page_title: Economic history of Mexico
section_title: Porfiriato, 1876–1911
hierarchical_section_title: Economic history of Mexico / Porfiriato, 1876–1911
caption_attribution_description: Español: Pintura del entonces Presidente de México Porfirio Díaz Mori (1830-1915), exhibida en el museo del Templo y Ex-Convento de Santo Domingo de Guzmán, en la ciudad de Oaxaca de Juárez, Oaxaca, México.
context_page_description: Mexico's economic history has been characterized since the colonial era by resource extraction, agriculture, and a relatively underdeveloped industrial sector. Economic elites in the colonial period were predominantly Spanish born, active as transatlantic merchants and silver mine owners and diversifying their investments with the landed estates. The largest sector of the population was indigenous subsistence farmers, who lived mainly in the center and south.
  New Spain was envisioned by the Spanish crown as a supplier of wealth to Iberia, which huge silver mines accomplished. A colonial economy to supply foodstuffs and products from ranching as well as a domestic textile industry meant that the economy supplied much of its own needs. Crown economic policy rattled American-born elites’ loyalty to Spain when in 1804 it instituted a policy to make mortgage holders pay immediately the principal on their loans, threatening the economic position of cash-strapped land owners. Independence in Mexico in 1821 was economically difficult for the country, with the loss of its supply of mercury from Spain in silver mines.
context_section_description: When Díaz first came to power, the country was still recovering from a decade of civil war and foreign intervention, and the country was deeply in debt. Díaz saw investment from the United States and Europe as a way to build a modern and prosperous country. During the Porfiriato, Mexico underwent rapid but highly unequal growth. The phrase "order and progress" of the Díaz regime was shorthand for political order laying the groundwork for progress to transform and modernize Mexico on the model of Western Europe or the United States.  The apparent political stability of the regime created a climate of trust for foreign and domestic entrepreneurs to invest in Mexico's modernization. Rural banditry, which had increased following the demobilization of republican force, was suppressed by Díaz, using the rural police force, rurales, often transporting them and their horses on trains. Other factors promoting a better economic situation were the elimination of local customs duties that had hindered domestic trade were abolished.
  Changes in fundamental legal principles of ownership during the Porfiriato had a positive effect on foreign investors. During Spanish rule, the crown controlled subsoil rights of its territory so that silver mining, the motor of the colonial economy, was controlled by the crown with licenses to mining entrepreneurs was a privilege not a right. The Mexican government changed the law to giving absolute subsoil rights to property owners. For foreign investors, protection of their property rights meant that mining and oil enterprises became much more attractive investments.
  The earliest and most far reaching foreign investment was in the creation of a railway network. Railroads dramatically decreased transportation costs so that heavy or bulky products could be exported to Mexico's Gulf Coast ports as well as rail links on the U.S. border. The railway system expanded from a line from Mexico City to the Gulf Coast port of Veracruz to create an entire network of railways that encompassed most regions of Mexico. Railroads were initially owned almost exclusively by foreign investors, expanded from 1,000 kilometers to 19,000 kilometers of track between 1876 and 1910. Railways have been termed a "critical agent of capitalist penetration," Railways linked areas of the country that previously suffered from poor transportation capability, that is, they could produce goods, but could not get them to market. When British investors turned their attention to Mexico, they primarily made investments in railways and mines, sending both money and engineers and skilled mechanics.
  The development of the petroleum industry in Mexico on the Gulf Coast dates from the late nineteenth century. Two prominent foreign investors were Weetman Pearson, who was later knighted by the British crown, and Edward L. Doheny, as well as Rockefeller's Standard Oil. Oil has been an important contributor to the Mexican economy as well as an ongoing political issue, since early development was entirely in the hands of foreigners. Economic nationalism played the key role in the Mexican oil expropriation of 1938.
  Mining silver continued as an enterprise, but copper emerged as a valuable mining resource as electricity became an important technological innovation.  The creation of telephone and telegraph networks meant large-scale demand for copper wiring. Individual foreign entrepreneurs and companies purchased mining sites. Among the owners were Amalgamated Copper Company, American Telephone and Telegraph, American Smelting and Refining Company, and Phelps Dodge. The Greene Consolidated Copper Company became infamous in Mexico when its Cananea mine workers went on strike in 1906 and the rurales in Mexico and Arizona Rangers suppressed it.
  Northern Mexico had the greatest concentration of mineral resources as well as closest proximity to a major market for foodstuffs, the United States. As the railroad system improved, and as the population grew in the western U.S., large-scale commercial agriculture became viable. From the colonial period onward, the N
caption: Porfirio Díaz, liberal military hero and President of Mexico 1876–1911
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