Don’t Panic About Taiwan
Alarm Over a Chinese Invasion Could Become a Self-Fulfilling Prophecy
THE election of July 7, considered for months in advance as likely to be a turning point in Mexican affairs, undoubtedly deserves to be recorded as an event of singular importance, if only because it was both the freest and the most bitterly contested that had been held in that country for over a quarter of a century. Indeed, the violence of political rivalry which has marked the aftermath of the election bears witness to the intensity of the emotions and convictions which it brought into play. Nevertheless, in another and perhaps more significant sense, history may well refer to this consultation of the electorate as something of an anti-climax. Nearly a month before, the Mexican Government had already made what amounted to a declaration of policy, of which the full consequences cannot yet be determined but which disposed, at least for the time being, of the most acute issue of the day -- the possibility of armed insurrection by the opposition candidate for the presidency, General Juan Andreu Almazán.
On June 11, the publishers of the metropolitan press of Mexico City were convoked by Señor García Téllez, Minister of the Interior and ranking member of the Mexican Cabinet. With considerable solemnity, he informed them that President Cárdenas had just sent the following cablegram to President Lebrun of France: "I wish to inform Your Excellency of the painful impression upon my Government caused by Italy's declaration of war against the great French people, which has traditionally been the spokesman of human liberties and the rights of man, as well as of international morality. I reiterate my best wishes for the prosperity of the French people and for the personal well being of Your Excellency."
Taken at its face value, this communication was merely Mexico's customary expression of sympathy for a victim of aggression -- Italy having taken the initiative in declaring war on France. But viewed in relation to the trend of Mexican foreign policy since the outbreak of the war in September 1939, the message of President Cárdenas was of the utmost significance. In effect it marked a sharp reorientation in Mexico's attitude to the international situation created by the war. In other words, on June 11 Mexico entered a period of closer coöperation with the United States and, as a consequence, of partiality toward Britain in her struggle against Germany.
To be sure, the possibility that such a declaration might be made had been indicated by such straws in the wind as: the Government's agreement with the Sinclair oil interests, officially announced on May 8; the remarks of the official Mexican delegate to the International Petroleum Exposition at Tulsa, Oklahoma, whom the press on May 18 quoted as saying that Mexico "would probably follow the United States' attitude in the war;" and General Avila Camacho's campaign speech delivered at Nogales, Sonora, on June 9, in which for the first time the candidate of the Party of the Mexican Revolution, now President-elect of Mexico, linked together "Fascists and Communists" as elements which "might pretend to initiate a movement against our democratic principles" -- this despite the fact that the Communist Party (of only slight influence in Mexican politics, it is true) supported his candidacy.
The immediate repercussions, both domestic and international, of the message to France indicate its crucial importance. At once the peso made a twenty percent gain in terms of the dollar, without any apparent economic justification; anti-Mexican feeling among American Congressmen and Senators abruptly subsided; the executive committee of the Confederation of Latin American Workers, in session in Mexico City from June 12 to 15 and presided over by Mexico's foremost labor leader, Lombardo Toledano, studiously avoided giving offense to the United States;[i] and the daily press of Mexico City, both Right and Left, redoubled its attacks against the Axis Powers. On June 13, officials confirmed the rumor that Arthur Dietrich, Press Attaché at the German legation and director of Nazi propaganda for a large part of Latin America, had been declared persona non grata by the Mexican Government. Shortly after, it was announced that a law for compulsory military training, the first in Mexico's history, would be introduced at a special session of Congress. Last but not least, it was very soon apparent that the turn in Mexican-American relations would mean the postponement, if not the collapse, of the long awaited rebellion, since it could not very well succeed as long as the Mexican Government had the confidence of Washington. Later events, including the Pan American Conference of Foreign Ministers at Havana, have indicated that the Cárdenas régime, and presumably the government over which Presidentelect Ávila Camacho will preside after December 1, at present enjoy that confidence. Nevertheless, the internal situation in Mexico -- to say nothing of possible international developments -- is fluid enough to make even a short-term prediction concerning the effectiveness and durability of Mexican-American coöperation a very hazardous undertaking.
A nation's geographic situation and natural resources are generally regarded as determining, to a large extent, its conduct in international affairs; yet in the last analysis they limit rather than create foreign policy. The really decisive factor is the internal social and economic organization of the nation. Thus Mexico, saddled from the very beginning of its history as an independent republic with a primitive agricultural socio-economic order has always had the foreign policy of a weak country attempting to maintain not only its political, but even more, its economic independence in a world dominated by powerful, expanding industrial nations -- particularly the United States. In this sense, the Cárdenas régime has sustained Mexico's traditional foreign policy: a defense of national interests, not by force, which Mexico lacks, but by the maintenance of peace and international law and order. What has distinguished Mexican foreign policy under Cárdenas from that of all his predecessors is the energetic and effective manner with which he has carried it out.
We need review only briefly Mexico's participation in world affairs during the past six years to discover that never before has her attitude been so positive and her rôle so significant. As early as April 1935, Mexico participated at the League of Nations, in the condemnation of German rearmament as a violation of the Treaty of Versailles. In 1936, during the Italo-Ethiopian dispute, Mexico urged that sanctions against Italy include an oil embargo, and when in July of that year all sanctions were raised, the Mexican delegate, Narciso Bassols, not only indicated with devastating logic the inevitable consequences of this act, but refused to be a party to it by withdrawing from the League Assembly.
Mexico's attitude toward the Spanish Civil War is too well known to need elaboration here. From the beginning Mexico insisted on the strict application of the rule of international law which clearly distinguishes between a legally recognized government and a rebellious faction. Mexico officially called the world's attention to the Italo-German invasion of Spain. Mexico shipped arms and munitions to the Spanish Republic from the very start of the war, and as early as June 1937 gave hospitality to five hundred Spanish children. Mexico was the only country, with the possible exception of Russia, to abide by international law to the extent of openly lending both diplomatic and military aid to the legal Spanish Government.
On March 19, 1938, the Mexican delegate at Geneva raised his voice against the invasion of Austria, and on several occasions, both before the League of Nations and at the Nine Power Conference in Brussels in November 1937, Mexico asked that concrete measures be adopted against Japan for violating the integrity of China. Then again in purely American affairs, Mexico played an active rôle in building up continental solidarity on the basis of mutual respect and of the peaceful settlement of disputes. At the Inter-American Conference held at Buenos Aires in December 1936, at the Eighth Pan American Conference in Lima two years later, and at the Panama meeting in September and October 1939, Mexico vigorously upheld the principle of inter-American consultation, and by inference at least rejected any unilateral scheme of action such as the Monroe Doctrine.
Finally, the expropriation of the American and British oil companies in March 1938 provided the conclusive test for the Cárdenas foreign policy. Here it was not merely a question of maintaining certain principles of international conduct which did not directly affect Mexico's interests, but of applying these principles in the defense of her own sovereignty and in the face of great odds. No matter what other issues were involved in the petroleum conflict, in the eyes of the Mexican Government -- and indeed in the eyes of the entire people, for never before had there been such a unanimity of opinion in the country's history -- the fundamental issue at stake was the sovereignty of the nation.
In more ways than one, as will be indicated later, the expropriation of the foreign oil companies was an act of far-reaching significance. One immediate result was that Mexico felt obliged to take the drastic step of breaking off diplomatic relations with Great Britain. There followed the exchange of a series of notes between the two countries in which England characterized the Mexican action as "arbitrary" and to which Mexico replied by citing its laws to the effect that foreign investors may not invoke the intervention of their governments under pain of forfeiture. Then on May 11, 1938, the British sent a brusquely worded memorandum demanding immediate payment of a small debt four months overdue. Not a word was said about the oil expropriation. Judging this to be a manœuvre to embarrass the Mexican Government, especially in view of the trifling sum in question (approximately 371,000 pesos), and provoked by the language of the note, Mexico paid the debt on May 13 and simultaneously withdrew her Minister from London. Comments in Mexico referring to Great Britain's failure to pay her own huge debts and her complacency toward the powerful transgressors of international morality indicated the depth of Mexican resentment.
From what has been said above, it must be clear that Mexico has conducted her foreign affairs during most of the Cárdenas era not only with unaccustomed vigor but also with remarkable consistency. The explanation of this phenomenon lies in the very nature of the Cárdenas government itself. Ever since the War of Independence in the early nineteenth century, Mexican history has been characterized by a deep yearning, often translated into bitter and violent conflict, to throw off the social and economic heritage of Spain. When régimes opposed to the fulfillment of that yearning have held power, Mexican foreign policy has not only been ineffective in defending the country's interests, as in the case of the war with the United States in 1846-48, but has even gone to the extent of sacrificing national integrity, as during the period of the French intervention and Maximilian's unhappy empire.
The Revolution of 1910 was the most dramatic manifestation of that persistent drive toward social and national liberation. After ten years of bloodshed and destruction, it succeeded in establishing a stable legal basis for Mexico's peaceful evolution from a semi-feudal and semi-colonial country to an economically independent, capitalist and democratic nation. Today, thirty years after the beginning of the Revolution, its objectives are still short of achievement, though considerable progress has been made. Most of that progress has, in fact, been made during the past six years.
Since Mexico is primarily a semi-feudal, agricultural nation, the most reliable barometer of the advance of its Revolution is the extent to which land has been distributed among the peasants. During the Cárdenas period more than 47 million acres have been divided among over a million peasants, whereas less than 20 million acres were turned over to three-quarters of a million peasants during the previous two decades. As regards education, at the end of 1934, Mexico had some 7,500 primary schools; today they number 20,000. Other public services -- such as the building of roads and dams, sanitation, child welfare -- have improved correspondingly. When Cárdenas took office, trade unions were weak and ineffective, and labor legislation existed merely on paper. Today, the C. T. M. is a relatively well-organized body of both industrial and craft unions numbering close to a million members, and labor laws, including provisions for collective bargaining, are ordinarily enforced.
Whatever inefficiencies, errors or injustice the above figures conceal, they nevertheless indicate that the régime of President Cárdenas pushed the Mexican Revolution ahead more resolutely and at a faster tempo than ever before. In the light of these figures, his foreign policy takes on its true meaning: it is the logical extension of his domestic policy. However, what Cárdenas left undone must also be considered. Today, at least half of the peasants are still without land, and it is estimated that some 175 million acres, chiefly in the form of great plantations and cattle ranges, are still in the hands of about 10,000 proprietors. Also, despite the nationalization of oil production and of the republic's principal railroad lines, the greater portion of Mexican industry, such as mining, electric power, telephone service and the largest textile factories are still operated by foreign corporations. In short, even the Cárdenas régime has failed by a considerable margin to carry the Mexican Revolution through to its conclusion. Mexico remains basically a semi-colonial country.
That the arrested development of Mexico's Revolution has a profound bearing on the immediate international problems now confronting that country will presently be made clear. The causes which have determined its successes and failures are, of course, enmeshed in an extremely complicated historical process. But one obvious factor has always played a preponderant rôle: the active resistance on the part of both domestic and foreign groups whose interests have come unavoidably into conflict with the advance of the Revolution. During the last two or three decades, the foreign resistance of greatest practical consequence has originated in the United States. American investments in Mexico amount to nearly one-half billion dollars, the largest of any foreign country, while the United States ordinarily accounts for almost two-thirds of Mexico's international trade.
How much the "Good Neighbor" policy of the Roosevelt Administration contributed to the success of the Cárdenas program would be difficult to estimate, though it is certain that the cordial relations between the two governments, at least during the first half of the Cárdenas term, played some part in strengthening the Mexican Government. It was during this period -- on April 13, 1937 -- that the United States agreed to cancel Article 8 of the Mexican-American (Gadsden) Treaty of 1853. The elimination of this provision, which granted the United States the free passage of goods, mails, troops and supplies across the Isthmus of Tehuantepec, was primarily an act of courtesy by the American Government; but at the same time it enhanced the prestige of the Cárdenas government. After the expropriation of the American oil companies, these relations became less than cordial, a situation that was aggravated still further by the terrific pressure brought to bear against Mexico by the expropriated companies.
The exchange of diplomatic notes which grew out of the oil controversy and the contingent problem of compensation for agrarian expropriations, proved that, though some progress had been made towards establishing a permanent basis of understanding between the two countries, serious obstacles still existed. By conceding to Mexico the right to expropriate foreign property on its territory, the American Government gave concrete evidence of its desire to respect Mexican sovereignty. However, by urging immediate payment for the expropriated property, by calling for international arbitration, and by insisting that it would be a violation of fundamental human rights to expropriate any more property without having the means to pay for it, the American Government raised what in Mexican opinion is the real point of conflict: the desire of the foreign investor or property-owner to get preferential treatment over the native owner.
Thus, commenting on the American notes of July 21 and August 22, 1938, President Cárdenas made the following pointed remark in his annual message to the Mexican Congress on September 1 of that year: ". . . the case under discussion accentuates the bitter reality that weak states must ever be obliged to increase their precaution in respect to foreign investors, who even if they do produce benefits for the state, and often with fabulous profit, come to be an obstacle to the very conduct of affairs of that government. The Ibero-American countries have felt this, and if a positive value can be given to Pan Americanism, it must be attributed to the conquest of the principle that foreigners may not aspire to a privileged treatment in prejudice to that of [our own] nationals."
From this moment on, the Mexican Government was faced with the difficult task of defending its position and at the same time of dealing with Washington with the utmost tact. This task was immediately complicated both by an economic crisis -- caused partly by the Anglo-American oil boycott and partly by the general business slump in the United States, Mexico's chief customer -- and by the increasing pressure of the native elements opposed to the Cárdenas program. The latter consisted not merely of the traditional opponents of the Mexican Revolution -- the feudal landlords, the high salaried employees of the large foreign companies, and those who move in their orbit -- but merchants, professional people, factory owners and bankers, some of them closely connected with the Cárdenas government itself, who in their apprehension over the effects of the economic crisis and over the growing strength of labor began to call for a halt in the revolutionary program.
On the whole these conservative elements, in particular those of the traditional type, consistently opposed the entire Cárdenas program, foreign as well as domestic. Hence, almost the entire Mexican press, with the exception of El Nacional, the government organ, and El Popular, the C. T. M. daily, leaned toward the totalitarian Powers, favored General Franco in the Spanish Civil War, praised the Munich Agreement, criticized the Roosevelt Administration and often attacked "Yankee imperialism" (though usually with reservations in favor of the Republican Party in the United States). No better example as to how these sympathies worked out in practice was the ill-fated rebellion of General Cedillo in May 1938. Authentic documents reveal that Cedillo was, for a time at least, in contact with Arthur Dietrich, Nazi official mentioned earlier in this article, and that he enjoyed the friendship of persons close to the expropriated oil companies.
The attitude of the Mexican Government toward the early stages of the European War was most clearly defined by President Cárdenas in a public address delivered on September 17, 1939, in which he made the following statement: "In this supreme hour marked by events of transcendent significance for our country, as it confronts the outbreak of an international conflict between ambitious, unscrupulous and imperialistic interests, we must again reiterate our social credo which condemns war as an absurd instrument for the solution of difficulties which arise between nations. We continue in our faith that we shall some day see arise out of the action of the organized workers of the world an effective system which will put an end to the disaster caused by ambition, and will defend the liberties and the sovereignty of nations, [and] the maintenance of organic peace."
This declaration of neutrality came as a considerable surprise to those who had expected Mexico's long-standing anti-Fascist attitude to lead her into the Allied camp. Some circles, both within and outside the republic, assumed that Cárdenas, in taking this position, was influenced by the Soviets' definition of the war in similar terms. No one, to be sure, can judge the purely intellectual effect of the Russian point of view on Mexican political theory; but to explain the statement of President Cárdenas on September 17 as merely a reflection of Russian policy is to ignore Mexico's experience during the prewar years and the concrete realities which the country faced when the war broke out. Moreover, Mexico's official condemnation of the invasion of Finland, made at Geneva in December 1939, can hardly be imputed to Soviet pressure. Nor could the fact that there have been no diplomatic relations between the two countries since January 1930 be blamed on Communist influence. As for the Fascist Powers, the subversive activities which they, in alliance with native reactionary groups, had been carrying on in Mexico were assuming serious proportions. However, Mexico's antipathy towards the totalitarian states was balanced by her lack of confidence in the European democracies as the defenders of weak nations and the upholders of international law. In the case of Britain, this lack of confidence turned into positive hostility at the time of the oil expropriations. Thus, Mexico considered that there was little choice as between the contending Powers.
Mexico had repeatedly declared her willingness to make substantial sacrifices in order to maintain international law and collective security. But as far back as the Italo-Ethiopian dispute she had realistically refused to take any unilateral action that might jeopardize her own welfare. She therefore continued to sell oil and other products to Germany, Italy and Japan, and when the Anglo-American boycott took effect, she did not hesitate to compensate for her losses by entering into extensive trade agreements with Germany. As a matter of fact, the export of Mexican petroleum, after dropping (in terms of United States currency) from $2,500,000 in February 1938 -- the month previous to the expropriation -- to $300,000 in the following April, had again reached the $2,000,000 mark by July 1939. This phenomenal recuperation, vitally important to Mexican economy, was almost entirely due to German purchases. Hence, for economic as well as political reasons, the Mexican Government preserved an attitude of strict impartiality toward the belligerent Powers -- without at the same time restraining her repugnance toward the political philosophy of the Fascist states.
Even more confusing than the Government's attitude towards the war were the regroupings that took place among the forces opposed to the Cárdenas régime. This phenomenon was not, however, unexpected in view of the new situation created by the war. To begin with, the representatives of British and German interests who, despite their prewar rivalries, could present a common front against the radical tendencies of the Cárdenas government, now found it extremely difficult, if not impossible, to preserve that common front. Furthermore, the pro-Allied neutrality of the United States, as well as the shift of. emphasis by the Roosevelt Administration from a "New Deal" to a war economy, were factors of great consequence. With or without reason, the most influential body of Mexican conservatives believed that because of the importance of Mexican raw materials to American war industries, the policy of the United States would now require that a halt be put to the advance of the Mexican Revolution.
Take, for example, Pedro Zuloaga, a prominent reactionary, who previous to the war actively opposed Pan Americanism in favor of General Franco's anti-Yankee "Hispanism." Now, to the dismay of many of his associates in the Acción Nacional, like the well-known Gómez Marín, he is trying desperately to reconcile a newly found tolerance toward the United States with his friendship for the Spanish "Caudillo." Likewise, the artist and anti-Cárdenas political leader, Diego Rivera, who recently turned pro-American, was publicly condemned by a prewar collaborator, León Ossorio, President of the Party of Public Salvation, as a traitor to his country and an accomplice of "international Jewry." The latter epithet perhaps makes it needless to add that Señor Ossorio receives spiritual and political guidance from the German legation. The result of these splits and new allegiances has been that the Nazis, though as active and persistent as ever, have been laboring under serious disadvantages; by far the largest section of the anti-government forces was able to unite under the leadership of General Almazán, a recognized friend of the expropriated oil companies and therefore likely to be favorably regarded by Washington.
Meanwhile, Mexican exports to Europe declined abruptly after the outbreak of the war: the sale of petroleum, for example, amounted in December 1939 to only $740,000. With the tightening of the British blockade early in 1940, the Mexican trade situation became appreciably worse, reaching its low point in June when the Italian market disappeared. The resultant financial crisis stimulated even greater pressure on the part of the more conservative elements within the government in favor of "consolidating" the Revolution -- that is, slowing down the distribution of land, reducing expenditures for public services and assuring greater protection for both native and foreign capital.
At the same time, Almazán began to acquire a certain mass following because of increasing unemployment, the unsatisfied land hunger of hundreds of thousands of peasants, the rising cost of living and the rapidly growing crisis in the nationalized oil industry (only partially relieved by the Sinclair settlement) and in the government-owned railways. Everything indicated that the expected Almazán rebellion would develop into a civil war of devastating proportions.
This likelihood was enhanced by the increasingly hostile tone of the American press and of members of the United States Congress toward Mexico. Some Mexican political analysts were led to believe that the Almazán uprising would not only have the unofficial support of influential groups within the American Government, but would also be the signal for the occupation of strategic points on Mexican territory by American troops. Even more disturbing was the proposed Townsend amendment to the Silver Purchase Act. Whatever its ultimate purpose may have been, its effects would automatically have been to deal Mexico's faltering economy a staggering blow.
The reply of the Mexican Government to this conglomeration of pressure was, as we have seen, the shift in its foreign policy as symbolized by the cablegram of June 11. A large section of Mexican conservatives considered this as a happy omen despite the fact that it seriously damaged the strength of General Almazán. Fundamentally, these people have aimed not so much at seizing direct control of the state -- though this is still an ambition of the conservative leaders -- as at putting an end to the further progress of the Mexican Revolution. The instruments by which the Revolution is to be liquidated are relatively unimportant. If the promise of greater concessions to outside capital will secure the direct or indirect support of a foreign Power, then the anti-revolutionary forces stand ready, now as in the past, to pay the price. If, on the other hand, the opposition leaders can force the Government to do their bidding by a formidable display of force, they are prepared to revise their attitude toward it.
Thus, for example, in the July 1 issue of El Economista, authoritative organ of the ultra-conservative Institute of Economic and Social Studies, an editorial article entitled "Will the Government Change its Orientation?" boldly answers in the affirmative. "It appears," writes the editorialist, referring to the Cárdenas government, "that on account of the world situation, what has not been done through conviction, will be accomplished through the friendly suggestion of our 'Good Neighbor.' . . . El Economista, faithful to its program, must see in the government's change of front -- even though it is not spontaneous -- a favorable indication for the economic resurrection of the country. . . . However, in view of the fact that proof [of the economic resurrection] is not yet available, we hope that the future president will be the one to take charge, at the proper time, of the task of providing an impetus to the new orientation." The "Good Neighbor" is, of course, the United States. Also to be noted is the neutral term "future president," which in view of the journal's political complexion indicates an extraordinary tolerance for the candidate of the Party of the Mexican Revolution.
These remarks in El Economista may be considered as characteristic of scores of similar comments which, with varying degrees of emphasis, have appeared in the conservative and reactionary press since June 11. Thus on June 14, Hombre Libre, staunch partisan of General Almazán and frequently cited as a source of information on Mexico by the publications of the Standard Oil Company, declared: "Almazán has not had to make special efforts to explain himself to the United States. His ideas on the position that Mexico must maintain in order to live with that country in a state of perfect harmony, were perfectly well known years ago, having been expressed at a time when there could be no suspicion that he was inspired by the opportunism of an electoral campaign. . . . Ávila Camacho . . . has suddenly conceived the desire of giving guarantees to the United States. . . . But who can trust General Ávila Camacho?" And so on, though sometimes more circumspectly, in Excelsior, El Universal, La Prensa, Novedades and other papers.
At the same time, it is also becoming increasingly clear that a stubborn and irreconcilable wing of the Almazán movement has now turned to the Nazis for support in carrying through the originally planned rebellion. Its friendly attitude toward the declarations of Colonel Lindbergh with respect to the war in Europe indicates that this group entertains some hope of sympathy even from the United States. However, prospects for a successful rebellion in Mexico are not very good just now.
The pro-government leaders and press -- Ávila Camacho, Lombardo Toledano, El Nacional, El Popular, etc. -- vociferously pledge that they will carry on the program of the Mexican Revolution without let-up, flatly contradicting the hopes and insinuations of their opponents. However, on the problem of American influence they keep a discreet silence. What does this silence mean? A firm belief in the benevolent intentions of Washington? An admission that their opponents have correctly estimated the situation? Or a tactic which will permit them to face events if and as they occur? The next few months will very likely provide the answer, but in the meantime both the clearly expressed attitude of the conservative opposition and the silence within the ranks of the Party of the Mexican Revolution point with equal vehemence to what looms as one of the key factors in determining the immediate future of Mexico: the current Latin American policy of the United States.
At the Havana Conference, Eduardo Suárez, Minister of Finance in the Cárdenas Cabinet, tactfully but nonetheless sharply posed the chief problem of Mexican-American and, indeed, of all Pan American coöperation. Speaking before the full assembly on July 22, Señor Suárez declared that "the economic development of the American republics can be accelerated by means of a broad and liberal policy of investments, prudently made, which would increase their production and raise their purchasing power. These investments, however, must not imply the threat of an imperialist absorption, thus becoming a grave danger for our institutions, since foreign capital not only must not turn into an obstacle for the country in which it operates, but must faithfully comply with its laws and be a powerful factor in the development of collaboration, understanding and mutual aid."
Señor Suárez thus reveals that the Mexican Government, while fully prepared to follow the lead of the United States in the military and economic defense of the Western Hemisphere, recognizes the danger which an "imperialist absorption" represents for Mexican economy. This danger, moreover, is difficult to overcome, for it is not the simple result of good or evil intentions but of impersonal factors such as the contrast between the highly developed economic organization of the United States and the backward agricultural economy of its southern neighbors, the severe strain which a decade of depression and a year of war have placed on all these countries, and the inevitable clash of interests that arise not only within but between these countries, as each seeks to find relief from the crisis.
In 1938, the United States absorbed 67 percent of Mexico's exports. In 1939, which included four war months, the proportion rose to 74 percent. In January 1940, after the British blockade became effective, 87 percent of Mexican exports went to the United States. Since then, and particularly since June, that percentage has probably increased, though exact figures are not yet available. Mexico must continue to export its raw materials; but she has only one customer, the United States. She must purchase machinery and manufactured products, but she can buy them only from one seller, the United States. Mexico can no longer count on international competition to protect her foreign commerce against monopoly control. The United States can now determine more effectively than ever the prices Mexico must pay for her imports and the returns she may receive for her exports.
It is the unwritten law of any business that, if it is to prosper, it must "buy cheap and sell dear." Is American business, now in possession of a great advantage in the Mexican market, willing or able to modify that law? Will American industry, in view of its extraordinary power and responsibility for building up the defenses of two continents, refrain from seeking higher returns on its mining, electric power and other investments in Mexico? Can the guarantee of greater security which American capital in Mexico requires be reconciled with the desire of Mexican labor for higher wages, or with Mexico's need for higher taxes in order to fulfill the basic program of the Mexican Revolution? In defending both American and Mexican soil against the possibility of outside attack, can the United States at the same time protect Mexico's economic independence against the intensification of American loans and investments envisaged by present plans for inter-American economic coöperation? These are some of the as yet unanswered questions and problems which, in effect, Señor Suárez raised by his reference to "imperialist absorption." The extent to which the solution of these problems does not delay the evolutionary process which has dominated Mexican history for over a century may well be the measure of the soundness and durability of the new phase of Mexican-American relations.
[i] In September 1939, Lombardo Toledano made a very strong pro-Allied statement. In November, the National Council of the Confederación de Trabajadores de Mexico (C. T. M.), with the approval of Lombardo, officially condemned both of the warring groups, thus supporting Cárdenas. Lombardo, though at times differing sharply with the Communist Party of Mexico, has for several years been sympathetic toward the Soviet Union. At present, he reiterates that sympathy, though in other respects his foreign outlook continues to be essentially that of the Mexican Government.