File No. 812.516/109

Special Agent Silliman to the Secretary of State


Department’s December 18, 6 p.m. National Bank of Mexico. General Carranza said this morning that the real fact in regard to the Bank of Mexico is that it is being required, as all other banks of issue in the country are being required, to redeem its own bills in Mexican silver as required by law and as stated on the face of the bills; not, however, in gold. This is in accordance with the order giving banks of issue forty-five days to comply with provisions of banking law. This order was afterward extended, but is now in force. The General was reminded that many banks had been directed to increase their circulation under Huerta and afterward had been deprived of their metallic surplus through forced loans and other illegal methods beyond their control by the Huerta Government and also by the revolution. When the General was informed that the Department feared the enforced resumption of immediate specie payment might result in the ruination of Mexico credit abroad and cause chaos in the country and that the Department reconsidered [?] the greatest consideration in the matter urgently necessary the Chief replied that it was not the intention of the de facto Government to be inconsiderate; that due consideration and a fair hearing would be given in each particular case, but that the banks had been taking undue advantage of the present situation and that in justice to all concerned the matter must be justly regulated.