The administration of this industry was entrusted to the Confederation of Mexican workers, which celebrated the presidential decision with a day of national jubilation. Moreover, the valorisation of workers ‘trade unions and their insertion into national life corresponds to Cárdenas’ program, as is one of the essential aspects of his policy that of aiming for the approval and favor of vast social circles, rather than isolated politicians.. In fact, he aimed to conquer the agricultural masses, with the application of the law on agrarian reform, those workers, with particular legislative provisions and with the laws of nationalization, and the army with an improvement in wages and salaries and with a radicalization of the military system.
In the popular education sector, the Cárdenas government continued the fight against illiteracy, which still stood at 59 percent in 1930. To this end, he increased the budget of the Ministry of Education and stimulated the construction of new schools (10,000 in 1935, 11,000 in 1936, 13,600 in 1937).
With regard to religious politics and the conflict between Church and State, the Cárdenas has, in a certain sense, attenuated the intransigent lines of Calles’ secular politics, or at least has attenuated the demagogic character of the same, since it is now believed that the Calles he used the anti-religious struggle to satisfy the revolutionary instincts of the masses and distract their attention from the socio-economic problems which he preferred to leave unsolved. That this more elastic tendency of the Cárdenas corresponds to the reality of things is also confirmed in a certain sense by the apostolic letter to the Mexican Church of Pius XI of March 28, 1937 which, while condemning the policy of the Mexican government, gave a glimpse of certain possibilities of conciliation.. In domestic politics, in May 1938 Cárdenas vigorously acted against the gen. Cedillo who had rebelled in the state of San Luis Potosí.
In the field of international relations, Mexico’s position in recent years has been marked by the policy of “good neighborliness” with the United States of America (which absorb most of Mexican exports) and by manifestations of societalism and pro-Sovietism in the relations with other states (in particular in the Ethiopian and Spanish questions). The hoped-for “Mexicanization” of the economy, which backfires completely against the foreign capital employed there and, in particular, the mentioned nationalization of oil resources, have aroused the protests of the most affected states, Great Britain and the United States, and have highlighted the reasons for a disagreement that will not be so easy to settle, because the governments concerned appear determined to carry out the work of defending the interests of their citizens to the end. The “good neighborly” policy with the United States has been compromised to a certain extent; as for England, the situation has worsened considerably due to the breakdown of diplomatic relations between the two countries, which took place on the initiative of Mexico which on May 14 recalled its representative in London (the British government replied, on the 26th, with the reminder of his representative in Mexico). It will be necessary to see if a compromise and understanding formula will still be possible, bearing in mind the strategic convenience for England of supplying Mexican oil.
All this work of structural reforms of the economy, the agitated social struggles and the extremist orientation of domestic and foreign politics seem to have served to tighten more completely around the idea of the reconquest the Mexican people, but they have still had little success in stimulating agricultural and industrial production. Undoubtedly, the agrarian reform constitutes a very complex provision whose developments it is not yet possible to discern, as it is still being implemented. It has upset the lines of the Mexican economy and has wreaked havoc in agricultural production. The other social changes have also had a disturbing result, so that the only real finding that can be made is that Mexican productive capacity has improved very slightly. The population, on the other hand, according to official estimates which cannot be very precise due to the backwardness of the statistical services, would have increased by 2 between 1931 (date of the last census) and June 1936. 321,000 units, that is, the increase of this five-year period would have been greater than that of the decade 1921-31. It should also be borne in mind that Mexico is pursuing a policy of pronounced self-sufficiency, so that the found deficient improvement of certain branches of production finds its compensation in the improvement of new ones. During the recovery phase of the world economy, between 1934 and 1937, Mexico was favored by the high prices of certain raw materials, especially metals, which compensated for the deficiencies in production. The trade balance therefore showed a satisfactory upward trend as can be seen from the following data (in millions of pesos):
Finance. – We give below the figures, in millions of pesos, of the balance sheets since 1932.
As of December 31, 1936, the external debt amounted to 892 million and the internal debt to 434 million.
In July 1933 the peso was pegged to the dollar at the rate of 3.55 pesos per 1 dollar; at the beginning of 1938, however, the exchange rate was 4.28 pesos per 1 dollar. In connection with North American politics, the demonetization of silver was decreed on April 25, 1935. An important monetary-banking reform was then implemented on August 28, 1936 with two decrees that each conferred unlimited liberating power to the new notes of the Bank of Mexico (which became the sole issuing bank) and to the monetary certificates of the value of 5 US dollars, representing coins and silver bars, and to fix the maximum emission (no more than 50 pesos per capita in view tickets and commitments) and the minimum legal reserve (25% of which 4 /5 in gold and currencies and 1/5 in silver), the other to specify the central bank figure of the Bank of Mexico (which had ceased all private banking activities since 1932) and to regulate credit. On 1 September 1936 the silver coins were put back into circulation.
As of November 30, 1937, notes in circulation amounted to 288 million and as of August 31, the gold reserve was 51 million.
Navy. – New units: Gunboats: 2 (Durango, Zacatecas) built in 1934-35 in Spain, of 1600 t. and 19 knots, armed with 2/102 and various anti-aircraft weapons, capable of carrying 500 men and 80 quadrupeds; 3 (Potosí, Querétaro, Guanajuato) built in 1934-35 in Spain, from 1300 t. and 19 knots. armed with 3/102 and various anti-aircraft weapons, capable of carrying 250 men and 20 quadrupeds.
Coast Guard Cutter: 10 (G. 20- G. 29) built in 1934-36 in Spain, of 160 t. and 26 knots, armed with 2/25 anti-aircraft and 4 machine gunners.
Merchant Navy. The merchant navy was constituted as of June 30, 1937 by 54 ships per ton. 41,371, mainly steam. Cabotage is reserved for the flag, but has been opened, on a temporary basis, by foreign shipping due to the shortage of domestic ships.