problems beset this first attempt at industrialisation in Mexico, but the constant factor proved to be the shortage and high price of the raw material. This made the issue of permission for, or prohibition of, the import of cotton from foreign sources – mainly the southern States of the United States – a perennial issue in the years from 1837 to 1854. In Mexico, raw cotton originated from two main areas of cultivation: the Veracruz Gulf coast, with the river port of Tlacotalpan at the core, where Marrón had the monopoly of supply after 1842; and the Pacific shore zone from Colima down to Oaxaca, including several areas within the State of Puebla, notably the district of Tlapa, which (as we shall see in Chapter 7), would be a centre of unrest in 1844. In the city, the handloom artisans, fearing competition for supply, viewed this issue in a different light from the water-powered factories. The Veracruz zone had mainly fallen under the control of three planters, Marrón, Velasco and Vallarino, who established a monopoly of supply to Puebla. This encouraged several factory owners to argue for permission to import foreign cottons. By 1842, Marrón, a rival of Antuñano, had become one of the richest men in Puebla and presided over the twenty-two-man Junta de Industria in the city. Cotton harvesting in the Veracruz zone never ceased to be erratic, and price levels reflected this. In 1843, for instance, production fell to half the level of 1841, but 1844 rendered a record cotton crop. Yet, also in 1844, the Pacific zone crop failed entirely. In 1846, high cotton prices created a scarcity among textile producers in the city of Puebla. After the outbreak of war with the United States and the imposition of a blockade of Mexican ports, cotton production in the southern Puebla district of Tlapa received an unexpected boost. The market for Mexican cottons, however, remained limited. Inadequate, irregular and costly raw-cotton supply remained the central obstacle preventing the cotton textile industry from lowering the price of its product.²³

In effect, the repeated difficulties facing the nascent textile industry caused the first process of industrialisation in Mexico, beginning in the 1830s, to stall by 1842–3. However, production continued in Puebla, and several other centres, notably Guadalajara and Querétaro, became significant producers of cottons. Even so, the problem of raw-material supply was not resolved until the development of the northern centre of cotton production, principally in the Río Nazas region, known as the Comarca Lagunera, in the States of Coahuila (Torreón) and Durango (Tlahualillo) from the 1880s. In the 1840s, Veracruz was the production zone closest to the factories in Puebla. Cotton production could not keep pace with demand in the industry, which was obliged to import foreign-grown cotton. The Veracruz and Oaxaca juntas, however, wanted a quota to be set for foreign imports. Alamán favoured importation but under conditions suitable for Mexican agricultural production.²⁴

In the earlier phase, Puebla’s industrialists were, in effect, merchants, not dissimilar from their counterparts in the late colonial period fifty years previously, who, in response to market trends, diversified investments into industry, from the sources of raw material to the processes of production and distribution. This hardly represented a major shift in strategy or orientation. Nevertheless, the foundations for future industrialisation, beginning with a mechanised textile sector, were laid from the 1830s to the early 1850s. Even then, the problems of limited demand in a society in which the informal sector played such a large part, and deficiencies in the infrastructure of supply still had to be overcome.²⁵

Alamán had been a pioneering figure, strongly supporting the establishment of the Credit Bank (Banco de Avío) in 1830 for this objective. In the early 1840s, Alamán became Director General of Industry. His reports of 1842, 1843 and 1844, drew attention to Mexico’s technological backwardness and lack of enterprise.²⁶ He defended the Credit Bank in his report of 1843 as a major contribution to the diversification of the economy. Furthermore, as a complement, Industrial Commissions (Juntas de Industria) were established in Guadalajara on 18 February 1843 and in Puebla on 24 March 1843, for the purpose of coordinating with central government and compiling statistics on the agricultural and industrial wealth of the Republic. Prominent merchant-financiers, Manuel Olasagarre and Joaquin de Haro y Tamariz, presided over the respective commissions in the two cities.²⁷

Alamán listed fifty-nine cotton textile factories in the Republic by December 1843, twenty-one of which were in Puebla, seventeen in Mexico City and eight in Veracruz. Among the Puebla factory owners were Luis Haro, Cosme Furlong and Felipe Codallos, each owning one, and Antuñano with two.²⁸ Despite earlier expansion, the number of enterprises in the Republic fell from sixty-two in 1844 to fifty-five in 1845. The tariff of 1846, accordingly, prohibited the import of all types of cotton textile. This, however, proved to be a risky course of action, in view of the generalised loss of the cotton crop in Mexico in that same year. Tariffs, furthermore, only encouraged contraband import of textiles.²⁹

Guadalajara, with developing wheat-producing estates in the growing city’s orbit from the later eighteenth century, also became a major textile centre in the nineteenth century. As in Puebla, the newer sector complemented and rivalled the family-based artisan industries operating since colonial times. Even so, the guilds were in decline and large-scale merchants continued after Independence to extend their influence over the processes of raw-material supply, production and distribution through the availability of capital from such merchants as the Villaseñor and Cañedo families. Artisans complained that they lost out to these suppliers of capital.³⁰

The Guadalajara nexus stretched northward and westward across the mountain ranges to Durango and along the Pacific coast into Nayarit, still a largely Indian zone, with the port of San Blas, and the mining zones of Sinaloa, with the port of Mazatlán. Regions further north would enter the picture principally after 1867.

The merchants fully integrated with the Guadalajara landed families to form an integrated elite. Long-established families, several of Basque descent, dominated landholding, such as the Vizcarra, the Porras Baranda and the Basauri. Francisco Javier Vizcarra, awarded the title of Marqués de Pánuco by the Spanish Crown, had made his fortune in silver-mining at the Rosario mines in Sinaloa, which also provided the wealth of the Cañedo family. The Vizcarra family became owners of grain and livestock haciendas, with contracts to supply the growing city of Guadalajara with flour and meat. The Basauris, major wheat producers, acquired the important Hacienda de Atequiza for 100,000 pesos in 1784, the value of which increased to 160,000 pesos by the mid-1790s. Atequiza, situated to the north of Lake Chapala, was strategically located to supply the provincial capital city. The fourth generation of the Basauris, however, had been unable to maintain the wealth of previous generations, and financial difficulties led to the sale of the estate to a newcomer.³¹

This was Pedro Juan Olasagarre, who bought the estate along with the Hacienda de la Huerta. Olasagarre and other Central or South American merchants were taking up residence in Guadalajara at the end of the 1810s and in the 1820s.³² One of the explanations for the growth of Guadalajara during the later 1810s, and its attractions for enterprising men with capital at their disposal, may have been the opening of the small port of San Blas in 1812. That was certainly one of the attractions for merchants such as Olasagarre, who had been trading from Jamaica across the Isthmus of Panama up to the western coast of Mexico. In cooperation with British businessmen, he took up residence first in San Blas, then subsequently abandoned the coastal heat for the more congenial climate and far broader contacts of the city of Guadalajara. Newer arrivals, like Olasagarre, took over the interests of the late colonial peninsular merchants, at first challenging the older families and soon marrying into them and binding themselves closely with them and Mexico City merchant-financiers in a range of activities, which included lending to government, financing industrial enterprises, maintaining landed properties and trading. In August 1828, for instance, Olasagarre took over the Hacienda de Huejolotitlán, which had traditionally belonged to the Villaseñor family. The Olasagarre kept it for eleven years and then sold it in 1839 for 130,000 pesos.³³

The Mining Sector

In many respects, the century from the 1780s into the 1880s was one of difficulties at many levels, overall economic decline and aborted attempts at recovery. Not even new technology and outside investment succeeded in rehabilitating the silver mines. The imbalances between the agricultural and the mining sectors, on the one hand, and the external and the internal markets, on the other, remained. The colonial-era paradox of a silver-producing economy with a shortage of circulating medium continued well into the nineteenth century. Eighteenth-century New Spain had been the world’s principal producer and exporter of silver. Only the collapse of the world price of silver in the last quarter of the nineteenth century altered this over-specialisation.³⁴

New Spain had coined more than 27 million pesos in 1804 and 1805 but only 8.6 million by 1815, after four years of insurgency. In the years between 1821 and 1826 low levels continued, from 9.4 million to 8.2 million pesos. Some recovery could be seen between 1848 and 1852, rising to a peak of 19.4 million pesos in 1850. Relatively high levels were sustained, despite deepening political turmoil between 1855 and 1859, with a peak in 1858, the first year of the Civil War of the Reform, at 20 million pesos coined. By 1841– 50, gold and silver coinage at 159.3 million pesos had recovered from the 1823–30 level of 80.9 million pesos, although it still remained considerably lower than the 253.1 million pesos for 1796–1803. The monetary crisis, thereby, continued into the 1840s. Sustained recovery, however, had to wait until the later 1860s and 1870s.³⁵

Technical problems within the mining sector prevented any spectacular expansion of silver production and exporting. Flooding and drainage of mines required effective pumping equipment and high capital overheads. The ‘Valenciana’ mine, which had yielded so much profit to the Guanajuato mine-investors in the late colonial era, lay in a pitiful condition. The frustration of the British companies and their Mexican partners was recurrent from the 1820s into subsequent decades. Through the auspices of Alamán, British capital began to invest in Mexican mines, notably in 1824–6. The United Mexican Mining Association, of which Alamán was president, had an initial capital of £1.2 million, operated the Real del Monte Mine in the State of Hidalgo and had other operations in the States of Mexico, Guanajuato, Jalisco, Zacatecas and Chihuahua. In March and July 1824, respectively, the original operators – the Conde de Regla and Tomás Murphy of the Veracruz merchant family, plagued with insoluble drainage problems since 1801 – handed over the working of their mines for a twenty-one-year period to a British joint stock company established in London with £200,000 initial capital divided into 500 shares. The contract included the lead mines at Zimapan, seventy-five miles distant. The founders and shareholders hoped to make great profits. Even so, the seven haciendas de beneficio, for reduction processes, lay in ruins.³⁶

From its inception in 1555 until the 1890s, the Mexican mining industry used the amalgamation process for separating silver from the ore. It relied on imported mercury. Although the prime supplier in colonial times had been the Spanish mercury mines at Almadén, Independence from Spain did not alter that fundamental economic relationship. Despite efforts to discover alternatives in Mexico, none proved to be satisfactory. Even so, the Spanish deposits were also in crisis after war in the peninsula and a dearth of investment throughout the 1820s. In 1835, the House of Rothschild of London and Paris took over the monopoly of the Almadén mines to complement its control of the Idrija (Idria) mercury mine, since 1831, in Slovenia. The world price, determined on the London Stock Market, doubled to 100 pesos per hundredweight (‘quintal’) in comparison to its 1824–31 price in Veracruz. The Real del Monte Company searched for mercury deposits in Mexico (although with little success) in order to circumvent the Rothschild monopoly.³⁷

Steam engines for drainage had to be imported from England, shipped across the Atlantic to Veracruz, and then transported uphill into the Mexican interior. The Real del Monte Company brought nine steam engines by pack animals to the mining zone (at 9,000 feet above sea level) for reassembly. With the deterioration of public order in Mexico during the 1840s, banditry and rebel bands subjected this transit to repeated robbery. Naval blockades by France in 1838–9 and the United States in 1846–7 further interrupted transit.³⁸

The opening of the Nuevo Almadén mercury mine at Santa Clara County in US California, in the late 1840s broke the Rothschild monopoly and led to a significant lowering of the price of mercury after 1851. It provided relief for Mexican silver producers, although it never exceeded Almadén as the principal supplier.³⁹

The Guanajuato mines demonstrated a marked recovery during the 1840s and the first part of the 1850s. The total mintage from all the Guanajuato mines in 1840–9 rose to an annual average of 5 million pesos, rising to 6.3 million pesos in 1850–9. This latter sum from the 1850–9 period exceeded the late colonial annual average for 1800–9, which had reached 5.34 million pesos. The bulk of this mid-nineteenth-century expansion took place at the La Luz and San José de los Muchachos mines. The former had been in a bad condition during the 1820s and early 1830s and began to recover only after 1835. Shares rose rapidly in value and in 1848 the mine was in full production. Even so, decline set in during the mid-1850s. Low operational costs helped to keep profits high, with the result that a great deal of money circulated in the vicinity of the expanding mines. Margaret Rankin estimates profits accruing to shareholders as high as 17 million pesos from the two mines between 1843 and 1859.⁴⁰

The interesting question is, where did that money go? At the present stage of our historical knowledge, we cannot answer this question with any precision. A few thoughts on the subject may suggest where we might investigate. First, we need to know how much or how little of the profits went into re-investment in the mining sector; second, one suspects that much of the profit, if not the greater part, went into land – into purchase, extension or increased production for accessible markets. In the Sierra Gorda and its contiguous areas, evidence suggests expanding estates and local community responses during the 1840s and early 1850s, precisely at the time of the revival of the Guanajuato mines. It would be tempting to assume a connection between these phenomena, although we are in no position, to confirm or deny this.

The British Real del Monte Company yielded only small profits in 1837 and 1838 and again in 1842, 1843 and 1848. It was dissolved in 1849, since every other year saw losses. In twenty-five years, the company lost 7.5 million pesos overall in its Mexican operations. Drainage remained a serious issue throughout, rising to the annual cost of $90,000 by 1847. The amalgamation process presented a major problem. The company tried to prospect for mercury deposits near the town of El Doctor in the Querétaro Sierra Gorda in 1837, but nothing came of it. Even the fall of the mercury price by 1849–50 could not save the company. Ironically, the Rosario mine, worked by the Mexican successor company during the 1850s ‘yielded one of the most spectacular bonanzas in the history of the Real del Monte-Pachuca district’, with a profit of $3,898,659 by 1859 and good prospects for the foreseeable future.⁴¹

The mining districts of the State of Mexico similarly experienced setbacks. The restoration company imported a Cornish steam-powered machine to assist in drainage at the El Oro mine. Francisco Murphy, son of the Veracruz merchant and brother of the Mexico City businessman Tomás (the younger), became the principal investor in this company, operating in the 1840s from Tlalpujahua, where he intended to establish, under his own rules, a monopoly of production. Murphy, involved in mining since 1839, was closely associated with leading businessmen, with Santa Anna, back in power in 1841–4, and Governor Riva Palacio, Minister of Justice and Minister of Finance in 1844–5 and Minister of Finance once again in 1848, both during Herrera’s presidency. Murphy also resided at the mine, broker and operator at the same time, maintaining business contacts with Mexico City merchant-financiers, such as the Martínez del Río Company, and leading agiotistas, such as Manuel Eduardo Gorostiza and Ewen Mackintosh. The latter and the House of Manning and Marshall acted as his financial guarantors.⁴²

There were also signs of movement in the Oaxaca mining sector. A group of foreign investors, acting in concert with local mine operators and investors, emerged in the mid-1830s, several of them British, such as Diego Innes, Juan Sadler, Benito Hampshire, the Fenochio brothers from Gibraltar and, in the 1850s, Constantino Rickards. In 1836, fifteen shareholders with 100 pesos each established the Mining Company of Oaxaca, with the mining deputation leader Paulino Benavides at the head, and including Sadler, Hampshire and the Tehuantepec dye merchant José Santiago Hernández.⁴³ Even so, the most well-known properties continually ran into financial and production difficulties in these years. In 1846, Innes partnered with Pascual and Andrés Fenochio to manage three haciendas de beneficio in the Yavesía mining zone of the northern sierra district of Ixlán. The three of them took over Sadler’s interests for a five-year period after Sadler returned to Britain in 1850. The contract was to be renegotiated for a further five years starting from 1 January 1851.⁴⁴ Innes arranged, before the Justice of the First Instance of Santo Tomás Ixtlán, to rent lands from the alcaldes of the pueblos of Lachatao, Amatlán and Yavesía. The period would be for six years from 1 April 1852 at the rate of 60 pesos annually.⁴⁵ The two Germans, Carlos Jürgensen and Guillermo Haaf, transferred the unproductive ‘Castresana’ mine in Ixtlán to Sadler at minimal price in 1843.⁴⁶ By 1845, Hampshire had run up considerable debts at the metal-refining ‘Hacienda de los Cinco Señores’ to the total of $18,646, of which $12,182 was owing to Sadler and Innes, his main investors.⁴⁷

Miguel Castro had married Doña Jacinta Meijueiro, daughter of another sierra Liberal family. A mine operator at San Miguel Talea in the Villa Alta district, he arranged with the Sadler Company to develop the metal-refining ‘Hacienda de Santa Gertrudis’, his wife’s property in Talea. In 1845, when the Sadler interest passed to the House of Innes, she owed her investor $5,853, which if not paid promptly would lead to the sale of the estate and mines at the best market price, along with her other properties in Talea.⁴⁸

Not until the 1870s and 1880s, with the construction of railways, did a national market that was also linked to the international market, and to the United States in particular, emerge. The railway line connecting Mexico City with the port of Veracruz was not opened until 1873, some forty years after the first concession. The long recession had meant that funds were unavailable for public works on infrastructure projects designed to improve communications in a regionalised economy. Expansion of the textile sector remained uneven from mid-century. The 1845 total of fifty-six cotton textile factories dropped to forty-seven in 1853, perhaps a consequence of post-war economic contraction combined with rural unrest in the raw-material zones. Furthermore, few were large units of production. Civil strife in 1858–67 further stunted growth. When by 1878–9, the number grew to ninety-nine, most factories were small, with an average of 2,000 spindles. Not until the 1890s did cotton textile manufacture become transformed from small-scale firms responding to localised markets into large firms oriented towards a national market.⁴⁹