María del Carmen Collado

Entrepreneurs and Their Businesses during the Mexican Revolution Most of the academic work on the Mexican Revolution (1910– 1920) has focused on sociopolitical and military affairs; few scholars have considered the economic aspects of the period. Even though business historians know now that the Revolution did not bring generalized chaos or total destruction of manufacturing, we still need more research on economic issues. This article analyzes the evolution of the businesses of the Braniff family, as well as their involvement in politics once the regime of Porfirio Díaz collapsed. It examines the Braniffs’ political ideas, their strategies to gain power, and their support of the political faction favorable to their interests. The article exposes the tactics the family used to guarantee the safety of their businesses, the losses they suffered, and the new ventures they made after the Revolution.

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exican entrepreneurs thrived during the presidency of Porfirio Díaz (1876–1911), sheltered by the peace and capitalizing on the unprecedented growth of industry and a railway system that connected the major regions of Mexico. They were favored by a market protected through high tariffs, tax exemptions, and duty-free imports of modern machinery, which facilitated a wide variety of manufacturing plants, including textiles, metal products, beer, paper, tobacco, cement, and chemicals. By the end of this era, the elite experienced discord. Investors in the north were upset at being excluded from politics and viewed with suspicion the prosperity of those in the heart of the country. These families received support from President Porfirio Díaz and the group known as the “científicos,” led by José Y. Limantour, the powerful Minister of Finance and member of one of the most important families involved in financial activities. They were also uneasy about the growth of American investments in the north. Their discontent led to the ascension of Francisco I. Madero, a member of one of the richest families in Mexico’s northeast, to power on November 6, 1911. At the same time, Business History Review 86 (Winter 2012): 719–744. doi:10.1017/S0007680512001195 © 2013 The President and Fellows of Harvard College. ISSN 0007-6805; 2044-768X (Web).

María del Carmen Collado / 720 the dissatisfaction from peasants and from farm and urban workers burst forth.1 The Díaz government was toppled with relative ease in May 1911 but the rebellion escalated when Madero was unable to achieve consensus among popular groups or among the supporters of Díaz, known as Porfiristas. The Mexican Revolution did not bring the total destruction of property, generalized chaos, or a total paralysis of production, as historian John Womack has pointed out.2 Various factions temporarily occupied some properties and factories and commandeered their production. Many capitalists, fearful for their lives, fled the country for some years. But while industrial production dropped between 1914 and 1916, it began to recover in 1917. The most evident consequences of the armed conflict in the short term were the contraction of investments and the flight of capital.3 However, once the most violent phase of armed struggle ended, the rail system was rebuilt and trade flowed again, major industries and the banks that survived the expropriations of the revolutionary party led by Venustiano Carranza began to recover, and these industries even generated revenues to reinvest in new equipment by 1925.4 This article studies one family of businessmen. I investigate why the Braniffs entered into politics during the Revolution, what repercussions this decision had on their fortunes and lives, what changes their investment patterns underwent, what their ideological position was, and how they reentered the life of the country once the armed conflict had ended. I will also explain the types of networks they established and the shifts they made in their investments as a result of the political changes that took place over the period. The Braniffs were one of Mexico’s wealthiest families in the twilight years of the Porfiriato. General Porfirio Díaz, who ruled Mexico for thirty-five years, maintained political control of the country through a complex system of alliances and balances in the different states of Mexico, dominated the legislature and judiciary system, and also controlled elections as a means to be ratified in the presidency. During these years, a handful of Mexican and foreign investors controlled great industrial growth. This group, well connected to the president, earned big profits 1 Friederich Katz, La guerra secreta en México, vol. 1: Europa, Estados Unidos y la Revolución Mexicana (Mexico City, 1982), 33–35. 2 John Womack, “La Revolución, 1910–1925,” in Historia Económica de México, ed. Enrique Cárdenas (Mexico City, 1992), 394–99. 3 Stephen Haber, Industria y subdesarrollo: La industrialización de México, 1890–1940 (Mexico City, 1992), 184–86. 4 Stephen Haber, Armando Razo, and Noel Maurer, The Politics of Property Rights: Political Instability, Credible Commitments, and Economic Growth in Mexico, 1876–1929 ( New York, 2003), 124, 158, 170.

Entrepreneurs during the Mexican Revolution / 721 through an almost monopolistic system, a protected market, and property rights guaranteed by the government in exchange for support. The fortune of the Braniffs flourished in this privileged context. The founder of the dynasty in Mexico was Thomas H. Braniff, originally from the US. When he died in 1905, he left a fortune of over nine million pesos (some 4.5 million dollars). Eighty-one percent of this sum was divided between his wife, Lorenza Ricard de Braniff, and six descendants.5 Thomas was one of the business magnates of his time, investing heavily through his corporations in the most dynamic and upto-date industries of the day. This tycoon invested about 45 percent of his capital in industry. He was one of the main investors and president of the board of CIDOSA, the largest cotton textile company in Mexico. In 1905 he had shares valued at 1,845,850 pesos, about 12 percent of total equity, at 1908 prices. He also founded and helped fund the Compañía Papelera San Rafael y Anexas in 1894, the only paper producer for newspapers in the country. In this business Braniff had shares valued at 1,015,000 pesos and bonds at an interest rate of 7 percent valued in 161,000 pesos. In 1905 his shares represented 33 percent of the stake of this big enterprise.6 He was also a minor investor in the Compañía Eléctrica e Irrigadora in the state of Hidalgo with shares valued at 132,975 pesos; in the Compañía Cigarrera el Buen Tono, the largest in its sector, with shares valued at 114,375 pesos; and in the Fábrica de Tejidos San Ildefonso with shares valued at 104,000 pesos. Thomas Braniff’s investments in real estate were also large, about 22 percent of his fortune. His personal residence on Paseo de la Reforma, the most luxurious and important avenue of Mexico City, was the most valuable of his properties. In addition, he owned many lots on both sides of this avenue, which later formed the Juárez and Cuauhtémoc neighborhoods. Braniff’s investments in banking were also noteworthy: he had shares in the Banco de Londres y México valued at 1,017,575 pesos and also 30,000 pesos in shares in the Banco Internacional e Hipotecario. He also granted 767,320 pesos in loans to several businessmen and companies. The diversification of Thomas Braniff’s portfolio was similar to other important entrepreneurs. At the end of his life, his capital was allocated thus: 44.9 percent in industry, 21.6 percent in real estate, 14.1 percent in banking, 10.3 percent in investment loans, 4.6 percent 5 Notario Agustín Pérez de Lara, No. 62, Deed no. 921, 23 Oct. 1906, Archivo Histórico de Notarías del Distrito Federal, Mexico City (hereafter cited as AHNDF). 6 Laura Espejel, “Luces y sombras de un proyecto empresarial: La Compañía Papelera San Rafael y Anexas,” in Los inmigrantes en el mundo de los negocios, ed. Rosa María Meyer y Delia Salazar (Mexico City, 2003), 155.

María del Carmen Collado / 722

Power looms at CIDOSA, Río Blanco, Mexico, 1900. (Source: J. R. Southworth, El Estado de Veracruz-Llave, Sus historia, agricultura, comercio e industria en inglés y español [Liverpool, 1900], p. 121.)

in trade, 3.2 percent in railway, 0.94 percent in mining, and 0.42 percent in agriculture.7 Thomas Braniff increased his capital thanks to his excellent relationship with President Díaz and his closest associates, and also with Mexico’s Barcelonnettes, an important group of investors born in the Valley of Barcelonnette, France. This group was his main business network; they were his associates at CIDOSA, San Rafael, and Banco de Londres y México. The alliance with this French group helped him to find financial support from their Societé Financière pour l’Industrie du Mexique, a company that placed shares in Paris and Geneva. The shares of San Rafael, for example, were placed with the Paris Stock Exchange in 1906. Most of his children’s marriages linked the Braniff-Ricard family to members of the elite. Braniff had five sons and one daughter. George married into the Lascuráins, an entrepreneurial and political family; Óscar married Guadalupe Cánovas, owner of the Hacienda de Jalpa estate in Guanajuato; Tomás married Elena Amor, heir to the Hacienda de Monte Blanco estate in Veracruz; Arturo married into the wealthy 7 Notario Agustín Pérez de Lara, No. 62, Deed no. 921, 23 Oct. 1906, AHNDF. All the data from his properties in 1905 come from his will.

Entrepreneurs during the Mexican Revolution / 723 Garamendi family; and Alberto married the well-to-do Luz Franyutti. Only the Garamendis and the Franyuttis, although rich, were not among the business elite. Braniff’s daughter, Lorenza, married Spanish noble Luis Bermejillo, the Marquis of Mohernando, who was related to the Mexican branch of the entrepreneurial Bermejillo family, which helped found the Partido Católico (Catholic Party). The executors of Thomas’s fortune were his wife Lorenza and his two eldest sons, George and Óscar. They held the shares in major companies. And they sold the securities of Banco Internacional e Hipotecario and the shares of smaller businesses such as mining companies, and in exchange bought 841 more shares of the Banco de Londres y México. According to Thomas’s will, his wife received half of the property, and the other half was divided equally among his six children. All received a portion of company shares and property and formed a company to manage the valuable lots of land on Paseo de la Reforma, except George, who preferred to administer his fortune himself.8 As the investment portfolio was divided among seven heirs, the power they had was dissipated. Alberto, the youngest of the Braniffs, excelled in sports like auto racing and made the first aerial voyage in the country in his plane. Óscar succeeded as a partner and cofounder of new companies, like Banco de Comercio e Industria, the insurance company Latinoamericana, and a construction company. At the same time, Óscar, in partnership with his brother George, managed the commercial company G y O Braniff, and their brother Arturo joined them after the death of their father. This company, dedicated to the sale of heavy machinery and electric and telephone equipment, acquired several mines in the state of Queretaro, and they invested some capital to modernize the mines. Tomás Jr. also engaged in prominent economic activity, owning shares in the Compañía Papelera San Rafael, representing 13.77 percent of the total capital of the company in 1905. Both Óscar and Tomás became co-owners of their wives’ estates and invested in modern technology for running these agricultural enterprises. Óscar and Guadalupe’s Hacienda de Jalpa in Guanajuato produced wheat, corn, alfalfa, and cattle; Tomás and Elena’s Hacienda de Monte Blanco in Veracruz produced coffee. George started the elegant Hotel Imperial on the Paseo de la Reforma. After the death of his father, in the twilight of the Porfiriato, the Braniff brothers created business networks with other Mexican businessmen close to the regime and with their in-laws, and they kept their ties with the Barcelonnette network. 8 María del Carmen Collado, La burguesía mexicana: El emporio Braniff y su participación política, 1865–1920 (Mexico City, 1987), 81–82.

María del Carmen Collado / 724 Springboard to Politics When the Mexican Revolution began in November 1910, the Braniff name began to figure in the political world. Only George, the oldest, had been politically involved during the dictatorship. In 1900 during Guillermo de Landa y Escandón’s second term as mayor George served as a Mexico City alderman, a position more symbolic than powerful.9 But the Madero uprising pushed Óscar and Tomás into politics. This experience made them enemies and eroded the assets of the family. At the same time, they modified their investment strategy in the face of the economic uncertainty generated by the civil war. The rebel movement led by Madero erupted in late 1910 after the electoral fraud that year. It attracted disaffected middle-class sectors, farmers deprived of land, and a wide range of rural and urban workers. In a few months this movement became a threat to the Díaz dictatorship. In 1911 the siege of Ciudad Juárez prompted Óscar to seek an audience with Porfirio Díaz and to offer his services to negotiate an armistice with the rebels with Toribio Esquivel Obregón, an important lawyer and detractor of the regime who had protested against Díaz’s reelection and thus was on good terms with Madero. The elderly dictator accepted Óscar Braniff’s proposal. The plan was that Braniff and Esquivel would act as unofficial emissaries and try to convince Madero to sign a peace accord with the promise that the regime would enact certain reforms.10 Óscar was drawn into politics by a combination of his fears that revolutionary chaos would take over the country, affecting the course of business, and his personal ambitions to hold some important public office in the power vacuum that prevailed at the time. Although he always claimed to have no personal political ambitions, his actions contradicted his words. He claimed that he had the support of an organization that backed the armistice.11 At the same time Óscar was venturing into these troubled waters under the flag of apoliticism and even of philanthropy, he was conspiring with other groups and writing numerous letters to American businessmen and officials, and even to the US president, 9 Daniel Cosío Villegas, Historia moderna de México: El Porfiriato—La vida política interior, vol. 2 (Mexico City, 1972), 410; Ariel Rodríguez Kuri, La experiencia olvidada: El ayuntamiento de México—Política y gobierno, 1876–1912 (Mexico City, 1996), 69. 10 Díaz forced his cabinet to resign on March 24, retaining only Limantour, the visible head of the científicos, and González Cosio, his Minister of War. However, this effort was insufficient and failed. François-Xavier Guerra, México: Del Antiguo Régimen a la Revolución, vol. 2 (Mexico City, 1993), 304–6. 11 Letter from Óscar Braniff to C. A. Coffin, 18 Apr. 1911, 812.00/1589, National Archives and Records Administration, Records of the Department of State Relating to Internal Affairs of Mexico, 1910–1929, Washington, DC (hereafter cited as NA).

Entrepreneurs during the Mexican Revolution / 725 giving his views on the situation in Mexico and painting himself as a moderate reformer. In April 1911, before going to Ciudad Juárez, the negotiators went to Washington to see Madero’s representative Francisco Vázquez Gómez to find out what Díaz’s status would be if they could reach an armistice. Óscar’s pose of neutrality did not convince the rebels, who were well aware of his ties with the dictator Díaz. Vázquez Gómez was persuaded that the interest expressed by Minister of Finance Limantour and the científicos, including the Braniffs, in achieving a peace was an interest in saving “me and mine,” as they were convinced that the continuance of the Díaz regime was unsustainable.12 From the start, Óscar Braniff’s strategy consisted of seeking the support of the US government to increase his political capital with the Maderistas. His idea was to present himself as a well-informed, well-connected man and to exaggerate the danger of a US invasion to increase pressure on the rebels. While in Washington, Braniff made contact with business friends who had some influence in White House circles. He wrote a letter to C. A. Coffin, founder of General Electric, asking it to be sent to President William Taft. In the letter, he claimed to speak for Mexico, saying that he was eager for “radical” change, a new government, effective democracy, an expanded educational program, and fairer land distribution, but opposed to these changes being achieved through an armed confrontation. He further claimed that the “Mexican people” were in favor of an armistice. To underline the purity of his intentions, he wrote, “My fortune, my business interests and my personality preclude personal political ambitions.”13 Óscar tried to portray himself as a neutral reformer; supporting neither the dictatorship nor Madero’s choice to take up arms, but as a viable third option during the change in power that showed every sign of drawing near.14 He also met with Cormy Thompson, a close friend and business associate of President Taft, who supposedly warned him about the imminence of a US invasion to protect the lives and interests of Americans in Mexico threatened by armed movements in the vicinity of the border.15 The envoys reached Ciudad Juarez on April 19 and immediately met with Madero. The negotiations were characterized by Madero’s contradictory decisions, which were the result of pressure from the 12 Letter from Francisco Vázquez Gómez to Federico González Garza, 14 Apr. 1911, Binder 16, File 1525, Fondo CMXV, Archivo Federico González Garza, Centro de Estudios de Historia de México CARSO, Mexico City (hereafter cited as AFGG). 13 Letter from Óscar Braniff to C. A. Coffin, 18 Apr. 1911, 812.00/1589, NA. 14 Daniel Cosío Villegas, Historia moderna de México: El Porfiriato—La vida política exterior, vol. 2 (Mexico City, 1963), 401–2. 15 “Revelaciones sobre la caída de Díaz,” Excélsior, 2 Dec. 1960, Óscar Braniff Archive, Biblioteca Nacional de Antropología e Historia, Mexico City (hereafter cited as AB).

María del Carmen Collado / 726

Pascual Orozco, Óscar Braniff, Pancho Villa, and Giuseppe Garibaldi during the peace negotiations at Ciudad Juárez, April 1911. (Source: Library of Congress, Prints and Photographs Division, Washington, DC, Bain News Service, Publisher. Reproduction Number: LC-DIGggbain-09417 (digital file from original negative), http://www.loc.gov/pictures/item/ggb 2004009417/.)

revolutionaries and his relatives, and the poor condition of his troops. At the second meeting, Madero agreed to set aside his demand that Díaz immediately resign in exchange for new congressional and presidential elections, points proposed by the unofficial government envoys.16 But Madero demanded that Vice President Ramón Corral resign, political prisoners be freed, that his troops control the northern territories, and that the government pay the wages for his army. As a result of the agreement, the negotiators implemented a five-day ceasefire while waiting for the arrival of Francisco Carbajal, official representative of Díaz. In the meantime, Óscar Braniff and Madero’s brother and father, Evaristo and Francisco Madero Sr., loaned Madero fifteen thousand dollars to pay his army.17 This initiative earned Óscar a reprimand from Limantour, who vigorously urged him to abstain from such actions because it would be an outrage for his government to pay the revolutionary army.18 16 17 18

“Declaration of Mr. Óscar Braniff,” 1911, Binder 18, file 1817, Fondo CMXV, AFGG. Telegrams from Óscar Braniff to José Y. Limantour, 22 Apr. and 4 May 1911, AB. Telegram from Óscar Braniff to José Y. Limantour, 4 May 1911, AB.

Entrepreneurs during the Mexican Revolution / 727 Once Francisco Carbajal had arrived in Ciudad Juárez, Braniff and Esquivel refused to cooperate with the official envoy, pretending that they were independent from Díaz and Madero, although they stayed in the border city to wait. The discord among the revolutionaries bred insubordination on the part of Pascual Orozco, Francisco Villa, and José de la Luz Blanco, at the time leaders of discontented popular groups, who broke the armistice and took over Ciudad Juárez, tipping the balance of power toward the revolutionaries. A few days later, the unofficial envoys’ mission ended in scandal when the rebellion of the three leaders was blamed on Esquivel’s intrigues with Pascual Orozco. Madero asked Esquivel to stay away from his camp, and Braniff also maintained his distance in “solidarity.” The negotiators returned to Mexico City without achieving their aims; the Treaty of Ciudad Juárez that ended the Díaz government was signed without them. Francisco León de la Barra became interim president and organized elections that brought Madero to the presidency as well as a new congress. From this point on Braniff and Esquivel’s criticism of Madero heightened. Tomás Braniff took up the family’s political standard. He was elected as an independent representative for the state of Veracruz in 1912. When he won this election, he resigned as chairman of the board of the San Rafael paper mill in order not to harm the company with his political activity, a decision that his Barcelonnette partners welcomed.19 During the brief term of the Madero government (November 1911– February 1913), Tomás formulated legislative initiatives that resurrected agrarian reforms that his brother Óscar had publicly proposed in 1910.20 In 1912 Tomás proposed that the government acquire all the shares of the Caja de Préstamos para Obras de Irrigación y Fomento de la Agricultura (Loan Fund for Irrigation and Agricultural Promotion) to lend to large landholders who wished to break up their estates.21 This reform represented the interests of an entrepreneur who wished to see large properties subdivided without throwing landowners into ruin, by means of government financing of agrarian reform.22 Luis Cabrera, a representative in the same legislature, opposed Tomás’s reforms and 19

Espejel, “Luces y sombras de un proyecto empresarial,” 148. Óscar Braniff, Observaciones sobre el fomento agrícola considerado como base para la ampliación del crédito agrícola en México (Mexico City, 1910). 21 This institution was created with a governmental loan to grant credits to small farmers, but since its creation in the Porfirian regime, its funds were used to buy the problematic loans from commercial banks. The Maderista regime used the “Caja” to rediscount unguaranteed loans and commercial paper from the banks, turning them into liquid cash. Noel Maurer, The Power and the Money: The Mexican Financial System, 1876–1932 (Stanford, 2002), 49, 66, 139. 22 “The Great Error of Gen. Diaz,” The Evening Mail, 22 May 1913, AB. 20

María del Carmen Collado / 728 accused him of promoting his own and his family’s interests, as his brother Arturo had recently acquired the Tepetitlán and Chapingo haciendas with the idea of subdividing them. Cabrera’s accusations were not without foundation, as George Braniff had also just acquired the San Juan de Rancho Viejo hacienda in the state of Guanajuato.23 Óscar and Tomás Braniff joined the group of critics of the Madero regime identified with Porfirismo. The Braniffs accused Madero of having brought anarchy; Óscar stated that the universal suffrage that Madero promoted was unacceptably “socialist,” and Tomás fell out with the president because he had not supported Tomás’s ambitions to be governor of Veracruz in 1912. The entrepreneurs did not accept the small labor reforms that Madero offered in response to workers’ complaints because their income would be affected. At the same time, the Zapatista peasants in central Mexico, followers of Emiliano Zapata, rebelled because the regime made no immediate move to return land to the peasants who were dispossessed during the dictatorship. Meanwhile, Pascual Orozco, who was initially an advocate for agricultural workers, also withdrew his support from the Madero government. With other prominent businessmen Óscar criticized the regime’s inability to control the Orozquista and Zapatista rebels in 1912.24 Going against his brothers, Alberto, the youngest, supported Madero by organizing a demonstration in his favor and also paid for a corps of volunteers with his own money to defeat Pascual Orozco. Madero gave Alberto the rank of lieutenant colonel when he went to fight in the north in June 1912. Despite public criticism by his brother Óscar, Alberto continued to support the government and returned to the capital at the end of the year to get married.

An Unstable Alliance with Huerta By January 1913, overwhelmed by criticism from many Porfiristas and by the belligerence of the Zapatistas and Orozco, Madero’s situation became unsustainable. The democratic government was overthrown by a coup backed by several military leaders and supported by Porfiristas and some members of the Catholic Party. After Madero’s assassination, the former Maderista revolutionaries from the north formed an unstable alliance, the Constitucionalistas, led by Venustiano Carranza, to fight against the military regime. 23 Letter to Eduardo Hay, Secretary of Foreign Affairs, 26 Oct. 1936, File 3296–25, Archivo Histórico de la Secretaría de Relaciones Exteriores, Mexico City (hereafter cited as AHSRE). 24 Octavio Magaña Cerda, “Historia documental de la Revolución,” El Universal, 20 Jan. 1951.

Entrepreneurs during the Mexican Revolution / 729 Constitucionalistas accused Tomás of contributing financially to the military coup that toppled Madero and accused Óscar of participating in the conspiracy.25 What is known is that the Braniffs had ties with US ambassador Henry Lane Wilson, one of those who worked to engineer Madero’s fall.26 A report he sent to Washington mentioned that Óscar had told him that “the best elements in Mexico” had financially supported Pascual Orozco’s movement. 27 On February 9, 1913, a military rebellion against Madero’s government freed from prison General Félix Díaz, nephew of Porfirio Díaz, and General Bernardo Reyes, a former competitor for the presidency. This rebellion started terrible battles in Mexico City during the Decena Trágica—the Ten Tragic Days—which caused the deaths of several hundred people, as well as property damage.28 General Victoriano Huerta betrayed the President, joined with the rebels, and on February 18 imprisoned Madero and the vice president, José María Pino Suárez. A day after, a group of legislators and other persons with political interests met to discuss the coup in Tomás Braniff’s house under the US flag. At this meeting, the group mentioned the possibility of appointing Tomás president in Madero’s place, but reached no agreement. Madero was forced to resign, and Pedro Lascuráin, Secretary of Foreign Affairs, became interim president but resigned immediately on February 20, facilitating the appointment of Victoriano Huerta as provisional president with the approval of a large part of Congress, in a session in which Tomás also participated. En route to the federal prison Madero and Pino Suárez were murdered on February 22. During the early months of the government established by the military coup, all seemed well for the Braniffs. The family had a friend in the cabinet, as Esquivel was appointed Minister of Finance, and Tomás was a legislative representative. Esquivel proposed a law before Congress, which if approved, would make the government guarantee bonds issued by land subdividers to facilitate the division of large estates, a new version of the reform Tomás had proposed the previous year. Óscar, concerned about the direction taken by the regime they had supported, offered himself to Huerta as an unofficial representative of his government in Washington. Woodrow Wilson, the new US president, didn’t recognize Huerta because he was a product of a military 25 See Collado, La burguesía mexicana, 126. Katz, La guerra secreta en México, vol. 1, 129–30. 26 Berta Ulloa, La revolución intervenida: Relaciones diplomáticas entre México y Estados Unidos (1910–1914) (Mexico City, 1971), 48–52. 27 Woodrow Wilson to the Department of State, 26 Apr. 1912, 812.00/3732, NA. 28 There is no figure of casualties of the event, but according to reliable sources around five hundred people were killed on the first day of attack. Alan Knight, La Revolución Mexicana: Del Porfiriato al nuevo régimen constitucional, vol. 1 (Mexico City, 1996), 540.

María del Carmen Collado / 730 coup. The dictator, who had already sent several representatives to the US capital to negotiate recognition of his government, accepted Braniff’s offer. In spite of his reservations about the loyalty of the Braniff family, Huerta decided to entrust Óscar with the assignment, forced by the urgent necessity of obtaining approval from Mexico’s powerful northern neighbor. It was not long before Huerta attempted to divest himself of Tomás, offering him the post of ambassador to Japan, but Tomás declined the appointment.29 According to Óscar Braniff, Huerta tried to buy his loyalty by supporting his businesses and offering to buy the French arms sold through his trading company, but said that he did not take advantage of these and other offers in order to maintain his independence.30 Óscar left for New York in April 1913 and traveled back and forth between Washington and New York, meeting with his business and government acquaintances to lobby for recognition of the new government. He defended Huerta against charges that he was involved in the murders of Madero and Pino Suárez, another important reason for President Wilson’s reluctance to grant recognition. Óscar also informed the Americans that Huerta was willing to call presidential elections shortly, in which he would not stand as a candidate.31 The facility with which Braniff entered Washington circles is explained by his friendship with such influential men as A. B. Farquhar, president of the US Chamber of Commerce, who, in turn, was in the president’s confidence. Moreover, Óscar’s coming from a wealthy family, boasting no public office, his fluent English, and the ease with which he moved about his father’s homeland smoothed his path in the US. Farquhar took a memorandum from Óscar to President Wilson in which he pleaded the case for recognizing Huerta’s government. He also met with John Basset Moore, Undersecretary of State, vouching for Óscar’s credibility and promoting support for the Huerta government among businessmen.32 Óscar met with Secretary of State William Jennings Bryan and handed over letters presenting him as a defender of agrarian reform, claiming that this was the only way to end rural discontent and rebel movements.33 Óscar sent glowing reports of his progress to Esquivel and embassy official Francisco León de la Barra. He urged them to have Huerta fix the election date, telling them that once this matter was settled, the US would grant recognition.34 Óscar was confident that US capitalists, who 29

Letter from Óscar to Tomás Braniff, 10 Apr. 1913, AB. Letter from Óscar Braniff to Felix Sommerfeld, 2 Jan. 1915, AB. 31 Letter from Óscar Braniff to William Jennings Bryan, 27 Apr. 1913, AB. 32 Letter from A. B. Farquhar to Óscar Braniff, 25 Apr. 1913, AB. 33 Letter from Óscar Braniff to Felix Sommerfeld, 2 Jan. 1915, AB. 34 Telegram from Óscar Braniff to Araiza, 27 May 1913, AB. 30

Entrepreneurs during the Mexican Revolution / 731 supported reestablishment of diplomatic relations, would compel the White House to grant recognition.35 However, he had to deal with Huerta’s growing animosity toward the United States, a result of Wilson’s resistance to recognizing his government even though Great Britain, France, and Germany had already done so. Huerta’s hostility toward the US put Óscar in an uncomfortable situation that ended in May, when he received the long-awaited reply: the elections would be held October 26 and Huerta would not be a candidate.36 This promise was not sufficient to convince the White House to grant recognition, but it did stir the men in Mexico City who harbored presidential ambitions to begin making their moves. On June 23, several politicians and entrepreneurs met at Tomás Braniff’s home to make preparations for the elections and call a convention, but they reached no agreement. Congressman Querido Moheno, at that point closely identified with Huertismo, claimed that Tomás Braniff and his group had agreed to demand Huerta’s resignation as a condition of Congress approving the loan Esquivel had been negotiating with the European banks since May 19 in order to hasten the dictator’s downfall.37 The actual reason for the delay of the loan was the impaired economy during Huertismo. The cabinet changes made by Huerta starting in April showed his ambitions to stay in power.38 When Félix Díaz accepted the appointment as special ambassador to Japan, conservative elements—which believed that elections could be a way to end the civil war—created the Junta Unificadora Nacional (National Unifying Committee) headed by Tomás Braniff.39 This group attempted to bring together all the diverse political groups, Maderistas, anti-Maderistas, members of the Catholic Party, and even Constitucionalistas, to solve their political discrepancies by nominating one candidate representing order.40 The Catholic faction, however, left the committee. Huerta was facing battering not only from the Zapatistas and Constitucionalistas; the National Unifying Committee was also frustrating his plans to remain in power. Óscar tried to convince President Wilson to give his support to a conservative civilian capable of uniting 35

Ulloa, La revolución intervenida, 63–64. Telegram from Óscar Braniff to De la Barra and Toribio Esquivel Obregón, 26 May 1913, Telegram from Esquivel Obregón to Óscar Braniff, 28 May 1913, AB. 37 “Se aclara el misterio de la junta celebrada ayer en la casa de don Thomas Braniff,” El Universal, 24 June 1913, AB. 38 Michael Meyer, Huerta: A Political Portrait (Lincoln, 1972), 96–101. The followers of Félix Díaz and Huerta signed this pact in the American Embassy in Mexico City during the military coup that overthrew Madero. 39 Knight, La Revolución Mexicana, vol. 2, 625. 40 Jorge Vera Estañol, La Revolución Mexicana: Orígenes y resultados (Mexico City, 1957), 331–32. 36

María del Carmen Collado / 732

Large gathering of CIDOSA’s workers, Río Blanco, Mexico, 1900. (Source: J. R. Southworth, El Estado de Veracruz-Llave, Sus historia, agricultura, comercio e industria en inglés y español [Liverpool, 1900], p. 121.)

Mexicans.41 Óscar then approached Carranza with the goal of building an alliance and advised Huerta that he negotiate an armistice with Carranza.42 The Braniffs and their group had become enemies of Huerta, as they opposed his presidency, but the Constitucionalistas did not accept them either.43 Aureliano Urrutia, the Minister of the Interior, threatened Tomás Braniff and his group “with imprisonment, destruction of their property and even death.”44 Remaining in Mexico put Óscar in danger, leaving him no alternative but to save himself by exiting the country. Before leaving for Havana, he appointed López Araiza as his power of attorney to take care of his business interests. The rest of his family took similar measures.45 To protect their huge investment in Papelera San Rafael, they resigned from the board of the company and left 41

Knight, La Revolución Mexicana, vol. 2, 625. Letter from Óscar Braniff to John Bassett Moore, 24 July 1913, AB. 43 Memorandum, I. E.786-R, File 38 (12), 124, AHSRE. The consular reports of Carrancistas contained the dubious information that Óscar Braniff and Alonso Mariscal Piña had contacted Wilson, offering him five million pesos in gold to recognize Huerta in June 1913. 44 Estañol, La Revolución Mexicana, 132. 45 His brother-in-law Luis Bermejillo asked Óscar to find a new power of attorney in Mexico. Telegram from Toribio Esquivel Obregón to Óscar Braniff, 28 May 1913, AB. 42

Entrepreneurs during the Mexican Revolution / 733 the defense of their interests in the hands of their Barcelonnette associates, who managed their assets as a French property to protect them from the Zapatistas’ and Constitucionalistas’ invasions from 1914 to 1919, when the Braniffs and their associates recovered the mill.46

Exile In September 1913, Óscar, Tomás, and Alberto Braniff left Mexico. Their mother and the rest of their siblings had already done so and were lodged in Biarritz. During the years they spent outside Mexico, members of the Braniff family lived in France, Spain, and the United States. Óscar had not given up on the possibility of influencing Mexico’s destiny and remained active throughout the years of exile, especially in New York, from which he made statements to the press, wrote letters to US officials, and met with other Mexicans in exile interested in an alternative to Carranza’s plan. To the Constitucionalistas it was clear that the Braniffs were “enemies of the Revolution”; that they were part of the Porfiristas viciously opposed to Madero and supporting the military regime.47 Óscar’s rupture with Huerta did not erase his collaboration with the dictator or his conservative affiliation, nor did his attempts to promote a reformist proposal midway between Porfirismo and Constitucionalismo in Washington. Óscar Braniff’s most original proposal was a moderate agrarian reform supported by the landholders themselves with government financial support. They thought this reform would cut off the revolutionary movement at the roots. Unlike Madero, Óscar did not believe that full democracy was Mexico’s most pressing need, justifying that Díaz had not respected the vote because he could not trust the judgment of “the ignorant, irresponsible masses.” Óscar claimed, “Señor Madero wrongly concluded that democracy had won, when the social force which truly won was hunger.” He blamed the outbreak of the Revolution on the poor advice Díaz had received from those close to him who, in an alliance with the bankers, halted the liberalization of financial institutions. This alliance would have promoted inexpensive, long-term agricultural loans, eliminating the “usurious” interest rates from which the banks profited, thus raising production and avoiding civil war.48 46 The Zapatistas attacked San Rafael because Porfirio Díaz had seized the communal properties of the woods of Tlalmimilulpan and Hueyapan and given them to the paper mill. Espejel, “Luces y sombras de un proyecto empresarial,” 148–50. 47 Letter from Francisco González Garza to Venustiano Carranza, 9 Apr. 1914, Binder 32, File 3160, 1914, Fondo CMXV, AFGG. 48 “The Great Error of Gen. Diaz,” The Evening Mail, 22 May 1913, AB. Braniff’s criticisms implicated the científicos.

María del Carmen Collado / 734 As President Wilson’s efforts to influence Huerta to call elections failed, Washington determined to depose him. Óscar presented himself as a very influential man and insisted in his statements to the press that Mexico needed a government of conciliation.49 To emphasize his political independence, he made sure to mention that his brother Tomás had repudiated the rumors of his presidential candidacy. Óscar continued his efforts to get US support for his candidacy, ensuring its independence and the fact that many Mexicans wanted him as provisional president. Óscar’s work was supported by Farquhar, who pressured the White House to receive his friend, saying that Carranza was equal to or worse than Huerta.50 Near the end of the year, once Huerta had dissolved the Congress and postponed elections, Óscar declared for the first time, in a letter to Bryan, his willingness to see the United States intervene in Mexico to remove Huerta from power. However, he warned Bryan that Huerta’s exit by violent means would benefit the Constitucionalistas, which could be avoided if the US government supported a candidate who represented “the interests of all, and not only of Señor Carranza’s group.”51 Wilson abandoned his policy of watchful waiting and landed troops in Veracruz in May, after a military incident between the dictator’s troops and American soldiers, advising Mexico that the US intervention would cease the moment Huerta resigned. Wilson thought Constitucionalistas could make the reforms Mexico needed. He ordered the troops to disembark when it was clear that Huerta wanted to remain in office and Constitucionalistas were winning the war.

The Nightmare Huerta’s downfall in August 1914 followed a bitter struggle between the Constitucionalistas and the Villistas and Zapatistas, which initiated one of the harshest periods of the Revolution (September 1914– October 1915). Followers of Villa and Zapata represented the aims of the agrarian and popular groups from northern and central Mexico. They formed their own government, the Convencionista, and fought against Carranza, whom they saw as a conservative. Not only did Constitucionalistas defeat Porfiristas, but they also fought against Zapata’s and Villa’s troops. But as the civil war went on, they moved to more

49 “President Must Change Policy to Solve Mexican Problem, says O. J. Braniff,” New York Herald, 14 Sept. 1913, AB. 50 Letter from A. B. Farquhar to President Wilson, 13 Dec. 1913, AB. 51 Letter from Óscar Braniff to William Jennings Bryan, December 1913, AB.

Entrepreneurs during the Mexican Revolution / 735 radical positions to win broader popular support. The Braniff family was not immune from the consequences of this radicalization. Óscar continued trying to get White House support for a conciliatory candidate, independent of the Constitucionalistas, underlining the need for peace, order, religious freedom, and the subdivision of large estates while respecting the rights of landowners.52 In another letter to Farquhar, he stated that the government of Mexico should rely on its intellectuals and propertied classes to avoid chaos, the destruction of property, and foreign intervention.53 Shortly before Huerta’s fall from power, Óscar Braniff contacted Sherbourne G. Hopkins and Felix Sommerfeld. Both men were acting as lobbyists for Carranza and Villa in the United States and selling their loyalty to the highest bidder in the armed conflict. Sommerfeld was a double agent for Villa and Carranza, a weapon supplier to Villa’s División del Norte, and a spy for the German government during World War I. Hopkins served American businessmen with interests in Mexico trying to influence Villa.54 Óscar introduced himself to Hopkins and Sommerfeld with the aim of drawing closer to the revolutionaries in order to save his family from retaliation.55 However, events confirmed the Braniffs’ fears. During the period when Constitucionalistas controlled Mexico City (August–November 1914), the Braniffs’ houses suffered under the temporary occupation, and some of their properties were confiscated. They sought protection at the US embassy, Óscar’s mother, Lorenza, and his eldest son, George Braniff, claiming to be US citizens. They pressured Carranza through the Brazilian representative Juan Manuel Cardoso de Oliviera, who took charge of United States interests in Mexico upon the suspension of diplomatic relations in August 1914. Their most difficult days began in August when military authorities attempted to confiscate wiring, cords, and copper cable from Óscar and Tomás Braniff’s engineering and import company Compañía Ingeniera Importadora y Contratista. To avoid being divested of the goods, they argued that the materials belonged to American companies and were only being stored there.56 Conrado Pelayo, George Braniff’s legal representative, closed the Imperial Hotel to safeguard it from the forces of Constitucionalistas that entered the city, leaving the keys with the 52 Memorandum to the US government, 1914, AB; written communication from Óscar Braniff to Wilson, AB. 53 Letter from Óscar Braniff to A. B. Farquhar, 4 Jan. 1915, AB. 54 Friederich Katz, Pancho Villa, vol. 1 (Mexico City, 1998), 362–64. Sommerfeld was also the chief of Madero’s secret service. 55 Letter from Óscar Braniff to Felix Sommerfeld, 2 Jan. 1915, AB. 56 The Compañía Ingeniera Importadora y Contratista S.A., was successor to G. & O. Braniff. File 16-12-33, AHSRE.

María del Carmen Collado / 736 Brazilian legation. In spite of his precautions, the hotel was occupied in September and its rooms were used as headquarters.57 General Álvaro Obregón occupied the personal residence of Lorenza Braniff, the widow of Thomas Senior, and another Braniff house suffered a similar fate. These incursions were not the last of the family’s troubles, for General Francisco Cos’s Constitucionalista forces occupied their hacienda at Jaltipa and its annexes El Sabino and La Corregidora in Mexico State. During the invasion, 310 occupying soldiers confiscated mules, sheep, and some of the furniture at Jaltipa. They destroyed fields, seized wheat, and used outbuildings for shelter.58 The Brazilian ambassador demanded that the properties be released immediately since they belonged to American citizens, and Señora Braniff’s attorney submitted a petition for restitution, warning that she would sue for payment for harm and damage suffered during the occupation. On October 29, Ignacio Pesqueira, head of the Foreign Affairs Department Office, having verified the nationality of the plaintiffs, replied that the haciendas would be returned on Carranza’s orders, “but not the houses, being urgently needed by the Constitutionalist Army.”59 The Federal District Reserve Police occupied another of Lorenza Braniff’s houses. The response of the officials to Señora Braniff’s complaints was that her goods had been “duly secured” before they had taken possession of the property.60 The taste demonstrated by some revolutionaries for luxury cars and houses and the climate of hostility affected the Braniffs and other prominent business families. The Constitucionalista forces occupied a house belonging to George Braniff and confiscated three of his European automobiles, as well as his private railroad car.61 Rafael Buelna occupied one of Tomás Braniff’s houses, where he often played billiards.62 In October 1914, George Braniff applied to Carranza for authorization to go to Mexico City to attend to some of his business affairs, but Carranza’s response, denying the permit, made it clear that the Constitucionalistas considered the Braniffs as enemies.63 57

Document by Conrado Pelayo, 1 Sept. 1914, File 16-13-139, AHSRE. Lorenza Braniff, Confiscation of two houses and two haciendas, File 16-13-139, AHSRE. 59 Y. L. Pesqueira to the Senior Officer of the Ministry of Foreign Affairs, 29 Oct. 1914, File 16-13-139, AHSRE. 60 Señora Lorenza Braniff’s complaint about the occupation of the house at no. 12, Benito Juárez Street, 4 Jan. 1915, File 16-14-10, AHSRE. 61 Complaints by the Minister of Brazil to the Mexican government, 1914, File 16-13-103, AHSRE. 62 Knight, La Revolución Mexicana, vol. 2, 752. 63 Letter to Sr. Cardoso de Oliveira from Venustiano Carranza, 7 Oct. 1914, File 16-13-103, AHSRE. 58

Entrepreneurs during the Mexican Revolution / 737 Tomás Braniff, living in New Orleans and often traveling to Cuba, moved to New York, and his wife Elena Amor sold the Monte Blanco hacienda in Veracruz to his mother on June 1, 1914 (although the sale was probably a sham). As Señora Braniff had US nationality, the transaction was made to protect the property, which took the name Monte Blanco Real Estate Corporation.64 This precaution did not prevent the Constitucionalistas from invading the hacienda before the year was out, but since it was in Tomás’s mother’s name, it became part of the official claims presented by the US government after the Revolution.65 Tomás embarked for Veracruz from Havana in November 1914 to meet with Carranza and Luis Cabrera to discuss his impressions of what had happened in Washington.66 He wished to become closer to the Constitucionalistas and perhaps convince them of the need to support the election of a consensus candidate. When he reached the port of Veracruz, he was captured, but managed to escape and return to Cuba a few days later.67 Óscar was embittered by his powerlessness; his family, a favorite of the Porfirista regime, collaborators in Madero’s fall, had had the economic power and influence to challenge Huerta, but now found themselves unable to remove the Constitucionalistas and Convencionistas, who, not surprisingly, distrusted and resented the Braniffs. Óscar was upset and concerned by Miguel Maceo Abreu’s invasion of the Jalpa hacienda in Guanajuato, a region under Convencionista control. Maceo Abreu had declared the Braniffs “enemies of the revolution” and proposed to subdivide their estate. Braniff wrote Sommerfeld on January 2, 1915, to complain that nobody defended the properties from occupation. Óscar believed that his family’s rupture with Huerta should be cause enough for the regime’s enemies to approve them. The letter he wrote reflected his mood and clearly expressed his class consciousness: I have received confidential news from Mexico informing me that not only has my hacienda been taken over by elements authorized by the Convention, but also that there is an atmosphere of open and intolerant hostility towards the Braniffs in Mexico City. This simply means that the common crowd with whom of course we never got along, has won again, just as they triumphed in Madero’s time, carrying out their surreptitious dirty work . . . The most basic truth is that we are “rich” and therefore they see us in a 64 Copy of deed, undated, unnotarized, papers of Tomás Braniff, held by his heir Elita Boari, Mexico City. 65 Letter from Crawford M. Bishop to Óscar Braniff, 27 Oct. 1938, private archive of Tomás Braniff. 66 Letter from Salvador Martínez Alonso to Isidro Fabela, 4 Dec. 1914, L. E. 808 R. File 1, p. 16, AHSRE. 67 Óscar Braniff to Arturo Braniff, 18 Dec. 1913, AB.

María del Carmen Collado / 738 position in which some of them would take part of what we have and of course there are all sorts of facile arguments used these days [to do so].68

At the same time as this once powerful family fought to defend their properties by all means at their disposal, the Constitucionalistas increased in strength and presented their first proposals for agrarian reform in the appendices to the Plan de Guadalupe and in the January 6, 1915, Agrarian Act. The Braniffs opposed the Constitucionalistas’ scheme to solve the agrarian problem; the Constitucionalistas called for restoring and endowing the people with ejidos by expropriating the haciendas, converting the state into the direct agent of reform. The Constitucionalistas’ exit from the capital in November 1914 did not restore the Braniffs’ Mexico City properties; when the Convencionistas forces entered the city, Eulalio Gutiérrez, who had been appointed president of the Convencionistas, occupied Lorenza Braniff’s mansion. In May 1915, Constitucionalistas occupied Doña Lorenza’s haciendas in the state of Mexico and the family’s “winter home” at Lake Chapala in Jalisco for the second time.69

The Fight against Carranza In March 1915, Óscar tried again to approach Villa and Carranza through Sommerfeld, but without success.70 Like so many other exiles, Óscar did not want the radical revolutionaries to take control of the presidency, and he sought President Wilson’s support to this end. Thanks to his ongoing contact with Washington, US officials took interest in his opinions. When he suggested that the US support a coalition government in Mexico, he was asked to submit a memorandum listing potential candidates. He assured the US officials that such a government would receive “universal” backing from all Mexicans since it would be made up of representatives of all groups and currents, although Óscar did not include the main protagonists of Villismo and Constitucionalistas in his list.71 The Constitucionalistas’ military victories over Villa in April 1915 and their harrying of the Zapatistas by Pablo González’s forces, which had held Mexico City since August, made Carranza appear as the victor. Woodrow Wilson’s government granted Carranza de facto recognition in October, which deeply disappointed Óscar, as it was blatant proof 68

Óscar Braniff to Felix Sommerfeld, 15 Jan. 1915, AB. Letter from John D. Rodgers to Cándido Aguilar, 13 Apr. 1915, File 12-27-5, AHSRE. 70 Letter from Óscar Braniff to Felix Sommerfeld, 1 Mar. 1915, AB. 71 Memorandum, 21 July 1915, AB. 69

Entrepreneurs during the Mexican Revolution / 739 that Washington had ignored his opinions. He accused the United States of having contributed to Carranza’s victory with its occupation of Veracruz. He stated that it was inconceivable that the White House would recognize those who “DESTROYED peace and order, and whose incompetence and immorality had been proved time and again.”72 He declared his opposition to Carranza’s reforms, branding them as “infeasible radicalism and systematic exclusion” of those who dissented from their viewpoints.73 Tomás went even farther and sent a memorandum to Robert Lansing, new Secretary of the State Department, describing the history of Mexico and concluding that only “whites” were qualified to govern because they were the only representatives of the national tradition. He declared his opposition to the universal suffrage defended by Madero and Carranza, since it could not be applied to a people lacking in education.74 Before Carranza was instated as president-elect, Óscar asked the State Department to support a government of reconciliation and proposed a list of candidates who were for the most part Porfirian and Huertistas.75 His attempts to garner support in Washington were fruitless, which, added to the family’s rejection and antipathy towards Carranza, led Óscar to seek other means to remove Carranza from power. The opportunity to support a rebel movement against Carranza came in October 1916. Tomás and Óscar Braniff contacted Manuel Peláez, a local leader and sometime ally of Félix Díaz who controlled most of the oil region in the State of Tamaulipas and financed his operation by providing protection to the oil companies. The brothers devised a plan to send arms to Peláez so that he could capture the port of Tuxpan. The only problem was to find secure transport to convey the munitions from New Orleans to Mexico. They contacted the Constitucionalista consul in New Orleans, Colonel Francisco Villavicencio, proposing that he provide a government vessel to ship the weapons. To gain his support, they argued that Constitucionalista nationalism may cause a new American military intervention to safeguard American economic interests, such as William Randolph Hearst’s properties in Chiapas and Chihuahua. But the Braniff brothers did not succeed in convincing the Colonel who, instead, denounced them, ruining their plan.76 72

Typewritten document on recognition of Carranza (n. p., n. d.), AB. Memorandum, 24 Jan. 1916, AB. Letter from Lansing to the Secretary of the Interior, with memorandum by Tomás Braniff annexed, 812.00/20 000, NA. 75 Letter from Óscar Braniff to Leon Canova, 6 Mar. 1916, AB. 76 Jorge Flores, “La conspiración contrarrevolucionaria de los hermanos Braniff,” in Novedades, 16 Jan. 1966, AB. 73

74

María del Carmen Collado / 740 Also in 1916, two old Villistas, brothers Roque and Federico González Garza (Roque was the Convencionista ex-president), began to draw together a political organization of ex-Maderistas and ex-Villistas, many of them Convencionista members in exile in the United States. The association sought to pressure Carranza to modify his policies.77 Through the ensuing years, especially after the enactment of the 1917 Constitution, other conservative exiles with ties to the Díaz or Huerta governments, including Óscar Braniff and Manuel Calero, joined the association. The González Garza brothers thought these conservative men could contribute with money to their association, which was named the Liberal Mexican Alliance in 1918.78 Óscar offered to pay the expenses of an envoy to France to take charge of the association’s activities in Paris.79 The inclusion of such men triggered further division, and the Alliance failed.

Reorganization Óscar Braniff’s controversial participation in the Alliance was his last significant activity in exile. He likely returned to Mexico in 1920 following Carranza’s death, protected by the conciliatory policies of the provisional president, Adolfo de la Huerta. From the time of their return to Mexico, the Braniffs retired completely from politics and dedicated themselves to business. After the Revolution, which ended in 1920, their main business activities related to subdividing properties and urban development in Mexico City. While they suffered damages and losses during the occupations of their properties during the Revolution, they did not suffer permanent expropriation. Likewise, their industrial investments suffered losses, but the factories were not destroyed. Their most important loss was in the San Rafael paper mill, invaded by Zapatistas and Constitucionalistas, which the owners recovered in 1919. The claim for all damages, presented through the French representative in 1920, amounted to 2,335,000 golden pesos, but the family desisted from the claim until 1930, probably because they wanted to protect their monopolistic production of journal paper.80 This industry controlled about 83 percent of the Mexican market in 1929. CIDOSA, the biggest textile industry of the country, recovered once the violence diminished and communications improved. Huge 77

Katz, Pancho Villa, vol. 2, 270. Letter from Federico González Garza to Roque González Garza, 4 Feb. 1919, Binder 48, File 4777, Doc. 1, 1919, Fondo CMXV, AFGG. 79 Letter from Federico González Garza to Miguel Díaz Lombardo, 3 Feb. 1919, Binder 48, File 4772, Doc. 1, Fondo CMXV, AFGG. 80 Espejel, “Luces y sombras de un proyecto empresarial,” 151. 78

Entrepreneurs during the Mexican Revolution / 741

Compañía Papelera San Rafael, 1910. (Source: Lorenzo Zubaldía, Album oficial del Comité Nacional de Comercio: 1er centenario de la Independencia de México, 1810–1910 [Mexico City, 1910].)

enterprises were able to survive the bad revolutionary economic conditions because they had financial resources. The cotton textile industry began to recover by 1917 because of the demand generated by the First World War. This industry was 20 percent bigger in 1925 than it was in 1910.81 The economic dominance the Braniffs had enjoyed during the Porfiriato was relatively reduced in the post-Revolution era because of the growth of the entire economy and the rise of new entrepreneurs. Only Arturo Braniff managed to increase his fortune considerably, thanks to the success of some of his urban developments such as the subdivision in Colonia Moctezuma in the 1920s. Together with Federico A. Luna, who was close to Álvaro Obregón and Plutarco Elías Calles, Arturo developed and sold properties in a large neighborhood devoted to worker housing. Thanks to Luna’s connections, the government sold him approximately 424 hectares belonging to the War Department on the east side of Mexico City as well as giving him an atypical loan to buy the land.82 This 81 82

Haber, Razo, and Maurer, The Politics of Property Rights, 171, 175. Notario Agustín Carreño, No. 48, Deed no. 4442, 14 Apr. 1925, AHNDF.

María del Carmen Collado / 742 loan from the government was an unusual transaction produced by corruption. Luna and Arturo Braniff founded a company to manage and sell the land. Arturo made a commitment to invest up to 150,000 pesos in his development and to turn over 30 percent of the profits to Luna. Arturo was the majority shareholder with 60 percent of fully subscribed shares, consisting of the land, machinery, and promised sales, while Luna held the other 40 percent.83 Luna’s relation with Obregón benefited Arturo with a profitable business venture through a hidden partnership with Luna. Arturo was able to get City Hall to authorize the urban development and pay all the expenses of installing utilities in July 1928. Alberto also began to develop and sell land at Guadalupe Inn, site of the ancient Guadalupe hacienda in San Ángel, after his attempt to convert it into subdivided agricultural lots failed.84 This zone benefited from the construction of Insurgentes Avenue in 1923, which connected San Ángel with Mexico City. The real estate deals in which the Braniffs invested were medium to long term, ensuring the return on their capital as well as sizable profits. Their relationships with the municipalities and government officials ensured that they would recoup their investment in urban development projects, as stipulated by the regulations of the day. Once a lot was urbanized, it multiplied its value ten- to twelve-fold. We have no evidence of the new industrial investments of the family. It is very likely they kept the shares of the most important companies, as they did after their father’s death, and as most of the industrial owners did after the Revolution.85 They had to deal with the new group that rose to power and had to negotiate, sometimes in difficult conditions, the demands of the workers backed by post-revolutionary politicians.86 The most significant change in their investment patterns was their interest in the profitable business of large-scale real estate in different parts of Mexico City. Óscar and Tomás continued selling pieces of the land they owned on both sides of Paseo de la Reforma; they also continued with their building enterprises in different parts of the country and with their commercial firms. Óscar sold a part of Hacienda de Jalpa that he received after he divorced his wife in 1923. He subdivided his land in 1931 to 83

Notario Agustín Carreño, No. 48, Deed no. 13313, 19 July 1928, AHNDF. Jorge Jiménez Muñoz, La traza del poder: Historia de la política y los negocios urbanos en el Distrito Federal de sus orígenes a la desaparición del Ayuntamiento (1824–1928) (Mexico City, 1993), 159. 85 Haber, Razo, and Maurer, The Politics of Property Rights, 175. 86 Jeffrey L. Bortz, “The Legal and Contractual Limits to Private Property Rights in Mexican Industry during the Revolution,” in The Mexican Economy, 1870–1930: Essays on the Economic History of Institutions, Revolution and Growth, ed. Jeffrey L. Bortz and Stephen Haber (Stanford, 2002), 282. 84

Entrepreneurs during the Mexican Revolution / 743 keep it safe from the government’s expropriation of big landholdings. He made a simulated sell of the richest parts of the land to preserve it for him, and he sold six hundred lots of land to the old workers of the Hacienda.87 The Braniff family’s entry into the political arena began with the Revolution, when the convenient protection they had enjoyed during the Porfiriato disappeared. Madero’s and the Braniffs’ participation signaled the fracture of the elite towards the end of the Díaz regime and the existence of different goals for political and economic reform. The Braniffs’ political ideas were much more conservative than Madero’s, but they had a highly concrete proposal for changes in agrarian ownership. They wanted to strengthen small and medium property holders through government loans that would enable landowners to divide and sell their land, and they did not welcome the government taking agrarian reform in its hands. Between 1912 and 1914, they worked to promote this plan, themselves investing in haciendas that they intended to divide. It is also possible that the purchase of land by Arturo and Alberto during the Revolution was the result of economic uncertainty, an investment generally considered safe. The family sought to safeguard their economic interests through political participation and to promote a regime more conservative than those of Madero or Carranza. To do so, they tried to obtain support from the US government. But once the popular groups gained influence, the land reform became more radical, and thus the agrarian proposal of the Braniffs was dismissed. They did not share the democratic, representative ideals that motivated Madero, reflected in the 1917 Constitution, nor the populism that was to characterize Mexican politics throughout nearly the entire twentieth century. In summary, the political project on which they placed their bets was defeated, and although they were not able to maintain the social and financial preeminence they enjoyed during the Porfiriato, they succeeded in reestablishing themselves in the economy through real estate. Once the old entrepreneurs mingled with the revolutionary politicians, they managed to continue their old protectionist and monopolistic practices cultivated during the Porfirian dictatorship. The revolutionary regime, also authoritarian, guaranteed these and other privileges, but introduced new actors to the state coalition: the workers and the peasants. So the old entrepreneurs had to share part of their benefits with the workers through better salaries and labor conditions, especially during the 1920s and 1930s. They had to accept an agrarian reform that deepened in the second part of the 1930s, when president 87

Collado, La burguesía mexicana, 163.

María del Carmen Collado / 744 Lázaro Cárdenas expropriated and subdivided most of the larger estates of the country, benefiting many peasants. Even after many changes introduced during the last three decades, Mexican entrepreneurs maintain a particularly close relation with the state to this day. The Braniff family history is an example of how entrepreneurs coped with the political changes brought by the Revolution. After the downfall of the old oligarchic regime, businessmen lost the hegemony they had grown accustomed to. This forced them to deal with, and adjust to, the issues faced by a new multi-class state committed to capitalism. The changes in their investment strategies reveal details about the measures they took to protect their capital and are evidence of the opportunities opened by the post-revolutionary regime. . . .

MARIA DEL CARMEN COLLADO is a professor at the Dr. José María Luis Mora Research Institute and a lecturer at the Universidad Nacional Autónoma de México. She researches Mexican business history, urban history, and diplomatic history. She is the author of numerous research articles and books, including Dwight W. Morrow: Reencuentro y revolución en las relaciones entre México y Estados Unidos, 1927–1930 [Dwight W. Morrow: Rapprochement and Revolution in the Diplomatic Relations between Mexico and the United States, 1927–1930] (2005) and a forthcoming book on real estate entrepreneurship in Mexico City.