1941: Mexico

Relations with the United States.

Although Mexico was the only Latin American republic north of the Canal not to declare war on the Axis powers, following the sudden attack of Dec. 7 on Pearl Harbor, which precipitated the United States into the second World War, it has taken active measures to indicate its cooperation with the United States and to prove its pro-democratic stand in the present world division of political philosophies and forces. Mexico severed diplomatic relations with the three Axis states, thus closing the avenues of Axis propaganda provided hitherto by legations and consulates. The country's long and largely undefended coastline suggests certain strategic disadvantages to the United States in the event of Mexico's open belligerency. Mexican troops were sent, by agreement, across United States territory to guard the crucial region of Lower California, which, with its 700 miles of isolated and deserted coast, and one of the best naval anchorages in the world in Magdalena Bay, might easily be coveted by the Japanese for submarine or air bases, and ex-President Lazaro Cárdenas was made Commander-in-Chief of the Pacific Coast. Mexican soldiers were also sent to protect North American-operated mines producing essential defense materials. Japanese, German and Italian assets in Mexico were frozen. On Dec. 16 President Avila Camacho requested Congressional approval of measures to permit passage through Mexico, 'in cases of obvious urgency,' of military forces of other American republics, clearly meaning the United States. Finally, a joint Mexican-United States Defense Commission, similar to the Canadian-American commission, was created.

As early as April a convention was signed for the 'reciprocal transit of military aircraft,' the first step to implement the mutual-assistance pact concluded with the United States on March 15. The airfields, bases and ports of the Republic south of the Rio Grande are now, therefore, accessible to United States' ships and planes. In July the United States agreed to buy Mexico's entire exportable surplus of strategic minerals, and Mexico pledged itself to sell none outside the Western Hemisphere. In all these ways the understanding between the United States and Mexico to coordinate defense preparations, 'in principle,' has been implemented, and the statement of the Mexican Foreign Minister in January, that 'aggression against any Pan American country will be considered by Mexico as against Mexico herself' becomes more than phrase-making.

The immediate effect of the outbreak of war in the Pacific was the withdrawal of some $6,000,000 from Mexican banks on the part of Spanish and French residents, who own from 40 to 60 per cent of Mexico's total bank deposits. This was a severe shock to the Republic's financial system. The United States' priorities system created a precarious situation for Mexican industrialists, too, who are confronted with a shortage of chemicals, rayon, tinplate, steel-making alloys and machinery of all kinds. The allocation of tinplate by the United States Defense Board (see BOLIVIA) was the first step taken to face this effect of total war on Latin American economy. The seizure of Axis ships in Mexican ports, begun last April when Mexico requisitioned twelve German and Italian vessels, should be accelerated as the shipping shortage increases. The blacklisting by the United States of pro-Axis firms in July, which the German Government requested Mexico to protest, led the Mexican labor leader, Vicente Lombardo Toledano, to propose nationalization throughout Latin America of all such enterprises, in order to prevent their acquisition by North American business interests.

Internal Affairs.

The completion of the first year of the Avila Camacho administration indicated a rightist trend away from the Cárdenas policies, but no such immediate reversal of the program of the preceding régime as had been anticipated in many circles. The appointment of the President's brother, General Maximino Avila Camacho, as Minister of Communications, a step which the President himself opposed, suggests that a reactionary group, headed by former Presidents Emilio Portes Gil and Abelardo Rodríguez, may really be dictating the policies of the present administration. The land program announced at the close of 1940, providing for a parcelling of ejidal, or common, lands, was not extended to collectivized ejidal districts like La Laguna and the Yaqui Valley. Failure for two years to use the land deprives the ejidatario, or public landowner, of the right to it. Further attack on the hacienda system, through land distribution to the villages, which at the end of the Cárdenas régime totaled in the neighborhood of 40,000,000 acres, ceased. As for educational policy, Article 3 of the Constitution, providing for 'socialistic education,' remains unchanged but, among the administration bills presented to Congress when it convened Feb. 1, 1941, were several which drew the teeth of this provision. One would relegalize private and religious educational institutions, outlawed in Mexico since the Calles régime; another called for an educational program allowing for freedom of conscience. The bitter campaign of the Church, and of the Church-organized Padres de Familias, is reflected here, as is also the new President's own fervent religious faith, avowed in one of his first public statements.

Sinarquismo.

In his opening address to the Congress on Sept. 1, President Avila Camacho welcomed foreign capital and promised it fair treatment, though warning that this did not mean abandoning Mexico's social legislation. The repatriation of Mexican capital in the first four months of the present administration gave evidence of a confidence of business in the new régime. This slowed down substantially in the later months of 1941, although it was estimated that over $50,000,000 of liquid capital, mostly Mexican, moved from New York to Mexico during 1941. In this same speech the President condemned both Communism and Sinarquismo, a strongly clerical movement, as 'exotic and inappropriate.' The latter organization, which has been compared to the earlier Cristeros, is strongest in the rural districts, but is opposed by the left-wing peasant groups. Charges that it is associated with the Falange and the Nazis, and that it has tried to complicate United States-Mexican relations, though unsubstantiated, were responsible for the unfavorable action of the Chamber of Deputies, in October, on a project for the colonization by Sinarquistas of strategically located Lower California. This ban was lifted two weeks later by presidential decree on the ground that, as Mexican citizens, they had freedom of movement in Mexico.

Labor Relations.

In Avila Camacho's attitude towards labor can best be seen the middle-of-the-way quality of his rule in this first year. One of the first acts of the administration was to take the railways out of the hands of the Workers' Syndicate. Labor is still allowed three representatives on the managing committee of seven, but the leader of the Union of Railway Workers maintains that they are consistently ignored in policy-making. Although the Government did not crack down on labor as heavily as had been expected, the power of the strong labor leader, Lombardo Toledano, was sharply curtailed, and it was clearly intimated that the right to strike should not be exercised when the public interest is involved. In February the Government 'broke' a strike in a zinc-producing plant of the American Smelting and Refining Company. An impartial observer, however, called the present administration's attitude towards the majority of strikes as friendly, in general, as the Cárdenas attitude was during the latter part of the preceding régime. The request of President Avila Camacho that employees of the Federal school system form a union separate from the Mexican Federation of Labor must be chalked up, nevertheless, as a step to the right. The firing on representatives of the Union of Munition Workers, in September, when they were demonstrating before the President's official residence, was minimized by Lombardo Toledano.

The anti-labor tendencies of the present government have put the CTM (Confederation of Mexican Labor) in an embarrassing position, for it officially supported Avila Camacho in the presidential campaign. In February Vicente Lombardo Toledano's term as secretary-general of the CTM expired. He was succeeded by Fidel Velásquez. Lombardo has been concentrating on strengthening the CTAL (Confederation of Latin American Workers) which, at its Congress in the late fall, reelected him president. The CTAL and the dormant COPA (Pan American Federation of Labor) have been sparring for dominance in the inter-American labor world, just as CTM and CROM (Mexican Sectional Labor Federation) have within Mexico, although these two Mexican organizations signed a non-aggression pact this year, suggesting the possibility of a move for a united labor front to resist Avila Camacho's rightist moves. At its Congress the CTAL authorized Lombardo to travel through Latin America for organizational purposes. The CTAL is strongest in Mexico, Chile, Argentina, Cuba, and Colombia. The resolutions passed reflected Lombardo's orientation towards the democracies in the world conflict. Reduction of the working day, recognition in all Latin American countries of the right to strike, and the organization of peasants and industrial workers in a common front were the chief points of domestic program of the CTAL.

Tentative Agreements with United States.

The 'global settlement' with the United States, Nov. 19, 1941, has been called by Avila Camacho 'a touchstone to prove the genuineness of the Good Neighbor policy.' This agreement included: a loan of $40,000,000 to stabilize the Mexican peso at about the current rate; an undertaking by the United States Treasury to purchase monthly a fixed amount of Mexican silver at a fixed rate; an Export-Import Bank loan of $30,000,000 for road-building; a promise to schedule payments on $40,000,000 of North American agrarian and 'general' claims arising between 1927 and 1940; and an understanding, 'in principle,' to negotiate a reciprocal trade treaty. The major problem of the expropriated oil properties was virtually shelved. Provision was made for a token payment of $9,000,000 and the appointment by each government of an appraiser to determine final valuation and further compensation. In case of failure to agree, direct diplomatic negotiations will be resumed. If these fail, the token payment will be returned to Mexico. The oil company executives refused such a settlement, having already twice rejected similar proposals because they provided no inclusion in the appraisal of subsoil rights (90 per cent of their claimed valuation), and because they validated the original confiscation. The Mexican Foreign Minister, in defending the 'global agreement' before the Mexican Senate, declared that it paved the way for a 'just settlement' of the oil question, protected Mexico against inflation, and would lead to further agreements on national and continental defense. The pact showed how Mexican economic dependence on the United States, now complete with the entry of the United States into the War, could be turned to Mexico's diplomatic advantage, and is regarded as a triumph for the Cárdenista faction in the Government.

Great Britain and Mexico.

The British Government, on Oct. 21, in resuming diplomatic relations with Mexico, which were broken off in 1938 following the oil expropriation, made it clear that its position regarding the oil properties of its nationals remained unchanged. A settlement liquidating most of the claims of the Sinclair interests was completed in July, with the payment of $300,000 in cash to the Penn-Mex Fuel Company. Mexican oil production in 1941 declined and petroleum exports for the first ten months were 3,900,000 bbl. less than in the corresponding period of 1940. This decline is one reason for the country's adverse trade balance, amounting to about 150,000,000 pesos. A presidential decree of Dec. 30 encouraged private enterprise in the oil industry, chiefly in exploration, and permitted the importation of drilling equipment. It imposed a restriction of 30,000 hectares on the area any one company might explore, however, and specified the Government's right to expropriate at will.

Indian Problem.

The Inter-American Indian Convention was ratified by five countries (the United States, Mexico, Honduras, El Salvador, Ecuador), and an Inter-American Indian Institute may now be established. A skeleton organization has been functioning in Mexico for several months and has begun two publications: a monthly Boletín Indígenista and a quarterly América Indígena. Personalities and politics hampered it, however. Mexican students of the Indian problem are divided; one faction, led by Moïses Saenz, provisional director of the Institute, until his death in the fall, favored the absorption of the Indian into Mexican life; the other, led by Luis Chávez Orozco, opposed assimilation and favors advancing the Indian as a separate cultural entity. The successful functioning of the new Institute will depend on the reconciliation of such differences.