|Mexico Table of Contents
Propitious economic conditions did not greet Porfirio Díaz upon his rise to power in 1876. Mexico remained saddled with a huge foreign debt and an empty treasury. An army of bureaucrats was owed back wages, the country had a poor international credit rating, and persistent current account deficits caused serious balance of payments problems. Investment, whether foreign or domestic, was scarce, and the mining industry had yet to recover from the revolutionary wars. The relatively few mines in operation in 1876 were exploited haphazardly, and extraction and smelting techniques were archaic. Only a few miles of rail had been laid, transportation and communications were rudimentary, and dock facilities were dilapidated and unsafe. Endemic rural violence further hindered commerce.
During his first four years in office, Díaz began to tackle economic backwardness. He first decreed stiff measures against contraband moving across the United States border. Smugglers and bandits crossed the border from both sides, but Díaz would not permit United States troops to enter Mexico in search of them. Instead, he enlarged the Mexican border patrol. In 1877 Díaz agreed to honor US$4 million in claims by United States citizens against Mexico.
In 1880 at the end of his term and despite his followers' wishes, Díaz left office. The next president, Manuel González, continued Diaz's modernization program. Telegraph lines began to operate, and railroad construction was kept apace. In an attempt to meet his foreign debt obligations, González withheld the salaries of government officials, a move that led to a harsh campaign against the president.
During González's tenure, Díaz gathered a large following that restored him to office in 1884. Mexican positivism, embodied in the slogan "order and progress," was the backbone of the modernization scheme supported by the científicos , intellectual followers of Barreda. Led by José Ives Limantour, who served as adviser to Díaz, the científicos developed a plan for economic recovery that was to be carried out through the next twenty-seven years of the Porfiriato.
Source: U.S. Library of Congress