REORGANIZATION OF THE PUBLIC TREASURY. GROWTH AND INVESTMENTS - CULTURE VOCABULARY - 2025

The reorganization of the public treasury, in addition to foreign investment and economic growth, occurred during the period called "Porfiriato" in Mexico. Furthermore, it was in this period that the new urban middle class and the new working class appeared.

This was due to government policies that encouraged foreign investment, which encouraged industrialization and demanded a large amount of labor. This would end up bringing in new social layers as an indirect result.

Don Porfirio Díaz Source: SylowX

This cycle lasted a total of 35 years. It began in 1877, with the triumph of General Porfirio Díaz over the churches and Lerdistas, ending in 1911 with the explosion of the Mexican Revolution, which caused the ruler's exile to France.

Mexico would thus show a great growth originated by these investments, which brought with them facilities for railways and means of communication such as electricity, telegraph and telephone.

However, those times were characterized by the separation of social classes, economic disagreement, as well as the excessive growth of certain geographical areas, in relation to the lag in other areas, for which for Mexico the balance of payments grew unfavorably.

Capitalist reorganization

It all started when the government of Porfirio Díaz at the end of the 19th century set about launching a capitalist project. This task was quite complicated, because the finances of the public treasury were in bankruptcy.

Porfirio Díaz's economic policy was the same as that proposed by Benito Juárez in the Reform Laws, which was the impulse of the industry that depended on the outside and a country open to foreign investment.

In its beginnings, the government of Porfirio Díaz had to initiate a set of special measures in the economy, which were needed to get the country to readjust.

Porfirio Díaz received a bankrupt administration, plagued by internal and external debt, together with low tax collection, almost zero local industry, and little commerce.

Due to all this, a greater control of the income was implanted, and simultaneously the public expenses were reduced.

Likewise, new taxes were created that, unlike previous governments, did not hinder or tax trade, especially imports.

Economic surplus

With the help of a new loan, all the debt was restructured, which finally made it possible to forge great certainty abroad, thus obtaining security in the markets.

Thanks to the above, over the years, government spending did not exceed income and even, beginning in 1894, a surplus was registered in the country's economy, in a way that had not been achieved since the republic had been established.

Due to the increase in industrial activity, the middle class and the working class appeared. At the end of the Porfirian regime, both classes became agents of change.

Economic growth and foreign investments

In the government of Porfirio Díaz, great natural economic progress was experienced. This economic well-being of the Porfiriato was reflected in the renovation of the country's main cities: Mexico City, Guadalajara, Monterrey, Veracruz, Puebla, and San Luis Potosí, among others.

- President Porfirio Díaz and his ministers implemented general policies for the reorganization of public finances.

- Mining activity grew with a focus on industry, concentrating on the extraction of metals for industrial development.

- Industrial plants were modernized: production of paper, textile bar, gunpowder and tobacco. On the other hand, the brewing industry appeared for the first time, and there was a great advance in this regard.

- The soap companies, telegraphs, pulquerías, electricity companies, farms and commerce in general had a great boost.

- Agriculture was based on extensive crops of products for export, such as henequen and cotton.

- France, Great Britain, Germany and Spain came to Mexico to invest in agriculture, railways, mining, etc.

- The United States, France and England were responsible with their contribution for the exploitation of mining resources.

- The British and Americans participated in the oil extraction.

The railways

On September 8, 1880, the government of Mexico endorsed the first railroad concession of real importance with US companies.

As a result of the arrival of the railroad, people were able to begin to move more quickly throughout the Mexican Republic, thus changing the concept of time. Trade was also facilitated, in addition to the mobility of the military.

The railroad passed through Mexico City, Celaya, Querétaro, Irapuato, Salamanca, León, Guanajuato, Zacatecas, Aguascalientes, Chihuahua and Torreón.

Social injustice

During this period of the Porfiriato, several changes took place that have greatly influenced Mexican political life today. However, at the same time there was great social inequality. Most of the people did not agree with the kind of government they had.

From a macroeconomic point of view, Mexico was in an excellent situation. However, the economic and social situation of the town in general was bad: the majority of the peasants and workers, who represented more than 80% of the population, lived in total misery.

The wealth created by foreign investment, which was sometimes associated with national capital, was condensed in only a few people. Therefore, it can be assured that economic growth is not equivalent to social development in this case.

The Díaz regime, which sheltered itself under the slogans of "little politics, a lot of administration" and "order and progress," did not respond to its programs fairly or meet all of its challenges.

People's rebellion

At the beginning of the century, the main cities already had public lighting and the first cars could be seen in circulation. However, this entire universe of privileges was exclusive only for some social sectors of the Mexican nation at the beginning of the 20th century.

The working class of Mexico worked under conditions of extreme exploitation. This situation was more evident in the case of the country's own miners, who had to compete with foreign workers, especially English and American workers, who received better wages and treatment.

This situation of unequal treatment and injustice with the workers extended to the indigenous and peasants. This gave rise to movements of rebellions and peasant strikes against the regime of General Porfirio Díaz, as well as the formation of covert political parties, such as the Mexican Liberal Party.

References

1. History of Mexico 2 Secondary (2012). Reorganization of the public treasury. Economic growth and foreign investments. Taken from: historiademexico2univiasec.wordpress.com.
2. Notes of History (2017). Reorganization of the public treasury, economic growth and foreign investment. Taken from: ximenapuntes123.blogspot.com.
3. Expansion (2019). Public treasury. Taken from: expansion.com.
4. History 3rd grade (2017). Summaries Taken from: histdaniel.blogspot.com.
5. Wikipedia (2019). Economy of the Porfiriato. Taken from: es.wikipedia.org.