The troubles for Arixo, along with the rest of the old United States, really started in 1927, in particular with the second flu epidemic. Many people tried to flee to the relatively unaffected Southwest, unfortunately bringing the flu with them. Most western states were forced to limit immigration and eventually close their borders outright, as best they could, anyway. Though independant in spirit, Arizona and New Mexico were never before strong Regionalists, being dependent on commerce with the rest of the country, and so were hit hard. In 1928, they tried to form a Four Corners Coalition with Utah and Colorado, but Utah respectfully declined, and Colorado never even responded. One good thing, given the already generally poor economy in the soon-to-be Arixo, the stock market crash of '29 had little effect for most of its citizens. 

     By this time, the flu epidemic had largely run its course, and the two states had hopes of opening their borders to the rest of the country once again. When Texas seceded at the start of 1930, it caused more alarm than surprise (being neighbors, it was already known that Texas tried to do things its own way). But when the rest of the country started to fall apart around them, Arizonans and New Mexicans both became terrified. They tried to retain the pretense of being part of the United States for almost two years, but the distance to the capital made this increasingly tenuous. Support from Columbia dried up,  and Arixo was forced to fend for itself. The two states had long been considered basically a single entity, and so the border between them was erased easily. Thus, on November 27, 1931, the country of Arixo was born. 

     To even out the power base between the economically stronger New Mexico side and the weaker Arizona side, Phoenix  became the nation's capital.  Arixo has tried to maintain something like the democratic system of old, maintaining an elected President and fifteen member legislature. The current President is Theodore Davis, a cunning man most give credit for maintaining Arixo's viability as a country. However, some of the families of the old Spanish land-grants and large-scale ranchers are beginning to try to exert more power locally than the central government, building up private armies and quietly appropriating nearby villages and towns into their lands. It is not known how long this will be allowed to continue. 

     The last major blow to Arixo's development happened the following year when the Navajo Nation broke off, taking nearly a quarter of the land with them. Many residents were forced off the lands; all Anglos had to go, but Hispanics had more leeway. This lead to rather substantial increases in some cities' populations, especially Albuquerque and Flagstaff. Some of the Native Americans in other reservations moved into the Navajo Nation (particularly the younger generations), but many remained, seeing it as just too much trouble. The other Arixans tend to view those who stayed behind with some distrust,  not really knowing what to expect after the Navajo split. The militant Apaches of White River give just cause for such lack of trust. 

     Arixo proved to be self-sufficient in most fields, except for manufacturing industries. Only raw materials were in abundance, both agricultural and mineral, and most of the latter had previously been sent elsewhere to be processed. The Arixan government strives to maintain neutrality with their neighbors in hopes of trading for needed items, until their industrial base could be built up. the major exports remain, as they were in the days before the split, the three C's: copper, cotton and cattle. 

     This willingness to trade with just about anyone (with the exception of known pirates), saved the fledgling nation from economic ruin. Arixo also had the advantage of being the safest trade route from the west coast to the other eastern nations, bypassing Free Colorado and the Disputed Western Territories. This has helped make it a major trading center, especially the city of Albuquerque. Always looking for another source of  income, air traffic through the country must pay tolls, frequently quite high, which many still find preferable to the alternatives. Trade with Pacifica especially has remained strong. With the eventual accumulation of a few zeppelins, trade with parts east of the Mississippi became truly feasible, and routes were quickly established. The Empire State has proven a steady customer, as have Dixie and Louisiana, while trade with ISA has slowed down since local industries were established. Most other countries trade with Arixo regularly. 

     Arixo is not exactly a "dry" nation. Alcohol is shipped into and through the country often, but it is strictly regulated. Any kind can be bought, from beer to the most expensive liqueurs, but only officially at state run outlet stores, and usually at exorbitant prices, as the government uses these stores as a major source of internal revenue. It can only be sold to those twenty or older, and no Native American can buy any (an attempt to keep the remaining Indians and the next-door Navajo Nation happy). So far, this arrangement has kept everyone content, but it has led to a lot of smuggling, from Mexico and Free Colorado especially. Some believe the Arixan government is the primary buyer from the smugglers, and is the reason why legal alcohol is so expensive, but this has never been proven. 

     Given the distances between settlements in the desert regions, aviation became popular early on. However, few of the populace could afford to purchase their own plane. Most planes were part of air shows or used to ship cargo. Many had a chance to learn flying, but rarely the oppurtunity to implement their skills. With no means of production, and few useful planes, Arixo had virtually no air force for more than a year of its outset, though it did have many willing pilots.  Most commerce, at least with nearby countries, was by train; much of it continues to be. This had the upshot that Arixo was largely ignored by air pirates and potentially hostile nations for the first two years of its existence. Unfortunately, it also allowed many pirate groups to move into the mostly empty and unprotected regions unmolested. A few of the larger cities established militias, but the planes they flew were under armed and poorly maintained, and could not stop the pirates from moving in. By late '32, though, Arixo had purchased enough of a fleet to put up some resistance, leading shortly to the creation of the Arixo Air Defense Force (AADF). At first, it was really only enough to protect the newly amassed zeppelins, and pirates remained a problem. President Davis was forced to make a deal with the pirate bands, allowing them to remain in Arixo as long as they stayed away from the air militias and certain shipping lanes. The militias were not told of this deal, and were surprised when  pirate activity suddenly lessened. Last year, President Davis renamed the AADF, changing it the less specific Arixo Air Militia (AAM), but most Arixans still refer to the local air forces as the AADF. 

     The militias did not become idle, though, as Arixo is surrounded by hostile and potentially hostile countries. Smugglers and pirates from Free Colorado and Mexico are constant threats. War with Mexico is almost certain, as that older country seeks to reclaim its former holdings. Utah hates Arixo's alcohol policy, and occasionally runs attacks on warehouses. Relations with Texas are polite but strained, and with the recent discovery of oil and natural gas in southeast Arixo, they may be looking towards expansion. Only the Mexican threat has kept Texas at bay so far. Relations with Hollywood are cordial, but far from friendly. This is due in large part to Arixo's frequent trade with Pacifica, as well as the often heavy tolls on shipping to the East, but also because of negative stereotypes on either side. Many in Hollywood think of Arixans as little more than uncultured peasants, while Arixan citizens see the others as obnoxious snobs. The Navajo Nation is not a true enemy, mostly because neither side has a formidable air force. There are also the few Native American groups that stayed in Arixo territory, but don't recognize the government. No one, though, is happy with Arixo's essentially legitimizing attitude toward pirate activity. Local militias also have to deal with those pirate bands that didn't agree to Davis' deal, as well as several Unionist groups. Unionism is strong in Arixo, not so much because of high ideals about the glory of the old United States, but because many see it as the best means for survival. Many in power, though, have gotten used to being big fish in a little pond, rather than relatively little fish in a big pond, and would hate to lose their current status. 

     Since the splintering, Arixo has been working hard on building up its industrial base, with a number of state run factories constructed around the new country. Arixo Manufacturing in Tucson began production of light and heavy machinery in late 1932. By '34, Arixo Arms in Albuquerque had started creating weaponry especially for export, and Arixo Airworks in Phoenix opened in '34, producing the first locally manufactured plane, the Cougar. Another branch is set to open in several months in Santa Fe. Recently, the independently owned and run Baca Aviation Concern (BAC) started up in Los Alamos, specializing in auto-gyros. The Arixan government has tried to purchase this new company, but BAC has thus far refused. 

    Careful trading and a lack, so far, of strong, militant enemies have led to Arixo becoming fairly wealthy. The government's greatest concern is providing planes for an over-abundance of pilots, and maintaining trade with as much of North America as they can get away with. There has been some murmuring of the populace's dissatisfaction with the government's over-bearing policies. Most businesses, farms, and mines were taken over by the state, the party line being that it was necessary to protect against pirates and other nations. No one complained at the time, because they were seeing results (the formation of the AADF, continued dealing with other countries), but many are beginning to notice how much freedom they lost, and in the land of Old West frontiersmen, this does not sit well. This, combined with the large land-owners causing trouble, and the unease over the remaining Indians, makes Arixo a potentially explosive region, at least internally. Trade with the outside world will probably continue no matter what happens.