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Control over issues

As Primer Jefe Carranza tried to keep control over the Constitutionalist currency and only authorised or tolerated issues by his fellow revolutionaries with reluctance.

Thus he later claimed that he gave Villa permission to issue six million pesos to replace his earlier issue, which had been widely counterfeited, but that Villa had not withdrawn the formerEl Liberal, 25 October 1914 though on 4 February 1914 he had told Aguirre that the Chihuahuan government could continue issuing paper money to cover the costs of the army, money which would be exchanged for the new issue of $15m when it arrivedCEHM, Fondo MVIII, Carranza, Culiacán to A. Aguirre, Ciudad Juárez, 4 February 1914.

On 28 February 1914 Carranza (decree núm. 21) at Nogales made the paper money issued by the Constitutionalist governments of Sonora, Chihuahua, Sinaloa, Durango, Nuevo León and Tamaulipas, with his authorization or approval, forced currency throughout the territory controlled by the Constitutionalists. On 10 June Villa sent a telegram to Carranza asking him, because of the difficulties in Monterrey and other places for either exchanging or accepting the notes of the state of Chihuahua, either to send enough Constitutionalist notes to replace the Chihuahua notes or to order the latter’s free circulation in all the territory dominated by the ConstitutionalistsSD papers, 812.00/12228 telegram Carothers, Saltillo, 13 June 1914.

The developing tension between Villa and Carranza was reflected in Carranza’s attitude to Villa’s issues. On [ ] June Carranza, in Saltillo, issued a decree nullifying all Villa’s issues and his dispositions on their circulation and declaring that only his issues were obligatory. So, in the agreement made in Torreón on 4 -8 July to resolve their differences, the División del Norte and División del Noreste asked Carranza to exchange the notes issued by the various states for Constitutionalist notes as quickly as possible and in the meanwhile to accept Chihuahua notes in public offices, thus revoking the recent order to the contrary. Villa's División del Norte also agreed to hand over all the personnel and funds taken from Ciudad JuárezAPGG roll 50. On 8 July General Pablo González wrote to General Antonio I. Villarrealgovernor and comandante militar of Nuevo León that Carranza was disposed to give Villa the money he needed for his forces, but that it had to be brought there to Saltillo to be revalidated, a necessary requirement for it to circulate legallyAPGG, roll 50 González, Saltillo, to Villarreal, Torreón, 8 July 1914. The same day Villarreal reported that, having finished their work, they were going to leave that night but had to remain to collect the notes that would arrive the next morning from ChihuahuaAPGG, roll 50 Villarreal, Torreón to González, Saltillo, 8 July 1914.

As the Constitutionalists advanced their various currencies went with them. When their army entered Mexico City in August 1914 a few Carrancista notes were displayed as curiosities in the shop windows but within twenty-four hours the city had been flooded with notes and even the copper coins disappeared from circulation with the result that the public was forced to devise cardboard cartones in order to make change. Banknotes, which had fallen steadily in the markets after the Huerta decrees, also went into hiding. Within twenty-four hours of the arrival of the Constitutionalists nothing was to be found on the streets except Carrancista paper.

On 9 September 1914 Villa sent a telegram to Carranza telling him that federal offices continued to refuse to accept Chihuahua notes and asked him to order either their exchange or acceptanceAIF, F9-10-11, telegram, Villa, Chihuahua, to Carranza, 9 September 1914.

Carranza intended to unify the currency and withdraw all his earlier issues and to this end on 19 September he decreed the issue of the Gobierno Provisional notes. In accordance with the decree the notes of the Ejército Constitucionalista were to be exchanged for notes of the new issue. In November 1914 Sub-secretario José J. Reynoso announced that an office for exchanging the notes listed in the 19 September decree had been set up in one of the departments of the Subdirección de Contribuciones Directas, with two cashiers and two experts to check the genuineness of notesPeriódico Oficial, Coahuila, 21 November 1914.

In the meantime, however, the Constitucionalist notes had to be made acceptable to the public. On 20 September 1914 it was reported that all the sábanas (and dos caritas?) (todos los billetes que fueron emitidos por la División del Norte del Ejército Constitucionalista que manda el Sr. Gral. Francisco Villa) were to be revalidated in the Secretaría de Hacienda y Crédito Público so that they could enter circulationEl Reformador, 21 September 1914. They would then be of forced circulation. This was to be a temporary measure until they were replaced. Many thousands of such notes were circulating in Mexico City, and generally accepted in small quantitiesLa Opinión, Veracruz, 21 September 1914: El Observador, Guanajuato, 24 September 1914.

On 23 October the Constitutionalist Secretario de Hacienda issued a clarification that all paper money with Constitutionalist identification or the authorisation of the Primer Jefe were legal tender; the paper money issued in Monterrey, Saltillo, Mazatlán and Guaymas by the Federal troops during Huerta's regime were worthless, and, finally, banknotes were legal tender.