ECONOMIC CRISIS AFTER THE MEXICAN WAR OF INDEPENDENCE - HISTORY - 2025

The economic crisis after the Mexican War of Independence was mainly due to the fact that Spanish merchants returned to Spain with their money, ousting the country.

After achieving independence, Mexico faced many economic difficulties. Independence from Spain brought consequences for which Mexicans were not prepared.

Furthermore, many of the productive silver mines were destroyed during the insurgency and lost Spain as a supplier of mercury.

Most of the wealth patterns in the colonial era continued into the first half of the 19th century, exacerbating the Mexican social and economic crisis. These conflicts made the crisis worse.

Inequalities in society only deepened during the time of the economic crisis. The lack of good administration in the face of so many needs in the country only exacerbated the whole problem.

By the end of the war, the Spanish had taken all their money out of the country. The struggle also resulted in the death of 10% of the producing population of that time; production was almost non-existent.

Also, the new government had to recognize and face an external debt of about 45 million pesos. In addition to this, the crisis only deepened after the civil wars that occurred between the federalists and centralists.

The post-independence economic crisis

Background

Rather than the insurgency becoming a social revolution, it ultimately allowed the conservative forces in now independent Mexico to remain at the top of the economic and social system.

In order to finance the war of independence, it was decided to implement several previously non-existent taxes. Among these new taxes was the rule that imported products should have a 15% tax. This situation resulted in several bankruptcies and bankruptcies.

Although independence may have brought great economic growth in Mexico since the Spanish crown was not sovereign, Mexico's economic position in 1,800 was better than it would be in the next 100 years.

At the end of the colonial era there was no national market, only poorly designed and regional markets. Most of the population was poor and peasant who worked small plots to survive or worked for very low wages.

The other rest of the population were urban residents, most of whom were unemployed or worked in a small artisan sector.

A large part of the military that acted in independence became bandits; they stole cattle, stormed the tracks, and sowed terror among the inhabitants.

Although New Spain had been a great producer of silver and the largest source of income for the Spanish crown, Mexico stopped producing silver in significant quantities for a long time, even until the late 19th century.

Poor transportation and infrastructure, the disappearance of a ready source of mercury from Spain, and the deterioration and destruction of large mines meant that the engine of the Mexican economy was immediately stopped.

The post-independence Mexican period was organized as a Federal Republic. This Mexican state was a poor institution, with regional struggles between federalism and a fairly poor central government. For this reason, the situation of this new Republic could not promote development and economic growth.

The post-independence republican governments never managed to control and rectify the disorders and insecurity that were a consequence of the problems and social tensions that occurred in the past.

Problems in the main economic sectors

The mining and agricultural industries were the ones that suffered the most from the consequences of the armed struggle. These sectors were completely economically abandoned. Practically all the income and the great majority of the wealth of Mexico came from mining and silver.

To promote the exploitation of silver in this area, the decision was made to lower taxes and allow free importation for the production of the mineral. Taxes on imported items were eliminated to promote foreign investment.

After the disappearance of Spain in this sector, the English showed great interest in this Mexican industry.

However, all the infrastructure necessary to carry out the exploitation was very precarious; Besides, it was not in good condition as a result of the armed struggle. This English investment was a loss that did not work out.

The agricultural sector also suffered the consequences of the war. The most productive fields were destroyed by both sides during the fighting.

At this time, irrigation canals were destroyed, warehouses and granaries were looted, cattle were stolen, and crops were burned.

Added to the destruction of the fields, there was a rather serious lack of machinery. The entire crisis the nation was going through made the much needed investment in this area impossible.

When independence was achieved, the Spanish were the ones who lost their lands, since the Creoles and the clergy were able to keep their properties.

At this time the hacienda predominated as the only form of property; their sources of credit were mortgages with the church, which charged interest and generally kept the land.

Diminished population

Another consequence of the war was the decline in population. This was most notable in the largest and most important cities such as Mexico City, Guadalajara, and Puebla; its population was practically decimated.

The urban population that was dedicated to the small artisan sector, as well as the workers of the mining industry, and of the textile industry were unemployed as a result of the war.

The demand for agricultural products dropped considerably as the population had also decreased in disproportionate amounts. This situation also contributed to the complete abandonment of the agricultural sector.

Another situation that worsened the crisis was the disease epidemics in Mexico in the 19th century. Diseases like the plague, malaria, typhus, and cholera wreaked havoc on society and the population during this period.

References

1. Economic history of Mexico. Recovered from wikipedia.org.