The Second Mexican Republic, also known as the United States of Mexico, was one of the earliest and hardest hit nations in the global economic downturn of the 1880s. The Panic of 1881 sent the nation to the edge of utter bankruptcy, with international creditors inpatient to be paid. As businesses failed, the government was seen as impotent. Into this maelstrom rose the Korsgaardistas, and their charismatic leader,
Angel Castellanos. Castellanos was hailed by his admirers as the second coming of Jorge Quintana. When the federal government deadlocked over the budget, the Korsgaardistas marched on Mexico City. Mexican President Rivera was 'convinced' to make Castellanos his vice-president, and to enact a Korsgaardista agenda. Protectionism, corporate support and guidance from the president, as well as an odd dual celebration of the Mesoamerican past and 'traditional' Catholicism were the first priorities. Within a year, Rivera resigned citing 'health' reasons, and Castellanos was raised to the presidency. Many Mexicans welcomed the Korsgaardistas and Castellanos as their policies seemed to offer them renewed prosperity and respect on the international stage. By 1885, the Korsgaardistas had gained control over the military, judiciary, and a sizeable portion of the legislature. Other parties were dissolved, as was the constitution, and the Mexican Empire was proclaimed by President Angel Castellanos.
The new flag of the Mexican Empire