Cardenism

The Crisis of Cardenismo
Author(s): Albert L. Michaels

Source: Journal of Latin American Studies, Vol. 2, No. 1 (May, 1970), pp. 51-79
Published by: Cambridge University Press
Stable URL: http://www.jstor.org/stable/156239 .
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J. Lat. Amer. Stud. 2, I, 51-79 Printed in Great Britain 51
The Crisis of Cardenismo
by ALBERT L. MICHAELS
By April 1938, Lazaro Cardenas had altered the course of modern Mexican
history. The hacienda system had virtually disappeared to be replaced by
smallholdings and by collective and semi-collective ejidos. The church-state
quarrel, cause of so much bloodshed in the I920S, had largely subsided; the
Catholic Church had supported the government against the foreign oil com-
panies, even seeking to help the government collect money to pay for the
nationalization. Both the nation's agrarian and urban workers had formed
powerful, well-organized unions ready and able to defend their members'
newly won gains. Most important to subsequent developments, however,
was the government's expropriation of the foreign oil companies in March
of 1938. The oil companies had defied every twentieth-century Mexican
government; nationalization temporarily united Mexicans as never before in
the nation's history. Although these accomplishments, especially the land
reform and oil expropriation, established Cardenas's credentials as the most
radical of modern Mexican presidents, his subsequent behaviour has made
many, especially on the extreme left, question his sincerity.
Expropriation of the oil industry served as the climax of Cardenas's
radical programme. Thereafter, the government began to follow a more
moderate course; and despite pressures from the mining and electrical
workers, there were no more expropriations.The government sought to dis-
courage labour conflicts. Also, land reform decreased appreciably; and the
government created an Office of Small Proprietors to protect small land-
owners from further seizure of property by the peasants. The most signi-
ficant move to the right occurred when the PRM chose Cardenas's successor
in I939. Led by Cardenas, the official party passed over the distinguished
radical, General Francisco Mugica, in favour of the little-known Secretary
of War, General Manuel Avila Camacho. Elected in I940, Avila Camacho
brought the radical phase of the Revolution to a close.
In 1939 the party's selection created little controversy, but later the
anguished left accused Cardenas of betraying the Revolution. 'The Ballad
of Francisco Mugica' showed the Mujicista resentment towards Cardenas:

52 Albert L. Michaels
Soon it was thirty-nine.
The Presidentialrace was on;
And Mugica,the candidate
From the left rankswas drawn.
It was everybody'sguess
He'd be the man to get the nod-
To keep the Left movementgoing on.
But a case of shaking knees
Causedthe boss to make sure-
That his successorwould turn out to be
An out-and-outrightist.
So he changedhis course,
Becausethe chief wanted it that way.
Mugica was eliminated-
Sacrificedby a friend.'
The mourners at Mugica's funeral in I954 further expressed this same
alienation. They would not allow Cardenas to speak and pelted him with
refuse.2 This widespread resentment of the Mexican left was naive and
unjustified. There had been no betrayal.
Cardenas had acted, not to destroy the Revolution but to preserve his
government's accomplishments. Furthermore, he did not act alone, but
under pressure from his friends and allies. Many Cardenistas had grown
rich since I934; determined to consolidate their power, they pressed Avila
Camacho upon Cardenas and the party. The wealthier Cardenistas-includ-
ing many army officers, state governors, and friends of the incumbent-did
not want the Revolution to gravitate towards socialism. Their interests
coincided with those of their more radical leader. Cardenas had created
hundreds of ejidos, a state petroleum industry, national railroads, labour and
peasant unions, as well as a new political party. Most of these innovations
remained unproven and controversial. A civil war or prolonged financial
crisis stemming from further reforms might ruin everything. Cardenas's
reforms had provoked hatred and anxiety among small landowners and the
growing urban middle classes. A new president would be required to pacify
these factions as well as worried foreign investors, or the economy might
completely collapse. These coincidences of the vested interests of the Betetas,
Avila Camachos, Padillas, and most of the Cardenas elite, together with
' Corrido de Francisco Mugica' in Armando de Maria y Campos, La revolucion mexicana a

traves de los corridos populares(Mexico, D.F., 1962), pp. 227-30.
2 The most recent
person to raise the issue of the rejection of Mugica's candidacy in I939
was the novelist Magdalena Mondragon in his novel Cuando la revolucion se corto las alas
(Mexico, D.F., I966). Also James and Edna Wilkie's oral history interviews with Jose
Muioz Cota, Mexico City, 27 Jan. I964.

The Crisis of Cardenismo 53
those of Cardenas himself, produced the candidacy of Avila Camacho. As a

moderate General, he appeared just the man to preserve the various gains
of the previous six years.
The Economic Crisis

In 1940 the national economy was squeezed between falling exports and
rising imports. Mexican workers' real wages had declined sharply during
the Cardenas administration, but in later years many experts have credited
the policies of the Cardenas government with the rapid development of the
Mexican economy after I940. The vast distribution of land and the wide-
spread public works programme, condemned by many as economically
harmful in the I930s, actually helped to create the internal market necessary
to industrialization.3 Yet in 1939 there was little or no hope of convincing
any native or foreign investor that Mexico's government was not destroying
the economy and creating a communist state. Mexican capitalists zealously
hoarded their wealth; they chose to invest abroad to the extent that the
flight of capital from the country assumed gargantuan proportions. Simul-
taneously, direct foreign investment in Mexico decreased alarmingly after
the oil expropriation.4
This crisis was incurred, to a large measure, by nationalization of
the petroleum companies. So many economic problems resulted that a
revamping of government programmes became imperative. The expropria-
tion also precipitated a contemporary financial crisis that put a damper on
continued social reform. Prior to 1938, Cardenas had been able to carry out
a revolutionary programme without heeding the fine points of international
monetary rules. The Mexican government had financed its reforms by
borrowing from the Bank of Mexico, thus Mexico's foreign debt was not
appreciably increased. At the same time the exchange needs of the private
sector were reduced by such methods as devaluation, abandonment of
the gold standard, and tariffs. Increased revenues from mining, oil and
minor exports supplied more than ample funds for the economy, especially
3 The long- and short-range economic benefits of Cardenas's economic policies are clearly
delineated in Raymond Vernon's The Dilemma of Mexico's Development (Cambridge,
Mass., 1963), pp. 81-7, and Leopoldo Solis M., Hacia una interpretacional largo plazo del
desarrollo economico de Mexico (Mexico, D.F., I966); the former argues that the environ-
ment under Cardenas 'taken as a whole was more congenial to the exercise of latent
entrepreneurialability '. Solis M. stresses the positive effect of Cardenas's agrarian reforms
on the internal market, rural education and the mobility of the labour force.
4 Sanford A. Mosk, The Industrial Revolution in Mexico
(Berkeley and Los Angeles, I954),
p. 60. Dr Mosk believed that ' some of the additional funds that went abroad or into hoards
would probably have gone into long-term investment in industry if it had not been for the
Cardenaspolicies'. See also James W. Wilkie, The Mexican Revolution : Federal Budget and
Social Change (Berkeley and Los Angeles, 1967), pp. 265-6.

since Cardenas had taxed most new income away.5 Expropriation changed
everything. Not only did capital flee but also oil earnings dropped, and the
government found itself with a staggering debt that had to be paid with
foreign exchange. No longer could the Mexican government ignore the
costs of internal reform. Business confidence lagged; federal revenues
dropped; and enemies of the government warned of a coming economic
apocalypse.
Carlos Diaz Dufoo, a conservative economist and the admiring biographer
of Porfirio Diaz's Finance Minister, Limantour, was one of the most articu-
late critics of the government's economic policy. Published in Excelsior,6 his
editorials attacked the government for its inflationary monetary policy and
permissive attitude towards labour agitation. He blamed the government for
stirring up the masses through salary increases that did not raise their buying
power. Although salaries had indeed risen, production and employment
were falling; investors feared the pro-labourorientation of both the Supreme
Court and the Juntas de Conciliaci6n. Diaz Dufoo warned that soon no
business could be transacted in Mexico. Funds for industrial development
were contracting, thus causing many businesses to close from lack of
resources for reinvestment. 'What good does it serve', Dufoo asked, 'if the
workers have more money yet industry lacks the means to consolidate a
state of things built upon air.' 7
The business community's anxieties over strikes, expropriations and
declining investment were echoed almost daily in the capital's two leading
newspapers, Excelsior and El Universal. In a February 1939 editorial, El
Universal complained that, due to the workers' antagonism towards manage-
ment, 'Nobody is disposed to work '.8 During the election of I940 Car-
denas's enemies sought to make an issue of the investor's disgust with
frequent strikes and his lack of confidence in the government. In I939 an
anti-Cardenas pamphleteer warned of the dangers of the contemporary
atmosphere:
Where there is no securityfor investment,where there are no guaranteesfor the
developmentof industry, where there are not enough sourcesof remuneration,
and where on the contrarythere are great dangersof possibleexpropriationsand
reverses and a jumble of unions with dubious motives, there is not, nor can
there be, money for investment.9
Cardenas was forced to heed the plutocracy's lack of confidence since the
year was I939 and the Second World War was at hand. At that time there
5 Marvin Bernstein, The Mexican Mining (Albany, 1965), pp. I8x,I83-7.
Industry I890o-950
6 See articles by Carlos Diaz Dufoo which appeared in Excelsior, 3, Ir, 25 March I939.
7 Carlos Diaz Dufoo, Excelsior, 3 March I939. 8 Editorial, El Universal, 13 Feb. I939.
9 Benito X. Perez Verdia, Cardenasfrente al tinglado electoral (Mexico, D.F., 1939), p. 45.

was neither a Red China nor Soviet Russia to channel aid to a radical
Latino government. Without foreign or domestic investment the Mexican
economy, and possibly the Revolution itself, might rapidly disintegrate.
Furthermore, a frightened business sector might then finance anti-govern-
ment factions like the Sinarquistas in the hope that they could save them-
selves in a civil war similar to the one just terminated in Spain.
The government would have been far less vulnerable to the attacks of its
economic critics had the nationalized industries been prospering under the
union-government partnership organized after the oil expropriation of 1938.
Unfortunately for Cardenas, the railroads and the petroleum industry both
appeared to be in much worse financial straits than had been the case prior
to nationalization.
Administration of the state railroads (nationalized on 23 June I937) had
been a complete disaster. The government initially gave the management of
the lines to an autonomous government department, but the new agency
immediately faced determined wage increase demands from militant workers.
The incidence of train wrecks rose at an alarming rate; equipment collapsed;
and revenue fell. Hoping to pacify the workers, Cardenas turned the rail-
roads over to the 70,ooo-man railroad workers' union in May 1938. This
new administration proved no better at coping with the railroads' problems
than had either the government or private enterprise. In 1939 and 1940 the
Mexican railroads reached an unparalleled state of collapse. On 12 April
I939, the Guadalajara and Laredo trains collided, killing fifty passengers
and injuring many more. Between January and April of the same year
there were eight major wrecks. Simultaneously the workers increased their
demands for higher pay, even striking against their own management.
Critics of Cardenas's economic policy, who also damned the government for
its concessions to labour, could find no better harbinger of national economic
collapse than the malfunctioning of the nationalized railroad lines.10
Expropriation of the oil companies in March of I938 served to enhance
the prestige of the revolutionary government. Many Mexicans, including the
clergy and many conservatives, applauded the government's defence of
10 All the Mexico
City newspapers carried constant reports of railroad crashes during the late
I930s. There is no single adequate study of the railroads' problems in these years, but the
interested reader may consult Alfredo B. Cuellar, Expropiaciony crisis en Mexico (Mexico,
D.F., 1940); Marcelo N. Rodea, Historia del movimiento obrero ferrocarrilero mexicana
(Mexico, D.F., I944), and Joe C. Ashby, Organized Labor and the Mexican Revolution
under Ldzaro Cdrdenas(Chapel Hill, I967), pp. 122-4I. Dr Ashby defends union adminis-
tration of the railroads on the grounds that it was no worse than the previous management,
yet it seems certain that contemporarieswho had to ride the trains and read of constant
disastersin the press were alarmed and disgusted.

Mexico's national honour. As a result of this action, the Mexican people
had been united as perhaps never before in their history.1l
But Cardenas's good relations with the conservatives and certain pluto-
cratic interests ended when the cruel reality of Mexico's economic position
was revealed. The government faced vengeful oil companies supported by
their governments. It also had to face the problems of ancient, antiquated
machinery. Worse yet, Mexico was now cut off from her normal petroleum
outlets by an Anglo-American boycott, and was forced to trade with the
Axis powers.l2 These necessary dealings must have been particularly galling
to the Cardenas government, which had actively opposed the Axis nations
in Spain and had protested at the League of Nations against every act of
aggression by those countries.13 This trade was not, however, enough to
revitalize the reeling Mexican oil industry. Furthermore, the English
blockade initiated at the outbreak of the Second World War deprived
Mexico of even this limited European outlet for her petroleum. With the
increase of labour costs and the reduction of sales, April I938 production
dropped 58 per cent from the preceding month. While I938 petroleum
profits reached I5,000,000 pesos, in I939 the same industry lost over
2I,000,000 pesos.l4 By June of 1940 expenses for the year exceeded income by
68,000 pesos. In I938 labour costs were 35 per cent of sales; in I939 they
rose to 42 per cent, as contrasted with 20 per cent in I936.15 Cardenas
constantly appealed to the workers to make sacrifices for the good of the
nation, but, like the tin miners in Bolivia in the I950s, they refused to give
up their new gains.
The intransigency of labour and the investors' fear of imminent expro-
priation also affected another key sector of the Mexican economy. The
mining industry (beset by labour problems, fear of nationalization and the
United States curtailment of silver purchases)16 also declined. Foreign
11 See Albert L. Michaels, ' Cardenas y la lucha por Ia independencia econ6mica de Mexico',
Historia Mexicana, xvIII, I (1968), for a general discussion of Cardenas'spolicy on national-
ization and its overall effects on Mexico in the late 1930s.
12 Maurice
Halperin, 'Mexico Shifts her Foreign Policy', Foreign Affairs, 19 (I940), 216. Also
see New York Times, i8, I9 Jan. and 25 Feb. I939, for reports of Mexican-Axis trade
agreements.
13 For Mexican foreign policy during the Cardenas period, see Isidro Fabela, Neutralidad
(Mexico, D.F., I940), and Isidro Fabela, ' La politica internacionaldel Presidente Cardenas',
Problemasagricolasy industrialesde Mexico, VII, 3 (1955).
14
Ashby, OrganizedLabor and the Mexican Revolution under Ldzaro Cardenas,p. 268.
15 Ibid., pp. 258, 260-I. Ashby believes that President Cardenas 'considered labor costs to be
the chief contributing factor to the unbalanced financial position of the petroleum industry'.
16 In
I939 the United States government, seeking to pressure the Mexican government into
paying 'prompt and adequate compensation for the expropriated oil companies', reduced
the purchase of Mexican silver.

investment in Mexican mining fell from I,ooI million pesos in 1938 to 996
million pesos in 1939: 'Despite excellent markets, the larger companies con-
fined operations to salvaging what they could and failed to provide new
venture capital and exploration programs'. Mine owners blamed labour
unions for the crisis. A convention of mine owners in Mexico in January
1940 complained that the workers, busy agitating for the unions, worked
only 40 per cent as hard as before.'8
Investors and businessmen particularly criticized the government's per-
missiveness towards labour agitation, yet many workers were far from
satisfied with the results of the government's labour concessions. In a
contemporary novel, a railway brakeman supporting the opposition candi-
date, Almazan, voiced his discontent with living conditions:
Isn't it true, Campillo, that the only thing that Mexico has to thank Cardenas
for is that the cost of living is five times higher than it was when he came into
power? . . . and how many thousandsare dying of hunger becausethere is no
work? 19
Even Cardenas's friends and supportersadmitted that rampant inflation had
erased most of labour's wage gains. Futuro, an official journal of Lombardo
Toledano and the CTM, admitted that real wages had declined 2I.5 per
cent between September 1936 and August I938.20 Sylvia and Nathaniel
Weyl, in their very sympathetic account of the Cardenas government,
admitted the existence of a serious inflation which they blamed on a three-
year drought, governmental heavy, short-term borrowing, and the wide-
spread speculation in agricultural products.21In 1938, seeking to curb infla-
tion, the government organized an official agency to regulate the food
market. The agency was empowered to purchase large quantities of food
directly from the peasants; in turn, the food was to be sold directly to
17 For an excellent summary of the effect of Cardenas's reforms on the Mexican mining
industry, see Bernstein, The Mexican Mining Industry I89o-I95o. For contemporaryfears
of a catastrophe in the mining industry, see Cuellar, Expropiacion y crisis en Mexico
(see also El Universal, 27 June 1930, and Excelsior, 30 Jan. I940).
18 Cuellar, Expropiaciony crisis en Mixico, p. I8.
19 Mariano Azuela, 'La nueva burgesia', Obras completas II. Novelas (Mexico, D.F. and
Buenos Aires, I958), p. 25. This novel, one of the author's best, has as its setting Mexico
City during the election of I940. It portrays a few short days in the lives of those who
achieved social mobility through the reforms of Cardenas yet felt no gratitude towards his
government. The novel was first published during the early I940s.
20
Futuro, 3I (September I938), 36. According to figures presented by the Bank of Mexico the
cost of living had risen 56 per cent between I935 and I938. See El Universal, I4 March
I939.
21 Nathaniel and
Sylvia Weyl, The Reconquest of Mexico: The Years of Ldzaro Cdrdenas
(New York and London, 1939), p. 232. The Weyls' estimate was that between 1934 and
1938 the price of consumer goods increased 48-7 per cent while that of food rose 53-9 per
cent.

consumers, thus preventing middle men from manipulating Mexico's food
supply. Cardenas had served notice that he would prevent unreasonable
profits from speculation.22
Measures such as this proved of little value as prices continued to soar;
according to official figures, between I935 and 1940, food costs rose 49-39
per cent.23 Inflation had its worst effects in the urban areas, particularly in
Mexico City. Official figures published in the Anuario Estadistico explain
much of the working class disillusionment with Cardenismo:
TABLE I
Cost of Living Index for Workers in Mexico City (I934 = oo)

Year Generalprice rise Rise in food prices Rise in clothing prices
1935 io8 I07 103
I936 II4 II4 II8
I937 I38 I37 I25
1938 153 I58 146
1939 I55 I56 i68
I940 157 154 i86
Source: Secretariade la Economia Nacional, Anuario estadistico de los Estados Unidos
Mexicanos 1940 (Mexico, D.F., 1941), pp. 783-4.
Although the unions were able to wring higher wages from management
by constant strikes, these increases did not generally improve the living
standard of the average worker. Successful strikes were followed by price
increases; production fell as many businessmen who feared expropriation
liquidated their companies and retired. Workers were caught between
ambitious labour leaders and a frightened plutocracy. The government could
not possibly afford to inaugurate socialism; neither could it afford to lose
the powerful support of organized labour. The rhetoric of President Car-
denas, Lombardo Toledano and their allies had raised the expectations of
urban labourers who expected an immediate improvement in their living
standards. Their real minimum wage had risen in 1934-5 but had dropped
sharply in 1936-7. In I938-9, it had risen again but the minimum wage
still lagged behind the high point of I934-5.24 Disappointed with the results
of Cardenismo, many confused urban proletarians, especially in Mexico
City, flocked to hear the programme of the opposition candidate, Juan
Andreu Almazan in I939.
22 Ibid.
23 Pedro Merla, Estadisticade salarios (Mexico, D.F., I943), pp. 15-I6.
24 See table in Wilkie, The Mexican Revolution, p. I87.

After 1938, most general economic indexes illustrated the catastrophic

state of the national economy. The Mexican peso, a stable 3.60 to the
United States dollar until I938, rapidly lost strength. The Cardenas govern-
ment continued to print money as capital fled the country, eventually
driving the peso down to a ratio of five pesos to one United States dollar.
Direct foreign investments entering Mexico dropped from 559 million
dollars in I938 to 480 million dollars in I940.25 The government's metal
reserve that had stood at 51.2 million dollars in I936 sank to 2I14 million
dollars in I938 and only rose to 31 million by I940.26
Cardenas had not tried to inaugurate socialism. He had tried to strengthen
organized labour in order to give it bargaining power with industry. He
had also attempted to force reactionary and uneconomical companies out of
business. His vast public works programme and the Nacional Financiera
had been designed to bolster, not to destroy, capitalism. The government's
design was to develop a capitalism which was Mexican-owned, tax-paying,
and beneficial to the nation. Specifically, there was the need of restoring the
confidence of the financial sector without retreating a single step in the oil
controversy. Mexico's post-I940 President had to be capable of allaying the
financial community's dread of inevitable expropriation. Simultaneously, he
had to lure foreign capital back to Mexico without permitting it to violate
national sovereignty. Failure to do so would mean Mexico's regression to the
status of a poor, perhaps autarchicalagrarian country.
Agricultural Problems
In 1933 the landless Mexican peasantry believed themselves betrayed and
cheated by a revolutionary government which had ceased to implement the
land reform programme authorized by the 19I7 constitution.27 Cardenas
restored their faith in the revolution of I9Io by immediately redistributing
much of Mexico's land. Although this served to quiet much of the
peasants' rage, their problems and those of the government were far from
solved.
The primary difficulty lay with the rapid demographic growth which had
raised Mexico's population by three million between 1930 and I940; during
the six years of Cardenas's government the nation's population grew from
25 Howard F. Cline, The United States and Mexico (Cambridge, Mass., 196I), p. 422.
26 ' Message of the President of Mexico', The Bulletin of the Pan American Union, II (I940),
782-8.
27 For this problem see Marte R. G6mez, La reforma agraria de Mexico: Su crisis durante
el periodo 1928-1934 (Mexico, D.F., I964). G6mez, Portes Gil's Secretary of Agriculture,
believes that the reforms of President Calles (1924-8) and those of Portes Gil (1928-9) created
a revolution of rising expectations which was not satisfied in the early 193os, thereby
causing a build-up of tremendous pressurein the countryside.

17,966,869 to I9,546,I35.28 In I940, 78-I per cent of these I912 million still
lived in the rural areas.29Cardenas had tried to help the peasants by giving
land to over a million people.30He thus disposed of most of Mexico's arable
land 3; the remaining large estates were either arid or underdeveloped or
divided into the extensive northern cattle ranches which were legally exempt
from expropriation. The situation was such that the expanding rural popula-
tion could easily destroy the impact of the reform. Overextended and short
of funds, the Cardenas government had completely neglected the improve-
ment of irrigation facilities.32 The next government had the direct respon-
sibility of either finding the means for the necessary irrigation extension or
else inducing individual owners to irrigate their own land. Without water
further land distribution would be meaningless.
The new government also had to face a vast number of agrarians who
had not adequately benefited from the actions of its predecessors. In 1940,
60 per cent of Mexico's agrarians had inadequate amounts of land or none,
despite Cardenas's efforts.33 In worse condition still were the 600,000
expectant ejidatarios who lacked both land and credit.34The new president
had to find land for this rural proletariat; he also had to produce
necessary credit and irrigation facilities. If the government could not find
enough adequate land to satisfy these aspirations, it must develop enough
industry to draw the landless rural proletariat into urban areas.
This very lack of revenue which had hampered the government's public
works, education and irrigation programmes also limited its ability to extend
credit to the ejidatarios. Previous governments had completely ignored their
needs by only lending money to individual private owners. In I935 Cairdenas
remedied this neglect by forming the 'Banco de Credito Ejidal' whose sole
purpose was extending loans to organized societies of ejidatarios. Yet the
bank's funds proved entirely inadequate in meeting the demands of the
growing numbers of collectivized peasants. By 1940 the bank had given
credit to some 3,493 ejidal societies that comprised some 234,407 ejidatarios.
There were still 978,804 who possessed land but were unable to obtain
28 Secretaria de la Economia Nacional, Anuario estadistico . . . 940, p. 93.

29 Nacional Financiera, 5o anos de la Revolucion mexicana en cifras (Mexico, D.F., 1963),
p. 22.
30 ' Message of the President of Mexico ', p. 784.
31 The rural population, economically active, had jumped from 3.6 million in I930 to 4.2
million in I942. See Hernan Laborde, ' Cardenas, reformadoragrario', Problemas agricolas
e industriales de Mexico, iv, I (1952), 60.
32 Mexican-AmericanReview (193I), p. 12. Frank Brandenburgin his The Making of Modern
Mexico (Englewood, 1964), p. 20, cites figures showing that less land was under cultivation
in 1938 than had been in 1933.
33 Cline, The United States and Mexico, p. 291.
34 Laborde, Cardenas, reformador agrario.

The Crisis of Cardenismo 6I
credit.35These unfortunates remained at the mercy of usurers. Distributing

ejidal bank money was a source of controversy; a large percentage was
poured into co-operative ejidos of the Laguna and Yucatan, where the
prestige of the government's entire agrarian programme was believed at
stake. Even though these areas had credit, they still were in great trouble.
The bank was not a charitable institution; it loaned money at an interest
rate which varied from 7 to 9 per cent.36 Ejidatarios, already facing diffi-
culties of declining production that stemmed from rapid change, found that
keeping up the bank payments was nearly impossible. The rapacity of many
bank officials worsened affairs considerably. Luis Cabrera called these func-
tionaries the Nuevos Amos of the land. He compared their power with
that of the old tierratenientes, because the bank officials selected the
recipients of credit, paid the ejidatarios daily wages, regulated the cultiva-
tion of crops, and oversaw the selling of the harvest.37 Exercise of such
powers proved an easy means of personal gain. Many officials kept most
profits and often paid the workers less than they had received before. The
ejidal bank in the Western Mexican Bajio was a particularly bad example
of this corruption. Here many disillusioned workers deserted the ejidos to
seek work elsewhere. The anti-government Sinarquista party had great
recruiting success in this area.38The Western peasant wanted to own his
land. He did not want to live on a collective farm as the powerless victim
of a state bureaucracy.
Lazaro Cardenas made few changes in Mexico's agrarian laws. He pre-
ferred to carry out the existing laws rather than to enact new ones. The
agrarian code of I934 had provided a legal basis for a new type of collective
farm to be worked and owned collectively. The law permitted collective
exploitation of haciendas producing crops such as sugar, cotton, and
henequen-products almost impossible for individual peasants to raise. The
Cardenas government refined the law in August of I937 by providing a
firm legal base for the collective farms:
The ejido will be organized by collective methods only in those ejidos which
require an industrial process to preparetheir goods for markets as such units
require capital in excess of that which could be supplied by the individual
economiccapabilitiesof the ejidatarios.39
35 Ibid., p.
64.
36 Ibid.
37 Bias Urrea (Luis Cabrera),Veinte anos despues (Mexico, D.F., 1937), p. 275.
33 Mario Gil (Mario Gil Velasco), Sinarquismo (Mexico, D.F., i963), pp. 43-6. For an attack
on the ejidal bank from the right, see Cuellar, Expropiacidny crisis en Mexico, pp. 500-I.
39 Victor Alba, Las ideas sociales contempordneasen Mexico (Mexico, D.F. and Buenos Aires,
I960), p. 225.

The new collective ejidos created by these reforms would never be sub-
divided into small landholdings. Their workers would constitute a new
rural proletariat which would never swell the ranks of agrarian capitalism.
The business community saw the growth of the collective, industrial ejidos
as a step towards communism.40 When the new ejidos ran into organiza-
tional difficulties resulting in production decreases, the critics blamed this
decrease on collective methods:
It has been impossible to convert a peon lacking initiative into a progressive
rancheror to inject a sense of responsibilityinto these who work collectively...
The ejido is not property;the ejidatario does not think of himself as a pro-
prietor, since he is prohibited from freely disposing of his crop, therefore,he
works little and without stimulus.41
Cardenas had risked the prestige of his programme on these industrial collec-
tive farms. Very few other acts of his government had raised such a storm
of criticism. The already frightened middle classes saw these experiments as
part of the attack on private property. The two most spectacularconversions
of haciendas into collectives were the expropriations in the Laguna and in
Yucatan. By late 1938 both of these were in deep trouble.
Mexico's oldest and most important cotton producing area, the Laguna,
was divided among the peasants in October of 1936. The government gave
the 30,000 peasants living in this north-centralbasin ownership of both the
land and the machinery used for harvest. This property was not distributed
to individual peasants but was farmed collectively. The ejidal bank extended
immediate and ample credit. Cardenas himself paid several visits to the area,
counselling the peasants on more efficient methods of agriculture.42The
'Confederaci6n de Trabajadores de Mexico' extolled this project as the
greatest proletarian victory 'thus far registered '.43 The psychology and
living standards of the campesinos greatly improved,44 but cotton produc-
tion declined. Tonnage produced fell from 36,141 tons in 1936 to 28,832
40 Luis Cabrera, 'La cruzada del Mayas', Hombre Libre, I Sept. 1937. Cabrera accused the
federal government of acting through the ejidal bank to become a great hacendado.
41 Editorial in Excelsior, 2 Nov. 1938.
42 William Cameron Townsend, Ldzaro Cardenas, Mexican Democrat (Ann Arbor, 1952),
p. i8i. For a general study of the Laguna and the results of the expropriation,see Clarence
Senior, Democracy Comes to a Cotton Kingdom (Mexico, D.F., 1939). Both Townsend and
Senior are extremely sympathetic to Cardenas and his reforms. See also Ashby, Organized
Labor and the Mexican Revolution under Ldzaro Cardenas,pp. I43-78.
43 Confederaci6nde Trabajadoresde Mexico, Informe del comite nacional 1936-I937 (Mexico,
D.F., 1938), p. 75.
44 Ashby, Organized Labor and the Mexican Revolution under Ldzaro Cdrdenas, p. 177.
Ashby is extremely sympathetic and tries to explain the problems faced by new ejidatarios.

tons in I938. A critic accused Cardenas of ruining the best agricultural lands
in Mexico.45
The henequen plantations of Yucatan were in more serious difficulties.
On 9 August I937 Cardenas had expropriated most of the great Yucatecan
plantations and turned them over to the Maya Indian Workers as collective
ejidos. As in the Laguna, Cardenas and members of his cabinet appeared
to oversee the distribution of the land. Also, as in the Laguna, the govern-
ment earmarked large funds from the ejidal bank to be lent to the new
ejidatarios.46The expropriation turned out badly both for the workers, who
suffered from an inflation that destroyed their wage gains,47 and for the
production of henequen fibre, which fell from 102,726 tons in I936 to
57,915 tons in I938.48 Those who disliked the government pointed to
Yucatan as another example of the failure of collectivism.
As the rate of Cardenas's agrarian reform reached its peak in 1937,
agricultural production declined. Throughout Cardenas's years in office,
food prices rose, reflecting production problems. At the same time several of
Mexico's basic food products declined in volume of production. Corn pro-
duction which had averaged 1,827,000 tons a year in I930-4 declined to
1,622,000 tons yearly in 1934-40; kidney bean production in the same period
dropped from an average of 132,000 tons (in 1930-4) to only II3,668 tons in
I934-40.49 By 1937 Mexico was forced to import corn from Argentina.50
Between 1934 and 1940 the price of corn rose from 521I2 pesos per ton to
124 pesos; beans rose from 69.5 to 185, while wheat increased from 130-65
to 237-28 pesos per ton.51
Land reform also adversely affected the production of other important
products. The rise in corn prices plus expropriation of large livestock farms
caused hog raising to drop considerably. Sugar, long one of Mexico's more
important crops, suffered a setback due in part to political struggles within
newly created sugar collectives: thus by I941 sugar was also imported.
45 Cuellar, Expropiaciony crisis en Mexico, pp. 418-I9. Virginia Prewett, Reportage on Mexico
(New York, I941), pp. 147-8.
46 Partido Nacional Revolucionario, La reforma agraria de Yucatan (Mexico, D.F., I937),
p. 29.
47 Wilberto Canton, ' Cardenasen Yucatan', Problemas
agricoles e industriales de Mexico, vn,
4 (I955), 368-70. Canton says that Cardenasleft the processingplants in the hands of the old
landowners who by using them were still able to control the peasants. He accuses Cardenas
of turning to other matters, leaving the reform in Yucatan unfinished. See Prewett,
Reportageon Mexico, pp. 148-9.
48 Cuellar, Expropiacion y crisis en Mexico, pp. 510-II.
49 Secretariade la Economia Nacional, Anuario estadistico, 1940, p. 504.
50 Hombre Libre, 5 March I957.
51 Eduardo Correa, El balance del Cardenismo(Mexico, D.F., I940), p. 205. Also see General
Reuben Garcia, 'Hambre, maiz, hambre', El Universal, 30 Jan. 1939. Using statistics from
the Direccion General de Estadisticos, General Garcia discusses the crisis in food production.

Tabasco's banana industry, expropriated in 1936, similarly fell, due to an
unfortunate blight and local political squabbles. In Michoacan the collec-
tivized rice industry also fell short of expectations.52These serious problems
greaty embarrassedthe government which had staked part of its reputation
on the success of the collectivized agricultural industries which had con-
stituted a major Cardenas innovation.
TABLE 2
The Decline of Land Distribution in Mexico after 1937

Dotations I934-40
Year Land distributed Campesinosbenefited
I935 2,I33,333Hectares 150,000
I936 3,500,000Hectares 225,000
I937 4,000,000Hectares 175,000
I938 2,500,000Hectares 125,000
I939 1,250,000Hectares 50,000
I940 1,250,000Hectares 50,000
Restitutions I934-40
Year Land distributed Campesinosbenefited
I935 75,000 Hectares 2,000
I936 (no figures)
-TT,r
I937 437,500Hectares 1,000
I938 100,000 Hectares I,500
I939 6,000 Hectares 750
I940 6,000 Hectares 500
Source: Lazaro Cardenas, Seis Aiios de Gobierno al Servicio de Mexico, 1934-1940 (Mexico,
D.F., I940), p. 334.
The Mexican government had acted decisively to place Mexico's land

tenure system within a more egalitarian framework. Yet by his reforms,
Cardenas had created a multitude of new problems equally serious as the
rural dissatisfaction of I933. The government, overextended everywhere,
lacked funds necessary to provide the peasants with credit to purchase the
seed, animals, fertilizers and machinery needed to farm their new lands.
Even in Yucatan and the Laguna where such aid had been poured in, the
collective farms seemed destined to bankruptcy. Even worse, the decline in
production of basic foodstuffs occurred at a time when the population con-
52 Prewett,
Reportageon Mexico, pp. 148-51.

tinued to rise. Some of the blame could rest on the inevitable organizational
difficulties accompanying large transferences of land, and on the natural
tendency of uneducated peasants to revert to subsistence farming after
receiving land, yet the agrarian reform still had to justify itself in improved
living conditions for the peasantry.
The government sought to solve the agrarian crisis by curtailing land
reform after I937. It hoped that this curtailment might give security to
Mexico's still large class of private landowners who would return to develop-
ing their lands. The allocation of land reached its peak in I937 and then
dropped off sharply. Both dotations (outright grants to landless peasants)
and restitutions (lands returned to those defrauded under previous regimes)
reflected the new policy.
The decline in distribution reflected both the lack of further arable land
available for expropriation as well as the government's desire to placate
small and medium landowners. The latter had feared to develop and
improve their lands, realizing that improved lands constituted a special
temptation to the landless rural masses. In the I935-7 period, lands had
often been expropriated immediately after harvest. The government's
changed attitude was reflected in the opening of the Oficina de Pequenia
Propiedad in May 1938. The new institution represented private land-
owners faced with peasant demands for the expropriation of their lands.
Given the power to issue certificates of exemption from seizure, it could
also return ejidal lands which had been illegally expropriated.53
Problems with Organized Labour

In I934 the Mexican labour movement was badly fragmented. During the
I92os Luis Morones, a talented electrician from the Federal District, had
forged a powerful union, the Confederaci6n Regional Obrero de Mexico
(CROM), out of many divergent elements. This organization was closely
allied with the regimes of Obreg6n and Calles and became an important
factor in their ruling coalition. CROM leaders held governorships, senate
seats, and even a post in the national cabinet. In the early I930s the CROM
collapsed for two reasons: first, it was unable to maintain its alliance with
increasingly conservative national governments; and, second, the Mexican
working class no longer approved of its policies of governmental co-opera-
tion, nationalism and curtailment of direct action. During CROM's years
in power between 1924 and I933, the strike had virtually disappeared
53 For information on the Oficina de Pequefia Propiedad, see Lazaro Cardenas, Seis Anfos de
gobierno al servicio de Mexico 1934-I940 (Mexico, D.F., 1940), p. 334. Hernan Laborde,
Cardenas, reformador agrario. Marte R. G6mez supplied additional information on the
office's function in a conversation with Albert L. Michaels in Mexico City on I2 Jan. I965.
L.A.S.-5

as a weapon of Mexican labour. By 1933 both rank and file members and
many aggressive leaders had withdrawn from CROM, leaving only a shell
of what the organization had been during Calles's presidency. The collapse
of CROM did not, however, immediately benefit individual workers. Every
local split into factions and most of labour's energy was spent in bitter
struggles for local or regional control.5"
During his campaign, Cardenas had urged the workers to do something
about their disunity and disorganization. In a speech at Campeche on
9 March I934, he advised the workers to organize and to forget their
internecine squabbles:
One of my foremostdesiresis that the working classeshave free accessto the
levers of power. But if this is to occur, they must organize, discipline them-
selves, and intensify their social action, not within a limited sphere,but embrac-
ing every area of the collectivityincluding the co-operationof women and the
youth.55
This message, repeated again and again throughout the campaign, was
aimed at convincing the Mexican labourer that he would again have a
friend and ally in the presidency, but that he must organize in order to take
advantage of the opportunity which would be presented to him in the
following years.
After I934 events proceeded rapidly; a new national labour organization,
the Confederacion de Trabajadores de Mexico, was created by many
opponents of the old CROM leadership. A young intellectual from the state
of Puebla, Vicente Lombardo Toledano, organized and took leadership of
the new union. Lombardo Toledano supported Cardenas in 1935 against
General Calles and his supporters. The government reciprocated by en-
couraging an unprecedented number of labour conflicts after Cardenas came
to power, most of which were resolved in favour of the workers. Once
again the state stood firmly aligned with organized labour, and the CTM
became perhaps the major prop of the Cardenas government.56 This close
labour-government alliance led to the oil expropriation. After March I938,
trouble developed. Workers in many industries, elated at their easy victories,
54 For Mexican labour between 1930 and I934, see Marjorie Clark, Organized Labor inz
Mlxico (Chapel Hill, 1934) and Rosendo Salazar, Historia de las luchas proletarias de
Mexico (Mexico, D.F., 1938).
55 Partido Nacional Revolucionario, Las jiras del General Ldzaro Cardenas (Mexico, D.F.,
I934), p. I56. This is an abbreviatedrecord of Cardenas's campaign speeches.

56 For the relations between the CTM and the Cardenas
government, see Ashby, Organized
Labor and the Mexican Revolution under Ldzaro Cdrdenas, and Albert L. Michaels,
'Nationalism and Internationalism,Organized Labor under Lazaro Cardenas', University of
Buffalo Studies (August 1968). For an almost day-by-day account covering the period up to
and during 1938, see the continuation of Rosendo Salazar's earlier book, Historia de las
luchas proletariasde Mexico (Mexico, D.F., I956).

now sought further triumphs. Ambitious leaders sought to satisfy followers

suffering from the rampant inflation of the time. Cardenas knew that the
actions of labour leaders had partially caused the inflation, but the President
could not make the workers heed his appeal to their patriotism. Eventually
he acted against the CTM by curtailing strikes.57
Cardenas had promised to give workers a share of power in the nation's
government. He had turned over factories to the workers only when
management claimed that wage increases would put them out of business.
The economic problems that developed out of the oil expropriation clarified
this distinction. Cardenas would allow the workers to harass arrogant
foreign interests or reactionary domestic capitalists, but he would not
tolerate strikes against the nation and its revolutionary government.
With expropriation the Revolutionary government descended from its
olympic heights as an arbiter of social affairs. Mexico's leaders could no
longer afford to concern themselves only with social justice while ignoring
the immediate economic consequences of their acts. Mexico had become a
producer whose interests were deeply affected by social changes. Many
workers and their leaders did not understand the changes.
Labour leaders tended to view the oil expropriation as an important step
towards complete nationalization of all Mexican industry. They hoped that
the expropriated industries would then be turned over to the management
of the workers themselves, as were the oil industry and the railroad lines.
In late 1938, the mineworkers' union presented a list of demands to the
mining companies, in order to force them into a position similar to
the oil companies, hoping the government would expropriate. Cardenas
demurred and ordered the union to make peace, assuring the companies
that further expropriation would not be carried out.58 This was a pattern
that was to be followed many times in the last two years of the Cardenas
government.
Strikes were not the only difficulty. Mexican workers still remained far
from unified. Union rivalries, assassinations and leadership conflicts were
all too frequent in the post-1937 period. The dominant CTM faced
challenges from the anarchist Confederaci6n General de Trabajadores
57 Cardenas had not
always given labour a free hand. In March 1936 he and PNR President,
Emilio Portes Gil, had prevented the CTM from organizing the rural workers. The govern-
ment then formed them into the ConfederacionNacional Campesina. For the 1936 dispute,
see Michaels, 'Nationalism and Internationalism', pp. 71-2.
58 Bernstein, The Mexican Mining Industry, p. I84. The Sonora copper strike of 1938 was
characteristicof the government's problems. The government forced the union to accept a
compromise solution, and the workers then tried to sabotage the mines which belonged to
the Anaconda Copper Company; production fell 50 per cent. For details see New York
Times, 20 Nov. 1938.

(CGT) and from the declining CROM headed by Luis Morones.59 Car-
denas, who desired labour unity above all else, was greatly disturbed by this
situation. His disgust with labour leadership was manifested in his official
discouragement of strikes and in the growing sternness of his admonish-
ments to labour.
The number of strikes and that of the workers involved in these strikes
reached a peak in I935, but the official record shows that a great decline
came after I937. In I935, over I45,000 workers had been engaged in 642
strikes; in I938, this number declined to I3,435 workers and 3I9 strikes;
even in I940, a year of much labour discontent, only I4,784 workers carried
out 357 strikes.60 Railroad workers and the petroleum workers, hitherto
highly favoured by Cardenas, proved the most obstreperous. Disregarding
official appeals, they continued to demand lower rents, higher wages,
shorter working days and longer vacations. In I940 the oil workers rejected
Cardenas's plan to reorganize the industry and pulled out of the CTM,
which had continued to support the government. An enraged Cardenas
actually sent federal troops to break a strike at the Atzapotzalco refinery.61
This act would have been inconceivable during the early years of his
administration.
Cardenas was obviously angered by the strike activity of these two
powerful unions. He had seized both industries and then turned the
management over to the workers themselves, yet the labourers still were not
satisfied. In the years 1938 to I940 Cardenas's speeches reflected his fury.
In February I939 he warned the CTM not to limit their objectives to their
own interests but to remember that their problems were intimately related
to those of the entire nation.62 Again and again the President urged the
workers to forgo immediate benefits for the future of Mexico. In February
of 1940, in a speech concerning the problems of the petroleum industry,
Cardenas reminded the union that they were the nation's highest paid
workers. He implied that attacks on management were damaging the
interests of all the nation's labourers. The union must show patriotism
and help the government 'consolidate Mexico's economic independence .63
59 The Mexico City press is filled with accounts of the inter-union and intra-union battles
which occurred during these years. See for example Novedades, 6 Aug. 1939, El Universal,
I2 Aug. I939, and Novedades, 31 Oct. I939.
60
Guadalupe Rivera Marin, El Mercado de Trabajo (Mexico, D.F. and Buenos Aires, 1955),
p. 226, and Secretaria de Economia Nacional, Anuario Estadistico, I940, p. 376. See also
Wilkie, The Mexican Revolution, p. I84.
61 For Cardenas's problems with the petroleum workers in I939 and 1940 see Betty Kirk,
Covering the Mexican Front (Norman, I942), pp. 64-5, 71, Casasola (Archivo Casasola),
Historia grdfica de la Revolucidn, IV, 2333-4, Carlos Diaz Dufoo, Comunismo contra
capitalismo (M6xico, D.F., 1943), p. 374.
62 El 63 El Universal, 2I Feb. 1940.
Nacional, 25 Feb. I939.

In July of his last year in office, the CTM honoured the outgoing
President with a banquet. Again Cardenas issued a call to patriotism
along with a warning: if the nationalized industries such as oil and the
railroads should collapse, the reactionaries would use these failures as argu-
ments against the feasibility of further reforms.64At Queretaro in June I940,
Cardenas again lashed out at both the railroad and petroleum unions. He
castigated the petroleum workers for their lack of discipline and failure to
make sacrifices for an industry which belonged to all Mexico; and he con-
demned the railroad workers for causing a great increase of accidents. The
President concluded with a plea for moderation:
In the case of the railroad and petroleum workers, these are not involved in
conflicts between labor and management; the former ought to resolve their
problems by fulfilling the obligations which they incurredby taking over the
administrationof the lines, and the latter ought to accept the moral and social
duty which they have with the Revolutionand the entire nation.65
This request was useless; the oil and railroad workers still refused to
co-operate, and labour problems continued to plague both industries.
At the very end of his term Cardenas tried once again. He addressed a
national congress of the CTM and perhaps made his most eloquent plea for
nationalism over class warfare.66 Once more he reminded the labourers
that his government had given the Mexican proletariat unprecedented
economic, political and cultural advantages. Yet these same advantages in
turn imposed new responsibilities; workers now had the 'obligation to do
their part to increase production'. Cardenas pointed out that Mexico was a
backward, rural nation whose greater population still lived in abject poverty.
He pointedly equated patriotism with increased production and admonished
the workers to unite, not against capital, but for economic development:
Every worker with the opportunityto producewho does not throw all his effort
and capacityinto his work or who gives himself over to vice or parasiticpractice
is evading his responsibility.He is a traitorto his class and an enemy of Mexico's
revindicatingmovement.
Cardenas then turned to the world situation and sought to show the
CTM how international events affected their own interests. The Mexican
Revolution and its social reforms were endangered by the world fascist
movement; every nation's proletariat must stay alert; if the Mexican
workers continued to be undisciplined, then the fruits of thirty years' labour
could easily be lost. Cardenas then clearly stated his reasons for slowing
64 El 65 Ibid.,
Nacional, 25 July I940. 29 July 1940.
66 Lazaro
Cardenas, Palabras del C. Presidente de la Republica en el homenaje, cue le rindio
el Decimosexto Congreso Nacional de la Federacio'nde Trabajadoresde Mexico (Mexico,
D.F., 25 Nov. 1940).

down the pace of social reform: 'We are entering a period of intense
struggle of an extraordinarily polemic nature which confronts us with the
necessity of ending extreme situations which would endanger the collective
interests .67
In his last years of government Cardenas more than moderated his early
pro-labourpolicies. He had discovered that labour leaders were only human
and that a 'labour boss' could be as predatory as a capitalist.68He had also
discovered that social reform without economic progress could cause an
inflation which would wipe out the gains of the reform itself. In the
1934-7 period, he had worked with Mexican industrial labour to form a
strong unified proletarian organization; in the 1938-40 period, he struggled
to convert the working classes to nationalism and to prevent their more
irresponsible leaders from destroying the infrastructure of the Mexican
economy.
The Disillusionment of the Middle Class

From I930 to 1940, there was a significant numerical increase in the rural
and urban middle classes. The small, agrarian proprietors grew Io per cent
to 78,000, while in the cities, especially the capital, the bureaucracy and
educated professional classes expanded too rapidly to be absorbed by the
economy. Migration of the upper classes from their threatened haciendas to
the city added further to the press for office jobs. The government bureau-
cracy alone had risen to I91,587, an increase of 48,000 from I935. Recovery
of the economy from the depression in 1935 to 1936 led to expanded indus-
trial and commercial opportunities; by I940, o109 per cent of the actively
employed population worked in industry while white collar workers
numbered over one half million in commerce.69All of these middle class
sectors were hurt by the economic crisis of the late I930s.
Cardenas had assumed the Presidency at a time of great public discon-
tent. The world depression had directly or indirectly caused governmental
changes throughout the world. In Mexico the same political faction had
ruled since I920. Furthermore, the depression had ruined many small
businessmen without affecting a large number of the great industries owned
by foreigners or government supporters.70By 1935 many ambitious, young
67
Ibid., pp. 4, 6-7.
68 Townsend, Ldzaro Cdrdenas,
p. 88. Townsend, a fervent admirer of Cardenas, blames his
naivet6 towards the labour bosses for most of the problems of the Cardenas government.
69 All these figures are taken from Nathaniel C. Whetten, 'El surgimiento de una clase media
en Mexico', in Miguel Othon de Mendizabal (ed.), Las clases sociales en Mexico (Mexico,
D.F., n.d.), pp. 53-60.
70 Valentfn Campa, 'El Cardenismo en la revoluci6n mexicana', Problemas agricolas e
industrialesde Mexico, vII, 3 (I955), 227-30.

politicians and businessmen joined the government along with Catholics,

labourers, teachers and agrarians against Calles; they tended to acclaim
those of Cardenas's early reforms-such as the public works programme
and direct government aid to industry which directly benefited the urban
middle classes.
Many observers do not realize the impetus that the Cardenas government
gave to private industry. By 1936, the government held a virtual monopoly
of agricultural investment, since land reform had left private investors
insecure about entering this field. The government sought to divert Mexican
capital, which formerly went into land, into domestic development. To
prevent hoarding of savings and flight of capital, Cardenas knew that the
government had to assure private investors that their funds would be rela-
tively safe. For this the Central Bank extended its functions guaranteeing
the liquidity of private securities; further, to induce industrial expansion,
the Nacional Financiera, founded in I933 to create a market for government
bonds, began to shift its emphasis to the encouragement of industry; it
offered to underwrite private investments and in addition offered initial
capital for industrial enterprises. To facilitate its activities the Nacional
Financiera began borrowing from the Central Bank in I938.71These efforts
eventually led to renewed investment, industrial development and executive
jobs but the baleful effects of the oil expropriation overshadowed the
Nacional Financiera's good effects.
In 1938 as the oil crisis had engendered inflation as well as a national
economic slowdown, these groups turned increasingly hostile to Cardenas.
The widespread agrarian reform obviously affected agricultural production,
seriously aggravating the inflation. An increased need to import food would
further decrease the supply of foreign exchange required for industrializa-
tion. The ejido bank was draining off funds needed for public support of
industry. The middle classes became additionally distressed by other actions
of Cardenas which did not relate to the economy: granting asylum to Leon
Trotsky, turning over the railroads and oil wells to the workers, free
immigration of Spanish Republicans, unionizing government bureaucrats,
and the anti-clerical education law of 1940 convinced many that Mexico was
heading towards godless socialism, a system which would mean the possible
end of the middle class hope of economic improvement. They feared their
own extinction and were prepared to defend their position.
71 For the efforts of Cardenasto encourage private industry, see David Shelton, 'The Banking
System ', Raymond Vernon (ed.), Public Policy and Private Enterprise in Mexico (Cam-
bridge, Mass., I964), pp. 138-41, and Calvin Blair, 'Nacional Financiera', in ibid.,
pp. 206-9. See also Robert T. Aubey, Nacional Financiera and Mexican Industry (Los
Angeles, I966), pp. 36-8.

Harold Laski had described fascism as the defence of the middle classes
against the onslaught of the masses; his observation explains the rise of
fascist ideologies as a response to communism in Europe in the I92os; it
also applies to Mexico. Although Mexico never produced a significant fascist
party, the country did produce the violently anti-communist and highly
regimented Sinarquistas who appeared to many as the beginning of a native
fascism. Less significant, but typical of the period, were the Spanish com-
munity's attempts to form a Falange and certain old revolutionaries' efforts
to create a party called the Gold Shirts. In I964 Manuel Gomez Morin
described the atmosphereof the times:
In these yearsmany young people felt attractedto rhythmicsteps of multitudes
marching in the streets . . . a world-wide phenomena. At this time it seemed
to be very romantic. There were fascisms red or black, but most everybody
thought in terms of organizing humanity within military formations.72
In Mexico, the middle sectors suffered from the same fears and longed
for order for the same reasons as the European bourgeoisie. Their horror
of socialism reached a climax in the 1934-40 period, because then as
never before in Mexican history the Mexican middle class saw the govern-
ment as one devoted to the cause of the proletariat over the needs of all
other classes. Their fears for the future and their contemporary anxieties
were summarized when two Almazanistas, General Jacinto Trevifio and
Emilio Madero, asked General Cardenas:
Mr President, you have said that the republic should be governed by the
workersand peasants.Mr President,is Mexico only composedof pure labourers
and peasants? . . . is there no middle class? Are there no businessmen? Are
there no industrialists? . . . Tell us, Mr President, is it our fault we were not
born peasantsor workers?73
The average middle-class Mexican, terrified by the growth of organiza-
tions like the CTM and CNC, and dismayed by the economic dislocation
caused by the oil expropriation, yearned for order and stability. He wanted
an end to official corruption, strikes, land reform, inflation, expropriations,
and the teaching of socialism in the schools; but, most of all, he wanted
security from the threat that further reforms might reduce him to the
economic and social level of an aroused proletariat.
The Mexican historian, Daniel Cosio Villegas, has described Cardenas's
72 Manuel G6mez
Morin, Interview with James and Edna Wilkie, Mexico City, I Dec. I964.
73 A commission of Almazan supporters went to Cardenas and asked him to reorganize their
candidate whom they claimed had won the elections. Cardenas, of course, turned them
down, but during the interview they managed to articulate clearly many of the causes of
the widespread discontent with Cardenismo. The text of this interesting confrontation was
published in the journal Hoy, 7 Sept. I940.

aides 'as the worst that any Revolutionary President has had '.7 In the late
1930s, Mexico City's press constantly charged the government with corrup-
tion, especially on ejidos. Mariano Azuela, the novelist, long a middle-class
critic of the Revolution, depicted Cardenista bureaucrats in a bitterly anti-
government novel:
They travel in Pullmansas there are no planes to transportthem. Never did our
old hacendadoseat, dress, or live in such a princely manner as they . . . The
masseshave merelychangedrulers.75
Such attacks were not limited to the conservative press of the capital or to
rightist critics. In I940 Concha de Villareal, a leftist critic, wrote a long
pamphlet pointing out many examples of bureaucratic exploitation of the
peasantry.7 In language similar to that used by both Cabrera and Azuela,
she attacked both labour leaders and ejido officials:
The bureaucracyhas taken over the government.This is not the dictatorship
of the proletariatbut of the governmentemployeesand their bosses. They have
taken control of the national economy and the destiny of both the peasantsand
the city workers.77
These public onslaughts on official corruption occurred with greater fre-
quency as the election drew near. In Mexico the President had been tradi-
tionally immune from personal attack, and therefore Cardenas was not
mentioned personally. Many Mexicans probably believed in his honesty and
sincerity, yet there could be no doubt that the venality of many of his
followers had sullied his government's reputation.
Cardenas never publicly criticized nor openly dismissed any close advisers
for their corruption. Apparently the traditional, personalistic ties of Mexican
politics took precedence over the President's undoubted morality. Yet some
evidence existed that Cardenas recognized the problem and tried at least to
curb it. In September 1939, he asked Congress to pass a law requiring all
officials to catalogue their personal assets in an affidavit upon taking office.78
74 In 'The Mexican Left', in

Joseph Maier and Richard W. Weatherhead, Politics of Change
in Latin America (New York, I964), p. 136. Ernest Gruening in Mexico and Its Heritage
(New York, 1928), p. 427, attacks Silvano Barba Gonzalez and Augustin Arroyo Ch., later
prominent Cardenistas,for their corrupt practicesin the I920s.
75 Mariano Azuela, Avanzada
(Mexico, D.F., 1940), p. I62. The novel describesthe tragic end
of a young idealist who tries to bring about technological reform in the countryside. He is
harassed and finally assassinated.
76 Concha de Villareal, Mexico busca un hombre (Mexico, D.F., I940).
77 Ibid., p. 31.
78 Townsend, Ldzaro Cardenas, p. 335. Townsend
quotes Cardenas as saying 'that any man
who goes into public office poor and comes out rich is advertising his veniality'. Among
those accused of corruption were Cardenas's brother, Damaso and his close supporters,
General Henriquez Guzman and Ernesto Soto Reyes; thus, considerations of family and
friendship might have limited the President'sresponse.

Father Joseph Ledit, S.J., tells an anecdote in his book about the church-
state problem 79 which, if true, shows Cardenas's growing realization of his
followers' shortcomings. In July 1939 agrarian guards killed several opposi-
tion Sinarquistas in Celaya, Guanajuato. After a mass funeral demon-
stration, Cardenas went to the area to investigate the murders personally.
Local Sinarquistas held a mass demonstration for the visiting dignitaries.
The President, obviously shaken by the opposition's strength among the
poor, turned to his entourage and bitterly blamed them for the growth of
Sinarquism.80Cardenas had made many changes, but he had not solved the
problem of political morality.81 This failure may not have weakened his
personal popularity, but it certainly helped to discredit his administration.
Corruption may have been no worse under Cardenas than it had been
under previous Mexican presidents, but the people certainly expected better
from an otherwise crusading administrator.
In 1939, after several years of peace, the religious problem again
threatened Mexico's tranquillity. The government was angered by the
Mexican church's delight over Franco's victory in the Spanish civil war and
the rise of the Catholic-oriented Sinarquista party. It took measures to
implement the Socialist Education Law of 1934, which had amended
Mexico's Constitution to provide for socialist education. The passage of this
law in 1933 had in principle established socialist education as the basis of
Mexico's pedagogy, but the government had never really implemented the
changes. In December of 1939 the government acted to carry out its earlier
pledge. Vicente Lombardo Toledano, the CTM leader, presided over a
meeting of the National Confederation of Education; the group, amidst
anti-clerical speeches, drew up a law to inculcate dialectical materialism into
the Mexican educational system. This law was passed by both houses of the
Mexican Congress on 31 December. For the first time there was to be
detailed state control of Mexican education from pre-primary through
secondary school. Private educational institutions could exist only under the
supervision of the state. All schools had to comply with the Constitution of
1917 and the new law.82 Passage of this law immediately threatened to
reopen the church-stateconflict which had subsided after 1936. The nation's
Catholics viewed this legislation written by the followers of the arch-socialist
Lombardo Toledano as the start of a new attack on the church. On i
January the headline of the conservative newspaper, Hombre Libre, called
79 Le Front des Pauvres (Montreal, I954).
80
Ibid., pp. 239-41.
81 For an excellent description of the problem of political corruption in Mexico, see Manuel
Moreno Sanchez, 'Un estudio norteamericano sobre Cardenas', Problemas agrzcolas e
industriales de Mexico (I955). Moreno blames traditional attitudes for much of the problem.
82 The text of the law was
published in El Universal, 28 Dec. 1939.

for resistance to the new law.83 Catholics renewed all the old objections
which had been raised against the Sexual Education Programme of 1933.84
One critic saw it as a new device to divide the Mexican family.85 Mexican
bishops warned against the threat to the souls of the nation's children but
promised to work within the law for modification of the Constitution.86
Another again dredged up the spectre of sexual degeneracy:
Under the pretext of giving students rational and precise explanationsof the
universe as the directorsof the socialist educationproclaim,students are prosti-
tuted by being taught criminal, imprudent, and tendentious knowledge of
reproductiveintimacies.87
In an editorial entitled 'Irresponsibles and Criminals', Excelsior described
a teachers' conference in terms not calculated to allay growing Catholic un-
easiness. The newspaper told how the communist teachers had insulted the
flag and mocked the national anthem. The nation as well as the souls of
its youth were clearly endangered.88On 9 March, the revived anti-socialist
groups, known as 'Fathers of Families', met and voted to boycott the
schools importing immoral education.89 But unlike Catholic opposition in
I933, there were no threats of armed revolt.
Cardenas had clearly miscalculated; the devout Catholic segment of the
population had supported the government throughout the oil controversy;
and they had refused to rally to the supposedly pro-clericalGeneral Cedillo
when he rebelled in May I938; but in I940 they had become dangerously
alienated from the government. The middle-class women, generally reli-
giously devout, feared particularly that Mexico was moving towards
socialism. Not only was the opposition strengthened, but also a dangerous
polarization between devout Catholics and anti-clericals was again on the
rise. Such a polarization could contribute to armed rebellion. Many Mexican
Catholics had revolted in I926; a lesser number had taken up arms in I933.
With a strength of around 500,000, the Sinarquistasmight serve as a nucleus
for a Catholic fascistoid army similar to the Spanish Carlists.
Many middle class Mexicans also became uneasy over Cardenas's fervent
support of Republican Spain. The government opened the country's doors
for Spanish refugee immigration. Mexican opposition to this policy was
83 ' Es el momento de
reconquistar plenamente nuestros derechos come padres de familias',
Hombre Libre, I Jan. I940.
84 See in the
James W. Wilkie, Ideological Conflict Time of Ldzaro Cardenas (unpublished
M.A. thesis, University of California at Berkeley, I959).
85 Correa, El balance de cardenismo,
p. 320.
86 New
York Times, 20 Jan. I940.
87 Pedro Urdavinia, La situacidn de Mexico la sucesion
y presidencial (Mexico, D.F., 1940),
p, 42.
88 Excelsior, i March
1940. 8:! El Universal, Io March 1940.

based on the fear of contamination of Mexico by communist ideas; the
Spanish veterans might easily prove valuable to the left in a civil war.90
Some workers feared that the Spaniards would provide job competition,
especially on the railroads.9lOne of the many anti-government pamphleteers
showed the depth of feeling over this issue:
The governmentof General Cardenashas committed no other error of such
transcendencefor the future of our country than that of opening our doors to
that swarm of immigrantsthat bring with them ... a desireto transplantto our
soil the germs of the desolationthat provokedthe Spanish catastrophe.92
On 7 May I940, the Cardenasgovernment ordered the temporary suspension
of admission of Spanish refugees.
Many strongly protested against the Public Employees Statute which
allowed the formation of a union of government employees. Although
Cardenas prevented this new union from adhering to the CTM, his critics
still foresaw the possibility of a strike which could paralyse the federal
government.93 A group of revolutionary veterans led by Enrique Estrada,
Bolivar Sierra and Ram6n Iturbe opposed the measure in the House of
Deputies. Iturbe equated the unionization of public employees with com-
munism. Such acts, he claimed, were part of the Red conspiracy to socialize
industry and bring about the dictatorship of the proletariat. In Mexico such
a union would promote class divisions rather than strengthen democracy.94
Since the Partido Nacional Revolucionario then expelled Iturbe and Sierra
for their opposition, they then formed their own political party, the Frente
Democratico Constitucional Mexicano, to combat Lombardo Toledano's
alleged attempt to turn Mexico into a communist state.95
Although other measures, such as land reform, created more controversy,
the Spanish immigrants and the Public Employees Statute proliferated the
fears of the middle classes. The disaffected construed these acts as part of
the communist conspiracy, the final object of which was a socialized Mexico
without the Catholic church, the Christian family, or private property. In
late 1939 they received a further jolt as Cardenas granted asylum to Leon
Trotsky. If the next government wanted to avoid a civil war, it must
somehow reassure the middle class. Failure to do so might force the terrified
90 El Universal, 7 Jan. 1939. An opposition group protests the admission of Spanish republican
militiamen whom it called mercenaries 'who would disturb the country's peace'.
91 New York Times, 8 Aug. I939. A group of railroad workers withdrew from the CTM in
protest over the employment of Spanish refugees as drivers and firemen.
92 Benito X. Perez Verdia, Cardenasfrente al tinglado electoral, p. 66.
93 Benito X. Perez Verdia, Cardenasapostol v.s. Cardenasestadista(Mexico, D.F., I939), p. 85.
94 For debate see Diario de los debates diputados, 12 July 1938, p. 42.
95 See El Universal, I8 Jan. 1939, and New York Times, 12 Feb. 1939, for examples of the
manifestos issued by Frente DemocraiticoConstitutional Mexicano.

white collar workers and professionals into the ranks of a native fascist
movement. Supported by many army officials, such a force would be
polarized against the organized workers and agrarians. Once this split took
form, it would be difficult for Mexico to avoid Spain's fate.
The End of Cardenismo

Throughout his presidency Lazaro Cardenashad relentlessly pursued three
aims: social justice for the proletariat, an end to political violence, and the
encouragement of a national identity among Mexico's disparate population.
As his term drew to a close in I940, Cardenas could see that he had made
much progress towards the first two objectives. The third, despite the wide-
spread euphoria incurred by the oil expropriations, was far from achieved.
Mexico was in fact in many ways as disunited in I940 as she had been in
I933. Organizations such as the CNC and the CTM had internally streng-
thened the Mexican proletariatbut had encouraged institutional rather than
national loyalty. By their continuous strikes in 1939-40, the oil and railroad
workers had shown that a powerful labour organization could not be relied
upon always to place national over class loyalty. Although the CNC was
always loyal to Cardenas, it still showed no signs of political maturity. The
middle sectors had been both frightened and dangerously alienated from
the government. The possibility of intra-class or intra-institutional conflict,
or both, had dangerous implications; such conflict could lead to civil war
and thus restore violence as a means of settling political disputes. If, as in
Spain, a civil war were won by the conservatives, then much of Cardenas's
progress towards social justice would be destroyed. Time was running out,
and Cardenas knew it.
The international crisis added to the complexity of Mexico's problems.
Cardenas had always condemned any international aggression as in the cases
of Spain and Finland. He had observed the oppression of organized labour
and the liquidation of democratic freedoms in Italy, Germany and Spain.
Yet he was forced to send Mexican oil to Germany and Italy because of
reprisals taken by the oil companies in the allied countries. By early 1939,
Mexican-Axis barter deals had increased the German-Italian share of the
Mexican import market to 22 per cent.96 This additional trade with the
Axis powers brought with it a flood of fascist propaganda and rumours of
German support for the Sinarquistas and other anti-government factions.
Fortunately for Mexico, the outbreak of the Second World War and the
establishment of the British blockade soon reduced the share of German-
Italian trade with Mexico to 6-4 per cent.97 Later, the outbreak of war
96
Prewett, Reportage on Mexico, p. 208.
97 Ibid., p. 209.

between the United States and Germany re-established Mexican normal

trade patterns with the United States. By 1940, 87 per cent of Mexico's
trade was with her northern neighbour.98Cardenas found no alternative in
the foreign policy of the Soviet Union. The invasion of Finland and the
murder of Trotsky had shown him that Soviet imperialism could also
threaten small nations. Mexico had no choice but to become an ally of the
United States. On i June I940, Mexico abandoned her neutral stance and
expressed sympathy with France at the time of Italy's treacherous attack."
The Second World War and Mexico's growing commitment to the allied
cause increased the need for national unity in Mexico.
Throughout his last year in office, Cardenas worked to complete
important social reforms. In Chiapas he distributed German-owned coffee
plantations to workers' co-operatives. Although the bill that would have
granted female suffrage fell short of final enactment, Cardenas persisted in
strenuous efforts in support of this legislation. There were, however, many
successes for Cardenas, including a law that placed a high tax on excess
profits and another that implemented the 1934 amendment to the Constitu-
tion which provided for socialist education. Until the end of his term in
office, he continued to visit constituents in various parts of rural Mexico.'0?
To some, it appeared that he was determined to hear every Mexican's
problems before leaving office. Everywhere he went, he again and again
restated his plea for peace and unity.
In February of 1940 he summarized the spirit of his last years in an
important speech before the State Legislature of Guerrero at Chilpan-
cingo.l0 The major thrust of this speech was to assure the middle classes
and the Catholics that his government was not communist, but was the
representative of the unique Mexican Revolution. Also, he sought to con-
vince them that he envisioned a 'democratic and liberal' Mexico developing
through class unity, not class conflict. All sectors were urged to forget their
selfish interests and work towards the good of the entire nation:
There is not a communistgovernmentin Mexico.Our constitutionis democratic
and liberal. True, it has some moderatelysocialisticfeaturessuch as those con-
cerning national territoryand relationshipsbetween capital and labor, yet they
are no more radicalthan those of other democraticcountriesand of some which
retain monarchialinstitutions.It is not necessaryfor us to rely on the ideologies
98 Maurice Halperin, 'Mexico Shifts Her Foreign Policy ', Foreign Aflairs, 19 (Oct. 1940),
220. 9) Ibid., p. 225.
100 Salvador Novo, La vida en Mexico en el
periodo presidencialde Ldzaro Cardenas(Mexico,
D.F., I964), pp. 492-3. During his six-year term, Cardenashad spent a total of I6 months
out of the capital.
101 The entire text of this speech can be found in Partido de la Revoluci6n Mexicana,
Cardenas habla (Mexico, D.F., I940), pp. 248-56.

or ideals of other countries, but rather to adhere more closely and with a
greater sense of justice and liberty to our own principlesand to the vital needs
of Mexicoat this time.l02
Further, he defended the collective ejido from the charge that it was
based on a Russian model; it had only been formed where there had been a
pressing need for massive cultivation, irrigation, new technology and credit.
The only alternative to the ejido would have been anarchy and the waste
of human energy caused by conflicts among the workers. Far from being
communist, the collective ejido represented the government's effort to work
within the Mexican ambiente. Catholics were assured that the government
did not seek to attack religious sentiment or children's veneration for their
parents. Education reforms were directed only against fanaticism and super-
stition. He denied that his government was a dictatorship, but stressed the
modern concept of the state as an active agent for social justice. The state,
he pledged, would not be a passive observer before the disloyal struggle of
private enterprise. Over and over he emphasized the nationalism of his
government. Mexico's future organization would rest on her peculiar terri-
torial, spiritual, and ethnic conditions-including the pre-Cortesian,Spanish,
and western influences. Mexico had to summarize the experience of great
nations in the conquest of contemporary technology in order to create a
Mexican nation secure in its personality and sure of its destiny.l03
He continued the theme of moderation in his last speeches. On 15 Sep-
tember 1940, he travelled to the city of Dolores Hidalgo for the traditional
independence day celebration. This was the first time a Mexican president
had celebrated these rites at the birthplace of Mexican independence.
Concluding, once again he eloquently pleaded for peace and unity:
The Mexican Revolutionwishes to unite all the Mexicanpeople. It wishes to
encompassall within its generousprogramof social justice. Above all, it wishes
to avoid the danger which threatensa country when its sons are carriedaway
by ambitionand politicalpassion.
We believe that the best way to commemoratethis date which marks I30 years
of our independenceis not only to honor the immortalfigure of Hidalgo where
he lived, pronouncedand sufferedfor independence. . . but also we must think
briefly of the world situation. Again we reiterate to all Mexicans our call to
unification,peace, and work.l04
These were the last official words of a man who had accomplished most
of what he had set out to do six years earlier. In the future an increasingly
prosperous Mexico-unified, peaceful and hardworking-would build upon
the reforms he had initiated. With this in mind, he had selected his
successorin I939.
102 Ibid., 103 Ibid.
p. 252.
104
Casasola, Historia grdfica de la Revolucion, v, 2365-6.


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The Crisis of Cardenismo

Author(s): Albert L. Michaels

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The Crisis of Cardenismo

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now sought further triumphs. Ambitious leaders sought to satisfy followers

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politicians and businessmen joined the government along with Catholics,

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74 In 'The Mexican Left', in

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