Banco Minero issues during the revolution

The directors of the Banco Minero, apart from Luis Terrazas hijo, joined Mercado in his retreat to Ojinaga. They then moved to El Paso, where bank officials set up new quarters. The bank also continued to operate in Mexico City, through the good offices of the company 'Creel Hermanos'. Creel Hermanos was a private banking firm established in February 1911 by Luis Creel and Enrique Creel hijo, two sons of Enrique C. Creel, with Eduardo C. Cuilty also involved^{El Paso Herald, 14 January 1911. In July 1911 it was located at 2a calle de Capuchinas, No. 43, Mexico City. It was 'intervened' on 24 September 1914 by order of the Governor of the Federal District, General Jara (CEHM, Fondo Creel, carpeta 149, legajo 38352). In June 1916 it was accused of being a hotbed of speculators (madriguera de “coyotes” a la alta escuela). A newspaper reported that it was repaying its depositors in Veracruz currency, at the rate of one peso in paper money for every peso in silver. As the paper money was worth 2c oro nacional, thousands of people who had worked hard over many years to build up their savings, were being defrauded(acción mundial, Vol 1, Num. 49, México, 14 June 1916). It was still in existence in 1936.
On 5 October 1915 Francisco C. Terrazas sold calle de Capuchinas, No. 42 to a German, Walter E. Herrmann. On 8 November Asesor Cecilio Garza González, on Pablo González’s orders, searched the house to collect all safes, canceles, papers and other things belonging to Enrique C. Creel and render an account to Cuartel General. The German legation complained, but to no avail, as González said that none of Hermann’s belongings were taken (APGG, leg. 7, exp. 74).}.

During the first eight months of 1914 the Banco Minero increased the value of notes in circulation almost exponentially, from $4,796,449.95 in November 1913 to $14,405,390.00 in October 1914. This was facilitated by Huerta’s legislation: on 7 January 1914 Huerta changed the proportion of underlying funds needed to support the value of notes in circulation from 50% to 33%, and on 30 March he gave the banks the right to issue notes up to 90% in value of the federal bonds that they had had to take up.

As the Banco Minero’s head offices in Chihuahua had been taken over and communications were poor, on 18 February Enrique Creel had to give a bond that the Banco Minero actually had $2m in metallic deposits^{CEHM, Fondo Creel, 85, 21988}. Thereafter the bank put in regular, almost daily, requests to issue more notes, supported by evidence of deposits of at least 33% of the sum requested made to the Comisión de Cambios y Moneda^{The applications were:
12 January $700,000 (CEHM, Fondo Creel, 85, 21986)
3 February $500,000 (CEHM, Fondo Creel, 85, 21987)
19 February $500,000 (CEHM, Fondo Creel, 85, 21998)
10 March $200,000 (CEHM, Fondo Creel, 85, 21999)
6 April $300,000 (CEHM, Fondo Creel, 85, 22001)
21 April $500,000 (CEHM, Fondo Creel, 85, 22002)
27 April $300,000 (CEHM, Fondo Creel, 85, 22003)}.

The notes were shipped from the American Bank Note Company in New York to offices in Veracruz, overprinted with signatures, revenue stamp and Secretaría de Hacienda seal in the Oficina Impresora de Estampillas, and held by the Banco Central until released^{CEHM, Fondo Creel, 92, 23566}. Details of these consignments were:

A question that needs to be answered is why the Banco Minero felt obliged to issue so many notes. The historian Francisco Almada^{Francisco Almada} was particularly incensed by the way that the Banco Minero took advantage of Huerta’s 7 January decree relaxing the rules on banks’ holdings, although it was not published in Chihuahua, as the city had been captured by the rebels, and the bank no longer operated from Chihuahua, where it was chartered. Creel’s descendents took offense with Almada’s version of events and in a letter to Guillermo Porras, dated 8 October 1951, Eduardo J. Creel included various documents to prove that the bank’s issues were to absorb the bonds forced on the bank by Huerta ^{The documents were:
(a) a contract dated 31 October 1913 between Adolfo de la Lama, the Secretario de Hacienda y Crédito Público, on behalf of the Ejecutive, and Enrique C. Creel, representing the Banco Minero de Chihuahua
(b) a contract dated 17 January 1914 between Lic. Pascual Luna y Parra, the Sub-secretario de Hacienda y Crédito Público, and the Banco Central Mexicano and the Banco Nacional de México, representing the banks of issue
(c) a contract dated 17 January 1914 between Lic. Pascual Luna y Parra, the Sub-secretario de Hacienda y Crédito Público, and the Banco Minero de Chihuahua
(d) a contract dated 31 March 1914 between Adolfo de la Lama, the Secretario de Hacienda y Crédito Público, and the Banco de Londres y México and the Banco Nacional de México, representing the banks of issue
(e) a list of the distribution of the 50 million pesos of Huerta´s bonds. (Fondo Fuentes Mares, letter Eduardo Creel to Guillermo Porras, 8 October 1951)}.

1914 50c note

The situation with small change had grown so serious by 30 March 1914 that Huerta issued a decree allowing the Secretaría de Hacienda to authorise individual banks to issue 50 centavos notes guaranteed by their equivalent in gold or silver legal tender.

By February 1914 the Banco Minero had already been considering issuing a 50c note as they discussed the matter with the American Bank Note Company. On 27 February its head office wrote to Charles Blackmore, its agent in Mexico City, “We have discussed this matter with Mr. Gibbs [foreign department] and have thought it better to refrain from making this design until we know whether the Banco Oriental had been successful in securing permission to issue 50 centavos notes, because it seems to us that if they cannot obtain authority to issue notes of this small denomination neither will the Banco Minero be able to issue them. If, after we have submitted the Oriental models, Mr. Collada finds that he can issue these notes, we will of course prepare the model for the Banco Minero. This is only an idea on our part which we thought would perhaps save our going to any unnecessary expense. However, if you think that Mr. Creel is expecting a model and would be annoyed if he did not receive one, we will of course make up a design. Please let us know what you think"^ABNC. On 23 March Blackmore asked the company to prepare a model and the next day the company wired back "Banco Minero, Chihuahua printed 50 centavos bank note in 1888. Are sending proofs and prices this mail. Shall we prepare new models?"^ABNC. However, Enrique Creel was getting annoyed with the ABNC because it was trying to get payment in advance and for this reason, and no doubt because of the time restraint, went to a local Mexico City printer, Eduardo I. Aguilar^{Besides printing books, Aguilar also produced two illustrated magazines, El Mundo Ilustrado and La Semana Ilustrada}. They produced a note, payable ‘al portador en billetes de Banco’, but it was never issued. On 29 June it was reported that banks had given up the idea of issuing 50 centavos notes because the Comisión de Cambio had been able to acquire a large quantity of silver and was minting 10c, 20c and 50c coins^{El Imparcial, 29 June 1914}.

Besides the 50c Banco Minero de Chihuahua, Aguilar printed two other ill-fated notes: a $1 dated 31 July 1914 for the Banco de Morelos and a $1 for the Banco de Zacatecas. On 29 September 1914 the newpaper El Liberal reported that the day before a Mr José Campero had been taking an inventory of the printers on behalf of the authorities. Having made a detailed inventory of all the stocks of paper, inks, presses, linotype machines and accessories, he opened the door to a darkened cellar and was surprised to find several wooden boxes full of brand new banknotes. There were 1,200,000 $1 Banco de Morelos and nearly 300,000 $1 Banco de Zacatecas, lacking only signatures and the Secretaría de Hacienda validation. The police were informed and took away eveything, including the plates used to print the notes^{El Liberal, 29 September 1914}. By an ironic coincidence, on the same day, 29 September, Andrés Padilla, a lithographer for Eduardo Aguilar, wrote to President Carranza, complaining that the forced closure of the printshop had thrown all out the employees onto the streets without hope of work. The reason the authorities had given for the closure was the fact that Eduardo Aguilar had printed some banknotes, and Padilla asked that loyal supporters who only wanted stability, peace and work should not be punished so^{CEHM, Fondo XXI, carpeta 16, legajo 1626)}. So it seems that none of these three issues ever made it to circulation and Aguilar had his business closed down for his pains. A newspaper report from Mexico City mentions $1,000,000 in 50c notes found at Aguilar’s premises, just needing to be validated before entering circulation^{Regidor, 4 November 1914}. If these were these Banco Minero notes, this suggests that two million were printed.

American Book and Printing Company and Bouligny & Schmidt notes

The bank also produced three other denominations printed by companies in Mexico City. The $2 note was printed by the American Book & Printing Company whilst the $5 and $10 notes were printed by Bouligny & Schmidt of 1^a Nuevo México 22.

All these (totalling $5,030,000) are listed in the bank’s records as being issued to the account ‘Por Creel Hermanos c(uenta) esp cir’.

Circulation and value

On 2 March 1915 Ismael M. Ruiz wrote from Nogales that the banks there were distinguishing between the old ABNC notes and those printed in Mexico City in 1914 (called ‘blancos’), refusing to accept the latter. The manager of the First National Bank there had told him that his head office was not accepting such Banco Minero notes. As there were so many Banco Minero notes he was worried that customers would take advantage of their depreciation to buy them and pay off their loans from the bank^{CEHM, Fondo Creel, 122, 31243}. On 6 March 1915 he added that the Banco de Sonora and Banco Occidental had taken in almost all of their notes, but had the advantage that they had not issued ‘blancos’^{CEHM, Fondo Creel, 122, 31242}.

In March 1917 the Bouligny & Schmidt notes were valued around 7c, but with no sellers, whilst ABNC notes were 8½c ^{CEHM, Fondo Creel, 170, 43755, letter Juan A. Creel, El Paso to Enrique C. Creel, New York, 26 March 1917}.

In November 1919 a reader from Batopilas wrote to La Voz del Pueblo, in Ciudad Juárez, asking where and by whom Banco Minero notes were being redeemed since it had moved its offices to the United States, as he and other friends still had sizeable sums^{CEHM, Fondo Creel, 238, 61040}. On 11 November Juan A. Creel told the paper that the bank offices were at calle de Capuchinas No. 41, Mexico City, under the management of Francisco C. Terrazas, but that the bank’s notes, like notes of the other banks, were not being redeemed, due to the moratorium decreed by the federal government^{CEHM, Fondo Creel, 238, 60949}.