Mexico a great potential market

Title

Language

English

Year

1936

Rights

In Copyright - Educational Use Permitted

Fulltext

March, 1936 THE AMERICAN CHAMBER OF COMMERCE JOURNAL 13 Mexico A Great Potential Market Because Mexico must offer opportunities to Philippine exports, and might take quantities of Ilokano cloth and Manila slip pers, we reprint the following article from the Exporters’ Digest In order to understand the Mexico of today and of tomorrow one must first understand what the statesmen of the great republic south of the Rio Grande have done during the last fifteen years and what they are planning to do under the sixyear plan that went into operation when Gen. Cardenas be came President a year ago. The changes that have taken place since 1920 arc epoch-making in character and extent. Unremitting efforts have been made to provide the peons of Mexico, whose abject poverty and ignorance under the Diaz regime was proverbial, first with land so that each head of a family might be independent, and second with educational opportunities. Already hundreds of thousands of peasant farmers have been granted individual holdings of 10 to 50 hectares each, while co-operative associations have been pro moted to provide them with farm machinery and assist them in financing their operations and in marketing their crops.- At the same time the Federal Government established and has since maintained more than 12,000 rural and primary schools in the various States. In 1910 the number of illiterates was 7-1/2 million, or 60.73%. Today with a population one-third greater, the percentage of illiterates is only 39.26%. As a result of these and other measures the standards of living among the former peon class arc gradually rising, while a pros perous middle class is coming into exist ence for the first time. All this means increased buying power as the years go by, and larger and more diversified wants to be satisfied. Thus far 6,000 kilometers of improv ed highways have been constructed, in cluding the Mexico City-Laredo Highway now practically complete. Work is pro gressing on highways from Mexico City to Acapulco and to Guadalajara. Ano ther trunk highway is projected, to be built during the six-year period, from Sonora to Chiapas—connecting the U. S. with the Guatemalan border. The various States are to be encouraged to build highways of their own to connect with these trunk lines and between their principal cities. Aviation has made tremendous progress in Mexico during recent years and the six-year plan aims to encourage this de velopment still further by remitting all taxes paid by private companies for gasoline consumed by their planes the first year, 75% of the tax the second year, 50% the third and 25% the fourth. The Federal Government is to construct all necessary border airports, while the States will build those needed in the interior. Already there are 200 air fields in the republic, of which some 50 are commercially important. Another part of the plan contemplates the expenditure of 60 million pesos for the construction of four new railway lines to open up regions now isolated. Still another develop ment of recent years that merits attention, thoijgh not speci fically a part of the six-year plan, is the creation and encourage ment of native industries. Formerly Mexico was content to export her great mineral and agricultural staples and buy from abroad all of her requirements in manufactured lines. For the last ten or fifteen years there has been gradually growing Mexican economic reforms include the breaking up of large estates and making the peons free holders, out of which is developing the lower middle class; and great attention to the arts, as well as free public education, steadily reducing illiter acy; also attention to public works, the building of trunk highways and the pro motion of all means of rapid communica tion including flying. The flowering of art in Mexico is one of the more signifi cant signs of the times. up a very important group of manufactures, many of the factories being American owned or controlled. While this industrial development is curtailing our market in quite a number of lines they provide a large and steady field for the sale of industrial machinery of all kinds. Accord ing to the 1935 industrial census there are now 8,156 industrial establishments in the country having an annual production of 7,500 pesos or more. (The 1930 census enumerated a far larger number of industrial establishments, but 80% of them had an annual production of less than 5,000 pesos.) In these reported for 1935 the number of employees was 269,757, exclusive of directors and salaried employes, and the amount paid as wages and salaries was 170 million pesos. This de velopment has materially increased the buying power of a large mass of people. About 30% of wages paid in all indus tries are reported for the Federal District. Monterrey ranks next as an industrial center, while there are many manufac turing plants in the States of Vera Cruz, Puebla, Coahuila, Guanajuato and Jalisco. Next to Monterrey, the capital of the State of Nueva Leon, the cities of Puebla and Orizaba with their large cotton mills and Guadalajara with its wide range of industries arc the leading industrial centers. Best location for agency, if only one is needed, Mexico City. If more than one, Mon terrey, Chihuahua and Hermosillo may be suggested for the northern states (from east to west), Mexico City for the central portion and Vera Cruz for the southeastern states. It is reported that Ambassador Da niels has had studies made with a view to initiating negotiations for a reciprocal trade agreement between Mexico and the U. S. The two countries are closely bound together by rail, by the new high ways built and in prospect, by numerous steamship lines and by fast air routes. Mexico City has lately been a delightful host to thousands of American Rotarians and Lions at their annual conventions, while the country’s many attractions for American tourists will draw increasing numbers across the border as t he new highways are perfected. Whether there is a treaty or not, exporters will find Mexico a market well worth watching and cultivating. The high price of silver is stimulating its mining industries, business conditions, credits and collections are very good, and there art' no exchange restrictions. Mexico City is becoming modernized and has many fine business buildings, hotels and apartment houses. The political situation should be watched carefully, however, and, if the U. S. changes its silver purchase policy, the mining industry will undoubtedly be less active than it is now. Mexico’s exports for the first ten months of 1935 amounted to 581 million pesos, an increase of 17% over the year before, while imports totalled 322 million pesos—up 26%. The U. S. took 333 million of the exportsjand supplied 222 million of the imports—an increase of 40% over 1934, according to Mexican official statistics. The United Kingdom ranked second as a source of imports, with Germany a close third—having in creased its shipments by 39% as compared with 1934.

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