The Paycheck Revolution

(See Cover)

Though Mexico is next door to the U.S., though millions of U.S. citizens have seen it themselves, the country south of the border is still mostly a colorful legend. It is--to many Americans--unsanitary and exotic, the place where Aunt Clara got dysentery and watched dark-skinned boys dive 165 ft. into a surging wave at Acapulco. It is violent: the plump senora in the cartoon scolds her sombreroed husband as he cleans his pistol, saying "Oh, Pablo, you're not going back into politics!" In the cities it has modern hotels, traffic jams, skyscrapers and ocherous murals; in the country drowsy peons in scrapes prop the walls of moldering churches in quaint colonial villages.

U.S. citizens with a firm grip on French and British history may remember, when it comes to Mexico, little more than the cinema-celebrated names of Pancho Villa and Emiliano Zapata, and the conquistador Hernan Cortes. Few are aware that in the past three decades Mexico, historically unstable (see box), has stirred itself, put away its pistols and begun an explosion of industrialization that has pulled one-third of the once-somnolent population into a new middle class.

"I Promise . . ." One morning last week, in a northern sierra of this awakened land, twelve Tarahumare Indians, famed for their fleet feet, rose at dawn and began running south. Six days later (with an assist from a truck) they chuffed into the capital to honor the grand inauguration of Mexico's new President, Adolfo Lopez Mateos, 48. It was a ceremony worthy of the effort. The setting was Mexico City's famed Palacio de Bellas Artes, an Italianate pile of marble as remote from today's Mexico as an igloo, despite murals by the famed Big Four of Mexican art: Rivera, Siqueiros, Orozco and Tamayo. As Lopez Mateos entered, the 3,000 guests, including U.S. Secretary of State John Foster Dulles, stood and cheered the President-elect's march to the stage.

Outgoing President Adolfo Ruiz Cortines lifted the ceremonial red-white-and-green sash of office from his shoulders, draped it on his successor, returned to his seat and retired from public life. Lopez Mateos repeated the oath of office, which, in anticlerical Mexico, specifically excludes the usual "so help me God." "I promise to observe and uphold," he said, "the political Constitution of the United States of Mexico and the laws that derive from it. And if I fail, may the people call me to account."

In the Middle. The people that Lopez Mateos pledged himself to serve range from Mexico's idle rich to Mexico's idle poor. The lower class--still more than two-thirds of Mexico's population of nearly 33 million--is made up of slimly nourished Indians, peons and drifters who barely manage to stay alive on beans and tortillas, who wear huaraches or go barefoot, who live in Mexico's 2,000,000 adobe hovels, who never spend more than a few pesos from the time they are born until they die. The upper class, socially defined, consists of between 300 and 500 families who are the remnants of the old Spanish hacienda-owning aristocracy. Across the gulf between rich and poor stretches the growing middle class, a healthy 9,000,000 strong, born of industry and fed by solid paychecks and hope. It is so new and changing that Mexicans vie to define it. A man enters the middle class--according to typical definitions--when he:

P: Puts shoes on his feet and buys a second shirt.

P: Leaves the barter economy and enters the money economy.

P: Begins to eat eggs, meat and butter and wash with hot water.

P: Hires a member of the lower class as a servant.

President Lopez Mateos defines the middle class as "that group which works and lives on a regular salary at a regular job. Its members are literate, ambitious, with dreams for their children and their country. All the dreams may not come true, but these families struggle and never stop hoping."

Statistics show that many of the dreams are coming true. Mexico now prefers bread to the corn tortilla. In 1937 the average consumer ate 41 lbs. of wheat bread a year; now he eats 62 lbs. He switches from pulque (the fermented juice of the century plant) to beer. In 1941 per capita consumption of beer was 97 quarts; today it is 25. He spends money to see movies, bullfights and soccer games. In 1936 the average Mexican spent 1.42 pesos on entertainment; last year it was 7.05. He begins riding, if only a bicycle. Bike registrations climbed from 80,082 in 1946 to 386,782 last year.

The rewards of the switch to the middle class are enticing. In San Cristobal de las Casas, Erasto Urbina, once a barefoot peon on a southern coffee plantation, now runs a store that amply provides for his family of 8. Juan Carrasco, bellhop and car-parker at the capital's Continental Hilton, proudly drives his own green 1947 Plymouth.

The Leaders. The new class creates markets for businessmen; in demanding entertainment, it creates a need for entertainers ; by growing in strength and importance, it creates leaders. A new class of the popular, or the powerful, or the influential has risen to the top of the middle class to meet the demand. Famed Cantinflas, who charmed as well as went Around the World in 80 Days, was once a tent-show clown. Mexico City's Archbishop-Primate Dario Miranda had a boyhood poorer than that of Pope John XXIII. Top Matador Carlos Arruza learned his trade at 14 in Mexico's dusty, provincial bullrings; at 24 he was fighting with Manolete. Switch-hitting, switch-pitching Angel Macias, 14, came out of the slums of Monterrey to win a Little League world series title in 1957 in Williamsport, Pa. Such cultured artists as Composer-Conductor Carlos Chavez, Actress Dolores del Rio, found big audiences and vast popularity among the new middle class.

"We've got a new breed of technicians," says Lopez Mateos. "Mexican experts who belong to the people They are our middle-class leaders--bosses, employees, doctors, teachers, lawyers, engineers--and I'm with them too."

The Climber. As ranking leader of Mexico's new middle class, President Lopez Mateos is stamped in the left-favoring, socially conscious mold of such Latin American leaders as Costa Rica's Jose ("Pepe") Figueres and Puerto Rico's Luis Munoz Marin. His father was a dentist who died in 1910 when Adolfo was less than a year old; his mother was a granddaughter of a hero of the 1865 war against the hapless Emperor Maximilian.

In his boyhood, as his mother struggled to support five children on a trickle of pesos from a small insurance policy and handouts from relatives, Lopez Mateos' life was a struggle against genteel poverty. He was a scholarship student both at Mexico City's French Lycee and at secondary school in Toluca, the capital of Mexico state. Ruggedly athletic, he played soccer and boxed, sometimes walked 35 miles over 12,000-ft. mountains to Mexico City on weekends to see his mother. Eventually his walking took on epic proportions, and once he hiked all the way to Guatemala--700 miles--in 36 days. "I had my shoes half-soled oftener than any other student," he jokes today. Walking led naturally to mountain climbing--and climbing mountains, including Popocatepetl (17,887 ft.), led to a disciplined approach to life. "The way to climb mountains," he says, "is never to forget your goal--the top."

Where Are You Going? Lopez Mateos climbed the slippery slopes of politics with the aid of a fine baritone speaking voice, a gift for oratory, a quick wit, and a knack for making close and lasting friendships. At college in Toluca, he was an ardent campus politician and belonged to the Socialist coalition, which at that time was the major opposition to the government's National Revolutionary Party, now the all-dominant Revolutionary Institutional Party (P.R.I.). In 1929 Colonel Carlos Riva Palacio, head of the government party, came to Toluca for a party convention, and Lopez Mateos, as the town's leading orator, made the welcoming speech. Riva Palacio urged Lopez Mateos to work for him as a secretary. Lopez Mateos switched to the government party. "I wanted a wider horizon," he says, and in a few months Riva Palacio promoted him to the post of secretary-general of the party's Regional Committee for the entire capital. Nights, he worked on his law degree at the National University.

Mountain Meeting. Riding the bus to the office and the university from his home in the Mexico City district of Santa Maria, Lopez Mateos kept running into a fellow rider from the same district named Miguel Aleman. Aleman was already practicing law, and when Lopez Mateos set out to arrange a pension for his mother as a descendant of a national hero, Attorney Aleman saw the case successfully through the courts. "From that time on," says Lopez Mateos, "we have been friends." (Lopez Mateos' mother died in 1945, but his 95-year-old aunt still gets the pension.)

One day, on a mountain-climbing party in 1938, Lopez Mateos met a pretty young schoolteacher named Eva Samano. Lopez Mateos married her in 1940. Senora Lopez Mateos' grandfather was British, and she is ardently Anglophile and pro-U.S., but her affection for the U.S. never rubbed off on her husband. He compounds the Mexican's moody distrust of the Colossus of the North with an unshakable belief that the U.S. is run by and for a profit-hungry band of bankers. Told once that only 5% of all U.S. citizens could be called truly rich, he replied: "Aha! But what a 5%!"

Walking & Talking. In 1945 Miguel Aleman was nominated for the presidency by the P.R.I. Remembering Lopez Mateos' gift of oratory, Aleman asked him to serve as one of his top campaigners. Lopez Mateos handled the job with such brilliance that Aleman, with P.R.I, at his disposal, gratefully arranged his election as Senator from the state of Mexico.

Aleman sent Lopez Mateos off to international conferences in Washington (where he developed a taste for U.S. cheesecake from Duke Zeibert's Restaurant), Argentina and Switzerland, and appointed him Ambassador to Costa Rica. Moving higher in government circles, he met a top bureaucrat named Adolfo Ruiz Cortines. Soon the two Adolfos were taking long and friendly walks through the city at night. When Ruiz Cortines was nominated as P.R.I.'s presidential candidate in 1951, he got Lopez Mateos to manage his campaign. Lopez Mateos did so well that on inauguration day, six years ago, he was named Secretary of Labor.

Model Efficiency. To settle labor disputes, Lopez Mateos expanded the corps of government arbitrators from one to 50, set up teams of investigators to look into management's books and labor's demands. By the time a dispute reached the mediation stage, he and his arbitrators were ready, willing and prolabor. Once, after a long wrangle with a group of representatives of management, Lopez Mateos tapped his finger on the table for attention. "Gentlemen," he said. "Perhaps you did not notice the sign over the door. It says Secretary of Labor. I am here to represent labor." In six years Lopez Mateos' office handled 62,191 disputes, let only 13 grow into strikes.

As Labor Secretary, Lopez Mateos lived quietly in a two-story, eight-room house on the outskirts of the capital's fancy suburb-on-a-lava-field, Pedregal. The house, made of glass and lava stone, is furnished with nude marble statuettes, alabaster floor lamps, overstuffed furniture in shades of purple and rose. The Lopez Mateos' only child, Evita, 16, studied at Torrington Park, an English school for middle-class girls, in Arundel, West Sussex, learned flawless English (her father, fluent in Spanish and French, can read English but does not speak it).

Lopez Mateos likes to rise at 6 and start the day with a cup of ink-black coffee and the newspapers, then shave with a Remington shaver. He dresses in double-breasted suits of conservative cut and dark color, wears monogrammed ties.

For breakfast he likes papaya and huevos rancheros--fried eggs with spicy tomato sauce on a tortilla, with a side of beans. By 8:30 he is at work, stays at it until 4 p.m., then quits for Mexico City's typically heavy (steak and trimmings), typically drawn-out (two hours) dinner. Back at work at 6 or thereabouts, he works into the evening, then spends an hour or two in a smoking jacket with a detective story or Beethoven on stereophonic hifi. He likes to play canasta and watch fights on TV.

He does not go to church. "I was raised in a Roman Catholic background," he says, "but I practice no religion."

Candidate of Stability. Lopez Mateos' record of efficiency in office made him a strong contender for the presidency in 1958. In choosing him, Ruiz Cortines followed the tradition that lets each President pick the government party's candidate, provided that he is not objectionable to any ex-President. A whoop-it-up campaign this year introduced Lopez Mateos to the country, and as P.R.I.'s candidate he was easily elected over a brash and helpless opponent.

The transition of power was peaceful, in contrast to Argentina (where President Arturo Frondizi was elected after the overthrow of Dictator Juan Peron), Brazil (where President Juscelino Kubitschek was permitted to take office only because of an army "preventive coup") and Venezuela (where an election is being held to replace a dumped dictator).

Private Plus Public. Amid such political stability, Mexico's current revolution is industrial--and the government is free to give its attention to growth.

In 1933, to aid private capital in speeding industrialization, Mexico devised a development agency, patterned after Herbert Hoover's Reconstruction Finance Corp., called Nacional Financiera. Today, financed by bond issues, loans from the Export-Import Bank of Washington, the World Bank, private U.S. banks and its own profits, Nacional Financiera is a powerful catalyst for industrialization. It measures Mexico's need for a particular industry, finds private sources, domestic or foreign, for part of the necessary capital, puts up the rest itself. When the industry prospers, Nacional Financiera pulls out (although Mexican businessmen charge that it is suspiciously slow in pulling out of its more prosperous enterprises). Since 1946, it has founded or refurbished some 200 plants and businesses, scoring notable successes in copper, steel, sugar, china, textiles, fertilizers, chemicals.

Today, near the big Papaloapan dam, a new paper mill that is 50% U.S. and Canadian and 50% Nacional Financiera is chewing jungle into pulp for newsprint. Next door to the Nacional Financiera-supported Altos Hornos steel mill at Monclova, a new nitrogen fixation factory is rising, financed one-third by private Mexican capital, one-third by French, one-third by Nacional Financiera.

In its haste to develop industry, the government also cares for the worker who keeps it running. His food bills are forcibly held down by the Mexican Export and Import Co., a government agency that buys and stores crops in order to avoid price fluctuations. His rent, in the government-owned multifamiliar (apartment house), is pegged by the government at a modest $16 a month for a two-bedroom flat. Social Security gives him free medical treatment; movie prices are frozen at 32-c- for the best seats in the house.

DDT & Freight Cars. New industry is rising from Yucatan to Baja California. In Guerrero state, a $2,000,000 cement plant is under construction to feed the fast-growing Acapulco area. In fruit-growing Hermosillo, south of the Arizona border, another nitrogen fixation plant is going up to supply its fertilizer mixing plants. In industrial Monterrey a new chlorine plant is feeding DDT and other insecticides to Mexican farmers. In Irapuato, Salamanca, Leon, Aguascalientes, Queretaro and San Luis Potosi--centers of a new industrial complex north of Mexico City--new factories are pouring out detergents, oil, glass, shoes, corn flakes. On the Isthmus of Tehuantepec, U.S. firms are pumping up sulphur, shipping it to a modernized port at Coatzacoalcos.

In the irrigated deserts of Baja California, around Ensenada, grow acres of cotton, harvested and ginned in a near-continuous operation. Tomato gardens supply a sizable part of the U.S. market. In a dry wasteland in central Hidalgo state, the new city of Sahagun has sprung up in four years to turn out Fiat cars and trucks, looms, and bright orange freight cars. In the jungles of Tabasco state, on the Gulf of Campeche, government bulldozers have cleared tangled vines and trees to build a sprawling new oil city and a new natural-gas absorption plant to feed lines snaking toward Mexico City.

U.S. names rise above factories everywhere : Goodyear, Westinghouse, Monsanto, Kelvinator, General Electric, Pennsalt, Singer Sewing Machine, Carnation Milk, Ralston Purina, Kellogg. Mexicans flock to Dairy Queen frozen-custard stands in Chevies, Plymouths and Fords labeled "Made in Mexico by Mexicans."

To the Laundromat. The jobs, dreams and struggle of the new middle class are typically on display in Guadalajara (pop. 560,000), the once sleepy colonial capital of Jalisco state. In humming factories on the grassy hills around the city, men, women and machines make textiles, copper tubing, shoes, mattresses, Nescafe, paper bags, fertilizer, matches, glass, plumbing supplies, corn sirup, and the oils of cottonseed, peanuts and sesame. In the city are the concrete skeleton of a high new medical center, a sprawling new market, the circular sweep of a new sports arena, the glassy modern blankness of expensive new houses in 16 separate real estate developments.

On Saturdays work slows, and the city's center fills with men, women and children with pesos in their pockets. They mill through Sears, Roebuck, buying made-in-Mexico soap, blankets, toys and washing machines. They sit in chrome chairs along barbershop and beauty-parlor walls, waiting and listening to the hum of electric clippers and dryers. Young wives come in fashionable maternity middy blouses, push wire carts through the aisles of bright supermarkets, squeeze cellophane-wrapped loaves of Bimbo bread and Bimbollos (rolls). Husbands buy bottles of the new, high-quality tequila (from the modernized distilleries in the town of Tequila, 35 miles away) and Sangrita, a tequila chaser made of a secret formula of tomato juice, lime juice, orange juice, sugar, salt, pepper, chilies and spices. The couples watch carefully as automatic cash registers whir up the week's purchases in toothpaste, carrots and dehydrated pimento soup -- and then they stop by the Laundromat to pick up the washing.

Sunday afternoons Guadalajarans like to gaze through the windows of a two-bedroom model home on Independence Highway. A sign over the house tells why: "12,000 pesos [$960] total cost! Ten years to pay! Complete with life insurance and water!"

Bound to Rise. Away from the boulevards and the showcases lurks old Guadalajara, with adobe slums, iron-grilled balconies and carriage-width streets. Swarming families live on tortillas and cheap pulque; rack-ribbed dogs nose through decaying garbage. But even here the gaudy gleam of a twirling hula hoop around the waist of a barefoot child serves notice that the old standstill Mexico of manana and the travel posters is scrambling toward prosperity.

The urge among swarming lower-class families to put at least one member on the bottom rung of the new middle class stirs all across Mexico. In Portales, a section of Mexico City, one such family lives over the garage behind a big house. The father is caretaker for his landlord. The Indian mother and all the family--except one--spend their days squatting on a curbstone around an open charcoal brazier, making and selling tacos (tortillas rolled around fillings of beans, meat or chicken). The exception is a teen-age daughter, who wears nylons and goes to a commercial school--her way into the middle class paid for by her family.

Rational Nationalism. Lopez Mateos' main problem in keeping the Mexican boom going is that of any nation with mixed-capital enterprise. Which comes first--enterprise or the welfare state? An example is Pemex, Mexico's government oil company. Subsidized Pemex proudly proclaims itself "in the service of the nation," fulfills the proclamation by keeping prices of its products artificially low and supporting a welter of government social services. As a result, it makes little profit to plow back into development and into the establishment of a much-needed petrochemical industry.

Lately, many Mexicans have been demanding that Pemex be run as a business, with normal profits for reinvestment in development. But Lopez Mateos is almost forced by his natural nationalistic inclination to keep the state paramount and Pemex its old, slow-moving self. He might also be inclined to:

P: Insist on strict adherence to the letter of the law, now largely ignored, that ownership of companies in many sectors of the economy be at least 51% Mexican.

P: Overemphasize the role of Nacional Financiera to the point where it dominates rather than facilitates industry.

P: Embark on a program of nationalization of such industries as sulphur, using the clause in the constitution giving the state control over subsoil resources.

A fortnight ago, relaxing in his book-lined library overlooking the swimming pool, Lopez Mateos summed up the problem as he sees it: "Mexico must create national wealth from capital to make jobs for an additional 1,000,000 Mexicans a year. Mexican capital alone--private and government--has not been able to develop our potential. With the help of outside capital, perhaps this can be achieved.

"But," he added sharply, "Mexico must scrutinize any new private capital investment with care, supervising it closely. Foreign capital must be aware of and recognize its responsibilities and not merely provide a vehicle for the extraction of profits. The human factors involved--that is, whether the worker gets enough to eat and whether his malaria is cured--are the responsibilities of modern capitalism."

To give Lopez Mateos' 1,000,000 new Mexicans houses and food, to raise the nation's standards of living, to lift members of the lower class into a better life at the same rate as recent years, Mexico must create 1,650 new jobs every day. In this task Adolfo Lopez Mateos will probably cut close to the pattern of welfare-state capitalism that has given his country its great splurge of growth.

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