The Banco de Avio was the first body created in Mexico in order to encourage and promote the development of industry and the national economy. At the same time, it was the first industrial development bank in Latin America.
Its foundation took place on October 16, 1830 by Lucas Alamán, Minister of Foreign Relations of Mexico during the presidency of General Anastasio Bustamante.
Lucas Alamán founder of Banco de Avío
Background
During the presidential term of General Guerrero, his interests were directed to the protection of the Mexican artisan industry rather than to the improvement of its techniques.
With the coming to power of General Anastasio Bustamante in January 1830, a significant transformation of government industrial policies took place.
These were directed to the impetus in the establishment of modern technological methods of manufacturing in existing factories and industries.
The implementation of the new guidelines was planned under the premise of supporting with public funds the industrial rehabilitation with capital, machinery and technical education.
Foundation of the Avío Bank
Lucas Alamán was the forerunner of the idea that the economy would recover if industry was supported; this would achieve national prosperity.
Thus, in the summer of 1830, Congress approved the creation of the Avío Bank for the Promotion of National Industry.
The entity would be administered by a board of 3 permanent members, under the presidency of the Minister of Foreign Affairs.
It would turn with a capital of one million pesos, which would be taken from a part (20%) of the income from customs taxes on cotton articles.
Avío Bank Operations
The Avío Bank for the Promotion of National Industry began operations of loans at interest with guarantee for the benefit of companies and individuals.
During his 12 years of activity, he was involved in the purchase and distribution of industrial machinery to mainly support the textile sector.
Banco de Avío's mission differed at all times from those of commercial banking. In a special way, its function was limited to supporting private capital.
This was so in order to provide credits, machinery and funds at rates well below the amounts of the commercial market.
On the attribution of the merit for the creation of the Banco de Avío, numerous opinions have been woven that exclude Alamán as the father of the idea.
Despite this, analysts agree that, although there were other contributions, both the conception of the project and the influence for its approval were the work of Alamán.
Closure
The boost given to the cotton and wool industry was a great achievement of the project. On the contrary, the granting of the same privileges to the sector of silk, paper manufacturing and iron foundries distorted the concept of industrial support.
As the production of cheap and widely consumed products ceased to be supported, the bank's resources were dispersed and its effectiveness reduced.
In 1842 it was closed by decree issued by General Antonio López de Santa Anna. The closure was argued under two considerations:
- That their financial support was not possible due to the low profits obtained.
- That the Mexican textile sector, thanks to its expansion, would no longer need special financing.
References
- Avío Bank. (sf). Retrieved on November 29, 2017 from: encyclopedia.com
- Bernecker, W. (1992). Of Agiotistas y Empresarios: Around the Early Mexican Industrialization (XIX century).
- Gómez, S. (2003). Mexico history.
- Potash, R. (nd). The Foundation of the Banco de Avío. Retrieved on November 29, 2017 from: codexvirtual.com
- Russel, P. (2011). The History of Mexico: From Pre-Conquest to Present.