‘Putting Mexico on its feet again’: the Kemmerer mission in Mexico, 1917–1931

Abstract

This article scrutinizes the results of the mission carried out by Edwin Walter Kemmerer in Mexico during 1917. Based on unpublished materials from his private archive, as well as other Mexican archives, this article analyses the process of approval, installation and implementation of the reforms introduced by Kemmerer's mission in Mexico. It is argued that Kemmerer's work as a financial advisor for Venustiano Carranza was not a total failure, as the existing literature on the subject claims. Indeed, on the eve of Great Depression, Mexico exhibited the main institutional features of ‘Kemmererized’ countries: a central bank, the gold standard and a centralized tax system. It is also suggested that the economic knowledge brought into the country by the money doctor moulded the ideological foundation of the new financial and economic elite of revolutionary Mexico.

Ruled by “fear of floating”. Mexico’s exchange rate policy during the interwar period, 1925-1936

“…Pani, in his well-known pamphlet of 1935, describes his action as "revolutionary", driven by the main 10 For a description of the Mexican monetary system during the 1920s, see id. ; Nodari (2019). Sources: Boletin Minero y Financiero (1918)(1919)(1920)(1921)(1922)(1923)(1924)(1925) and Banxico, Informes Annuales (1925Annuales ( -1936.…”

“…SeeSterrett and Davis (1928).10 For a description of the Mexican monetary system during the 1920s, see id. ;Nodari (2019).…”

Latin American Experiments in Central Banking at the Onset of the Great Depression

“…The first of these missions took place in Mexico (1917) and Guatemala in (1919). In Mexico, (Nodari 2019) argued that the government adopted the gold standard, established a central bank and pursued a fiscal reform in 1925, all based on the principles designed by Kemmerer and despite high levels of political instability. To some extent, a similar narrative was to be found in Guatemala, where the central bank was established in 1926 (D. L. Kemmerer and Dalgaard 1983).…”

“…While all over Latin America governments attempted to gain control over central banks, the opposite was true in Mexico where, during the 1930s, a mix of orthodox and heterodox reforms were implemented to make it more autonomous. While legally designed as a central bank, Bank of Mexico functioned until 1931 more as an instrument to directly promote and generate investments than as a proper central bank (Nodari 2019). After 1931, while the legal gold minimum reserve remained untouched (50%), the central bank was allowed to issue paper money backed by silver reserves (100%).…”

Políticas bancarias durante la gran depresión: Colombia y México, 1929-1937

“…El diseño institucional de los bancos creados por el money doctor estadounidense en América Latina ofrecía a los institutos centrales la posibilidad de realizar operaciones de primer piso, o sea de prestar directamente a los privados. Oportunidad que, como la Figura 2 muestra, fue utilizada en momentos distintos 10 Para Colombia véase Drake (1989) y para México Nodari (2019).…”