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Victory Lost 1914 |
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The war continued to rage as the monetary system staggered into 1914. Foreign loans guaranteed by Madero, and later by Huerta, were in danger of default. Coinage for the year would be little more than half that of the previous year, with silver coins dominating. The banks, which had been allowed to count only a small amount of metallic assets in 50 centavos pieces, were now allowed to hold an unlimited amount of this coinage to back their paper at the required 33 percent rate.
The situation quickly worsened to such a degree that on January 27, 1914, President Huerta decreed that bank paper would be guaranteed by the government and required no metallic backing whatever. With a stroke of his pen, he had made the Mexican bank notes worth no more than any revolutionary paper issued by his opponents. Bank notes issued after Huerta’s January 1914 decree became know as “Huerta Money”, a nickname that implied their worthlessness. Even so, they circulated extensively along with the revolutionary issues.
Huerta’s January 27th decree destroyed whatever coherence the Mexican monetary system may have retained under the stresses of the revolution and outside economic pressures. Many of the “banks-of-issue” gave up their charters rather than continue to issue paper money. Huerta was forced into the position of having to order some banks to continue to issue paper, regardless of what their balance sheets might show. 1914 would be the last year of issue of paper money for all of the banks of Mexico.
With all of the circulating paper money now fiat money (i.e. money backed only by promises), there was an explosion of issues, both paper and coin, from a large variety of sources. The examples below are typical of the “Huerta Money” that circulated at par with the rebel issues. |
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50 centavos El Banco de Jalisco, Guadalajara, Jalisco |
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1 peso El Banco Oriental de México, Puebla, Puebla |
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2 pesos El Banco Minero de Chihuahua, Chihuahua. Chihuahua |
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In addition to his monetary problems, President Huerta found his army units being isolated and rendered ineffective piecemeal. General Refugio Velasco’s federal Division of the North at Torreón was cut-off, as were the military government of Coahuila at Saltillo, the Division of the Bravo occupying Monterrey in northeast Mexico, and the Division of the Yaqui, occupying the port of Guaymas in northwest Mexico. It was little consolation to Huerta that Zapata had not managed to isolate any of the federal forces in the south. Huerta authorized the commanders of the cut-off divisions to issue whatever funds they required in the form of notes on the federal treasury. Thus far, the issue paper money to meet local requirements had been limited to rebel governments and military units operating in central and northern Mexico. As Huerta’s central government and federal army units became isolated and began to issue their own money, the paper money economy of the country exploded. The paper of the chartered state banks, having no advantage over other paper issues, ceased printing paper entirely. |
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Isolated at Torreón, General Velasco, commanding the Federal Division of the North, continued the issue of the “bank-on-bank” checks originated by Pancho Villa. Checks were issued in denominations of 1, 2, 5, 10 and 20 pesos by the Banco de la Laguna against the Banco de Coahuila. |
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General Joaquín C. Tellez, commanding the Division of the Bravo at Monterrey, was in the same predicament, and began to issue notes in denominations of 10 and 50 centavos, and 1, 2, and 5 pesos in the name of the Mexican Republic and payable by the federal Treasury on January 8, 1914. |
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The military government of Coahuila at Saltillo followed suit on January 27th. The notes were issued in denominations of 10, 25 and 50 centavos, and 1, 2, and 5 pesos. The design of the front of the notes is similar to that used by General Tellez at Monterrey. The notes were payable by La Tesorería de la Federación (the federal treasury). |
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The first notes of the Division of the Yaqui at Guaymas appeared in mid-March. Issued under the authority of the division commander, General Pedro Ojeda, these notes too were drawn on the federal treasury. Notes were issued in denominations of 10 and 50 centavos, and 1 and 2 pesos. |
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The rebel governments and military units markedly increased their output of paper money. By the beginning of 1914, most of the State of Durango was under the control of General Domingo Arrieta, a Constitu-tionalist. He decreed a number of paper issues for Durango during 1914, beginning in January. Notes were issued in denominations of 10 and 50 centavos, and 1, 5, 10 and 50 pesos. These notes circulated almost exclusively within that portion of the State of Durango which Arrieta and his brother Mariano controlled. |
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A critical shortage of small coinage in the capital city of Durango was curbing business to such an extent that General Arrieta ordered the production of 1 and 5 centavos pieces. Very crudely made and struck on many different metals and alloys, these ugly little coins served the city well. Frequently attributed to General Villa, these coins properly belong to General Arrieta. |
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In February 1914, the villista government of Chihuahua inaugurated a new paper money issue which would not be as vulnerable to counterfeiting as the Tesorería General del Estado notes of 1913. This issue was titled El Estado de Chihuahua (The State of Chihuahua). Issued in denominations of 1, 5, 10, 20, and 50 pesos, these notes gained very wide acceptance in both Mexico and the border states of the U.S.A. Known popularly as “dos caritas” (two little faces), the front of the notes pictured two martyrs of the revolution — President Francisco I. Madero at the left, and Chihuahua Governor Abraham Gonzalez at the right. |
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The villistas also re-opened the old federal mint at Chihuahua and began to produce “small change” for the commerce of the state. Made only in the 5 centavos denomination, these coins bear the legend Ejercito Constitutionalista (Constitutionalist Army). |
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Dumbbell Ornaments |
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Common Obverse |
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Spearhead Ornaments |
