The Agricultural Bank of Zapotiltic
My grand uncle lived and died in rural southern Jalisco, Mexico at a time of several violent national revolutions and wide-spread political, economic, and military tumult around the world. He and all Mexican society had to survive the effects of the Mexican Revolution (1910) followed for several more years by regional “little wars” (guerrillas) throughout Mexico, the Cristero War (1927-1929), and two World Wars (WWI 1914-1918) (WWII 1939-1945) .
By 1927, the federal government had established a national agricultural bank to provide subsidized loans to rural farmers through eight regional agricultural banks, one of which was giving loans to farmers in and around Zapotiltic.
In January 1942, while trying to cope with the economic effect of World War II on the Mexican economy, the President decided to “modernize” agricultural production. He temporarily shutdown the national system of providing loans to rural farmers. The “temporary” shutdown lasted five years. National agricultural subsidies were not granted between 1942 and 1946. The sudden shutdown – with no advance warning – of federally subsidized rural agricultural banks caused great economic hardship for the majority of Mexico’s population which at that time relied on growing crops as a way of living. At the time Zapotiltic’s economy was almost totally based on agriculture – that is poor farmers planting crops on small plots of land called ejidos.
For more details: El Informador de Guadalajara, Editorial, dated 2-January-1942, and http://www.slideshare.net/Pumukel/banco-nacional-de-crdito-agrcola-banagrcola. Both Internet sites accessed November 25, 2016.
Following the Mexican revolution in 1910 and following agrarian reform laws, small plots of land called ejidos were granted to small Mexican farmers. Due to national political and worldwide economic conditions the majority of Mexican farmers were poor, small land owners. Definition:
ejido — In Mexico, village lands communally held in the traditional Indian system of land tenure that combines communal ownership with individual use. The ejido consists of cultivated land, pastureland, other uncultivated lands, and the townsite.
An owner of an ejido is called an ejidatario.
The annual planting season involved having to apply for a subsided loan from the agricultural bank to buy planting materials, like seeds, posts and fencing supplies, oxen and feed for the working animals, etc. At harvest time, profits from sale of the produce to granaries or food companies allowed the ejidatarios to pay back the loan plus interest. The remaining money was usually enough to survive economically until the next planting season. But, beginning January 1, 1942, the subsidized agricultural government bank was closed by the President. Farmers now had to find other sources of money in order to plant their crops.
The impoverished ejidatarios were forced to turn to private lenders. In Zapotiltic, a few people began to give loans to farmers in the area. The farmers immediately ran into an almost impossible situation. They had to pay higher interest rates. And, in order to pay back the loan plus interest, the private lenders imposed an additional condition. The money lenders found they could make more money by acting as commodity brokers and so required the farmers to sell their crops to them at what amounted to unfair prices. The result of adding a “middle man” to the local economy dramatically reduced the income the small farmers could earn.
In forcing the farmers to sell their crops to them, the money lenders paid extremely low prices to the farmers. The money lenders then immediately sold the crops at the higher market rates. So the money lenders reaped the rewards of the farmers’ labor, thus squeezing the small farmers out of the level of income they had enjoyed in the past.
Upon arrival as Pastor, noticing this injustice that resulted from the lack of a subsided agricultural bank, Fr. Francisco supported a movement to organize a local lending cooperative. This local agricultural financial group operated by a local committee of farmers for their mutual financial aid was allowed by Mexican law at the time. The local cooperative became known as the Sociedad de Crédito Agrícola de Zapotiltic, capitalized with the initial investment sum of $4,000 pesos. In subsequent years more and more farmers obtained loans and paid back with interest, making the Sociedad de Credito a success for the farmers, and for the community in general.
See: Ley de Crédito Agricola, del 10 de Febrero de 1926 which permitted the creation of local and regional Sociedades de Credito Agricola, in Article 3, Section I of the law. The law created a federal Banco Nacional de Credito which began operations in March 1926.
Parishioners formed a collective farmers association to negotiate as a group the selling prices of their crops, and, at the same time, to make agricultural loans to any local farmer in need of low-interest money during the planting season.
Fr. Francisco, as pastor of an economically deprived parish in a small rural village must have merely had the holy intention of demonstrating the Social Doctrine of the Catholic Church. He must have seen his actions as a corporal work of mercy to slowly – and intelligently – improve the lives of his poor rural parishioners in a just and equitable manner. Somehow he empowered qualified parishioners to organize a cooperative community bank, the key words being “community” and “organization.” He assisted in getting together a board of directors, whose members were local businessmen, farmers, and persons with sufficient administrative and accounting skills to operate the local cooperative in a business-wise way. The Zapotiltic group established policies as to how to handle delinquent accounts (Example of one of their policies: Do not lend money the following year to a debtor who failed to repay his loan), and follow a strict bookkeeping and cashiering system.
While he offered advice to the small farmers on how to organize, he would always get the approval of Archbishop Jose Garibi Rivera, as the Zapotiltic Parish records show. He suggested ways for the small farm owners to organize into an association so as to speak with one voice especially regarding crop prices. But he did not handle their money. In the official parish records dated September, 1945, describing the lending association of small farmers, Fr. Francisco tells his Archbishop that “there are six men on the board and three of them have the authority and are responsible for the success or failure of the effort and any consequences therefrom.”
As another example of Fr. Francisco’s process of helping to organize committees to operate lay civil organizations is found in the official parish records dated September 1950 when an additional fund-raising effort had begun, necessitated by the construction of the new Church to replace the earthquake-destroyed parish church.. By 1950 certain persons who had pledged money to pay for the construction of the new church were not paying the donations they had promised. The construction fund was experiencing large debts. A group of volunteer businessmen formed a new board of directors to build and operate a bullring in Zapotiltic. The goal was to raise additional money to reduce the ever-increasing construction project debts. In his report, Fr. Francisco tells the Archbishop the names of the members of the board of directors: Jose Gutierrez Godinez, J. Ines Barragan and Manuel Cardenas. Fr. Francisco writes that Mr. Cardenas is also the president (or “Head of the Secretariat”) of the small farm owners’ association.
Fr. Francisco clearly relied on boards of directors, and separate secular groups of parishioners to govern for themselves the fund-raising efforts the construction fund. Knowing all this, then, allows me to think that as pastor, despite the fact that he was ultimately responsible to the Archbishop for the church building project, Fr. Francisco was probably not directly involved in any day-to-day fund-raising transactions.
The text, in Spanish, of above entries copied from the Zapotiltic official parish records are found on pages 90 and 138, respectively, in the book titled, Historia del Señor del Perdón, Patrono de Zapotiltic, Jalisco, by Sister Aurora Munguía Cárdenas, which I purchased in the book store of the Diocese of Ciudad Guzman, Ciudad Guzman, Jalisco, Mexico.
How much did the Sociedad Agricola help the small farm owners?
According to one newspaper article, the loan portfolio of the Sociedad de Crédito Agrícola de Zapotiltic grew from $4,000 pesos in 1942, to $100,000 pesos by 1947.
See: Un Sacerdote Resuelve Problemas Sociales, El Sol de Guadalajara, Guadalajara, Jalisco, 1947, as reprinted in A. Munguía Cárdenas, Historia del Señor del Perdón, Zapotiltic, 2010.
In 1947, the El Sol newspaper listed the amounts handled by this community lending institution in Zapotiltic. I prepared the graph appearing below based on the figures in that news article. Two points of explanation: In January 1993 Mexico introduced the “new peso” thus making 1 “new peso” equivalent to 1,000 “old pesos.” The Pesos Today column is in “new pesos.” Further, the foreign exchange rate of $20.46 pesos for 1 dollar was used for the Dollars Today column. The source of the data for the Pesos Then vs Pesos Today columns was the website BajaEco.com, published by Ero Tecnología y Estudios, S.C. These rough estimates are only here to help the reader grasp the significant effect my grand uncle’s ideas had on the economy of Zapotiltic and nearby small villages in South Jalisco during the Second World War.
Year |
Pesos Then | Pesos Today | Dollars Today |
| 1942 | 4,000 | 138,600 | 6,774 |
| 1943 | 17,000 | 490,000 | 23,949 |
| 1944 | 33,000 | 742,900 | 36,311 |
| 1945 | 67,000 | 1,398,610 | 68,262 |
| 1946 | 92,000 | 1,614,600 | 78,917 |
| 1947 | 100,000 | 1,717,160 | 83,930 |
It would be instructive to know how Fr. Francisco was able to convince such individuals to begin capitalizing the farmer-owned lending association. What words did he use? Where did he meet? How much was being requested of each individual? Which “rich” person or persons did he approach for assistance? Remember, some wealthy individuals already controlled the private agricultural lending business following the closing of the government’s Banco Ejidal.
Did Fr. Francisco perhaps use some of his own personal wealth at the beginning? Did he gather small amounts from the small farmers themselves in order to convince the higher wealth individuals to join in with larger investments? Did the Archbishop provide financial or at least oral guarantees? I have not performed enough research to know. Perhaps I will never learn how it was done. But, assuming Fr. Francisco was only putting into practice true principles of the Social Doctrine of the Catholic Church with the best of intentions, the Holy Spirit must have been working here.
By 1951, the success of the Sociedad Agricola and the magnificent church that was beginning to take shape in this small mountain village attracted widespread attention as we can see from newspapers in Guadalajara and Mexico City. I have read several newspaper articles of the day, including a full page article appearing on Page 6 of Atisbos Newspaper, Mexico City, DF, dated March 22, 1952. The writer was Dr. Alfonso Perez Vizcaino, well-known journalist, author, and in 1952, the director of the largest Latin American news service published in newspapers through Mexico, Central and South America:
| SPANISH (ORIGINAL) | ENGLISH (TRANSLATION) |
| UNA LABOR GIGANTE EN UN PUEBLECILLO JALICIENSE – LA VERDADERA REVOLUCION MEXICANA | TREMENDOUS WORK IN A SMALL JALISCO VILLAGE – THE TRUE MEXICAN REVOLUTION |
| La labor del señor cura Vizcarra Ruiz ha sido gigantesca, no obstante el minúsculo escenario en que se ha desarrollado, pues siguiendo la ley de proporcionalidad, se puede comparar, sin ninguna exageración a la realizada, por ejemplo, por Kemal Ataturk en Turquía, ya que la intensidad del esfuerzo tuvo resultados obtenidos con los que cuentan y no las dimensiones del escenario en que se actúa. | Father Vizcarra Ruiz’ work has yielded giant results, despite the limited resources he had to work with, since, according to the law of proportionality, we could compare [Fr. Francisco’s work] without exaggeration with that of Kemal Ataturk in Turkey. Since it is the intensity of their work that got the results they achieved and not the size of the venue within which the work was done. |
¿Donde está mi dinero? Where is my money?
During his 20 years as Pastor in Zapotiltic, Fr. Francisco suffered due to conditions over which he had no control, especially when he was getting the most worthwhile results.
He encountered resistance among some sectors of Zapotiltic when he persisted in his attempts to bring mercy and justice to poor and marginalized people in his parish by organizing new ways of funding their needs. Resistance came from those long accustomed to the benefits of exploiting the poor. It must have been difficult to awaken within the slumbering faith of rich landowners a sense of solidarity and respect for human dignity among all members – rich and poor – in Zapotiltic.
As I briefly described, rich individuals were long accustomed to buying crops from poor campesino farmers at rock bottom prices thus leaving the farmers with very little to feed their families. I imagine Fr. Francisco might have also found it ironic as he preached during Sunday Mass homilies to those penurious farmers sitting in the church pews alongside predatory money lenders. The Pope had recently brought renewed attention to the Catholic social doctrine of subsidiarity, the idea of the dignity of work, that “a laborer is worth his wages” as one contributes to all levels of society as a whole by doing their best work, but only according to the person’s capacity for work, skills, knowledge, and training.
Subsidiarity and solidarity are Catholic social principles. In 1931 as worldwide movements of communism, fascism, anarchy, and capitalism were feverishly discussed, and as the bloody confrontations of the Cristero War were beginning to subside, Fr. Francisco must have eagerly read what Pope Pius XI wrote, a part of which I quote below. Surely my grand uncle tried through homilies, parish activities, and personal dealings to align people’s faith and actions into Christian focus within their daily lives. He was formed as a priest, after all, and not a community organizer. These are some of the words of Pope Pius XI that Fr. Francisco must have read and tried to put into action in Zapotiltic:
“Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to members of the body social and never destroy and absorb them.”
Quadraqesimo Anno: AAS 23 (1931), 201
These concepts are not new to Christianity. The Catholic Church’s Social Doctrine must have been explored by Fr. Francisco’s professors at seminary classes taught at the beginning of the 20th century. The 1931 Quadagesimo Anno Encyclical certainly brought the concepts into sharp focus for Fr. Francisco, especially following the experiences of the Cristero War. Yet, many in Zapotiltic at that time must have found such worthy and holy concepts very difficult to comprehend, and might have taken steps to silence this “radical priest,” a priest merely following the radical Way of Jesus and totally in communion with the Pope and his Archbishop.
Time and again resistance comes toward persons who are only trying to bring the Good News to all, and trying in their own way to explain how reasonable are the teachings of the Church. And how easily they can be practiced in our daily lives if we only try.