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Networks and Entrepreneurship: The Modernization of the Textile Business in Porfirian Mexico

Published online by Cambridge University Press:  13 December 2011

Aurora Gómez-Galvarriato
Aurora Gómez-Galvarriato
Affiliation:
AURORA GÓMEZ-GALVARRIATO is professor in the Department of Economics of the Centro de Investigación y Docencia Económicas, A.C. in Mexico City.
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Abstract

In Mexico, as in other parts of the world, the introduction of modern transportation and communications brought about major changes in the production and distribution of goods and in firms' management and structure. Between 1880 and 1910, the Mexican textile sector was modernized through the efforts of entrepreneurial French immigrants from Barcelonnette, whose closely knit network enabled them to succeed in overcoming limitations in the Mexican institutional framework.

Type
Articles
Information
Business History Review , Volume 82 , Special Issue 3: Business in Latin America , Autumn 2008 , pp. 475 - 502
Copyright
Copyright © The President and Fellows of Harvard College 2008

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References

1 Alfred D. Chandler Jr. has written that the combined impact of technology and market growth facilitated the rise of U.S. managerial business enterprises during the late nineteenth century. In textiles, a labor-intensive industry, the large, integrated firm had few competitive advantages. However, the emergence of large-scale manufacture in the New England textile industry, carried out by limited liability corporations, has been considered part of the same process. See Chandler, Alfred D. Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990), 235–94Google Scholar; and Lazonick, William, Competitive Advantage on the Shopfloor (Cambridge, Mass., 1990Google Scholar). However, firms in diverse countries and regions adapted to the new technologies in various ways, depending on the particular conditions they faced. Regional variations in the textile industry have been studied by Phillip Scranton, who examined its evolution in Philadelphia, and by Mary B. Rose, who has written about its history in Great Britain. See Scranton, Phillip, Proprietary Capitalism: The Textile Manufacture at Philadelphia, 1800–1885 (Cambridge, U.K., 1983Google Scholar); Rose, Mary B., Firms, Networks, and Business Values (Cambridge, U.K., 2000CrossRefGoogle Scholar).

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23 Gómez-Galvarriato, Aurora, “The Impact of Revolution: Business and Labor in the Mexican Textile Industry, Orizaba, Veracruz, 1900–1930,” Ph.D. diss., Harvard University, 1999Google Scholar.

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30 From 320 francs to 20 francs for 100 kilograms of merchandise. Meyer, “Les Français au Mexique au XIXe Siècle,” 63.

31 D'Anglade, Un Grand Patron, 65.

32 Ibid., 76–79; Archivo de Notarías de la Ciudad de México, Fondo Antiguo, Notary Ignacio Cossio, Acta 5 no. 57, 3 July 1868.

33 This is one of the main features of the Barcelonnette network according to the model developed by Castañeda in “The Barcelonnettes: An Example of Network-Entrepreneurs in XIX Century Mexico.”

34 D'Anglade, Un Grand Patron, 110–14.

35 Archivo de Notarías de la Ciudad de México, Fondo Antiguo, Notary Ignacio Burgoa, Acta 255, 3 June 1879.

36 D'Anglade, Un Grand Patron, 200–2.

37 Ibid., 173–92.

38 Ibid., 165–68.

39 Meyer, “Les Français au Mexique au XIXe Siècle,” 64; Everaert, Luis, Centenario, 1889–1989 (Mexico 1989), 60Google Scholar.

40 The new association was formed by Ollivier, J. and Co.; Tron, J. and Co.; Ebrard, J. B. and Co.; Signoret-Honnorat, and Co., Lambert-Reynaud, and Co., Garcin-Faudon, and Co., Robert, S. and Co., Richaud-Aubert, and Co., and Bellon, N. and Payan, and Co. Arnaud, François, Documents et Notices Historiques sur la Valée de Barcelonnette (Marseille, 1981), 58Google Scholar.

41 Gómez-Galvarriato, “The Impact of Revolution,” 74; Everaert, Centenario, 64–67.

42 Alejandro Reynaud, Eugenio Signoret, Sebastián Robert, Fermín Manuel, Paulino Richaud, and José Jacques. Ciudad Mendoza Veracruz, Actas de la Asambla General (hereafter AAG), Asamblea Constitutiva (organization meeting), 24 Nov. 1896, art.1, Archivo de la Compañía Industrial Veracruzana (hereafter CV).

43 El Economista Mexicano, 6 July 1904, 401.

44 Twenty-four companies (twelve Barcelonnnette, twelve made up of other nationalities) grouped together in 1889 to appoint Manuel Pérez and M. Dávila to recover their default credits. D'Anglade, Un Grand Patron, 152.

45 Ibid., 148.

46 Ibid., 249.

47 Gouy, Péregrigations des “Barcelonnettes,“ 60.

48 The data from the Mexico City Notarial Archive were taken from a database built with information taken from twenty notaries. In 1907 these notaries made up 95 percent of the total firm contracts of 1907. There were seventy-six notaries working in Mexico City during this period. The secondary sources I used were: Erika Y. Galan Amaro, “Los Barcelonnettes en México, un ejemplo de espíritu empresarial (1821–1930),” B.A. thesis, Universidad de las Américas Puebla, 2005; Ojeda, Leticia Gamboa, Au-Delà de Lócéan: Les Barcelonnettes à Puebla, 1845–1928 (Sabença de la Valéia, 2004Google Scholar); and D'Anglade, Un Grand Patron; Pérez-Siller, , “Inversiones Francesas en la Modernidad Porfirista,” in La Banca Regional en México (1870–1930), ed. Cerutti, Mario and Marichal, Carlos (Mexico City, 2003Google Scholar). In the case of banks, I only included Barcelonnette partners.

49 This measure is the binary density reported by the UCINET 6 software for Social Network Analysis.

50 Musacchio and Read, “Bankers, Industrialists, and their Cliques,” 860.

51 This finding would qualify the importance of government officials in Porfirian business networks argued in Razo, Armando, Social Foundations of Limited Dictatorship: Networks and Private Protection During Mexico's Early Industrialization (Stanford, 2008Google Scholar).

52 I follow the methodology used in Musacchio and Read, “Bankers, Industrialists, and Their Cliques.”

53 Chandler, Alfred D. Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), 209–24Google Scholar.

54 François Arnaud, “Description des Magasins,” quoted in Proal and Charpenel, L 'Empire Barcelonnette au Mexique, 104.

55 “Le Premier Grand Magasin Construit à Mexico,” Le Mexique, 1904, quoted by Gouy, Péregrigations des “Barcelonnettes,” 60–62.

56 Proal and Charpenel, L 'Empire Barcelonnette au Mexique, 34–60.

57 Le Mexique, 1904, quoted in Gouy, Péregrigations des “Barcelonnettes,” 60–63.

58 Ibid.

59 Cerutti, Mario, Burguesía, Capitales e Industria en el Norte de México (Mexico City, 1992), 231–32Google Scholar.

60 Razo, Armando and Haber, Stephen, “The Rate of Growth of Productivity in Mexico, 1850–1933: Evidence from the Cotton Industry,” Journal of Latin American Studies 30 (Oct. 1998): 481–517CrossRefGoogle Scholar.

61 Gómez-Galvarriato, “The Impact of Revolution,” 86–87.

62 Price list, 1907, CV. It includes 74 different items.

63 Keremitsis, Dawn, La Industria Textil Mexicana en el Sigh XIX (Mexico City, 1973), 102Google Scholar; and Galarza, Ernesto, La Industria Eléctrica en México (Mexico City, 1941), 12Google Scholar.

64 Bolio, Mario Trujillo, “La Fabrica Magdalena Contreras (1836–1910),” in Historia de las Grandes Empresas en México, 1850–1930, ed. Marichal, Carlos and Cerutti, Mario (Mexico City, 1997), 245–74Google Scholar.

65 Galarza, La Industria Eléctrica en México, 12–14.

66 Haber, Stephen, “Financial Markets and Industrial Development: A Comparative Study of Government Regulation, Financial Innovation, and Industrial Structure in Brazil and Mexico, 1840–1930,” in How Latin America Fell Behind, ed. Haber, Stephen (Stanford, 1997), 163Google Scholar.

67 They were the companies listed in Table 3, with the exception of San Ildefonso (which produced woolens) and the addition of La Hormiga S.A. “Manifestaciones presentadas por los fabricantes de hilados y tejidos de algodón durante enero a junio de 1912,” Archivo General de la Natión, Fondo Departamento del Trabajo, 5/4/4.

68 This argument is developed convincingly by Lamoreaux, Naomi, The Great Merger Movement in American Business, 1895–1904 (Cambridge, Mass., 1989Google Scholar).

69 Chandler, The Visible Hand, 9–10.

70 Asamblea Constitutiva, 24 Nov. 1896, Art. 35, General Shareholders Meeting minutebook, CV.

71 This was the case for Joseph Signoret, president of the CIVSA board in 1897 and 1906–1907. He was head of A. Reynaud & Co. in Mexico and manager of Las Fábricas Universales. Sébastian Robert was vice president of the CIVSA board in 1896; from 1897 to 1911 the vice president was his associate, Emile Meyrán, head of S. Robert & Co. in Mexico and manager of El Centro Mercantil and La Valenciana.

72 Board Meeting, minute-book, 3 Sept. 1900, CV (henceforth AC).

73 AC, 19 Jan. 1897, CV.

74 Anexos a la declaratión del Income-Tax, Resumen de Profesionistas, Empleados y Obreros con los emolumentos que percibieron en el año de 1926, CV.

75 AC, 2 8 Mar. 1911; AAG, 25 Apr. 1910, CV.

76 For example, in 1917, CIVSA's general manager asked the Advisory Committee in Paris to approve the $2.50 dividend per share suggested by the board. AC, 12 Apr. 1917, CV.

77 Although CIVSA got several short-term loans from hanks, which facilitated day-to-day operations, its investment capital came from the shares bought mostly by Barcelonnette entrepreneurs. The cases of CIDOSA and CIASA were similar. See Gómez-Galvarriato, Aurora and Recio, Gabriela, “The Indispensable Service of Banks: Commercial Transactions, Industry, and Banking in Revolutionary Mexico,” Enterprise and Society 8 (Mar. 2007): 84–91CrossRefGoogle Scholar. In the case of smaller textile mills, some investment capital came from banks, yet even in that case the Barcelonnette network was crucial, since insider lending prevailed, as described in Haber and Maurer, “Institutional Change and Economic Growth.”

78 Haber, “Financial Markets,” 163.