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Corporate Control of a Monocrop Economy: International Harvester and Yucatán's Henequen Industry during the Porfiriato

Published online by Cambridge University Press:  24 October 2022

Gilbert M. Joseph  and
Allen Wells
Gilbert M. Joseph
Affiliation:
University of North Carolina at Chapel Hill
Allen Wells
Affiliation:
Appalachian State University
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The thirty-four-year reign of President Porfirio Díaz (1876–1910) is generally acknowledged to have been the period of Mexico's great economic transformation. In reality, Mexico was unable to avoid the accelerated change that overtook it during the last quarter of the nineteenth century, as proliferating patterns of trade, which accompanied the burgeoning industrial development of the United States and Western Europe, tied Mexico ever more closely to the global economy. An international economic division of labor was negotiated between foreign industrialists and entrepreneurs—who urgently needed primary products, markets for goods, and opportunities for investment, and national and regional elites—who welcomed infrastructural improvements, modern machinery, an array of consumer goods, and the increasing availability of foreign capital.

Type
Research Article
Information
Latin American Research Review , Volume 17 , Issue 1 , 1982 , pp. 69 - 99
Copyright
Copyright © 1982 by the University of Texas Press

Footnotes

*

Research for portions of this article was conducted in Yucatán and Mexico City with assistance from the Social Science Research Council and the Organization of American States. We are indebted to Robin W. Winks, Fred V. Carstensen, and Diane Roazen for sharing data and insights; to Katherine Conant Wells for preparing figures and tables; and to Julia Preston for critiquing an earlier version.

References

Notes

1. Mira Wilkins, The Emergence of Multinational Enterprise: American Business Abroad from the Colonial Era to 1914 (Cambridge, 1970), pp. 113, 125, 128, 134; United States, Department of Commerce and Labor, Daily Consular and Trade Reports (Washington, 1912), p. 316.

2. The paternity of the celebrated quotation attributed to Porfirio Díaz has been disputed; on occasion the epigram has been credited to other contemporary statesmen. Yet, none doubts its validity in conveying an important attitude of the period regarding Mexico's relationship with the United States. For a general examination of the Porfirian economy and its penetration by foreign capital, see Wilkins, Emergence, pp. 113–34; Daniel Cosío Villegas, ed., Historia moderna de México. El porfiriato: la vida económica (México, 1970); and William K. Meyers, “Politics, Vested Rights and Economic Growth in Porfirian Mexico,” Hispanic American Historical Review 57(1977):425–54.

3. Celebrated examples of more direct patterns of foreign penetration and control are the northern mining sector where the Guggenheims' American Smelting and Refining Company held sway, or the Veracruz Gulf Coast oil domain where British and American corporations (Doheny's, Pearson's, etc.) exercised a high degree of autonomy and control throughout the Porfiriato and even the first revolutionary decade. See, for example, Wilkins, Emergence, pp. 115–20, 122–24; Marvin D. Bernstein, The Mexican Mining Industry, 1870–1950: A Study in the Interaction of Politics, Economics and Technology (Albany, 1964); Fritz L. Hoffman, “Edward L. Doheny and the Beginnings of Petroleum Development in Mexico,” Mid-America 24(1942):94–108; and Mark Wasserman, “Oligarquía y intereses extranjeros en Chihuahua durante el Porfiriato,” Historia Mexicana 22, no. 3(1972):296–310.

4. E.g., Roland E. P. Chardon, Geographic Aspects of Plantation Agriculture in Yucatán (Washington, D.C., 1961), p. 160 and passim.

5. Thomas Benjamin, “International Harvester and the Henequen Marketing System in Yucatán, 1898–1915: A New Perspective,” Inter-American Economic Affairs (hereafter cited as IAEA) 31, no. 3(1977):3–19. Benjamin's essay provides a comprehensive discussion of the historiographical debate and extensive bibliographical references for the major positions.

6. For the “collaborator model,” see Ronald Robinson, “Non-European Foundations of European Imperialism: Sketch for a Theory of Collaboration,” in Bob Sutcliffe and Roger Owen, eds., Studies in the Theory of Imperialism (London, 1972), pp. 117–41; Robinson and John Gallagher, Africa and the Victorians: The Climax of Imperialism in the Dark Continent (New York, 1961); and Robin W. Winks, “On Decolonization and Informal Empire,” American Historical Review 81, no. 3(1976):540–56. For lucid discussions of the various approaches within the “dependency paradigm,” see C. Richard Bath and Dilmus D. James, “Dependency Analysis of Latin America: Some Criticisms, Some Suggestions,” Latin American Research Review (hereafter cited as LARR) 11, no. 3(1976):3–54; and Fernando Henrique Cardoso, “The Consumption of Dependency Theory in the United States,” LARR 12, no. 3(1977):7–24.

7. For some insight into the severe problem of communication that hampers theoretical discussions of imperialism between Marxists and non-Marxists, see Bath and James, “Dependency Analysis,” pp. 3–4, and Sutcliffe and Owen, Studies, an anthology of papers representing an extended debate on Lenin's theory of imperialism at Oxford University in 1969–70. Some cross-fertilization has, however, begun to occur. Latin Americanist Richard Graham draws profitably from “imperial historigraphy” in his analysis of British informal empire in nineteenth-century Brazil. A. G. Hopkins is one of several African economic historians who has recognized the mutual benefits attending a dialogue between non-Marxist imperial historians and historically grounded dependentistas. See Graham, “Sepoys and Imperialists: Techniques of British Power in Nineteenth-Century Brazil,” IAEA 23 (1969):23–37; and Hopkins, “On Importing André Gunder Frank into Africa,” African Economic History Review 2 (1975):13–21.

8. The natural fit of these estranged bodies of literature can certainly be argued on historical grounds. Long before the “imperial historians” began to build their elaborate functional model of collaboration in the 1950s, the problem of collaborating elites had preoccupied the major theorists of imperialism working within the Marxist idiom. Speaking generally, Marx pointed out that to the extent to which the dominant class was capable of absorbing the best men of the oppressed classes, the more solid and dangerous would be its domination. Lenin and Trotsky, in their analysis of Russia's backward condition under the Tzarist Regime—today regarded to be the classical formulation of modern dependency theory—underscored the importance of internal social groups allied with external economic forces. Gramsci's entire work on hegemony concerned itself greatly with the terms by which a ruling class might in certain situations extract the “active consent” of segments of the exploited. However, perhaps most influential as a theoretical bridge between classical Marxist theory and contemporary neo-Marxist “theories” of dependency and underdevelopment was the conception of collaboration advanced by Paul Baran. To a great extent, Baran based his opposition to Marx's prediction of an evolutionary development of capitalism in the developing nations on the notion of “clientele classes” or “comprador bourgeoisies.” Baran broke with Marx in speculating that the development of autonomous capitalism at the periphery would be forcibly shunted off its normal course, distorted, and crippled to suit the purposes of Western imperialism. These distortions would have their source largely in the nature of the wealthy classes in the local societies, which had existed prior to the onset of colonial rule or were created during the colonial period. Such classes, according to Baran, did not wish, were not able, or were not permitted to develop into autonomous bourgeoisies, and were thereby not in a position to develop the classical capitalist mode of production in their countries. Rather, they were doomed to form part of the structure through which wealth would be siphoned from their societies to the imperial metropolis, even after the formal period of colonial rule was over.

9. The proliferation of scholarly and popular works on multinational enterprise is surveyed in Louis Wolf Goodman, “Horizons for Research on International Business in Developing Nations,” LARR 15, no. 2 (1980):225–40.

10. Wilkins, Emergence, pp. 115–34, 149–72 and passim, and The Maturing of Multinational Enterprise: American Business Abroad from 1914 to 1970 (Cambridge, 1974), pp. 92–128.

11. Wilkins, for example, in concentrating exclusively on direct investment stakes, makes no mention in her survey of the kind of indirect penetration mechanism that Harvester employed to control the fiber industry; e.g., see Emergence, pp. x, 211, 214–15. For some nineteenth-century examples of indirect market control by British investors, see D. C. M. Platt, “Economic Imperialism and the Businessman: Britain and Latin America before 1914,” in Sutcliffe and Owen, Studies, pp. 295–311.

12. Howard Cline, “Regionalism and Society in Yucatán, 1825–1847: A Study of ‘Progressivism’ and the Origins of the Caste War,” Microfilm Collection of Manuscripts in Middle-American Cultural Anthropology (University of Chicago Library, 1950), p. 535; Frederick Ober, Travels in Mexico and Life among the Mexicans (Boston, 1884), pp. 65–66, 88.

13. Nelson Reed, The Caste War of Yucatán (Stanford, 1964).

14. Friedrich Katz, “El sistema de plantación y la esclavitud,” Ciencias Políticas y Sociales 8 (1962):103–35, p. 104; Emiliano Busto, Anexo núm. 3 a la “Memoria de hacienda del año económico de 1877 a 1878,” Estadística de la República Mexicana (México, 1880), p. 264.

15. Winks, “On Decolonization,” p. 554.

16. Robinson, “Non-European Foundations,” pp. 117–41.

17. Winks, “On Decolonization,” p. 554.

18. The relations of International Harvester Company and earlier North American buyers with this succession of exporting houses are discussed in Gonzalo Cámara Zavala, Reseña histórica de la industria henequenera (Mérida, 1936).

19. One of the most eminent and vocal non-Marxist scholars of imperialism, D. C. M. Platt, suggests that it is precisely in situations where monopolistic control of a commodity by a single market or even a single firm exists that the worst abuses of late nineteenth- and early twentieth-century economic imperialism become evident. Platt, “Economic Imperialism,” pp. 295–97, 303–4.

20. Ibid., pp. 303–4.

21. Katz, “El sistema,” pp. 112–13.

22. Chardon, Geographic Aspects, p. 160.

23. Katz, “El sistema,” p. 133n.

24. Manuel Irabién Rosado, Historia de los ferrocarriles (Mérida, 1928), p. 13 (authors' translation).

25. Keith Hartman, “The Henequen Empire in Yucatán, 1870–1910,” (Masters thesis, University of Iowa, 1966), pp. 130–31; Chardon, Geographic Aspects, p. 35.

26. Allen Wells, “Henequén and Yucatán: An Analysis in Regional Economic Development, 1876–1915” (Ph.D. dissertation, State University of New York at Stony Brook, 1979), pp. 83–84; cf. Antonio Betancourt Pérez, “La verdad sobre el origen de las escuelas rurales en Yucatán,” Revista de la Universidad de Yucatán (hereafter cited RUY) 12, no. 76 (1971):41–43; Renán Irigoyen, “Origen y trayectoria del henequén,” RUY 15, no. 86 (1973):125.

27. Cf. Wasserman, “Oligarquía,” pp. 279–319, for many interesting similarities between the Yucatecan oligarchy and its Chihuahuan counterpart, led by the Terrazas-Creel family. The following discussion of the Molina family draws heavily upon Francisco A. Casasús, “Ensayo biográfico del Licenciado Olegario Molina Solís,” RUY 14, no. 81 (1972):68–95; and José María Valdés Acosta, A través de las centurias, 3 vols. (Mérida, 1923–26), 2:1–19.

28. Betancourt Pérez, “La verdad,” p. 44; Edmundo Bolio, Yucatán en la dictadura y la Revolución (México, 1967), pp. 12–121.

29. El Henequén (Mérida), 15 Feb. 1916.

30. Mexico, Land of Unrest (Philadelphia, 1914), pp. 18, 167–70.

31. Humberto Lara y Lara, Sobre la trayectoria de la reforma agraria en Yucatán (Mérida, 1949), pp. 8–9; Irigoyen, “Origen,” p. 125.

32. In 1907, for example, Don Porfirio made Molina his Minister of Development.

33. Cf. Wasserman, “Oligarquía.”

34. International Harvester's actions in Yucatán are better described as a monopsony. A monopsony is analagous to a monopoly, except that it describes the buyer's side of the market. Harvester, through its operations in the henequen industry, effectively monopsonized the supply of raw materials; however, to eliminate jargon, we have opted to use the more familiar term. See Armen A. Alchian and William R. Allen, University Economics (Belmont, California, 1972), pp. 442–46.

35. The contract was published in the Revista de Yucatán (Mérida), 27 Nov. 1921, p. 1, and has been reproduced in a variety of secondary accounts, e.g., Bernardino Mena Brito, Reestructuración histórica de Yucatán, 2 vols. (México, 1969), 2:205. An English version and analysis is found in United States, National Archives, Record Group 59, Records of the Department of State Relating to the Internal Affairs of Mexico, 1910–1929 (Washington, D.C., 1959; hereafter cited as SD), 812.61326/372, 375 (Dec. 1921).

36. Boletín de Estadística (Mérida), Nos. 10, 11 (1, 16 Oct. 1894).

37. Reed, Caste War, p. 261.

38. Winks, “On Decolonization,” p. 552; Robinson, “Non-European Foundations,” pp. 120–29 and passim; Yen-p'ing Ho, The Comprador in Nineteenth-Century China: Bridge between East and West (Cambridge, Mass., 1970); and cf. Molina's reluctance to collaborate at the end of his career in Gilbert M. Joseph, “Revolution from Without: The Mexican Revolution in Yucatán, 1915–1940” (Ph. D. dissertation, Yale University, 1978), pp. 92–95.

39. See n. 35; International Harvester Company Archives, Chicago, Illinois (hereafter cited IHCA), Doc. File #2395 (“Early Developments of Fiber and Twine Operation”), H. L. Daniels to Cyrus McCormick, 2 Oct. 1906; and memorandum “Re H. L. D. Sisal Purchase 1909,” from “E. A. B.,” 19 Dec. 1912.

40. Some of the planters established producers' cooperatives to hold fiber off the market until they were guaranteed a fair price. A contentious lot even under completely favorable market conditions, the planters were hampered from the start in their cooperative strategy by a lack of solidarity and agreement. In fact, virtually all they could agree upon was their resentment and envy of the casta. A variety of false starts aimed at “valorizing” the price of fiber resulted. Typically an important segment of the producers' cooperative would cave in before Montes' pressure, removing its fiber from the organization, thereby defeating the scheme. As a rule, planters made little conscious effort to correlate their production with world market trends. Given the choice of selling at a low price or withholding production to starve demand and raise the price, planters invariably chose the former. The fact was that even when the price dropped close to three cents per pound, a small return was realized. Finally, in 1908, when the price of fiber had fallen all the way down to three and one-half cents per pound—perilously close to the loss of any profit—the planters seemed determined to hold fast. They obtained a loan from the Banco Nacional de México, putting up a sizable quantity of fiber as collateral, and collectively resolved to resist the casta's pressure. Yet, scarcely had the price risen a cent when the bank, under the orders of Diaz's Minister of Development, Don Olegario Molina—still allied with IHC—dropped the liened fiber onto the market, glutting it, and wiping out the price gains the planters had achieved. This scenario, with only slight alterations, would repeat itself several more times prior to 1915 and the consolidation of General Alvarado's revolutionary regime in Yucatán. Reed, Caste War, pp. 260–62; Wells, “Henequén and Yucatán,” pp. 239–40; Katz, “El sistema,” p. 114; Joseph, “Revolution from Without,” pp. 202–5; El Agricultor (Mérida), 1908, passim.

41. IHCA, 2395, Daniels to Alex Legge, 16 July 1909; and see the testimony of Victor Rendón, Faustino Escalante, and Fernando Solís Cámara, dated 16 and 17 Feb. 1916, in U.S.Senate, Importation of Sisal and Manila Hemp: Hearings before the Sub-Committee of the Committee on Agriculture and Forestry, 2 vols. (Washington, D.C., 1916).

42. Revista de Yucatán (Mérida), 27 Nov. 1921, p. 1; SD 812.61326/375; Yucatán, Mensajes del Gobernador Constitucional C. Lic. Olegario Molina al Congreso de Yucatán, 1902–1906 (Mérida, 1906), pp. 48–49, 121.

43. Fernando Benítez, Ki: El drama de un pueblo y de una planta (México, 1965), p. 74.

44. See Celso Furtado's discussion of the “System of International Division of Labour” in Economic Development of Latin America (Cambridge, U.K., 1976), pp. 42–47.

45. United States National Archives, Washington, D.C., Department of State Consular Post Records: Progreso (hereafter cited as SD-CPR), Despatches to the Department, November 9, 1897 to December 19, 1904, Thomson to State Department, 25 Feb. 1899; SD 812.61326/283; Victor Suárez Molina, “La industria cordelera en Yucatán en el siglo XIX,” Diario de Yucatán (Mérida), 20 Feb. 1972, pp. 3, 11. Although Yucatecan artisans had produced sacks, bags, and hammocks on a small scale throughout much of the nineteenth-century, “La Industrial” would represent the first attempt to manufacture a significant portion of the region's primary export.

46. Archivo General de la Nación (hereafter cited AGN), Mexico City, Ramo de Fomento, Industrias Nuevas, Legajo #17, passim. Olegario Molina led the way with an investment of 83,000 pesos. Prior to 1905, the peso was at par with the North American dollar; after 1905, the peso was fixed at 2:1 with the dollar.

47. Archivo Notarial del Estado de Yucatán (hereafter cited ANEY), Mérida, José Patrón Zavlegui, Oficio #5, vol. 99, 8 May 1901, p. 526.

48. Benítez, Ki, pp. 73–74; Wells, “Henequén and Yucatán,” pp. 55–56. “La Industrial” folded in 1903 but was revived during the recession of 1907–1908, when raw fiber prices were again low and Yucatecan planters had an incentive to industrialize. This time, however, Molina did not lend his support to the venture. Heavily encumbered with debt, the plant soon fell into the hands of Montes, who foreclosed on the mortgage late in 1908. Under Montes's control, the factory slipped quietly into oblivion and was virtually moribund in 1915, when a fire gutted the premises. See SD-CPR, Correspondence, 1915, 2:800, Young to Secretary of State, 30 March; Antonio Rodríguez, El henequén: Una planta calumniada (México, 1966), pp. 233–34, 305.

49. McCormick became interested in “La Industrial” shortly after Olegario Molina called for a subscription of shares in the new joint-stock company in 1896. In fact, McCormick may have invested a substantial portion of its initial capitalization; in addition, he provided modern machinery and technological supervision, and guaranteed North American markets (see Katz, “El sistema,” pp. 111–12). McCormick's Harvesting Machine Company actually dominated the plant's operation by dictating production and shipment schedules and standards of quality. Such participation suggests the lengths to which McCormick would go to seek an alternative means of supply of binder twine following a threatening attempt by the National Cordage Company to monopolize the industry during the 1890s. With the outbreak of the Spanish-American War in 1898 and the suspension of manila shipments from the Philippines, interest in twine production waned and efficiency deteriorated; executives of the McCormick Harvesting Machine Company quickly concluded that, despite their direct involvement in the manufacturing venture, “La Industrial” would never become their sole source of binder twine. By 1899, McCormick was already constructing his own stateside twine mill (which opened in Chicago in 1900) and, by the time of IHC's creation in 1902, the primary function of “La Industrial” as Harvester's supplier was terminated, for McCormick had by now picked up a variety of new cordage plants, including the large-capacity Deering and Osborne mills. Data has been gathered for this account from the McCormick Collection, State Historical Society, Madison, Wisconsin (hereafter cited McC), Mss. Letters Received, 2x, Boxes 521, 535, 537, 609, 613, 616, 620–21 (correspondence between “La Industrial” and McCormick Harvesting Machine Co.); Cordage Trade Journal (New York), 1899–1900, passim; ANEY, José Patrón Zavlegui, Oficio #5, vol 99, 8 May 1901, p. 526; and Wells, “Henequén and Yucatán,” pp. 52–56.

50. Winks, “On Decolonization,” pp. 552, 554.

51. The name of the firm was formally changed from “Olegario Molina y Compañía, Sucesores” to “Avelino Montes, S. en C.” on 18 May 1905. ANEY, Patricio Sabido, Oficio #17, vols. 8, 9, pp. 589–604.

52. Henry W. Peabody and Co. was an international trading and shipping firm based in Boston, Mass., with a branch office in New York. Peabody entered the fiber trade in the late 1860s, dealing at first almost exclusively in manila. In 1891, the firm selected the British-born merchant, Arturo Pierce, as its agent in Mérida and began to concentrate on the purchase of henequen. The firm also invested in Australian and New Zealand goods and fibers and had secondary interests in real estate and manufacturing. The Plymouth Cordage Co. of Plymouth, Mass., was founded in 1837 and, from its inception, specialized exclusively in the manufacture of twines, cords, and ropes. Plymouth's operations were dwarfed by those of the Chicago-based Harvester Co., which, in addition to buying and selling fiber and twine, specialized in a complete line of harvesting machinery. Plymouth Cordage Company Records, Baker Library, Harvard Business School, Cambridge, Massachusetts (hereafter cited PCC), various files; Henry W. Peabody Company Records, same location (hereafter cited PCR), memorandum, ‘J.P.B.’ to ‘R.W.H.’ re. Henry W. Peabody Co.,” 19 Nov. 1964, and ledger books, vol. AB-1, 1867–1869. The agreement (as yet unpublished) may be found in McC Mss., 2x, Box 621. We are indebted to Fred V. Carstensen and Diane Roazen for bringing it to our attention.

53. McC Mss., 2x, Boxes 621 and 478.

54. See note 52.

55. E.g., testimony of Edward Bayley in U.S. Senate, Importation of Sisal, 12 April 1916.

56. Although a variety of oblique references in correspondence between Bayley and Arturo Pierce, from Feb. 1902 to Mar. 1903, suggests that Bayley did indeed know of the agreement. See PCR, HL-3, Bayley to Pierce, 18 Feb. 1902, 14 Oct. 1902, and 11 Mar. 1903 (in which Bayley promises to tell Pierce all about the settlement “at some [later] time”).

57. E.g., testimony of Victor Rendón in U.S. Senate, Importation of Sisal, 17 Feb. 1916.

58. See page 80 for the specific terms of the contract.

59. SD 812.61326/193, 200. Alvarado's attack on the Harvester trust and its Yucatecan collaborators is analyzed in detail in Joseph, “Revolution from Without,” chap. 4.

60. For a discussion of the boom and bust economy's impact on entrepreneurial activity, see Wells, “Henequén and Yucatán,” chap. 3.

61. On the face of it, fiber prices appear to have increased slightly throughout the period despite the constant fluctuations. However, Yucatán's henequen industry experienced the effects of the same inflationary spiral that plagued the rest of Mexico during the Porfiriato. Real prices actually declined as labor and other costs of production increased.

62. For example, the “new perspective” on IHC's participation in the Yucatecan henequen trade, which Thomas Benjamin, “International Harvester,” pp. 5–6, 8–14, offers, turns on “less visible” macro-economic variables that “bound [Yucatán] to the thoughtless whims of world trade.” Benjamin's “revisionist” analysis ignores the web of power relationships that affected the structure and control of fiber production within Yucatán.

63. Limitations of space do not permit a discussion of the complex process by which IHC used its control of Yucatecan hemp supply to manipulate hard fiber stocks in other producing areas and ultimately gain a commanding advantage over its remaining domestic rivals in the manufacture of binder twine. By 1911, Harvester manufactured almost two-thirds of the binder twine sold on the national market and had forced most smaller binderies out of business or compelled them to become its satellites. See Joseph, “Revolution from Without,” pp. 100–104; IHCA, 2395, Mary Lieb to Edgar A. Bancroft, n.d. (1912?); U.S. Department of Commerce, Bureau of Corporations, International Harvester Company (Washington, 1913), p. 184.

64. Bureau of Corporations, International Harvester, p. 184. Diane Roazen's provisional analysis of Harvester, Plymouth, and Peabody account books reveals that IHC made good profits during the 1902–16 period; indeed, returns that were substantially higher than its competitors. Profits fell off sharply after 1916, and Harvester began increasingly to invest in the fiber of other regions, such as Cuba.

65. SD 812.61326/124, 181.

66. SD 812.61326/372.

67. Ibid.

68. In Cuba and the Philippines, on the other hand, Harvester found it necessary directly to control the factors of production, purchasing large latifundia and existing import-export houses to marshall exports of sisal and manila fiber. IHCA, 2395, “Report of Fiber Department,” 25 Mar. 1905, and various documents in the following files: 2395 (“Early Operations in Fiber and Twine”); 2864 (“Cuban Fiber Operation”); Wilkins, Maturing, p. 102; cf. Emergence, p. 170.

69. McC Mss., Letters Received, 1901–1902, 2x, Boxes 613 and 621; IHCA, 2395, E. H. Thompson to Daniels, 26 Feb. 1906; Daniels to McCormick, 1 Mar. 1906.

70. On at least one occasion, in 1901, his friend and closest advisor, H. L. Daniels, expressed the opinion that, in principle, there was nothing wrong with buying plantations, and each offer should be considered on its financial merits. In the case of Tabí, the Yucatecan seller offered to manage the estate, secure additional workers, and plant the fields (McC, Letters Received, 1901–1902, 2x, Box 621). Interestingly, by 1905, after the amazing success of Harvester's contractual arrangements with Molina and Peabody had become fully appreciated, Daniels altered his open-ended approach. When McCormick was offered a purchase option on two of Yucatán's largest henequen haciendas, Daniels reminded him that “two or three years ago you didn't think it wise and there is no reason to change your mind now” (IHCA, 2395, Daniels to McCormick, 1 Mar. 1906).

71. Bureau of Corporations, International Harvester, pp. 149–50; Katz, “El sistema,” pp. 108–10.

72. Katz, “El sistema,” p. 108.

73. The process by which planters intensified the conditions of labor to lower the cost of production, although beyond the scope of this essay, is discussed fully in Joseph, “Revolution from Without,” chap. 3 and Wells, “Henequén and Yucatán,” chap. 6. For a detailed discussion of Yucatecan society during the Porfirian transformation, see both of these studies, and Joseph, Revolution from Without: Yucatán, Mexico, and the United States, 1880–1924 (forthcoming from Cambridge University Press).

74. The European nations also seemed determined to cultivate sisal in their own colonial possessions, rather than buy henequen from Yucatán; thus, by 1915, the British were establishing sisal plantations in East Africa, India and Nepal, New Zealand and Mauritius; the French in Madagascar; the Germans in East and West Africa and New Guinea; and the Dutch in their East Indian colonies. In addition, earlier attempts by the Yucatecan government to grant a subsidy to fiber shipped to Europe had drawn an angry protest from the U.S. State Department, acting on behalf of the cordage trust. Without the subsidy, transportation costs made export to Europe unfeasible. For a variety of reasons, then, no more than 5 percent of Yucatán's henequen was ever shipped to Europe in the years prior to 1915 (Katz, “El sistema,” p. 111).

75. McC Mss., Letters Received, 2x, Boxes 478–79 (early experimentation in Brazil and Spanish South America, 1898–1902); IHCA, 2395, passim.

76. United States versus International Harvester Company et al. (Minneapolis, 1917), 13:52–56.

77. IHCA, 441, 2395, 2919, 2924, provide a rich source of documentation for IHC's fiber interests in the Philippines, Cuba, and elsewhere prior to 1924; Wilkins, Maturing, p. 102.

78. Winks, “On Decolonization,” p. 554. Wilkins, Maturing, pp. 123–27, describes the far greater social investment that accompanied more formal agricultural and mining enclaves.

79. See Joseph, “Revolution from Without,” chap. 5.

80. IHCA, H. L. Boyles Files, “History of the International Harvester Company,” n.d. (1947).

81. The proverb has been cited in Winks, “On Decolonization,” p. 556.