Family Elites in a Boom-and-Bust Economy: The Molinas and Peóns of Porfirian Yucatán

Writing for American Magazine in 1909, John Kenneth Turner offered North American readers a scathing indictment of Yucatán’s henequen oligarchy. Turner, who had visited local henequen estates a year before, depicted a brutal, repressive regime on the plantations; in large measure, he created the image we have today of the prototypical Yucatecan henequen planter (henequenero). Gorged with windfall profits unjustly reaped from the toil of a beaten, dependent labor force, this member of the casta divina built fabulous palaces on Mérida’s fashionable Paseo de Montejo. He traveled and educated his children abroad and generally pampered himself. Looking to the far-off capitals of the western world for inspiration and design, the prosperous henequeneros built ornate palaces with marble pillars, intricately carved façades, and ostentatious stained-glass enclosed porticoes.¹

Today, peeling and cracking paint adorns the weatherbeaten, ruined homes. The once impressive pillars now shadow decayed and run-down estates. Architectural imitations of nineteenth-century European mansions, these graphic heirlooms of henequen’s “Golden Age,” a period of forty years encompassing the last quarter of the nineteenth century and the first years of the present century, offer a visual reminder of the glaring inequities of Mexico’s ancien régime.

Presented with such powerful visual proof, few historians have contested Turner’s decidedly one-dimensional portrait of the aristocratic henequen planter. Yet more detailed research uncovers a far more complex, many-sided individual who played the combined roles of planter, merchant, and speculator, juggling investments continually in an effort to solve the demanding problems of the henequen economy. In addition to engaging in pleasant after-dinner conversation while sipping imported French wines on his shaded veranda, the henequen oligarch also spent considerable time keeping abreast of current stock quotations from Paris and dabbling in urban and rural real estate. Without denying that local oligarchs frivolously spent enormous sums of money on sumptuous carriages and extravagant parties, I would posit that Yucatán’s henequeneros were concerned with more than the twin pillars of traditional society: patronage and property. Intent on maximizing profit, they were unafraid of investing those earnings in local commerce, infrastructure, and industry. Buoyed by the seemingly insatiable demand of North American farmers for binder twine, which was manufactured principally from the fibrous (henequen) agave grown in Yucatán, henequeneros speculated freely with joint-stock shares of regional banks, railways, and industry.

The aim of this study is to analyze and amplify our impressions of an entrepreneurial ruling class that constantly struggled with a paradoxical problem: how to assure profits in spite of the capricious nature of a monocrop economy. Although planters secured bountiful profits through the purposeful exploitation of a dependent working class, tied to the plantation through the mechanism of debt peonage,² many henequeneros had difficulty adjusting to the boom-and-bust prices of the crop. A local entrepreneur’s path was fraught with pitfalls, and only those with a shrewd sense of timing, keen business acumen, and strong family ties could survive the severe dislocations characteristic of a region undergoing swiff economic growth.

While it is difficult to apply descriptive generalizations to the local agrocommercial elite, certain unifying features of the ruling class are apparent. The henequen oligarchy was above all a network of closely knit families. Fewer than thirty families controlled the all-important factors of production—land, labor, and capital—thereby regulating the pulse of the regional economy. By no means monolithic in background, political persuasion, or sources of wealth, this nexus of wealthy families, who had controlled the regional economy since colonial times, had the flexibility to accept and incorporate aspiring members of a much larger agrocommercial bourgeoisie. Regional historians estimate that 300 to 400 hacendados owned the more than 1,000 henequen haciendas during the Porfiriato. These lesser hacendados were powerful landowners in their own right. Many owned parcels of urban real estate in addition to their rural holdings. This landed class, while constituting one of the wealthiest sectors in Porfirian Mexico, was in many ways utterly dependent on the henequen oligarchy.³ As the monocrop economy prospered in the last quarter of the nineteenth century, the oligarchy’s grip over this regional bourgeoisie tightened. It must be emphasized that the rise of the monocrop economy did not alter Yucatán’s traditional class structure. In fact many powerful families, such as the Cámaras, Regils, and Peóns, whose forefathers had played a significant role in colonial Yucatecan society, solidified their positions during the boom (auge) and actually increased their corporate wealth, landholdings, and political power.

The ubiquitous familial clique, which exercised such preponderant control over the regional economy, comprised two types: (1) traditional large landholding families whose prestige and influence dated back to the colonial era, and who demonstrated an uncanny ability to adapt to the changing economic order; and (2) families whose principal source of wealth was the growing import-export trade rather than the land, and who used powerful foreign connections to secure domination of the henequen trade. Two of the most powerful families in Yucatán during the auge, the Molinas and the Peons, are representative of these types. Case studies of the two families may help to dispel traditional ideas about elite formation and sources of wealth and power among elite types during a period of rapid economic development. Within the larger context of Mexican historiography, the study of family ties and miniempires may well provide tools to analyze regional class structure and local conditions. Studies by Mark Wasserman on the Terrazas family in Chihuahua and Stuart Voss on elites in Sonora indicate that the process of family empire-building was a widespread phenomenon in Porfirian Mexico.⁴ Given the commonly accepted belief that the Mexican Revolution was in fact a reaction to regional and local stimuli, the importance of understanding the wealth and power wielded by families like the Molinas and Peóns must not be underestimated.⁵

The Growth of the Henequen Economy

A brief summary of the monocrop economy and its precursors will provide a useful introduction to the unstable and risk-laden circumstances in which henequen entrepreneurs operated. Before the appearance of the dynamic export economy at mid-century, members of the local elite largely ran cattle ranches in northwestern Yucatán. The colonial livestock economy, being low in labor and capital requirements, fit the needs of an isolated and peripheral region. Few demands were made on local village labor, so there was little threat of confrontation between whites and Indians. Maize production complemented the cattle economy and diminished the need for costly imports. Although henequen was indigenous to Yucatán and had been cultivated since pre-Columbian days, no organized attempt was made to exploit the fiber commercially during the colonial period.⁶

After independence, sugar rather than henequen proved lucrative because the fertile lands of the southeast were suitable for cane cultivation. Strong demand (reflected in high prices), and state legislation designed to spur the local cane industry, allowed sugar growing to become the dominant economic endeavor in Yucatán.⁷ The expansion of the sugar economy, however, displaced many Maya Indians from their traditional holdings in the southeast. In 1847, largely in response to white encroachment on Indian lands and to excessive church subventions, rebellious Mayans attacked the principal population centers of the southeast. The resulting conflict, commonly called the Caste War, raged for fifty years. Fighting between rebels and government forces disrupted the maize trade, devastated the cane-growing districts of Tekax, Peto, and Valladolid in the southeast, and forced white planters to abandon their sugar estates and flee to Mérida. Population plunged from an estimated 504,635 persons in 1846 to 256,381 a decade later.⁸

Certain scholars have asserted that the Caste War spurred the growth of the henequen economy by limiting agricultural production to the barren rocky northwest, the only sector safe from Indian attacks.⁹ A close examination, however, of local supply and world demand for the fiber, and recognition of important ecological conditions favoring the cultivation of the agave in the northwest, would argue against a simple cause-and-effect relationship between the Caste War and the growth of the monocrop economy. Henequen grows best in tropical climes on soils of partly decomposed limestone. The northwest quadrant of the Yucatán Peninsula is a semiarid plain composed of porous fossiliferous limestone, which affords excellent natural drainage and aeration for the plant’s roots. Also, the absence of anything but a thin layer of topsoil and loam discourages cultivation of, and hence competition from, maize or beans.¹⁰ Henequen cultivation, it can be argued, thus neither conflicted with sugar growing in the southeast nor benefited directly from the destruction of the sugar economy. Certainly the Caste War was instrumental in forcing white planters to move to the safe northwestern quadrant. Displaced planters commonly invested in land that favored the cultivation of the agave. The transition from cattle raising toward henequen cultivation in the northwest, however, had started well before the first outbreak of hostilities. In fact, as early as 1828, in order to arouse interest in the potential export, the Yucatecan government decreed that citizens cultivate at least ten henequen plants a year on their property. Two years later, local elites formed an economic society to promote, perfect, and increase cultivation of the agave. Both these early attempts to stimulate fiber production indicate an awareness of the potential for henequen. Only when early supply problems were ironed out, however, did widespread cultivation of the agave develop.¹¹

A major deterrent to the growth of the henequen industry before 1850 was the costly manner in which the fiber was extracted from the leaf. Five hundred leaves had to be scraped to secure one pound of raw fiber. Since colonial days time-consuming hand scrapers (toncos, pacché) had been used. Not until a mechanical device, the decorticator (desfibradora), was invented and perfected by Yucatecans during the 1850s, was the industry able to cut production costs and meet rising demand. Desfibradoras soon became standard operating equipment on all large plantations. By 1860, rasping machines each, on average, produced more than a bale (350 pounds) of fiber a day. Improvements in technology continued throughout the auge, and with the introduction of steam power to the machine house in 1861, henequen production soared.¹²

These same improvements made it possible for producers to keep up with increasing demand, as the fiber found a welcome market, principally in the United States. At first, henequen was sent to United States cordage factories where it was manufactured into inexpensive cordage and rigging or blended with costlier fibers, such as Philippine-grown manila (abaca), for heavy-duty cordage. Later, North American farmers demanded cheap twine to bind sheaves of wheat and turned to Yucatecan henequen to fill that need. By 1900 more than 85 percent of North American binder twine was manufactured with Yucatecan fiber. As a result, henequen production increased furiously, with exports rising from 112,911 bales in 1880 to nearly 1 million bales in 1915 (see Figure 1). Hacienda owners recognized the crop’s potential commercial value and gradually replaced livestock raising with henequen cultivation. This transition had to be gradual since the cost of capitalizing an average-sized plantation, and maintaining it for seven years until the first harvest, was 130,000 pesos.¹³ By 1860 local planters were firmly convinced that the economic future of the peninsula rested with the agave.

Hacendados became tied to the henequen production cycle, forsaking their livestock and maize plots for endless rows of bluish-green agaves. World market prices for fiber appear to have had little effect on local cultivation practices. With profits assured by low labor, land, and production costs, planters, given the choice of withholding production to starve demand and consequently force fiber prices higher, or of cutting leaves without regard to price or demand, invariably chose the latter option. Every organized attempt to withhold production and thereby increase prices during the boom met with abject failure. With even low fiber prices signaling profits, planters elected to produce irrespective of the economic climate.¹⁴ If price data are superimposed on overall production figures, the minimal correlation between world market prices and local production practices is evident. It can be inferred from Figure 1 that henequen planters strove to meet the growing world market demand for the fiber at any price.¹⁵

Planters and local merchants connected with the trade not only expanded their own estates and businesses, but reinvested in complementary service industries tied to the monocrop economy. Entrepreneurs reinvested profits and borrowed heavily on the future of their commodity. Pooling their capital, they formed joint-stock companies (sociedades anónimas). Unafraid to juggle investments, henequeneros speculated in stocks, real estate, and even mortgage credits on the assumption that the henequen monocrop would more than make up for losses incurred by inopportune ventures.¹⁶ This aspect of their activities is elaborated upon below.

Volatile price fluctuations, however, in fact played havoc with investment stratagems. For example, artificial market constraints, such as a war or an attempted corner on the fiber trade by one exporting concern, often caused the price of henequen to soar. This in turn triggered a chain reaction; capital poured into the regional economy, stimulating a surge in real estate values and inviting an influx of manufactured goods, luxury items, and even staple commodities. In fact, land values at times became so distorted that an estate valued regularly at 100,000 to 150,000 pesos before a boom might find itself being remortgaged for 300,000 to 400,000 pesos less than two years later. This type of artificial valuation colored the entrepreneur’s business mentality; he or she borrowed on the excessive assessments to invest in local joint-stock companies, such as railroads, to obtain a quick return on the stock market. Inevitably the external market factors that had created the upward price surge dissipated and the price of fiber came tumbling down. Conditioned by each boom-and-bust cycle, henequeneros had to react quickly while the money supply was plentiful. If their investments prospered, they could meet the mortgage payments when they fell due. More often than not, however, entrepreneurs critically overextended themselves and the inexorable decline of the world market price of henequen often coincided with past-due mortgage payments, late promissory notes (pagarés), and overextended loans. The 400,000 peso estate then deflated to its original value, profits shrank from the estate, and speculations sagged, all suffering from the same malady as the entire regional economy—an imposed recession brought about by a decline in world fiber prices.¹⁷

Given the great risks involved, it would be misleading to leave the impression that despite the lucrative nature of fiber production all those entrepreneurs who possessed profitable estates automatically succeeded during these tumultuous times. For every successful individual who exercised some measure of economic control over his or her own destiny, many more fell by the wayside, existing in a perpetual state of indebtedness, fiscal instability, and periodic bankruptcy. Many of these investors, successful in earlier endeavors, were unable to adjust to the boom-and-bust economy. Yucatán’s notarial archive documents bankruptcies throughout henequen’s “Golden Age,” demonstrating the fragile nature of the monocrop economy. Soaring henequen production, large-scale price fluctuations, and constraints on the availability of surplus capital forced many investors to react quickly, secure capital when it was obtainable, and then speculate as carefully as circumstances permitted. Unable to predict future prices and accompanying surges of inflation and recession, the henequen entrepreneur had to have access to adequate financial reserves, particularly since low fiber prices meant reduced profits. The most convenient way to stave off such fiscal uncertainty was to rely on family connections. A perfect example of this phenomenon was the meteoric rise of the Molinas during the auge.

Molinas

The Molinas do not fit the time-tested model for powerful Latin American families. As late as the middle of the nineteenth century, the family had no landed wealth. Within fifty years, however, it enjoyed unbridled political and economic power hitherto unmatched in Yucatán’s modern history. Despite the fact that the Molinas never realized the scope of investment that the far more numerous Peóns obtained, their versatility, coupled with far-reaching political and economic connections, enabled them to dominate Yucatán during the first years of the twentieth century.

Since the Molinas lacked landed wealth, the traditional tool of regional power, family members had to start elsewhere. Rather than relying on kinship ties, intermarriage with powerful landed families, or adroit investments, the Molinas instead succeeded as a result of the rise to power of their most dynamic son, Olegario Molina. The family prospered as a direct result of Olegario’s control of both the lucrative henequen trade and the governorship of Yucatán during the first years of the present century.

The Molina family had emigrated to Yucatán from Spain in the eighteenth century. Olegario, the second of ten children, was born in 1843 in Bolonchenticul, Campeche (then an integral part of Yucatán). His grandfather, Julián Molina y Bastante, after unsuccessfully pursuing tobacco cultivation in the eastern portion of the peninsula (outside Valladolid), moved his family to Bolonchenticul. His son Juan Francisco Molina y Esquivel expanded the family-run tobacco farm and opened a store in town. In an effort to improve his status Molina y Esquivel, like many first-generation Yucatecans, married the daughter of an established family—the Solís Rosales (see Figure 2). Marriage into a respectable family, however, did not assure Molina y Esquivel success. In 1847, during the Caste War, rebel Mayans razed the estate and store. The family then moved to nearby Hecelchakán, and reconstructed the family fortune— only to watch it be demolished once again, this time because of political differences with local authorities. The incident grew out of a Campechano attempt to secede from Yucatán in 1857. The Molinas opposed Campechano self-determination and paid dearly for their outspoken opposition. Their estate was overrun for the second time in ten years, this time by zealous secessionists, and the entire family fled to Merida.¹⁸

Forced to start anew in the principal commercial center of the peninsula, the younger sons of Juan Francisco went to parochial school and supplemented the family’s income by working part-time. Unlike some members of the regional elite who sent their sons abroad to study, Olegario’s parents elected to continue Olegario’s education by enrolling him in a state law school. He received his degree in 1866, just as the Molinas were about to be embroiled again in political squabbling. This time, Olegario and his brothers championed the Liberal cause, determined to chase the entrenched imperial forces of Emperor Maximilian from the peninsula. Olegario entered the conflict at an opportune time with a scant three months remaining in the fighting, and was named secretary to Liberal General Manuel Cepeda Peraza. After the Liberal victory, the Molinas profited for the first time from government contacts as Olegario and several brothers received positions in the new administration. Olegario was named director of the Instituto Literario. While dispatching his duties as director, he opted to continue his education and was awarded a degree in topographical engineering, a field that proved useful in later endeavors.¹⁹

Upon receiving his degree in engineering, Olegario chose to continue in the public sector. He left the directorship of the Instituto to pursue an active role in state and national politics (in both the legislative and judicial branches). Despite extensive public service, by 1880, Molina had neither profited from his political career nor succeeded financially. His sole investment during this period was as silent partner in henequen haciendas owned by his brother, José Trinidad, in Temax partido,²⁰ east of Mérida.

In 1880, after a decade of public service, Molina made a move that indelibly altered his career. Being one of a handful of engineers in the peninsula, Olegario was asked by José Rendón Peniche to aid in the completion of his Mérida-Progreso railway. The railway, begun in 1874, was experiencing extensive delays in uniting the peninsula’s principal port with the state capital because of capitalization and construction problems. Molina oversaw completion of the railway’s final kilometers, a major event in the economic history of the peninsula. For the first time an adequate transport network became available, dramatically cutting shipping costs and connecting distant markets to the interior. After completion of the railroad, Molina remained with the company and was promoted by Rendón Peniche to the post of superintendent. He held the position for several successful years, during which cargo income increased despite the generally depressed market price of the railway’s primary commodity, henequen.²¹

Molina’s prominent role in the railway company allowed for participation in an allied Rendón Peniche import-export company. He assumed a one-third partnership with the railway’s founder and with Mérida businessman Rafael Hernández Escudero. This was Olegario’s first introduction to the highly competitive yet profitable fiber trade, a field he would dominate within two decades. When Rendón Peniche died in 1887, Molina, who had preferential rights to continue the business, bought out Hernández Escudero and formed Olegario Molina y Compañía (hereinafter referred to as Molina y Cía). His brother Ricardo, who was state customs administrator in Progreso, acted as silent partner, providing 20,000 pesos as initial capital for the company. The export house (casa exportadora) underwent various permutations during the remaining years of the Porfiriato; as business partners joined and left the firm, capitalization consistently increased and affiliations with North American buyers shifted allegiances (see Table I).²²

Unquestionably, the key to Molina’s success in the regional economy was the continued growth of his casa exportadora. Working with North American importers who furnished capital and machinery, the casa played a pivotal role in the burgeoning henequen economy. Although export houses suffered along with local merchants and planters from the capricious boom-and-bust economy, the larger houses, including Molina y Cía, could fall back on their considerable “imported” financial reserves in times of crisis. Furthermore, the export house provided a variety of goods and services. The casa sold planters agricultural machinery, extended them lines of credit, and offered them loans and mortgages when fiber prices declined. These services were exchanged for the henequeneros’ crops. Sometimes hacendados ran up extensive credits and then, finding themselves unable to repay them, were forced to default their property to the casa. The Molina Company, however, usually steered clear of burdensome mortgage credits and assumed control of properties only when absolutely necessary. In one case, Molina y Cía took over Hacienda Polabán in Tecoh with a pact of retroventa, or resale, to the original owner written into the contract, so that as soon as the debts were repaid the hacienda would be returned to the debtors.²³

During the 1890s Molina y Cía continued to grow. Two young Spanish immigrants (see Table I), Manuel Suárez and Avelino Montes, both of whom started as bookkeepers for the casa, eventually became partners. Montes, who joined the firm at age twenty, quickly demonstrated a striking aptitude for the business, and at twenty-three became partner in the export house. Later Montes cemented his connections with the Molina family by marrying Olegario’s daughter, María. Although the company continued to prosper, sharp competition from exporters, such as the Boston-based Henry W. Peabody and Company and the local Escalante and Dondé houses prevented any single casa from garnering a commanding share of the local market (see Figure 3).²⁴

As Figure 3 indicates, until 1903, Molina never secured more than 35 percent of the henequen trade. After that date, assistance from powerful North American investors propelled Molina y Cía and its successor, Avelino Montes Sociedad en Comandita, to prominent roles in the fiber trade. Two events signal 1902 as a watershed in the history of the Molina house: (1) the formation of the International Harvester Company, a conglomerate that brought together the five largest harvesting machine companies in the United States, and (2) Molina’s decision to reenter politics— after an absence of more than twenty years—to seek the governorship of Yucatán.

The formation of the International Harvester Company was the last in a series of steps undertaken by harvesting machine companies in the United States to control the binder twine industry. Farm implement manufacturers required a steady and ample supply of twine for their customers. United States cordage factories had been the principal manufacturers of twine, purchasing raw fiber from casas exportadoras like Molina y Cía. In the late 1890s, powerful harvesting concerns (such as the McCormick and Deering harvesting machine companies) began to manufacture twine in order to assure supply and to share in the considerable profits connected with the fiber trade. By manufacturing their own product, harvesting companies sought to reduce their dependence on cordage factories. McCormick and Deering could then buy in bulk directly from Yucatán, thereby eliminating the cordage factory, a costly intermediary stage. When International Harvester was formed in 1902, binder twine operations were consolidated as company officials closed smaller mills and expanded their Chicago twine factories. The large corporation, which was later branded a trust by the United States government, then set out to assure itself a steady supply of raw fiber.²⁵

In October 1902, Harvester signed an agreement with Molina y Cía whereby the Yucatecan firm would act as the sole agent for Harvester, the largest purchaser of fiber in the world. Olegario Molina had first established business connections with the Chicago-based harvesting magnates in 1897 when he obtained financial assistance from the McCormick Harvesting Machine Company to open a Yucatecan binder twine factory, La Industrial. McCormick provided capital, and marketing and technological assistance for La Industrial, yet periodic manufacturing problems and McCormick’s own decision to build a binder twine mill in Chicago in 1899 led to the financial dissolution of the Molina-run factory. The Molina-McCormick connection had been established, however, and when International Harvester required the services of a local agent to purchase fiber, the Molina house was a natural choice. As part and parcel of the agreement between Harvester and Molina, the local casa, in exchange for generous commissions, would collaborate with the United States firm to drive the local price of fiber down—assuring substantial profits for both parties. Harvester’s principal reason for establishing the working agreement was to assure a dependable supply of fiber for the binders they sold to farmers all over the world. The implications of the International Harvester connection cannot be overstated. The contract effectively destroyed the previously competitive balance among local fiber traders, forced planters to sell at the price fixed by the exporter and manufacturer, and allowed both parent company and local agents to reap considerable profits.²⁶

Molina’s domination of the local trade permitted his casa to expand its investment base dramatically. Ventures in real estate, exports, and considerable speculation in local industry, commerce, and infrastructure made Molina/Montes a potent force in the regional economy. With the backing of foreign capital, the casa was able to invest even when henequen prices were low and the economy depressed, precisely the time when most businessmen faced capital shortages. This advantageous position allowed Montes, who assumed management of the casa in 1905, to buy, trade, and speculate in local stocks and real estate, when investors were selling at rock-bottom prices. When fiber prices became more stable and local property values recovered, Montes had the option of selling recently acquired assets for a profit or adding them to his expanding empire.

Molina’s political position as governor of Yucatán strengthened both his casa’s and family’s growing economic empire. There had been only token opposition to his selection, since he had been chosen as candidate by President Díaz, in accordance with the established practices of late Porfirian Mexico. Molina was a suitable choice for a number of reasons. He had served the Liberal cause since the days of Maximilian. Like Díaz, he was a self-made man. He had used his education to pursue a career in engineering and management. Finally, he understood the importance of science and technology for his own career and for the future economic development of Yucatán and Mexico.²⁷

After 1902 Molina not only was the most powerful economic force in the region (as a result of the Harvester contract), but also exercised considerable political authority. In 1903, Governor Molina began to amass a landed empire in Yucatán. At a state-run auction of the possessions of a wealthy hacendado who had just died, Molina bought Haciendas Chochóh and Cacao in Tixkokob partido for the extremely low price of 150,000 pesos, precisely at a time when boom prices had inflated property values. Comparable haciendas were selling for three times Molina’s purchase price. Included in the transaction were Haciendas Monchac and Kilinché and several adjoining tracts (anexos) for 75,000 pesos each. A 300,000 peso mortgage from the heirs of the estate at the low annual interest rate of 6 percent gave Molina added flexibility in financing his acquisitions.²⁸ How was the governor able to purchase these henequen plantations so cheaply? Although a lack of data prevents a direct connection between Molina’s political position and the acquisition of the haciendas, the fact remains that Molina was able to purchase all of León Ayala’s profitable estates at a fraction of their “real” value.

The land purchases are significant not only because of Molina’s potentially compromising position as governor of the state, but also because the sales signaled a trend among merchant families, who, after reaping considerable profits in the import-export trade, then reinvested their earnings in land. More often than not, a successful merchant would buy an estate not necessarily with an eye to a complementary investment, but as a signal to established elites that he was ready to take his rightful place in Yucatecan society. Molina’s purchase thus was not an isolated instance; wealthy families like the Dondés, Ponces, and Haros all purchased properties after establishing successful concerns in Mérida.²⁹ Molina was exceptional in the sense that he was one of the few of the nouveaux riches who built a landed empire entirely by his own efforts. After purchasing the aforementioned estates, Olegario later bought haciendas in the Tixkokob, Mérida, and Izamál partidos. In addition, he purchased large tracts of land in Espita, 150 kilometers east of Mérida, a fertile sugar-growing region. By 1912, Molina was one of the largest sugar producers in the state; his San Francisco Holcá mill processed 18,400 kilograms of sugar and 46,000 kilograms of molasses and honey a year. By the end of the Porfiriato, Molina not only was the single largest landowner in the state, but his haciendas cultivated more henequen than those of any other planter.³⁰

In addition, several family members and business associates also profited economically and politically from Molina’s influence and stature. Three of Olegario’s capable sons-in-law, Avelino Montes, Rogelio V. Suárez, and Luis Carranza, all played significant roles in the growing economic empire. All three were immigrants, Montes and Suarez coming from Spain and Carranza from Cuba; all started their careers working for the export house and all later branched out to play larger roles in the regional economy. Montes and Carranza both parlayed favorable investments and shrewd speculation to establish their own considerable fortunes. Carranza, for instance, became a member of the board of directors of several prominent local companies, including the Banco Peninsular and the Mérida Tramway Company. Both Montes and Carranza profited during the region’s fiscal crisis in 1907 and, like their father-in-law, used their earnings to acquire large henequen plantations. Montes, who effectively ran the casa after his father-in-law became governor in 1902, also played a leading role in local commerce, serving on the boards of local banks, the United Railway Company of Yucatán (a holding company composed of four previously independent railway companies), a local construction firm, an electric lighting and power utility, and several joint agricultural endeavors (compañías agrícolas). Montes’s prominent role in the railway company, secured by judicious speculations during the 1907 crisis, afforded his casa still another advantage as railway cars were dispatched first to Montes’s producers. Those planters who chose an independent course of action and sold their fiber to smaller casas often had to wait for railway service, a decided disadvantage since prices changed daily for the commodity.³¹

Brothers and nephews also benefited from family power and wealth. Juan Francisco Molina Solís, Olegario’s younger brother and a prominent lawyer and historian, acted as Molina y Cía’s attorney. This position was passed to nephew Ricardo Molina Hubbe, who later purchased and directed an influential local newspaper. Another younger brother, Manuel Molina Solís, was named interim governor from the fall of 1903 to the spring of 1904, to replace the vacationing Olegario. A further brother, Audomaro, a noted linguist and prominent henequen planter, received extensive grants of public lands (terrenos baldíos) as a direct result of Olegario’s tenure in Mexico City as President Díaz’s secretary of development (1907-11).³²

By the first outbreak of revolutionary hostilities in Mexico in 1911, the Molinas were the most powerful family in Yucatán (see Figures 4 and 5). Within a short time, Olegario Molina, with the aid of bright and able lieutenants, had created an economic empire. Power within the family structure radiated out from its central and driving force. Wealth and political power were a function of its most dynamic member.

Molina fled Mexico for Havana when the Díaz government collapsed in 1911. Nevertheless, his casa continued to prosper even after revolutionary forces occupied the peninsula in 1915. Molina died in 1925, still one of the wealthiest entrepreneurs in the state, which shows that the revolution’s attempt to bring about agrarian reform had fallen short of its goals in Yucatán. The most serious attack on the Molina empire came in 1916 when Montes was forced to close down the export house after Governor Salvador Alvarado and the revolutionary government seized control of the henequen industry. Montes reopened the business several years later, although it never regained the preeminent position it had enjoyed during the Porfiriato. While the Molinas were obvious targets of revolutionary leaders, their resilience and corporate wealth posed formidable obstacles to those interested in upending the old guard and establishing a new social and economic order.³³

Peóns

While the Molinas parallel Yucatán’s rise from relative obscurity to prominence through the rapid growth of the export economy, the Peóns follow the more accepted pattern of Latin American elite families. With wealth based in large landed estates acquired before the boom, the Peons expanded their stake in the regional economy by participating in a variety of businesses and industries. Although they did not date back to the original conquistadors of Yucatán, as several local families claimed to do, their prominence and long-standing tenure in eighteenth- and nineteenth-century Yucatecan society qualified them as gente decente (“respected people”). Epitomizing the goals and aspirations of many of the casta divina, the Peóns supported and participated in society’s most respected institutions, such as the church and the military, and indeed can be said to have embodied the aristocratic ideals of patronage and property that had become traditional in colonial times. And although the concepts of capital and competition were also rooted in colonial society (many landed families having engaged in local commerce), for the most part, the local gentry were preoccupied with land, leisure, and patronage.

Yet, if we can detect an air of confrontation between aristocrats and entrepreneurs during eras of rapid socioeconomic development else-where (as, for example, in England during the Industrial Revolution),³⁴ Yucatecan elites, exemplified by the Peons, present a model of acceptance, cooperation, and assimilation. Elite assimilation of aspiring young merchants was not a new phenomenon. Recent work by Marta Espejo-Ponce de Hunt has uncovered a similar pattern for colonial Yucatán.³⁵ What is significant about the elite that arose in Porfirian Yucatán is that even though the auge sparked an unprecedented surge of rapid development, elites continued to adapt to the changing order with little trouble. The Porfirian generation of Peóns, despite their aristocratic trappings, did not merely accept the intrusion of wealthy henequen merchants into their coterie of respected families, but actively engaged in business partnerships, social amenities, and intermarriage with nouveaux riches entrepreneurs.

Even the divisive nature of intraelite political strife (illustrated by twenty-five changes of governors in as many years),³⁶ seems to have had little bearing on the practitioners of the new economic order. While the political ideology or persuasion held by many of the Peóns was opposed to that of the aspiring Molinas, it did not prevent either family from engaging in all manner of business dealings with the other. The same Molinas who fought for Cepeda Peraza’s Liberals against Maximilian in 1867 later joined in forming sociedades anónimas with Peóns, who had openly accepted positions in the imperial government. While the politically “Conservative” Peóns³⁷ were prohibited from serving in political office during the early years of the “Liberal” restoration, they and their fellow Yucatecan imperialistas did not suffer economically. Peón capital was instrumental in building the region’s first railways, docks, and industries.³⁸

The Peóns, lacking an all-powerful figure like Olegario Molina, relied instead on sophisticated subregional empires that permitted them to control all phases of henequen production within certain geographical areas. Hence, various wings of the Peón family not only were the largest land-owners in a particular subregion, but they exercised considerable control over local marketing practices, transport networks, and sources of all-important mortgage capital. This dominance assured the Peóns flexibility in fiber shipments, control over every phase of the marketing cycle from field to warehouse, and, with the uncertain status of fiber price fluctuations, a free hand to speculate in a rapidly changing real estate market. In this fashion, the Peón y Peón wing dominated western Hunucmá and Mérida partidos (about 5 to 10 kilometers west of Mérida), the Peón y Regil brothers rivaled the Molina holdings in Tixkokob municipio (25 kilometers east of Mérida), while the Peón-Losa, Domínguez Peón, and Peón Cetina wings combined to gain a strong foothold in Maxcanú (60 kilometers southwest of Mérida). This practice of subregional control does not appear to be limited to the Peón family: families such as the Campos-Palmas (Motul), Peniches (Espita), and Regils (Acancéh) all possessed virtual fiefdoms in their particular sectors.³⁹

So immense was the Peón family (see Figure 6) that the entire range of its activities cannot be traced here. The manner in which it established subregional control, however, can be illustrated through the development of one wing of the family. Thanks in large measure to documentation provided by Juan Peón Ancona, a family chronicler, the Peón y Peón wing can be observed in detail and will serve as a case study of the way in which landed families first secured local control and then used the subregional framework to regulate the pulse of the internal henequen economy.

The Peón y Peóns of the late nineteenth century were descended from several generations of Yucatecan Peóns who had made their mark in society first through distinguished service in the local militia of the king of Spain and later with acquisitions of various cattle estancias. The first Peón to come to Yucatán, don Alonso Manuel de Peón Valdez, arrived in 1759. Don Alonso became colonel in the Milicia de Yucatán and received the Order of the Knights of Calatrava in 1768 for his fidelity and service. He married Leonor de Cárdenas y Díaz, a wealthy encomendera of Tixkuncheil in 1761, setting a pattern that future male heirs would follow: service in the military and marriage into landed families. Alonso Manuel’s son Ignacio Peón y Cárdenas was colonel of the Milicias Blancas, a crack royal regiment. Two grandsons even went to military school in Spain and later died serving the king during the Napoleonic wars. Not unexpectedly, during the Liberal-Conservative struggles that marked the first half of the nineteenth century, the Peóns generally fought on the Conservative side. The sons of Manuel José Peón Maldonado and his wife Loreto Peón Cano, who made up the Porfirian Peón y Peón wing, followed in this long line of military officers, fighting in their younger years for the imperial forces of Maximilian. During the siege of Mérida in 1867, the last stand for the die-hard imperialists, Arturo Peón y Peón, first son of Manuel José and Loreto, died in battle. Augusto Luis Peón, Arturo’s young brother and later the most successful of all Peóns, also fought for the imperialists. Despite the defeat of the Maximilianistas, the Peón y Peón wing (along with fellow Conservatives) did not suffer economically during the Liberal restoration.⁴⁰

Due to the systematic acquisition of large cattle ranches after the Caste War, the Peón y Peón wing was well equipped to take advantage of the ensuing henequen boom. Within eight years (1853-61) don Manuel José Peón y Maldonado purchased four large cattle ranches: San Antonio Yaxché, Ulilá, Cheuman, and Balché in western Hunucmá and Mérida partidos. The properties, except for small herds of grazing cattle and some rented corn plots (milpas), were generally undeveloped. Peón y Maldonado’s avowed intention, written into the bill of sale, was to increase those livestock herds. Several years later, when he applied to the state ministry of development for a public land grant of four square leagues of adjoining properties, Peón cited the devastation that the Caste War had precipitated and the consequent importance of bolstering the regional livestock economy. His request for these vacant lands was approved two years later by local officials who overrode village objections to the sizeable grants (totaling more than 7,000 hectares). Even though local inhabitants produced titles dating back to 1841 to the lands in question, which appeared to uphold their right to the properties, the public lands were awarded to don Manuel on a technicality; the villagers had failed to register their petition within the prescribed time limits.⁴¹

Manuel José, like many of his contemporaries, gradually transformed these ranches into full-fledged henequen plantations. When he died in 1873, the estates were distributed among his surviving heirs, all of whom continued the process of modernization. Augusto Luis, don Manuel’s second son and, after Arturo’s death, the oldest heir, inherited San Antonio Yaxché, the largest of the estates. By the end of the Porfiriato, Augusto had turned the relatively undeveloped cattle ranch that don Manuel had purchased in 1853 into one of the largest and most successful henequen plantations in Yucatán. More than any other Peón, Augusto was responsible for creating the subregional empire that the family enjoyed in western Hunucmá and Mérida. His mode of operation was to control or assure control over all factors of production, leaving little to chance, a powerful advantage in an industry that bankrupted as many as it endowed.⁴²

First Augusto modernized Yaxché by importing English boilers, American manufactured steam engines, and Yucatecan invented, though United States made, defibering machines to process the fiber. Narrowgage “Decauville” track imported from Belgium was laid throughout the estate, connecting distant fields with the central processing area and thereby improving the plantation’s productivity. The animal-powered tramways also served to join the hacienda with a nearby railway depot, further reducing transport costs.

Augusto also reduced the self-sufficiency of the estate, by limiting corn rental plots and planting nearly all available lands in henequen. By the 1880s, Yaxché, like other henequen estates, found itself importing corn, beans, and other staples from other parts of Mexico or the United States in an effort to feed its growing labor force. This was recruited from nearby villages and bolstered by indentured immigrants from other parts of Mexico, the Caribbean, and the Far East.⁴³

Following in his father’s footsteps, Augusto continued to expand Yaxché’s borders. He used two techniques, each representative of methods employed by many Yucatecan hacendados. First, he acquired land when the federal government ordered the dismemberment of corporate landholdings such as village common lands (ejidos). As the village lands were broken up, a small plot was granted to each head of family in the village. Once the lands were divided into parcels (lotes), landowners could and did buy out villagers individually. Lotes were quickly bought up, and villagers, left without land for subsistence cultivation, were forced to move to an estate. The secretary of development issued a report in 1912 estimating that only 2 or 3 percent of the Indians of Yucatán, Campeche, Tabasco, and Chiapas who had been given title to lotes had managed to retain them. “The rest have been expropriated, sold, or given away, with only a half a hectare or less reserved for the Indian’s own self-sufficient purposes.”⁴⁴ Augusto’s second method was to buy out neighboring estates. Often he would loan nearby planters mortgage capital and then repossess their holdings when they defaulted on their payments. In 1896, for example, Augusto and his sister Loreto, during a bust cycle in the regional economy, made seven loans within a span of weeks to local hacendados in nearby Ucu and Caucel. Several years later the haciendas were forfeited to the Peóns when the overmortgaged planters failed to meet their payments. Within thirty years of his inheritance of San Antonio Yaxché, Augusto tripled the size of the estate (to more than 6,000 hectares) by outright purchase, assimilation of parceled village lands, and mortgage-credit default of neighboring landlords.⁴⁵

A large modern henequen plantation was not enough, however, to assure success in the monocrop economy. Peón, more than any other henequenero, understood the vital significance of an adequate transport network. Consequently, much of his income was reinvested in the local transportation network. Realizing that railway rates would drastically reduce traditional transport costs and facilitate the transfer of bales of fiber to Progreso, Augusto early on invested in the Rendón Peniche project, serving on its original board of directors. When the railway was completed in 1881, after seven frustrating years of construction, Peón received permission to build a tramway from Yaxché to the nearby station of San Ignacio. The connection from estate to station and port gave him easy and rapid access to the market. Since henequen prices changed daily, and the producer who could be assured of delivering his fiber to Progreso at the proper time stood to gain even a small fraction of a cent per pound, Peón enjoyed a razor-thin advantage in a highly competitive industry.⁴⁶

Peón attempted to ensure further control by investing heavily in the more extensive peninsular railway network. He participated on the boards of two of the largest railway companies in the peninsula, the successor to Rendón Peniche’s railway company (Ferrocarril Mérida-Progreso e Izamál) and the Ferrocarril Peninsular, which united Campeche with Mérida. He later—October 17, 1899—secured a state concession to build a public tramway that carried both cargo and passengers from Yaxché through the towns of Ucu and Caucel and terminated in Mérida. Finished in 1903, the tram gave Augusto control of local fiber shipments throughout western Hunucmá and Mérida partidos.⁴⁷

The next step in a subregional empire was to build warehouses in Mérida and Progreso to store the henequen. In this way a powerful entrepreneur, by storing or selling the fiber as market concerns dictated, had some small measure of control over the fluctuating price of the fiber. In this manner, Peón acted as a broker as well as a planter and shipper. He purchased fiber from local planters, placed it in warehouses, and then speculated to his own advantage. As a powerful hemp broker, Peón also acquired fiber by extending mortgage credit assistance. Usually credit was given when fiber prices were high and capital was plentiful.

As documentation in both the Archivo Notarial del Estado de Yucatán and the Ramo de Justicia of the Archivo General del Estado de Yucatán attests, many henequeneros overextended themselves with second and third mortgages. As noted above, Peón, who possessed sufficient capital to play the role of creditor, often was able to assume control of properties by default. In the 1907 fiscal crisis, for example, he acquired haciendas in nearby Uman (Hacienda Tedzidz), Ticul (Yokat), and Tekax (Polyuc). In all three cases, Augusto had extended mortgages during the boom years of 1898-1904. As the market price of fiber declined, the regional economy faltered, land values plummeted, capital became scarce, and planters were unable to pay their creditors. In the case of Hacienda Yokat, Peón was forced to sue the proprietor, Fernando García Fajardo. The court forced the debtor to forfeit Yokat to Peón at a fraction of its “real” value. A year later, after fiber prices had recovered, Augusto sold the hacienda to three entrepreneurs for 600,000 pesos. A speculator had three options: sell immediately; wait until the economy recovered and land values were restored and then sell for a handsome profit; or add the estate to existing holdings. Many of the properties changed hands often, indicating that speculators had little desire to improve their acquisitions. Land speculation by those able to withstand the constant boom-and-bust fluctuations became a powerful economic tool. Capital-laden entrepreneurs simply had to wait out the bust period and then sell when land values were inevitably restored during the next boom.⁴⁸

Although this study concentrates on Augusto’s emergence as a powerful landholder and potent force in the subregional henequen economy, Peón did invest, like his counterparts the Molinas, in local commerce and industry. Besides participating on the first board of directors of the Banco Mercantil (the first bank established in the peninsula in 1890), he also bought shares in a variety of joint-stock enterprises. Augusto also played a role in Molina’s gubernatorial administration, acting as both president of the Mérida town council (ayuntamiento) and later jefe politico of Mérida partido.

While Augusto was obviously the wealthiest Peón y Peón, several of his brothers and sisters inherited sizeable properties in western Hunucmá and Mérida. Peón dominance of that subregion was thereby reinforced. The younger Joaquín, besides owning land in Hunucmá, benefited from speculations in the regional economy. He was a member of the board of directors of several peninsular transport companies, including the Mérida-Campeche and Mérida-Progreso e Izamál railways. With both brothers serving at the same time on the board of directors of these railway companies, the Peóns were assured adequate coverage for all their hemp shipments. Joaquín also possessed choice estates in Hunucmá, Mérida, Tekax, and Ticul. Joaquín’s lands produced henequen, corn, sugar, honey, aguardiente, and salt, a wealth of products in a monocrop society. He also participated in various joint-stock agricultural companies such as the Compañía Dzidzilché y Anexas (Mérida partido), Compañía Agrícola Nohobchocóh y Anexas (Maxcanú), and the Compañía Agrícola del Cuyo y Anexas, the last an ambitious attempt to develop the hinterlands on the northeast coast of the peninsula. Joaquín was a principal shareholder in regional banks and industries. Finally, with his sister Joaquina, Joaquín received a national grant in Celestún principally for the extraction of salt.⁴⁹

In short, both Joaquín and Augusto demonstrated a predilection for diversified investment within the expanding henequen economy, spreading from the plantation outward through local domination of the fiber trade and multiple endeavors in the regional economy. The Peón y Peóns were successful in dominating the transport network in their subregion, and regionally, through influence of two of the four major railway companies. With storage bodegas in the capital and the chief port, significant capital reserves, and their transportation network, the Peón y Peóns not only obtained rapid inexpensive transport for their own product, but also assured themselves a large measure of control over the marketing of all their accumulated hemp. The Peón y Peons enjoyed a degree of security that most henequeneros only dreamed about.

If we combine the preponderant control the Peón y Peóns exercised in western Hunucmá and Mérida with similar miniempires directed by Peón oligarchs in other subregions within Yucatán, we can begin to understand the wealth and power the family possessed. With the considerable investments secured through speculation in the regional economy, the Peón family wealth during the auge must have been truly staggering. Like the Regils, Campos-Palmas, and Peniches, they parlayed local control with adroit financial investments to regulate the “inner” regional economy.

The combination of two distinct types of families produced a dynamic familial oligarchy during the auge. While the Molinas and Peóns had similar beginnings in the New World—both emigrating to Yucatán from Spain in the eighteenth century—they acquired their holdings in different ways. The Peons, who founded their wealth through a systematic control over the internal factors of production—land, labor, and capital— had the ability to adapt their own particular strengths to the rigors of the monocrop economy. If large landholdings were the building blocks of the Peóns’ miniempire, then control of infrastructure, marketing, and local mortgage capital ensured the edifice’s structural soundness. If the Peóns lamented the passing of Maximilian’s imperial monarchy, they understood that differences in political persuasion did not in themselves prevent businessmen from consummating economic alliances with ideological opponents. The ability of the Peóns, Regils, and Campos-Palmas to accept the intrusion of new wealth illustrates the flexibility of the Yucatecan landed elite and its determination to adjust to the new economic order—a process that had characterized the oligarchy since colonial times.

On the other hand, the success of the Molinas indicates that landed wealth, social background, or political affiliation were not in themselves indicators of elite status in nineteenth-century Mexico. The Molinas (like the Peóns) had aspired to elite status through intermarriage with powerful Yucatecan families and (unlike the Peóns) failed to secure their position within the oligarchy through this time-tested process. They rose to power on the coattails of their most dynamic son, Olegario Molina. In addition, landed wealth, usually the most prestigious commodity a Latin American could possess, was not instrumental in shaping the Molinas’ empire. Rather, a decided proclivity for commerce and land acquisition; political influence; an ability to accumulate substantial capital reserves in order to withstand violent fluctuations in the monocrop economy; and economic power generated through control of the import-export trade were all more important determinants of nouveau riche family power than the traditional landed power base.

The assimilation of these two distinct types into a closely knit henequen oligarchy explains why the Mexican Revolution arrived so late in Yucatán. Not until Constitutional troops entered the peninsula in 1915 was the revolution imported “from without,” as Gil Joseph has so aptly proved.⁵⁰ Like family elites in many other parts of Mexico, the Molinas and Peóns only grudgingly yielded control over their expansive empires. Economic cooperation, despite social and political differences, explains the successful functioning of the Porfirian power structure at the regional level.

Author notes