File No. 812.516/141
Mr. Parker, representing American interests, to the Secretary of State
435. Virtual confiscation National Bank and Bank of London and Mexico under Carranza’s recent banking decree was accomplished yesterday. Details printed to-day here by authority Finance Department which I understand press censors last night refused to allow to go to United States papers. National Bank submitted to Government assuming control, merely making formal protest by management. London Bank refused to turn over property until overcome by soldiers sent to bank at the request of Subsecretary of Finance. Officials of both banks refused to yield up combinations of vaults which hold many millions pesos gold and silver reserves. Reported to-day that these combinations had been placed in keeping of French and Spanish Ministers but this is not confirmed. Wholesale arrests [Page 644] were made this afternoon of the directors and other officials of the banks because they refused to open the vaults. Most of prisoners are Mexicans but there are said to be several French nationals among them. British manager of London Bank hiding to-night in club. One result of the Government’s action in seizing these banks has been greatly to lessen the value of the notes of both institutions, temporarily at least. This effect is significant as indicating entire lack of public confidence in Government’s design. Cabrera statement as to object of decree and position taken by banks in depreciating Constitutionalist currency as printed in United States papers misleading as a whole and is absolutely erroneous. Depreciation in bank notes due to confiscations especially serious in effect which threatens to have upon other banks most of whom hold large sums in these notes as part of their assets. Nothing which this Government has done thus far promises to have such grave results in way of unsettling financial and business conditions generally. Government to-night refused to let this story pass the censors. One newspaper man asked Minister for Foreign Affairs to o. k. a story which he had written and Minister returned it to him with the statement that “there was enough in it to kill all the Constitutionalists in Mexico”. M. [Murray]