Evening star., 1940-12-08
Mexico Clears
Way for New
Trade Era
Comocho Faces Big
Task RehobiIitotinq
VituI Industries
Sr ecial Dispatch to The Star.


than the apparent new cooperation
of Washingtons nearest Latin
American neighbor, says Business
Week today.
For while Washington has not
allowed recent strained relations
with Mexico to stand in the way OF
important economic and defense
deals with other Latin American
countries, United States authorities
admit that the hemisphere program
has been complicated by Mexico S
extreme Socialistic program and the
necessary reluctance of both govern
ments to compromise on major is
sues.
1t is no easy task that confronts
the new Mexican President, it is
pointed out. He takes over at a
time when Mexico is in the midst
of serious economic difficulties. The
country. due to the war, has lost all
of its great foreign markets except
the United States It's oil industry
much of it appropriated from
British and American owners-is in
serious need of new equipment, new
capital and new markets. The
railroads that have been taken over
by the Mexican workers are suffer-
ing from lack of rolling stock.
Modernization Needed.
The utilities and the mines which
are still operated by foreigners have
not been modernized or enlarged
during most of the last six years be-
cause of the antagonism of the gov
eminent toward all foreign-con-
trolled businesses. And, states Busi-
ness Week. to many foreigners who
believe that Cardenas Mexico-for-
the-Mexicans program must surely
have added to the welfare of the
Mexicans themselves came the
shocking revelation last week that
Mexicans actually had less to eat
last year than before the six-year
Cardenas regime
When Cardenas became President
on December l, 1884, he set out to
raise the Mexican standard of liv-
ing by boosting wages and cutting
working hours. by breaking up the
vast estates and parceling them
out among the peasants, by building
roads and schools and improving
sanitary conditions, and by forcing
industry to accept a long program
of reforms. But despite doubling
of the public health budget. Mex
ico's infant mortality rate has in
creased 9 per cent between 1886
and 1899; the cost of living in Mex
leo City jumped So per cent while
wages climbed only 80 per cent
Savings deposits. however, increased
from 22S0O0,0O0 pesos in 1885 to
4l2,000,000 in 1899; the number OF
life insurance policies increased sc
per cent, anG the education appro-
priation jumped from 1885, ,42C
pesos in 1888 to 67O78,4 AS in 1899
resulting in an appreciable de-
crease in MeXico's high military
quotient.
Industrial Lag Seen.
1t was by subjecting industry to
strict government supervision, by
increasing industrial taxes, and by
expropriating American and other
foreign interests, that the Cardenas
administration threw monkey
wrench into the national economy
says Business Week. Industrial out
put as a whole. it is pointed out
increased only Is per cent between
1885 and 1899. though Mexico
needed all kinds of industrial equip
ment. Mineral production jumped
SO per cent in the same period, but
this was mainly due to the benevo-
lent silver policy of the United
States. And with the farm and oil
appropriations in 1887, Mexico ran
into real financial difficulties.
When Cardenas took Office in 1884,
the peso was worth about 27a. cents.
BY 1899 it had dropped to 19 cents.
Evidences of improved relations
with Washington are largely re-
sponsible for the recent recovery to
around Il cents.
Added to the unfavorable cur
rency situation is the fact that the
increase in general trade with the
United States from about 644,0O0000
pesos in 1884 to 914,000.000 in 1889
has not been enough to make up
for the loss of Mexico's European
markets since the outbreak of the
war. On top of this. the very i'm
portant oil industry has run into
serious trouble by the almost COM
plete loss of its foreign markets,
the wearing of equipment which
was beginning to be obsolete even
when the MeXicans took it over,
and finally the exorbitant wage de-
mands of the oil workers.
Reform Plans Curbed.
Business Week states that it was
the accumulation of all these
troubles which caused Cardenas
during his last year in Office to
place less emphasis on social re-
form and more on encouraging in
dustry and foreign capital. A 10
year tax-exemption program for
new industries was passed at the
beginning of 1910 which caused
American investors at least to prick
up their ears.
Trade between the two countries
increased during 1910 despite a
slump in the first six months due
to the unstable political situation
And during the last four or five
months of more favorable treat
ment on the part of the govern
ment. numerous American business
men have turned up in Mexico City.
"Avila Camacho. taking Office in
his stolid way at this time. is ex-
pected to continue and intensity
the recent trends of Cardenas, u
says the magazine. "Mexicans con-
fidently anticipate that Washing
ton and Mexico will soon announce
an important naval base deal, with
Mexico carrying out the projects
under full sovereignty, but with
Washington helping to provide the
materials. But business up North
will continue to move cautiously in
MeYtco until IL is sure that Ayila