Cárdenas presidency
MexicoLázaro Cárdenas was hand-picked by Calles as the successor to the presidency in 1934. Cárdenas managed to unite the different forces in the PRI and set the rules that allowed his party to rule unchallenged for decades to come without internal fights. He nationalized the oil industry (on 18 March 1938), the electricity industry, created the National Polytechnic Institute, implemented extensive land reform and the distribution of free textbooks to children. In 1936 he exiled Calles, the last general with dictatorial ambitions, thereby removing the army from power.
On the eve of World War II, the Cárdenas administration (1934–1940) was just stabilizing, and consolidating control over, a Mexican nation that, for decades, had been in revolutionary flux, and Mexicans were beginning to interpret the European battle between the communists and fascists, especially the Spanish Civil War, through their unique revolutionary lens. Whether Mexico would side with the United States was unclear during Lázaro Cárdenas' rule, as he remained neutral. "Capitalists, businessmen, Catholics, and middle-class Mexicans who opposed many of the reforms implemented by the revolutionary government sided with the Spanish Falange".
Nazi propagandist Arthur Dietrich and his team of agents in Mexico successfully manipulated editorials and coverage of Europe by paying hefty subsidies to Mexican newspapers, including the widely read dailies Excélsior and El Universal. The situation became even more worrisome for the Allies when major oil companies boycotted Mexican oil following Lázaro Cárdenas' nationalization of the oil industry and expropriation of all corporate oil properties in 1938, which severed Mexico's access to its traditional markets and led Mexico to sell its oil to Germany and Italy.