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In July, 1921, it was reported that foreign banks in Mexico were maintaining cash reserves or foreign balances of from 65 to 80 per cent of deposits. Mexican banks were content with a much lower reserve, running from the minimum of 33 per cent required by law, to 40 per cent. The nominal bank rate was 12 per cent, but the actual rate was from 2 to 22 per cent.

The whole banking situation is in an uncertain and unsatisfactory condition. Virtually a new system will have to be devised and put in operation before the business life of the country finds an assured foundation.


The Comisión Monetaria is a government organization which carries on all classes of banking operations. Its balance sheet of July 30, 1921, is printed below:

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Department "Refaccionario" de la Laguna. $5,313,416.99

Mexican Navigation Co..

Other debtors...







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863,251.14 124,959.48 5,449,220.48





For the period prior to 1920, Walter F. McCaleb, Present and Past Banking in Mexico, with its helpful bibliography will be found especially useful.




Leland Stanford, Jr. University

The preparation of a satisfactory account of labor conditions in Mexico is attended with extraordinary difficulties. The material available is fragmentary and inadequate. Until recent years no systematic effort has been made to collect labor statistics; since the establishment of a Bureau or Department of Labor under Madero the disordered conditions of the country have made the assemblying of reliable data all but impossible. Our chief sources for statistical information are the census reports of 1895 and 1910, which contain many serious gaps and reveal a number of inconsistencies. In the preparation of this chapter the writer bas used, in addition to the government documents available, a number of articles and monographs1 and the testimony of a large number of Mexicans and Americans with Mexican experience 'who are conversant with labor conditions.2 The picture which I will be drawn will be incomplete in many particulars; some of the conclusions reached are to be regarded as tentative. Yet an effort will be made to analyze the outstanding characteristics of Mexican Labor, to indicate the share it has had in the economic development of the country and finally to envisage the problem it must solve if it is to play its full part in the upbuilding and reconstruction of the Mexico of the future.

In other chapters in The Year Book will be found full data regarding the population of Mexico and its distribution. It may merely be recalled as a preliminary to our special study that according to the census of 1910 the population of Mexico was given as 15,150,369. Various estimates have been made of the racial composition of the Mexican people; the most recent writer on the subject states that the whites constitute 1,150,000 or 8 per cent; the Mestizos 8,000,000 or 52 per cent, and the Indians 6,000,000 or 40 per cent. There is reason to believe that the proportion of the whites is somewhat too low and that of the In1A partial list of authorities consulted appears on p. 354.

2The writer has personally interviewed over one hundred such persons. In addition he has utilized the testimony of certain witnesses before the Subcommittee of the Committee of Foreign Relations of the United States Senate investigating Mexican Affairs, Sixty-sixth Congress, First Session, 1919. (Generally known as the Hearings before the Fall Committee.)

Thompson, The People of Mexico, p. 37.

dians too high. As the Mexican census makes no classification according to races no official statistics are available. The population in 1910 was distributed as follows: The great central plateau contained 75 per cent of the population; the tierra templada, or foothill region of moderate temperature, 15 to 18 per cent; and the tierra caliente, or torrid region 7 to 10 per cent. It follows therefore that in dealing with labor or social conditions, attention should be focused upon the situation as found on the central plateau.

Characteristics of Mexican Labor: Although the characteristics of Mexican labor necessarily vary in different portions of the country, Mexican labor, both skilled and unskilled, is inefficient if judged by the standards of labor in the United States and the countries of Western Europe. The chief adverse characteristics may be summarized as indolence and apathy, improvidence and lack of ambition with a consequent willingness to accept a low standard of living, an improperly developed sense of responsibility, an addiction to routine which hinders the introduction of machinery and labor-saving devices, especially in agriculture; and finally a tendency toward dishonesty, especially manifested in petty thieving. These handicaps to labor efficiency have often been explained on ethnic grounds; certain it is that the crossing of the Spanish and Indian strains has not tended to accentuate those qualities ordinarily associated with efficient labor. Of more fundamental importance, however, are certain conditions, climatic, social, economic, which until recently at least have been more or less constant. The climate of Mexico, despite its wide variations due to differences in altitude, has in general exercised a depressing effect on labor efficiency. In the tierra caliente the handicaps common to all tropical belts are to be found; while in the plateau regions the lack of oxygen and the rarefied atmosphere make sustained exertion difficult. Of still greater moment are the economic and social causes. It has long been recognized that the excessive use of alcoholic liquors, especially pulque, has been an enormous factor in lowering the status of Mexican labor. It is noteworthy that in 1903, at the heyday of the Diaz régime, the value of corn raised in Mexico amounted to 82,169,962 pesos, while the value of alcoholic liquors produced during the same year reached a total of 28,393,213 pesos. During the Diaz period no effort was made by the government to cope with this evil; such efforts as were made to abate drunkenness were due to a number of progressive American companies who absolutely insisted that no liquor be consumed on their premises. Since 1910 spasmodic attempts, especially in Sonora and Yucatán, have been made to grapple with this problem, but the results thus far have hardly been encouraging.

Closely allied to drunkenness is gambling. Both the Mexicans and the Indians are born gamblers, but the government,

instead of seeking to check this vicious tendency, directly encourages it by licensing clubs, games of chance, and above all by supporting the lottery. There is perhaps no single factor more favorable to the creation of habits of general improvidence than the official exploitation of the gambling propensities of the Mexican of the poorer classes. Malnutrition and disease account in part for the low stamina of Mexican labor. While data on malnutrition are difficult to secure, there is reason to believe that large numbers of the poorer classes of the plateau regions are insufficiently nourished and occasionally are but little above the starvation line. Peons or farm hands coming to mines for work frequently have to be "fed up" before they are even reasonably efficient. In tropical Mexico, where nature is more lavish in her gifts, food is more generally abundant.

It need only be remarked in passing that venereal disease, malaria, tuberculosis, typhus and almost certainly the hookworm disease have taken a frightful toll among the laboring classes of Mexico. Dr. Ellsworth Huntington in a recent study on the factor of health in Mexican character states that "Mexico may almost be called a nation of invalids." He adds that it seems conservative to say that among Mexicans as a whole there is four times as much sickness and death as among Americans.

Finally, among the causes which may be singled out for the habitual inefficiency of Mexican labor, may be mentioned the faulty system of land tenure which has retarded formation of a small class of independent farmers, the demoralization of the laboring classes through successive revolutions, the lack of opportunity for industrial and primary education, and finally the decrease in the number of working days through the multiplication of religious festivals.

The foregoing analysis would seem at first sight to weigh very heavily on the debit side of the balance of Mexican labor. It should be made clear, however, that the Mexican people possess a number of admirable qualities which distinctly make for labor efficiency. The Indian, and to a somewhat less extent the mestizo, possess considerable physical endurance. From his Indian forbears the typical Mexican has inherited certain artistic gifts as revealed for instance in the native arts and crafts. The development and encouragement of these aptitudes should play a large part in any rational system of education. Again, the Mexican possesses within certain limits qualities of initiative and adaptability. With care and tact he can be taught the use of new tools and become fairly expert in their use. It is thus possible to convert unskilled laborers by proper training into good mechanics, stationary engineers and even locomotive engineers. The high degree of patience and docility possessed by the average Mexican laborer facilitates this process. Finally, it should not be forgotten that the Mexican if well treated quickly devel

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