File No. 812.516/128
The French Ambassador to the Secretary of State
Washington , September 11, 1916 .
Mr. Secretary of State: My Government has just been informed by its Minister to Mexico that General Carranza had caused an order to be issued to the Bank of London and Mexico to reimburse the National Mont-de-Piété (Pawnbroking institution) in coin and for the face value of the said bank’s note, a sum exceeding $200,000.
The bank being compelled to accept payments made in the Mexican Government’s paper money which is legal tender and all the coined money having gone out of circulation, rightfully holds that it cannot be bound to redeem its own notes otherwise than with the aforesaid paper money, on pain of immediately seeing its own assets melt away, for those notes now quoted at far below their face value would at once be presented in a lump for redemption.
The Minister of France has applied to the Mexican Minister of Foreign Affairs with a request that Mr. Carranza reconsider his decision and pointed out the disrepute into which Mexico would fall abroad as the result of violent measures against the banks. But Mr. Couget, unable to get satisfaction, fears that the de facto Government may have in mind to seize upon the refusal of the banks to redeem their notes in silver as a pretext to declare them bankrupt and lay hold of their coin assets with the decidedly vain hope of improving its financial condition. From what the French representative understands, a like order would shortly be served on the National Bank.
At the time when the negotiations are being carried on between the Federal and de facto Governments aimed at regulating the relations between the two countries as well as at assisting the Mexican Government to a final determination of its situation at home and abroad the Government of the Republic would attach great value to your excellency kindly bringing to the notice of General Carranza’s Government the bad name it would surely bring upon itself in foreign countries whose savings are largely invested in Mexico by taking measures of this kind against the banks which would be wrecked thereby under totally indefensible and inacceptable conditions.
Taking into particular consideration the fact that the Minister of Finance of Mexico is now in the United States in the capacity of president of the Mexican delegation to the commission sitting at New London, your excellency may perhaps see fit to bring before the said commission, beside any effort to be attempted in Mexico, the very serious steps that have just been taken and certainly run counter to the intentions disclosed by the two Governments in connection with that meeting.
Be pleased [etc.]