Mexico and the United States: Ambivalent Vistas

7. Soldiers, Priests, and Lords of Land and Industry

138 7 Soldiers, Priests, and Lords of Land and Industry Once’t there was a Bolshevik, who wouldn’t say his prayers, So Kellogg sent him off to bed, away upstairs; An Kellogg heerd him holler, and Coolidge heerd him bawl, But when they turn’t the kivers down he wasn’t there at all. They seeked him down in Mexico, they cussed him in the press. They seeked him round the Capitol, and ever’where I guess. Parody of a Popular Poem, 1927 World War I intensified the penetration of developing states and societies by the colonial powers. The world economy brought these countries into an expanding global network of commerce, trade, and Western ideas. Yet, in many instances, this contact provoked indigenous reactions that were highly nationalistic and anticolonial. Mohandas Gandhi’s passive resistance movement to British rule in India was only one of many worldwide rebellions that were known collectively as the “revolt against the West.” Others occurred or were brewing in Africa, Egypt, China, Indonesia, Tunisia, Turkey, and Mexico. In Mexico the counterpart to Turkey’s Kemal Ataturk was Plutarco Elías Calles. In the early and mid-1920s, he was a revolutionary nationalist who, like Carranza in 1918 and Lázaro Cárdenas in 1938, asserted that Mexico was equal in sovereignty to the United States and that Mexico had a right to control its own internal resources.1 The United States confronted a revolutionary Mexico as U.S. relative power in the interwar years vis-à-vis Europe and the USSR was declining . From a relative strong position in the early 1920s, the United States went into a depression in the 1930s that did not end until the resurgence of the wartime market of World War II. As noted, after World War I, the United States was the world’s greatest financial and creditor 139 Soldiers, Priests, and Lords of Land and Industry nation, holding huge stocks of gold and having a domestic market that allowed massive economies of scale by giant firms. It was the largest producer of manufactures and foodstuffs. Yet the financial collapse of 1929 and the subsequent depression injured it much more than any other advanced economy. By 1933 the nation’s GNP had fallen to half that of 1929, the value of manufactured goods was one-quarter of the 1929 figure, exports had decreased by over 69 percent since 1929, and fifteen million workers were out of jobs. After the panic of 1937, the U.S. share of world manufacturing output was lower than any time since 1910. Although the U.S. economy had tremendous potential, by the late 1930s it was greatly underutilized. Only the giant rearmament programs initiated by the army and navy in 1940 and afterward improved the economic situation.2 Mexico experienced the effects of a world depression three years before the Wall Street crisis of 1929. The crash came early, hit hard, but was over by 1932. Between 1926 and 1932 demand declined, output fell, profits disappeared, and investments evaporated. Political and social unrest paralleled the economic situation with unemployment, labor strikes, peasant revolts, increased emigration, and army rebellions occurring between 1927 and 1929. Along with the economic problems, the political costs of law and order placed heavy demands on the federal budget, especially for military expenses. Mexico possessed a fragile economy that relied on exports to the United States and a mining and hydrocarbon industry to drive it forward. Traditionally, exports had fueled imports into the consumer market and had brought revenues to the government. In 1920 exports peaked. Then in 1926 they began to decline, and after that date they fell drastically, causing a similar drop in government income.3 Oil was the first product to cause problems. Political unrest and rising production costs in Mexico, plus the discovery of easily tapped oil deposits in Venezuela, led to a contraction in output. By 1927 Venezuela ’s oil production was surpassing that of Mexico. As of 1932 Mexico was producing only 18 percent of what it had generated in 1922. Duties on petroleum, which represented one-third of all government income in 1921, had fallen to one-eighth of national earnings by 1927.4 140 mexico and the united states The contraction in the export sector was not confined to the oil industry . In 1926 the world market price of silver dropped, and Mexican silver exports collapsed. Lead, zinc, and copper followed...