Enrique C. Creel: Business and Politics in Mexico, 1880

The President and Fellows of Harvard College
Enrique C. Creel: Business and Politics in Mexico, 1880-1930
Author(s): Mark Wasserman
Reviewed work(s):
Source: The Business History Review, Vol. 59, No. 4, Business in Latin America (Winter, 1985),
pp. 645-662
Published by: The President and Fellows of Harvard College
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Enrique C. Creel: Business and Politics in
Mexico, 1880-1930
MARK WASSERMAN
? Enrique C. Creel was Mexico's leading banker, an innovative industrialist, venture capitalist, and representative of the nation's largest
land and cattle owner; he was also the political boss of the state of
Chihuahuaand the key conciliatorof the conflictinginterests of the
north and the national regimeof dictator PorfirioDiaz. In this essay,
ProfessorWassermandescribesCreel'sactivities, showinghow he and
his family built the greatest business empire in Mexico before 1910, sur-
vived the decade-longdestructionof the revolution(1910-20), and rebuilt their empire in the 1920s. Better than any of his contemporaries,
Creel combined managerial talent and vision with a mastery of the interplay of politics, regional interests, and foreign capital that comprised his economic environment. His career epitomizes the special nature of economic entrepreneurship and the intimate relationship
between business and politics in pre- and post-revolutionary Mexico.
Many of the economic and political strands of Mexican history
from 1880 to 1930 come together in the career of Enrique C. Creel.
As a member of Mexico's greatest landowning and cattle-exporting
family, the nation's leading banker, the most influential Mexican representative of foreign capital, and a major industrialist, Creel was at
the center of the key economic trends of the era of Porfirio Diaz.1 As
the son-in-law and second-in-command of the nation's most powerful
regional political boss, Luis Terrazas of Chihuahua, he was also
squarely in the middle of the major political struggle of the Porfiriato,
over centralization. As governor of Chihuahua on the eve of the outbreak of revolution in 1910, as head of Diaz's secret service along the
northern border, and as Mexican ambassador to the United States,
Creel stood in the midst of the social and political upheaval that
erupted in 1910 and 1911. His activities in exile during the revolution
and his eventual reconciliation with the revolutionary regime were
characteristic of a substantial part of the Porfirianelite.2
MARKWASSERMANis associate professorof history at Rutgers University.
1 Porfirio Diaz ruled Mexico from 1877 to 1880 and from 1884 to 1911. Historians have labeled the
era the Porfiriato.Manuel Gonzdlez, a close ally of Diaz, was president of Mexicofrom 1880 to 1884. The
Mexican Revolution erupted in 1910 and lasted for ten years.
2 There is no satisfactory biography of Enrique C. Creel. Alvaro de la Helguera, Enrique Creel:
Apuntes biogrdficos(Madrid, 1910), is an undisguised panegyric. Great grandsonAlejandroCreel Cobiin's Enrique C. Creel: Apuntes para su biograffa (Mexico City, 1974) contains much useful information
but is unabashed in its admiration. Its major value is that it uses the Creel family papers, which are not
Business History Review 59 (Winter 1985). ? 1985 by The President and Fellows of HarvardCollege.
646
BUSINESS HISTORY REVIEW
We can learn much about the relation of business and politics during
both the pre- and post-revolutionary periods by examining Creel's
fifty-year career. It embodied, perhaps better than that of any other
figure of the Porfiriato, the close relationship between native elite and
foreign capital and between political power and economic entrepreneurship. Creel was at the fulcrum of the delicate balance of the Diaz
regime between the national government, the regional elite, and foreign investors.
Unlike the tycoons who were his contemporaries in the United
States, Enrique C. Creel was a businessman with one foot firmly
planted in politics. A half century of chaos after independence had
taught Mexican (and Latin American) elites the necessity of acquiring
political power, at least to an extent that allowed them to control their
immediate environment. Control of local government was crucial to
protect their haciendas, mines, and commerce from extortion, robbery, and erratic law enforcement; control of politics at the regional
(usually state) level provided even more security. Throughout the
nineteenth century, local elites therefore fought bitterly to maintain
local and state political power to protect their economic holdings. It is
not the least surprising that the three greatest tycoons of the Porfiriato,
Luis Terrazas, Enrique Creel, and Olegario Molina, were state governors for extended periods.
Just as important as a state or local political base was the ability to
profit from the large influx of foreign investment after 1880. The scarcity of capital and technology forced Latin American elites to come to
terms with foreign entrepreneurs who had both, although Creel was
fortunate to have accumulated a firm capital base of his own.
Creel was extraordinarily successful in obtaining and maintaining
state political power and in dealing with foreigners. At a time when
Diaz crushed or coopted his regional foes, Creel led his family in resisting the dictator and eventually forced him to an accommodation.
At a time when other Mexican (and Latin American) elites sold out and
subordinated themselves to foreign capitalists, Creel retained his independence and kept the upper hand. The key to his success was his
ability to employ his family's political power as a business tool and, in
turn, to use his business empire to maintain his political base.
accessible to historians. Sr. Eduardo Creel kindly provided me with a copy of this book. Francisco R.
Almada, Diccionario de historia, geograffa e biografia Chihuahuense, 2d ed. (Chihuahua, n.d.), 124, and
Gobernadores del estado de Chihuahua (Mexico City, 1950), 437-47 are basic sources.
ENRIQUE C. CREEL
647
EARLY YEARS
Creel's self-discipline, organizational skills, and business acumen
were formed in a youth of genteel poverty. He was born in Chihuahua
in 1854, the son of merchant Reuben W. Creel, who had come to Mexico from Kentucky in 1845, and Paz Cuilty de Creel, the daughter of
a prominent landowner.3 In his teens Enrique sold cigars and cigarettes on the streets and taught night school. His family's financial difficulties ended his formal education, but his mother, a schoolteacher,
undertook his training at home. At fourteen, Enrique managed a small
store for his father; after Reuben died in 1871, the seventeen-year-old
Creel borrowed three hundred pesos and went into business himself.
By the time he was twenty-five, he had "one of the best mercantile
houses in Chihuahua."4 In 1880 he married Angela Terrazas, the
daughter of Chihuahuan political boss Luis Terrazas.
It was to be a partnership of enormous profit for both sides. For
Creel, the marriageprovided access to the Terrazas'scapital and family
connections. Most important, it brought him the crucial backing of
Luis Terrazas'spolitical power in Chihuahua. For the Terrazases, the
marriage drew into the clan a brilliant, ambitious young man who led
them into new economic fields, diversifying their holdings from the
traditional bases in land and cattle.
The Creel-Terrazas marriage was, in its political and economic usefulness to the families involved, a typical practice of the Mexican elite.
Elite families regularly injected "new blood"--often that of foreigners
in northern Mexico--to run their businesses and used their sons and
daughters to establish new alliances or deepen old ties with other elite
families. The Terrazases were among the most adept practitioners of
the political or economic marriage, for by 1910 they were related by
blood or marriageto virtually every important family in Chihuahua and
to many in northern Mexico.5
Enrique's father-in-law, Luis Terrazas, was the most durable and,
ultimately, the most powerful regional political boss of the post-Reform
era (1856-1911). He fought Porfirio Diaz to a standstill and forced the
dictator to recognize his rule in Chihuahua. At the same time, Terrazas
3 Reuben W. Creel was U.S. consul in Chihuahua during the French intervention. Paz Cuilty was
the sister of CarolinaCuilty Bustamente de Terrazas,the wife of General Luis Terrazas.The Cuiltys were
among the largest landownersin the state. J. Adolphus Owens, comp., Anywhere I WanderI Find Facts
and Legends Relating to the Creel Family (Warrior,Ala., 1975), 520-23.
Owens, Creel Family, 23; Creel Cobiin, Enrique C. Creel, 9-26; Chihuahua Mail, 17 Oct. 1882, 2.
5 The Creel-Terrazasmarriagewas not, as Enrique'sless-than-aristocraticorigins might hint, socially
demeaning for the bride or her family. Enrique's mother was the sister of Luis Terrazas'swife. Thus,
Enrique married his first cousin. Such intrafamilymarriagesseem to have been fairly common among
the Mexican elite.
648
BUSINESS HISTORY REVIEW
built the largest land and cattle empire in the western world: his personal holdings included ten million acres of land and 500,000 cattle.
For the better part of half a century Luis Terrazasmade the rules governing politics and business in Chihuahua.
Though his alliance with the Terrazasfamily was a significant factor
in his own political and economic rise, Enrique Creel learned early
and believed firmly in the virtues of hard work and self-discipline,
attributes which also contributed greatly to his success. Even as an old
man, he planned his days and his time almost to the minute.6
As he made his own fortune, Creel actively participated in local politics. He served as a member of the city council of Chihuahua City,
the state's capital and largest city, during the 1870s, and was elected
to the state legislature for four terms. He also represented Chihuahua
four times in the national congress.7
THE BANKER
Creel earned his greatest fame as a banker and international financier. As manager of the Terrazasfamily's banks, he ruled over an empire that counted more than two hundred million pesos in assets, almost a fifth of the nation's total bank assets in 1910. He presided over
or had substantial interests in banks in Chihuahua, Mexico City, Monterrey (Nuevo Le6n), Durango, Guanajuato, Sonora, and the United
States. Creel also functioned as a Mexican equivalent of J. P. Morgan,
coordinating the interests of various Mexican and foreign banking
groups. After 1900, as the Mexican member of important international
financial committees, he established a worldwide reputation.8
His base was the Banco Minero de Chihuahua. Founded with four
partners in 1882, the bank, under Creel's supervision, grew from a
modest investment of 100,000 pesos to a giant with 23.2 million pesos
in assets in less than three decades. During that time, it earned more
than six million pesos in dividends for its shareholders. By 1910, the
Banco Minero was Mexico's fourth largest bank, with branch offices all
over northern Mexico. It was a major underwriter of foreign mining
companies in Chihuahua and financed several large native-owned industrial concerns.9
Creel played a crucial role in coordinating native and foreign bank6 See, for example, the Memorandum of 17 Aug. 1931, the day he died, in Creel Cobian, Enrique C.
Creel, 371-72.
7 Ibid., 27-36; Almada, Gobernadores, 437-38.
8 M6xico, Secretaria de Estado y del Despacho de Hacienda y Cr6dito
Boletin de estadisticas
139.
Ptiblico,
fiscales, no. 336 (1910-11), 248-49, 264-65; The Mexican Yearbook (1911),
de Administraci6n, Informe del Consejo de Administraci6n
9 Banco Minero de Chihuahua, Consejo
y Comisario a la asamblea general de accionistas de 28 de marzo de 1908 (Chihuahua, 1908).
ENRIQUE C. CREEL
649
ENRIQUE C. CREEL, c. 1908
As a financier, industrialist, ambassador, son-in-law of the powerful Luis Terrazas,
and political leader in his own right, Enrique Creel stood at the center of Mexican
political and business activity during both the Porfiriato and much of the turmoil that
followed. His career provides a perspective on the interplay of business and politics
in Mexico throughout the period. (Photograph courtesy of Sefior Eduardo C. Creel,
Mexico City.)
650 BUSINESSHISTORYREVIEW
ing interests. He was associated with the Sonoran elite as president of
the Banco Mercantil de Cananea.10In partnership with Mexico City
lawyer Joaquin Casastis and several Monterrey entrepreneurs, he
founded the Banco Mercantil de Monterrey in 1889.11Creel was also
a large stockholder in the Banco Oriental de M6xico and a board member of the Banco de Guanajuato.'2
His most ambitious projects were two large banks in Mexico City.
Creel founded the Banco Central Mexicano in 1899 to provide "a
mechanism in Mexico City" for state banks of emission to circumvent
the currency monopoly of the Banco Nacional. By 1910 it had become
Mexico's second largest bank, with assets of ninety million pesos.13In
addition, Creel set up the Banco Hipotecario de Credito Territorial
Mexicano, which had thirty-eight million pesos in assets in 1910, to
furnish long-term, low-rate mortgages to finance the modernization of
agriculturalproperties. 14
In matters of national monetary policy, Creel ranked in importance
second only to Jos6 Y. Limantour, Diaz's minister of finance. He traveled widely on behalf of the government and was well-known in financial circles in New Yorkand Paris. He was instrumental in formulating
many of the fiscal policies of the dictatorship.',
The conjunction of business and politics is no better illustrated than
in Creel's banking enterprises. Political influence, Creel's business
acumen notwithstanding, was crucial in building his financial empire.
As governor of Chihuahua, Luis Terrazas granted himself and his sonin-law a state charter for the Banco Minero in 1882. He then defended
the bank from the provisions of the national commercial code promulgated in 1884, which would have canceled its charter. President Manuel Gonzilez had revised the code to make Mexico more attractive to
foreign investors and to gather regulatory power in the hands of the
central government. Terrazas delayed implementation of the law in
Chihuahua, claiming that it infringed on states' rights. Eventually, the
Diaz government compromised and granted Creel and Terrazasa new
federal charter in 1888. Creel also obtained exemptions from all state
MexicanHerald, 22 Jan. 1906, 7, and MexicanInvestor, 3 Feb. 1906, 7.
to
" Alexander M. Saragoza,"The Formationof a Mexican Elite: The Industrializationof Monterrey,
Nuevo Le6n, 1880-1920" (Ph.D. diss., University of California, San Diego, 1978), 84.
12 Document entitled "Negocios de Enrique C. Creel, May 10, 1922," which lists the landholdings
and stockholdingsand losses incurred by Creel during the revolution. This document is to be found in
the Creel papers in the possession of Sr. EduardoCreel in Mexico City. My thanks to ProfessorHarold
D. Sims and Sr. Creel for makingthis document availableto me.
13 El Correo de Chihuahua, 10 March 1904, 2; Bankers'Magazine 77 (Oct. 1908):525-29; Mexican
Investor, 31 March 1906, 19; Nicolas d'Olwer, et al., El Porfiriato:La vida econ6mica, 2 vols. (Mexico
City, 1965), vol. 7 of Historia Moderna de Mexico, ed. Daniel Cosi6 Villegas, 2: 827.
14Bankers'Magazine, 77 (Oct. 1908):537-41; El Correo de Chihuahua, 22 March 1904, 3; Mexican
Yearbook,1911, 129.
1' Helguera, Enrique C. Creel, 105-11; Creel Cobiin, Enrique Creel, 81-95.
ENRIQUE C. CREEL
651
taxes for all the Terrazas-Creel banks. After he became governor in
1904, Creel's Banco Minero lent the state government large sums to
finance his administration'sambitious program of public works. Interest payments of these loans not only enabled the bank to survive, but
to prosper during the severe depression that rocked the rest of the
Mexican banking community from 1907 to 1909.16
Terrazas and Creel, in turn, used their banking enterprise for political purposes. Not a few new allies were made and old allies reassured
by timely loans from one of the clan's banks.
THE INTERMEDIARY
Creel was at the center of the intricate interplay of regional, national, and foreign economic interests during the Porfiriato. He conducted business in four sometimes overlapping environments. In Chihuahua and the northern border, Creel brought together the capital of
the local elite and border entrepreneurs, most of whom were North
Americans. Creel's second financial nexus was among industrialists and
landowners based in Monterrey and the Laguna region of the states of
Durango and Coahuila. Third, Creel worked out of the national capital
to coordinate the interests of regional, Mexico City, and foreign investors. Finally, Creel acted alone as the highly valued representative of
large foreign corporations in Mexico.
Foreigners were important, though minority, stockholders in the
Banco Minero, the Guaranty Trust and Banking Company in El Paso,
Texas, and the Compaiifa El6ctrica de Ferrocarriles de Chihuahua.
The GuarantyTrust brought together prominent merchants Max Krakauer and Ben Degetau, Britton Davis, the long-time manager of the
giant Corralitos ranch, and Max Weber, an investor and speculator
from El Paso.'7 The Compaiifa Electrica, which supplied electricity to
Chihuahua City and ran its transit line, counted among its directors
and officers Krakauerand his partner Gustavo Zork.18
Creel's connections with the Monterrey and Laguna elite revolved
around the Compaiiia Industrial Jabonerade La Laguna, S.A., and the
16 El Correo de Chihuahua, 3 June 1903, 2; Chihuahua,TesoreriaGeneral, Presupuestosde egresos
para el ejerciciofiscal de 1907 a 1908 (Chihuahua, 1907); Chihuahua, Secretaria de Gobierno, Secci6n
Estadistica,Anuario estadistico del estado de Chihuahua, 1908; 1909, 205; El Peri6dicoOficialdel Estado
de Chihuahua [hereafter cited as POC], 17 July 1910, 10.
17 Walter M. Brodie to E. C. Creel, 5 Nov. 1910, pt. 2, reel 2, Silvestre TerrazasPapers, Bancroft
Library,University of California, Berkeley [hereafter cited as STPJ;E. N. Schwabe to W.E.D. Stokes,
28 Dec. 1910, Schwabe to Juan A.Creel, 29 Dec. 1910, and accompanyingdocuments, pt. 2, reel 14,
STP. Part 2, reel 2 lists the board of the GuarantyTrustand BankingCompany.This venture was one of
the few Creel enterprises that failed. It went into receivership in 1911. For an interesting perspective
on the bank see the MaxWeber Collection, University of Texas at El Paso.
18 Martin Falomir to Enrique C. Creel, 27 Dec. 1910, and 19 Jan. 1911, pt. 2, reel 14, STP.
652
BUSINESS HISTORY REVIEW
Banco Mercantil de Monterrey. The Compaiiia Industrial Jabonera, or
Jabonera as it was called, was organized in 1898 by the Terrazas-Creel
family, Juan Brittingham, a North American, and TomaisMendrichaga,
a Monterrey industrialist, landowner, and president of the Banco Mercantil, as a cooperative venture joining the interests of cottonseed producers and processors. The company manufactured cottonseed oil,
soap, and, most important, glycerine, a key element in high explosives. Although after 1902 a bitter dispute arose between the Laguna
cotton planters and the company over the low prices paid for cottonseed, the Jabonerawas typical of Creel's ambitious efforts to coordinate
the business activities of various regional elites and to extend his family's economic empire beyond the borders of Chihuahua.'19
Creel, Mendrichaga, and Joaquin Casas6s founded the Banco Mercantil in 1899. Its stockholders included many members of the Monterrey elite, among them the Madero family. The Terrazas-Creelsused
their connections with the bank to become involved in a number of
important industrial ventures in Monterrey.20
The great financier reached his zenith in putting together the Banco
Central, the Banco Hipotecario, and the Compafiia Nacional Mexicana
de Dinamita y Explosiva, because in these enterprises he joined powerful regional, national, and foreign groups. The Banco Central'sboard
of directors comprised northern industrialists Francisco Madero and
Juan Brittingham, Mexico City luminaries Fernando Pimentel y Fagoaga, and Casasts, and members of the capital's French community
like Donato Chapeaurouge. J. P. Morgan and Company, the Deutsche
Bank, and other foreign investors supplied half the capital.2'The Banco
Hipotecario brought together the same mix of financial interests.22
The Compafiia Nacional Mexicana de Dinamita epitomized the profitable combination of regional, national, and foreign interests and the
importance of political influence during the Diaz era. Established by
the Terrazas-Creels, Brittingham, the Financiera por la Industria en
M6xico (a consortium of Mexico City investors), and the Societe Centrale de Dynamite of France, the company obtained a concession to
manufacturedynamite in Mexico. With the cooperation of the Mexican
government-the sons of both Porfirio Diaz and Jose Y. Limantour
were on the board of directors-which raised the tariff on imported
explosives and exempted the company from all import duties, the new
19El Correo de Chihuahua, 21 Oct. 1903, 1; Bolet(n Comercial(Chihuahua),1 Sept. 1908, advertisements; William K. Meyers, "Interest Group Conflict and Revolutionary Politics: A Social History of La
Comarca Lagunera, Mexico, 1888-1911" (Ph.D. diss., University of Chicago, 1979), 88-94, 199-212.
20 Mexican Yearbook, 1912, 137;
John R. Southworth, Directorio oficial bancario de Mexico (Mexico,
245.
1906),
21
22
Bankers' Magazine 77 (Oct. 1908): 525-29; El Correo, 10 March 1904, 2.
Bankers' Magazine 77 (Oct. 1908): 537-41.
ENRIQUE C. CREEL
653
trust acquired a monopoly on dynamite sales. The Terrazas-Creelsprofited doubly by selling glycerine from their Jabonera operation at high
prices to the dynamite monopoly and then selling dynamite at high
prices to desperate mine owners. Despite its obviously detrimental
effect on the mining industry, the powerful trust operated
unchecked.23
In each of these enterprises Creel displayed his brilliant organizational abilities and his keen grasp of the role of politics in business. His
capacity to bring together Mexican industrialists, bankers, brokers,
politicians, disparate regional interests, and foreign investors was unprecedented, as was his ability to raise capital for his ventures. He not
only put the necessary political pieces in place: he also possessed the
talent to run the businesses expertly.
The system of relations among the national government, state (or
local) elites, and foreign businessmen was based on the mutual needs
engendered by the native elite's ownership of the nation's exploitable
resources and control of the government, and the foreigners' possession of capital and technology. In a typical case, a foreign corporation
sought to develop a mine or an estate. The foreign businessman hired
a local representative to arrange purchase or lease of the property and
the necessary government concessions, subsidies, or tax relief. Often,
a different elite intermediary was required to deal with each level of
government. The foreign businessman usually retained his representative(s) beyond the sale transaction to ensure continued favorable
treatment. Many members of the Latin American elite grew rich acting
as agents of foreign investors, taking advantage of opportunities available to them as lawyers, brokers, and influence peddlers.
Enrique Creel, as a member of the Terrazasclan, governor, cientifico (an influential group led by Limantour), and prominent banker,
was the most sought-after intermediary for foreign capitalists during
the Porfiriato. Creel could deal at all levels (local, state, and national)
himself, and he could arrange financing as well. He was known as "the
man to see" in arranging to start a business in Mexico. As Bankers'
Magazine put it, he was "known for his ability and integrity" and for
his accurate knowledge of Mexico's resources."2
But because the Terrazas-Creels were both political bosses and
bankers, they were not reduced to the subordinate role of other elite
intermediaries. They controlled Chihuahua with an iron hand, and
23Engineering and MiningJournal 76 (17 Dec. 1903):918; 81 (3 March 1906):429-30; 73 (22 March
1902): 428 and (12 April 1902):528; 78 (14 Nov. 1904):950; Meyers, "Interest Group Conflict,"201.
24 Bankers'Magazine77 (Oct. 1908):531. An earlier issue of this magazinelauded Creel in the following terms: ". .. stands in the front rank of the financiers in Mexico .... combined energy and skill of
Anglo-Saxonsuavity and tact of the Latin." Bankers'Magazine 77 (Feb. 1903):314.
654
BUSINESS HISTORY REVIEW
Creel's influence in Mexico City made it impossible to circumvent the
family by dealing directy with Diaz.
A virtual Who's Who of foreign entrepreneurs dealt with the Mexican and Chihuahuan governments through the good offices of Enrique
Creel, including the American Smelting and Refining Company
(ASARCO), Arthur Stilwell of the Kansas City, Mexico, and Orient
Railway, and William C. Greene, the copper tycoon. Creel's services
as an intermediary were costly. The Mexican Central Railroad (an
American-owned company) paid him 50,000 pesos a year to sit on its
Giant ASARCO had to purchase a concession and
board of
directors.'
land from the Terrazases to build a smelter in Chihuahua.26Greene
paid more than 800,000 pesos for two mines in return for help in acquiring an enormous concession to mine and cut timber in western
Chihuahua while Creel was governor of the state.27
THE RISK CAPITALIST
Acting as an intermediary was only one of the functions Enrique
Creel performed in his financial world. He was also a risk capitalist,
and one who used the technology of foreigners to considerable advantage. He took over a failing metal foundry begun by North American
Frank Fletcher in Chihuahua City and through shrewd management
and an infusion of capital transformed it into the Compaiiia Industrial
Mexicana, then one of the largest and most modern metal-fabrication
facilities in Mexico. The success of the investment was all the more
remarkablebecause the Terrazas-Creelswere temporarily out of power
in Chihuahua when they acquired the foundry, and because the mining
industry underwent a severe depression (1890-96) during the early
years of the venture. Creel undoubtedly used his wide contacts as a
banker and whatever political influence he retained (unquestionably
considerable) to obtain contracts for the Compaiiia Industrial; nonetheless, the company represented an important entrepreneurial
achievement. Creel had entered a very risky, capital-intensive, highly
competitive business, dominated by foreign corporations, and managed to succeed notably.28
5 El Correo de Chihuahua, 13 May 1903, 4.
26 Mexican Investor, 1 July 1905, 16, and 18 Nov. 1905, 3; Engineering and
Nov. 1905), 900. Brother-in-law Juan Terrazas obtained the lease on the company
part of the deal. Francisco R. Almada, La revoluci6n en el estado de Chihuahua
27 El Correo de Chihuahua, 1 March 1906, 1; 9 Feb. 1905, 1; 25 Jan. 1905,
April 1907, 11; 16 July 1907, 11.
28
Mining Journal 80 (11
store at the smelter as
(Mexico, 1964), 1: 73.
1. Mexican Herald, 22
Jorge Griggs, Mines of Chihuahua, 1907: History, Geology, Statistics, Mining CompanyDirectory
(N.p., n.d.), 80-81; Mexican Financier, 22 Aug. 1891, 541; 26 March 1892, 15; Mexican Herald, 21 May
1896, 2; Engineering and Mining Journal 72 (30 Nov. 1901): 698; El Correo de Chihuahua, 21 Oct. 1902,
2.
ENRIQUE C. CREEL
655
Creel sometimes experienced spectacular success as a mining entrepreneur as well. He turned the Rio Tinto mines in northern Chihuahua into a moneymaker after several foreign firms had gone bankrupt.29
He took 500,000 pesos out of the Mercedes mine in Santa Eulalia.30In
both instances, he sold out to foreign companies for substantial sums
when the mines began to give out.
At the turn of the century, taking his cue from businessmen in the
United States, Creel attempted to construct trusts in flour milling and
meat packing. He succeeded in acquiring a near-monopoly on the former in Chihuahua, but was unable to extend the enterprise elsewhere.31 The banker also obtained a concession to run the stockyards
of Mexico City, adding to the Terrazases' extensive meat-packing interests in Chihuahua. A "beef trust" was not feasible in the Mexican
market, however, and Creel sold his Mexico City operations to a foreign company.32
Control of the state government of Chihuahua, extensive influence
in the nation's capital, and access to a large pool of capital made Creel
a formidable economic force. His businesses enjoyed privileged treatment in the form of subsidies, tax exemptions, government business,
and favored status in the courts. Was political influence, rather than
entrepreneurial skill, the key to Creel's vast business success? Given
the coercive power in his hands, how could he not have amassed an
enormous fortune? Moreover, were not many of his entrepreneurial
activities in fact merely sophisticated forms of corruption?
The answers to these questions lie in the very nature of business in
Mexico (and Latin America) during this epoch. Creel operated in an
environment where business and politics were all but inseparable.
Certainly, political position and influence helped Creel--they were an
integral part of the conduct of business in pre-revolutionary Mexicobut it was his ability that ultimately made him the greatest entrepreneur of the Porfiriato. Creel understood the system better than anyone
else and used it to his advantage to a greater extent than any other man
of the era.
He diversified his enterprises most extensively and took the greatest
risks during the years he and his family were excluded from day-to-day
power in Chihuahua, from 1885 to 1902. During this period Creel ex2 Griggs, Mines of Chihuahua, 81, 336; Lewis Morgan and Hubert Bankart to Enrique C. Creel, 2
Dec. 1896; Creel to William Heimke, 14 Sept. 1896; Juan A. Creel to H. C. Hollis, 4 and 19 May 1904,
pt. 2, reel 17, STP; Mexican Herald, 16 Sept. 1905, 7.
3 Siglo XX, 27 July 1904, 2; POC, 31 Aug. 1895, pt. 2, reel 17, STP.
31 Federico Sisniega to Ernesto Madero, 25 Sept. 1900, pt. 2, reel 7, STP; U.S. Department of State,
Monthly Consular and Trade Reports, no. 305 (Feb. 1906);El Correo de Chihuahua, 12 Feb. 1902, 1.
32 Mexican Herald, 29 July 1908, 1; 30 July 1908, 3; 27 Sept. 1908, 1; El Correo de Chihuahua,
Sept. 1902, 1; 27 April 1904, 1; Federico Sisniega to E. C. Creel, 2 July 1904, pt. 2, reel 8, STP.
20
656
BUSINESS HISTORY REVIEW
panded his banking empire, widened his manufacturinginterests, and
undertook major ventures in transportation and trust-building. In a
time of relative political insecurity Creel proved willing to risk his capital. The daring of his enterprise should not be underestimated, for
despite his political stature, he still had to conduct business in a world
of stiff foreign competition and fluctuating markets.
Although Creel engaged in a wide range of activities as an intermediary, he was not involved in the overt corruption for which other cientificos became notorious. It was widely recognized that, unlike other
members of the Mexican elite, Creel earned his salary and fees. Otherwise his assistance would not have been so widely sought.
THE POLITICIAN
As Luis Terrazas'ssecond-in-command and agent in Mexico City,
Creel was deeply involved in the struggle between Diaz and Terrazas
for control of Chihuahua that lasted from the late 1880s until 1902.
Through his efforts as a conciliator, the two old, bitter enemies finally
reconciled. Creel's business accomplishments are all the more remarkable when considered in the light of this concurrent conflict with the
Diaz regime.
Luis Terrazas took up arms to oppose both of Diaz's rebellions, in
1872 and 1876, actually defeating the porfiristas in battle in the latter
year. He continued to rule Chihuahua until 1884, when the completion
of the Mexican Central Railroadended the state's isolation and enabled
the newly solidified Porfirianregime to exert control over the northern
tier. Luis Terrazas, however, never stopped fighting Diaz. For a decade he backed rebellions in Chihuahua, financed revolts in other
states, and otherwise harassed porfirista agents in the state. At the
same time, however, the family sent Enrique Creel to the capital to
establish contacts and begin negotiations for a settlement. In 1888 and
again in 1892 Creel arranged deals that ended protracted political
squabbling over the legislature and governorship.During the 1890s, Creel joined the cientifico circle, then led by Jose
Limantour. As the finance minister and his cronies grew in influence,
Creel moved toward a reconciliation with Diaz. In the first years of
the new century, the cientificos made a concerted effort to obtain governorships for members of their group. The Diaz-Terrazas reconcilia33Daniel Cosi6 Villegas, El Porfiriato:Lavida politica interior, 2 vols. (Mexico, 1972), vol. 9 of Historia Moderna de Mexico, 2: 58-64. See also William H. Beezley, "Opportunityin PorfirianMexico,"
North Dakota Quarterly 40 (Spring 1972):30-40.
ENRIQUE C. CREEL
657
tion paved the way for Creel to become governor of Chihuahua in
1904.
Creel served as governor from 1904 to 1910, and he initiated reforms
to centralize, streamline, and modernize state government. He
sought, furthermore, to expand the state's economy through a vast program of public works that built the infrastructurecrucial for economic
development and provided jobs for thousands of Chihuahuans. He also
recognized the need to invest in social capital, building new schools,
increasing the number of teachers, and establishing new commercial
and agricultural institutes. Like other positivists of the era, Creel constantly campaigned against the evils of alcohol consumption. At one
point, he attempted to form a corporation to purchase all the saloons
in the state.34
Creel's progressive program led to widespread unrest in Chihuahua,
compounded by the depression of 1907-9. To finance his ambitious
public works program, he and the legislature raised taxes, the burden
of which fell entirely on the emerging middle class and the working
class. The railroad construction boom engendered by Creel's policies
created a sharp rise in land values, setting off a large-scale campaign
of land theft from small holders and villages. His efforts to centralize
government administration and political power produced endemic political abuses. These actions and their consequences gave rise to extensive and deep-seated political discontent in Chihuahua that led to revolution in 1910.'
THE COUNTERREVOLUTIONARY
In December 1906, Porfirio Diaz appointed Creel ambassadorto the
United States. In his dual capacity as governor and ambassador,Creel
oversaw the Diaz regime's actions against revolutionaries who operated
on Mexico's northern border. He was instrumental in rooting out and
crushing uprisings by the Partido Liberal Mexicano (PLM) in 1906 and
1908.36 In 1910, however, the Terrazas-Creels quarreled with Diaz
M
Helguera, Enrique Creel, 61, 82-83; Almada,Gobernadores,441-42; Bankers'Magazine74 (Jan.June 1907):589; MexicanHerald, 6 Nov. 1906, 3; Chihuahua, Gobernador,Informe del C. Gobernador
Constitucional Interino de Chihuahua,Jose MariaSinchez, al H. Congreso del Estado 1 junio de 1907
(Chihuahua, 1907), 6; Chihuahua, Gobernador, Informe leido por el Gobernador del estado 16 septiembre de 1908 (Chihuahua,1908), 5.
35MarkWasserman,"The Social Origins of the 1910 Revolution in Chihuahua,"Latin American Research Review 15 (1980): 15-40.
3 Dirk Raat, Revoltosos: Mexico'sRebels in the United States, 1903-1923 (College Station, Texas,
1981), 175-202. Creel was ambassadorfrom 18 Dec. 1906 until 25 Sept. 1908. He was secretaryof foreign
relations from 25 April 1910 until 23 March 1911. See also the Flores Mag6n files in STP.
658 BUSINESSHISTORYREVIEW
about strategy in dealing with the revolution, led by Francisco I. Madero, that broke out in Chihuahua in November.3 Subsequently, Creel
was removed from his new post as secretary of foreign relations and
excluded from efforts against the revolutionaries.38
After the victory of the maderista revolution in May 1911, Creel
actively led his family's efforts to protect its property and restore its
political power. In the early stages of the revolution the clan reverted
to its time-tested strategy of simultaneously seeking conciliation and
exerting pressure. The Terrazas-Creels moved quickly to reconcile
with Francisco Madero. The Terrazases and Maderos had much in
common. They were related by marriage, and were business partners
in Durango and Monterrey.3 The new president showed his friendly
disposition toward the Terrazas-Creels when he rescued members of
the clan from embarrassing litigation brought by suspects in the notorious Banco Minero robbery whose rights had been violated by investigators led by Creel. Madero, who in 1909 had sent Creel an autographed copy of his pamphlet, The Presidential Succession of 1910,
obviously greatly respected his kin.40
Given these familial and economic connections, the Terrazas-Creels
must surely have been optimistic about relations with the revolutionary regime. Like other Porfirianelites, they saw Madero as one of their
own. The political situation in Chihuahua soon altered their strategy,
however. Revolutionary Governor Abraham Gonzilez, representing
the grievances of the middle and working classes, set about dismantling the system of privilege that had supported the Terrazas-Creel
empire. To thwart Gonzailez, the family clandestinely backed the revolt of Pascual Orozco against the Madero government.41In doing so,
it sought not only to protect its home base, but to apply pressure on
the national government as it had on Diaz twenty years before.
The failure of the Orozco rebellion in Chihuahua sent much of the
Terrazas-Creelfamily into exile in the United States in 1912. Enrique
whose family owned the largest native-owned smelter in
37 Madero was a landowner from Coahuila,
Mexico. His followers were known as maderistas. Madero was elected president of Mexico in 1911 and
was toppled and killed in 1913. Victoriano Huerta led a reactionary regime that lasted until 1914, when
it was ousted by the Constitutionalist forces led by Venustiano Carranza, another Coahuilan landowner.
Carranza ruled until 1920, when he was overthrown by Alvaro Obreg6n.
38 Raat, Revoltosos, 222-23; 178-79; POC, 1 May 1910.
39 El Correo de Chihuahua, 21 Oct. 1903, 1; Boletin Comercial, 1 Sept. 1908, advertisements; Mexican Yearbook, 1912, 62-63. The two families were partners in the Banco de la Laguna Refaccionario,
which had thirteen million pesos in assets in 1911. POC, 17 Nov. 1910, 30; Mexican Herald, 6 Nov. 1908,
5. They were related through the Zuloaga family. Francisco Madero made his headquarters at the Zuloagas's Hacienda de Bustillos during the spring of 1911.
40E. C. Creel to Juan Terrazas, 6 Aug. 1911; Ernesto Madero to Abraham Gonzilez, 2 Dec. 1912,
cited in Raat,
pt. 2, reel 2, STP; Madero to Creel, 31 Jan. 1909, Archivo de Francisco Madero, II, 312,
Revoltosos, 207.
"4Michael C. Meyer, MexicanRebel: Pascual Orozco and the MexicanRevolution, 1910-1915 (Lin-
coin, Nebr., 1967), 75.
ENRIQUE C. CREEL
659
Creel centered his operations in Los Angeles, where he seems to have
maintained his contacts with Wall Street and with other former Porfirian leaders. From this safe distance the Terrazas-Creels, through the
Banco Minero, pumped substantial money into the reactionary government of Victoriano Huerta, who had overthrown Madero in 1913.42
Creel journeyed to Spain in 1915 to persuade the deposed Huerta
to participate in a planned revolt sponsored by German intelligence.
The plot crumbled when Huerta and Orozco, its coleaders, were both
captured and killed in the United States.43
In 1917, once it seemed evident that Venustiano Carranzawas firmly
in control of the Mexican government, the Terrazas-Creelsmade overtures for reconciliation. As Carranza'spolitical base eroded in 1918 and
1919, he looked to the Porfirianelite to provide support for his regime.
The Terrazases agreed to back Carranzain Chihuahua in exchange for
the return of the lands expropriated from family members by Pancho
Villa in 1913.' Carranza ordered restitution of these lands, but was
overthrown in 1920 by Alvaro Obreg6n before his orders could be carried out.45
RECONSTRUCTION
Creel returned to Mexico in the early 1920s. He became an important financial adviser to the Obreg6n government, and many of his
recommendations provided a basis for the regime's fiscal and monetary
policies during the decade. He wrote and spoke widely on public finance. The ex-governor conducted his business through the firm Creel
Hermanos. He died in 1931.46
42 U.S.,
Congress, Senate, Committee on Foreign Relations, Revolutions in Mexico, hearing before
a subcommittee of the Committee on Foreign Relations of the United States Senate, 62d Cong., 2d sess.
(Washington, D.C., 1913), 131-32, 167, 345-46, 804, 559-60; Meyer, Mexican Rebel, 56. For the clan's
activities during the revolution consult box 83, expediente 32, Ramo de Gobernaci6n of the Archivo
General de la Naci6n, summarized in Friedrich Katz, The Secret War: Europe, the United States, and
the Mexican Revolution (Chicago, 1981), 535-36, 635.
43 Charles C. Cumberland, Mexican Revolution: The Constitutionalist Years (Austin, Tex., 1972), 206,
citing Gracey, U.S. consul, to secretary of state, n.d. (received 31 March 1915), file 812.00/14751, U.S.
National Archives, RG 59, General Records of the Department of State, Decimal files, 1910-1929; Meyer,
MexicanRebel, 124-25.
44 Pancho Villa was one of the leading figures of the Mexican Revolution from its inception. Fighting
on the side of Carranza, he was the key general in the defeat of Huerta. Later, he split with Carranza. A
series of defeats in 1915 forced him into guerrilla activities, which he sustained until 1920. From 1913
until 1916, Villa controlled the state of Chihuahua. In 1913 he ordered and carried out the expropriation
of all the property of the Terrazas-Creel family. His followers were known as villistas.
I Katz, Secret War, 534-36. The Ramo de Gobernaci6n is filled with the
correspondence between
members of the Terrazas extended family (Lujin, Horcasitas, etc.) and other terracistas in Chihuahua
with Carranza, petitioning for the return of lands confiscated by Villa. By 1919 the Carranza government
had in fact honored these requests.
'
Enrique Krauze,et al., Historia de la Revoluci6nMexicana,Periodo 1924-1928: La reconstrucci6n
econ6mica (Mexico City, 1977), 32-35; Lorenzo Mayer, et al., Historia de la Revoluci6n Mexicana, Per-
iodo 1928-1934: Los inicios de la institucionalizaci6n, la politica del maximato(Mexico City, 1978), 22425; Creel Cobiin,
Enrique C. Creel, 371.
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BUSINESS HISTORY REVIEW
Like the rest of the extended Terrazasfamily, Creel suffered enormous financial losses during the revolution, but was by no means destroyed. After the fighting he and his sons picked up the pieces and
rebuilt their empire. By his own estimate Creel lost five million pesos
in damages to his properties. The Constitutionalists (Carranza'sgroup)
looted the Banco Minero of its assets, finally revoking its charter in
1916. As late as the mid-1920s the Mexican government still owed the
defunct bank more than a million pesos, deriving from revolutionary
"loans."47Creel's sons retained control of major enterprises in Chihuahua, most importantly the Compafiia Electrica y de Ferrocarriles de
Chihuahua. Although he lost most of his land, Creel kept the core of
at least four haciendas, together extending over 185,000 acres, or approximately 10 percent of his earlier holdings."8
A MAN OF HIS TIMES
Creel's career during the Porfiriato,the revolution, and its aftermath
reflects the pattern of elite behavior in the Mexican states during these
periods. As second-in-command to a powerful regional political boss,
Creel participated in a long struggle with the central government over
state autonomy, a struggle that did not result in a clearcut victory for
centralization, as the Chihuahuan case proves. Like other members of
the elite, Creel became involved in the internecine squabbles that
eroded Porfirio Diaz's support. As a regional boss himself, he never
fully trusted federal centralization, though of course he centralized
Chihuahuan government. These differences with and within the dictatorship surfaced as the maderistas successfully fought their guerrilla
war in 1910 and 1911. Excluded ultimately from the inner circles of
the dictatorship, Creel quickly sought to make peace with the victors.
Although Madero was amenable to cooperation, the revolutionaries in
Chihuahua exceeded what the Terrazas-Creels found acceptable reforms. The clan then turned to Pascual Orozco. The defeat of the orozquistas sent Terrazas, Creel, and their brethren into exile, where they
lived and plotted even during the Huerta reaction.
Unlike the Mexico City elite, who had to endure the constant capture and abandonment of the capital city by various combatants, and
others who fled to Europe, the Terrazas-Creels were able to remain
47 David J. D. Myers, U.S. consul, Chihuahua, to Juan A. Creel, manager, Banco Minero, 8 Jan.
1929, file 851.6, vol. 6, 1929, RG 84, Records of the American Consulate in Ciudad Chihuahua, U.S.
National Archives; "Review of Commerce in Chihuahua," comp. Thomas McEnelly, U.S. consul, Chihuahua, 10 Oct. 1925, RG 84, vol. 6, 1925, National Archives.
48 "Directory of Agricultural and Grazing Lands in Chihuahua," comp. U.S. consulate, Chihuahua,
enclosure from McEnelly to Secretary of State, 17 June 1926, RG 84, vol. 6, 1926. The four were La
Gallina, Puerto de Lobo, Las Orientales, and a parcel in the municipality of Guerrero.
ENRIQUEC. CREEL 661
safe and relatively nearby, looking after their interests from El Paso
and Los Angeles. This may be why, despite the efforts of the villistas,
they kept as much of their empire together as they did.
Creel's plight during the revolution and in the 1920s accurately mirrors the outcome of the great upheaval. Substantial damage was inflicted on the Porfirian elite, especially on the landowning class, but
they were not destroyed. Much of their financial and industrial power
remained intact, and from this base they rose again. Many even regained their lands when the dust of the violent years finally settled.
By the mid-1920s, much in Mexico had returned to the old ways. Creel
was an exception among the old elite, for he played a more public role
than most in those years of reconstruction. His valuable financial expertise was badly needed by the Obreg6n government. After Luis Terrazas died in 1923, it was time to bury the hatchet. Like the other
Porfirians and their children, however, Creel could never reenter the
political arena or possess overt political power. He--and they--had to
be content to exert influence through family ties, economic might, and
pressure groups.
Although one cannot generalize from one case, comparison of the
career of Enrique Creel with those of contemporaries such as Olegario
Molina, the Maderos, and the Monterrey group illustrate clearly the
special nature of economic entrepreneurship in turn-of-the-century
Mexico (and Latin America) and the close relationship between business and politics. Facing frequent political turmoil and hampered by
lack of capital and technology, nineteenth-century Mexican businessmen, Creel foremost among them, achieved an exceptional record.
They adapted their methods to the changing political and economic
circumstances. During the first six decades after independence, they
employed private armies and local militia to fight off savage Indians
and regional rivals and used brute force to protect and expand their
holdings. Landowners became political bosses out of necessity. Government was a resource from which to appropriate money and land
grants and a coercive tool to protect one's property.
Later in the century, as the railroadended regional isolation and the
central government gradually imposed a measure of political order,
entrepreneurs shifted tactics. Political influence now served as a
means to acquire government concessions, subsidies, and tax exemptions. Coercion, for the most part, changed from a military to a police
or judicial function. Control at the local or state level remained crucial,
but bosses used state legislators, not soldiers, to get what they wanted.
As the central government grew stronger, regional and local flexibility in economic and political matters lessened. It became necessary
for entrepreneur-bosses to enter the national political arena. Some of
662
BUSINESS HISTORY REVIEW
the elite, particularly in Mexico City, the capital, eschewed entrepreneurial activity and satisfied themselves with bribes, fees, commissions, and no-work jobs. Others, especially in the north, struck out to
build great industrial and financial empires. Politics, however, remained the crucial variable. Elite families in Sonora and Durango were
badly hurt by Diaz's economic policies after 1900--the Maderos were
the most important example-and rebelled as a consequence. They
fought the revolution to gain political backing for their economic goals.
The victory of the revolution altered the rules of business once
again. A new entrepreneurial elite emerged. The old Porfirian elite
struggled to find a place in the new order. The revolutionary government gradually crushed local and regional autonomy. Because the
Mexican national government emerged with enormous power, businessmen became, once again, deeply enmeshed in politics. They exerted influence through pressure groups.
Clearly, Enrique Creel was a remarkablebusinessman. He, perhaps
better than any of his contemporaries, mastered the interrelationships
between business and politics. He was, moreover, an entrepreneur of
vision, who was the driving force behind his family's transition from
traditional economic pursuits to modern finance and industry. This
diversification enabled the clan to survive the exigencies of a decade
of revolution. Like the other great entrepreneurs of the age--for example, Carnegie and Rockefeller in the United States--Creel was
shrewd and ruthless. He fought hard to preserve the old order, which
he had helped to build, but failing that, he survived and adapted once
again. Enrique C. Creel was a capitalist entrepreneur of the highest
rank. He was a man of his times.