File No. 812.516/196

Ambassador Fletcher to the Secretary of State

No. 532

Sir: With reference to the Embassy’s despatch No. 505 dated September 25, 1917, reporting that President Carranza had issued a decree prescribing the manner in which private contributions to the capital necessary for the establishment of the Sole Bank of Issue provided for in Article 28 of the Mexican Constitution shall be collected, safeguarded and accounted for, I have the honor to enclose, herewith, the text and translation of the decree as published in the Diario Oficial.

I have [etc.]

Henry P. Fletcher

decree dated september 21, 1917, prescribing the manner in which private contributions to the capital necessary for the establishment of the sole bank of issue shall be collected, etc.

No. 532

I, Venustiano Carranza, Constitutional President of the United Mexican States to the inhabitants thereof make known:

That in virtue of the extraordinary powers in the Treasury in me vested by the Congress of the Union by the act of May 8 of the current year, and considering

That there is a large number of persons who have indicated to the Executive of the Union their desire to contribute to the capitalization of the Sole Bank of Issue to be established in accordance with Article 38 of the Constitution,

That, without prejudice to the negotiations of the Government to secure a foreign loan for the establishment of the said bank, the patriotic offers of the persons who desire to aid in the prompt national reconstruction should be taken into consideration, and that the character with which such offers should be accepted and the form in which the funds shall be collected and utilized should be established,

Have, therefore, seen fit to decree the following:

Article 1. Persons who desire to contribute to the capitalization of the Sole Bank of Issue shall make their deposits with commercial houses which the Department of Hacienda shall designate in each State Capital and the large cities, or with the banking institution in the City of Mexico which the said Department shall select for the collection of funds in the Federal District; and the said commercial houses and banking institution shall deliver to the depositor a provisional certificate for the amount delivered.

Article 2. Federal or State employees who desire to contribute shall make their payments direct to the houses designated without the intervention of their respective paymasters, nor shall the payments take the form of discounts from salaries.

Article 3. The funds collected in the various States by the commercial houses selected for that purpose shall be sent to the banking institution which, according to Article 1, shall be designated to collect funds for the Federal District; and the said institution shall retain on deposit at the disposal of the Department of Hacienda all such funds as well as those it may itself collect.

Article 4. The said banking institution shall issue final nontransferable certificates at par for amounts of twenty, one hundred, five hundred and one thousand pesos respectively, which shall be exchanged for the provisional certificates issued, a final certificate being given in exchange for any number of provisional ones the sum total of which is equivalent to any one of the values mentioned, it being understood that if the amounts deposited by any one person should not reach the total of twenty pesos and thus not enable the holder to exchange the same for a final certificate, such amounts shall be considered as a donation to the Nation.

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The funds received from performances or bazaars held for the collection of money for the capitalization of the Sole Bank shall also be considered as donations.

Article 5. Both the provisional and final certificates mentioned in Articles 1 and 4 shall be exempt from stamp taxation.

Article 6. The persons mentioned in Articles 1 and 2 shall be considered as creditors of the Sole Bank for the amounts which they may voluntarily have contributed for the capitalization of the same. Their credits shall draw interest at the rate of five per cent per annum beginning two years from the 1st of April, 1918, within which period the Sole Bank of Issue shall begin operations, unless it is found preferable, in decreeing the organization of the bank, to issue shares for the amounts so collected.

In any case, the Federal Government is responsible for the amounts received for the capitalization of the bank.

Article 7. If it is found, when the Sole Bank of Issue is to begin operations, that the amount collected is less than 5,000,000 pesos, the Federal Government shall furnish the bonds necessary to complete the amount, with which minimum capital the bank shall begin operations. Furthermore, the Government of the Federation shall furnish other assets, to be made known in due time, for increasing the capitalization of the institution stated.

Article 8. The Department of Hacienda shall issue regulations governing the compliance of this decree and shall decide any doubts that may arise in its interpretation.

I, therefore, order that this be printed [etc.]

Given at the National Palace of Mexico on the 21st day of September 1917.

V. Carranza