Disowning Villa's currency

In the beginning Carranza had supported the issues made in his name by colleagues such as Villa. Thus, on 14 November it was announced that the $5, $10 and $50 (sic, no mention of $1 or $20 notes) dos caritas. as well as other Chihuahua notes would be taken up without exception by the administration and Constitutionalist notes given out in their place, according to an interview given the day before by the Tesorero General de la Nación. He said that the statement of the Oficial Mayor of the Secretaría de Hacienda that many of these notes were probably the result of an unauthorized issue, to judge by their abundance and their newness, was doubtless correct, but the administration had bound itself to redeem them with good notes in the same manner as it had the notes of the Constitutionalist governments of other states, whose issue in some cases might likewise have exceeded the authorized limit. The redemption was to begin in a few days and the public would be given a period of probably sixty days in which to exchange their notes^{The Mexican Herald, 14 November 1914}.

However, matters changed once Carranza had been driven out of Mexico City and established his government in Veracruz. From there he issued decrees invalidating the issues of his former allies. In a simple decree dated 27 November he stated that, in view of the large quantity of notes that Chihuahua had issued beyond the number authorised by his Jefatura, its notes were no longer legal tender and would cease to circulate. In due course, he would arrange the exchange of those notes of the Gobierno del Estado de Chihuahua, whose issue he had authorised (los billetes emitidos por el Gobierno del Estado de Chihuahua cuya emisión haya sido autorizada por esta Primera Jefatura). Then on 8 December he published a decree that identified those issues that his government acknowledged as its obligation. The first article of the decree listed a series of military issues that would cease to be legal tender from 1 April 1915 and which the Federal Treasury would therefore exchange in some still to be determined manner^{‘los emitidos en Monclova Coah. con fecha 28 de Mayo de 1913, firmados por Francisco Escudero y S. Aguirre; los emitidos en Durango en Enero de 1914, firmados por J. R. Laurenzana, Pastor Rouaix y M. del Real Alfaro; los emitidos en Tampico con fecha 6 de Junio de 1914, firmados por el General Luis Caballero; los emitidos en Guadalajara con fecha primero de Agosto de 1914 firmados por el general Alvaro Obregón y por el teniente coronel F. R. Serrano y los emitidos en Durango en Agosto de 1914 y firmados por el general Domingo Arrieta, José Clark y Juan B. Fuentes’}. The third article declared that all those notes that had been issued, unless listed in the first article, and continued being issued without the authorization of the Primera Jefatura were null and of no value.

It is difficult to determine which Chihuahua notes Carranza was willing to acknowledge, and it is possible that he himself never really knew. The Ejército Constitucionalista notes bore the seal of the Primer Jefe and were never, except unintentionally, disowned. As for the other two issues (the sábanas and the dos caritas), Carranza claimed that he had given Villa permission to issue six million pesos for the costs of the campaign within the state of Chihuahua and this can be taken as some upper limit. But though Carranza had given this authorization whilst Villa was issuing the sábanas, the former would never have any truck with that issue (they did bear Villa’s name prominently across their face and were also notoriously susceptible to counterfeiting) but might have been willing to acknowledge some dos caritas. The first five million pesos’ worth of dos caritas had carried a Ejército Constitucionalista seal and in a clarification (Aclaracíon sobre circulacíon de billetes) issued by the Secretaría de Hacienda y Crédito Público in early 1915 the list distinguished between notes issued by the government of the state of Chihuahua without authorisation (which had ceased to be of legal tender and so were not of forced circulation) and notes issued with authorisation and which carried the seal of the Secretaría de Hacienda (que tengan el resello de esta Secretaría de Hacienda) (which were to be changed in the Tesorería General de la Nacíon when Carranza decided).

By October 1914 Carranza was claiming that Villa had issued more than thirty million pesos without his authorisation^{El Liberal, 25 October 1914}.

On 3 December 1914 a Veracruz newspaper reported that the Junta de Administración Civil had advised the public that the dos caritas were of forced circulation, but this was immediately corrected, as Carranza’s decree of 27 November was still in force^{El Dictamen, 3 December 1914}.

On 27 December 1914 the Secretaría de Hacienda y Crédito Público issued a circular (núm. 2). Several people, particularly soldiers, were asking the Tesorería General de la Nación to exchange Chihuahua notes that they had been paid in wages, so the Secretaría announced that since the 27 November decree they had not given a single Chihuahua note to paymasters (pagadores), so no-one should accept them. It warned any paymaster that paid in illegal currency that they would be severely punished.

It seems that originally Carranza was willing for people to hand in dos caritas in the hope of some future compensation. For example, in accordance with a decree of 19 September 1914, the Secretario de Hacienda set up an office for the exchange of Ejercito Constitucionalista notes (and other notes issued by the state government with Carranza’s authorisation), manned by two tellers, two aides and two experts to determine if the notes were genuine^{Gaceta del Gobierno, Toluca, 21 November 1914}.

On 6 April 1915 the Secretaria de Hacienda y Crédito Público, in circular núm. 21, instructed the Jefaturas de Hacienda and Administracion del Timbre that they stamp any notes that they exchange with the word ‘RETIRADO’, and forward them to the Tesoreria de la Nación. On 1 December 1915 the Secretaría issued a circular (núm. 48) to clear up the difficulties caused by the erroneous interpretation of previous legislation on the validity of certain notes. Among other provisions, the circular ruled that the holders of Gobierno del Estado de Chihuahua notes should present them to the Tesorería General de la Nación, or to the Jefaturas de Hacienda and Administradores Principales del Timbre for transmission to the Tesorería, before 31 December 1915. The Tesorería would exchange those notes that were included within article 2 of the decree of 27 November 1914 and burn the rest. People who tried to pass such notes and those who retained them after 31 December would be punished. On 28 December the Secretario de Hacienda told the Presidente Municipal of Guanajuato that circular núm. 48 provided that dos caritas, sábanas... should be deposited in the Jefaturas de Hacienda and Principales Timbre in exchange for a receipt.

Carranza later proroged the period for depositing notes (on 27 March 1915 and again on 19 June 1915) and on 16 February 1916 the Jefatura de Hacienda in Guadalajara advised people that the office would stay open until new instructions were received^{Boletin Militar, Guadalajara, 16 February 1916}.

On 5 December 1915 the Carrancista consul in El Paso, Andrés G. García^{García was the Constitutionalists' most active and trusted representative along the U.S.-Mexican border. He was the regime's most visible spokesman and oversaw an extensive enterprise of espionage and propaganda that contributed significantly to Carranza's military, political, and diplomatic successes. (Michael M. Smith, Andrés G. García: Venustiano Carranza's Eyes, Ears, and Voice on the Border in Mexican Studies/Estudios Mexicanos, Volume 23, Summer 2007). García was born in Monclova, Coahuila, in 1871; his mother, Guadalupe Arredondo de García,was related to the Arredondo family of Cuatro Ciénegas, connected by marriage to Venustiano Carranza, also of Cuatro Ciénegas. García was a first cousin of Eliseo Arredondo, Carranza’s nephew and ambassador to the United States. Thus, although not directly related to Carranza, García, like many other members of the Constitutionalist elite, shared close bonds of kinship, compadrazgo, and personal allegiance to the First Chief or members of his extended family (AHSRE, exp. 3-6-12, “Andrés G.García.Su expediente”).
Prior to the Revolution, García had been a farmer and worked variously as a newspaper distributor, traveling salesman, and insurance agent in Coahuila and surrounding states. He had resided for a time in the United States, where he acquired training as a telegrapher and perfected his knowledge of English, skills that would serve him well during his years in El Paso. By 1911 he had returned to Coahuila, where he became railroad station master at Sabinas.
After Huerta’s coup d’etat García raised a contingent of about one hundred men and extracted a forced loan from local businessmen to support the campaign. Then, posing as an insurance salesman, he traveled throughout Coahuila recruiting additional forces for the Constitutionalist ranks. Shortly thereafter, Carranza sent him to Brownsville, Texas, to establish a junta and organize support for the rebellion. One of García’s principal concerns was to obtain arms and supplies for General Lucio Blanco, whose army operated across the border in Tamaulipas and Nuevo León.
García was Carranza’s secret agent, nominally “commercial agent”, on the border and assumed his duties on 16 November 1914. According to García, El Paso was “essentially a Villista centre,” where Mexicans and North Americans of the “worst political and personal reputation converged.” El Paso merchants enjoyed a lucrative business relationship with Villa, and local politicians and police officials openly sympathized with him. Héctor Ramos, the ex-chief of the Thiel International Detective Agency office in Mexico City, a former Madero agent, and now head of Villa’s secret service, had recruited dozens of agents to operate in the area and spent huge sums of money to finance both espionage and anti-Carranza propaganda efforts. Villistas published several Spanish-language newspapers and paid off the influential El Paso Morning Times to support their cause. Counterfeit Constitutionalist currency circulated freely, and Villistas experienced little difficulty in smuggling goods into the United States or exporting weapons and supplies into Mexico (CEHM, Fondo XX–I, doc. 6795, memorándum of García to Carranza, El Paso, Texas, 25 November 1915). On 19 October 1915, Woodrow Wilson extended de facto recognition to Carranza, thereby formalizing García’s status as Mexican consul in El Paso. Ten days later, the Villista commercial agency closed its doors, thus officially severing its ties with the customs house in Ciudad Juárez, which still remained in the hands of Villa loyalists (El Paso Herald, 29 October 1915). According to García, however, the political climate in El Paso remained unfavourable to Carranza. He reported that the city’s resident Mexican population was comprised largely of wealthy refugees who opposed Carranza, and, more recently, remnants of Villa’s army, former Orozquistas, and many others. García, nevertheless, persistently negotiated with Ornelas and ultimately achieved his desired objective. On 19 December 1915, Zach Lamar Cobb, collector of customs in El Paso and a valuable U.S. intelligence operative, informed the secretary of state that García had been meeting secretly with Villista representatives in the consulate and had agreed to grant amnesty to them if they declared allegiance to Carranza’s de facto government. The next day, García formally accepted the capitulation of Ciudad Juárez in the name of Venustiano Carranza. Four thousand Villista troops and officers surrendered their weapons and crossed into the United States. Local political officials and Héctor Ramos, head of Villa’s espionage network, joined them in exile. García informed Carranza and Obregón that Generals Manuel Banda and Roberto Limón, Colonel Eduardo Andalón, and Lt. Colonel Flaviano Paliza had capitulated. Furthermore, General Fidel Avila, General Joaquín Terrazas, and other field commanders were relinquishing control of the fortified towns of Guadalupe, San Ignacio, and Villa Ahumada, as well as Casas Grandes and the scattered Villista forces in that area. García also announced that in a few days the Villistas would surrender the Chihuahua City garrison, along with eight locomotives and two thousand railroad cars. Finally, the consul reported that he had granted amnesty and guarantees of personal safety to all civil officials and military personnel, except Francisco Villa and his brother, Hipólito.}, announced that the government would shortly redeem those dos caritas that had been issued with Carranza’s authorisation, a total of some five million pesos. García’s statement was made without any official authorisation^{Prensa, 8 December 1915}, but a couple of days later the El Paso Herald reported that the Carrancista consul in San Antonio had made a similar statement: most of Villa currency was considered worthless but the dos caritas dated September and October 1914, which had been authorised by Carranza, would be validated^{El Paso Herald, 7 December 1915}. A few days later Prensa reported similar news from Mexico City, and said that the notes in question were the dos caritas issued in March 1914^{Prensa, 10 December 1915}. Finally, a week later, it was reported that the notes to be revalidated were dos caritas bearing the dates September and October 1914^{Prensa, 15 December 1915}. A León, Guanajuato paper also stated that the Secretaría de Hacienda had announced that dos caritas would be revalidated as long as they were dated September and October 1914 as these were issued with Carranza’s authorisation^{La Noticia, León, 22 December 1915}. In early January 1916 Sub-secretary Rafael Nieto said that the Carranza government would not accept notes or currency issued by Villa or the Convencionalistas, with the exception of 6,000,000 pesos issued by Villa that were authorized by General Carranza before the Convention opened at Aguascalientes^{The New York Times, 10 January 1916}.

On 22 December Charles B. Parker, in charge of American interests in Mexico City^{The United States had not yet recognised the Carranza government}, wrote to the Secretary of State that he had about $12,500 of the money listed in circular 48 (possibly Chihuahua, but more likely Gobierno Provisional) and that American firms had large amounts, because its circulation had been obligatory. He asked for instructions^{SD papers, 812.516/112}. He was told to advise Americans that they should not voluntarily comply with the decree and that he was not to surrender any note in his possession belonging to the U.S. government. The State Department also instructed Silliman, its consul in Saltillo, to tell Carranza that the Department expected him to take prompt and appropriate action to suspend enforcement of the decree in so far as it may affect citizens of the United States in order that the full impact of the decree might be considered^{SD papers, 812.516/112 telgram Lansing to consul, Saltillo 31 December 1915}. On 4 January 1916 Silliman reported that he had been told that “the object in calling in the extra issue was to validate whatever was presented as of the issue of six million pesos which Villa was authorized by the First Chief to make and to destroy the unauthorized issue. This has consistently been the course of the constitutionalist government as to currency issued and floated by its enemies whether Huertistas or others. The decree has no reference to the Chihuahua issued entitled Ejercito Constitutionalista, signed by Serapio Aguirre, validity of which is unquestioned. Concerning other money mentioned by Department, it was stated that the object was to withdraw it from circulation giving receipt for same and reserving the government’s final decision regarding it for future deliberation. Department concern for the interests of American citizens who might be holders of these different issues was conveyed to the sub-Secretary and he was reminded of the circumstances attending the various issues. He replied that the decrees were no longer in force as the time mentioned in them had expired and that while regretting any loss in consequence of them the government was not prepared at this time to suggest a mode of relief”^{SD papers, 812.516/115,telegram Silliman, Querétaro to State Department, 4 January 1916; letter Office of the Solicitor, Department of State, 14 January 1916}.

One can have more sympathy for Carranza than for Villa, who should be condemned for similarly disowning the Ejército Constitucionalista notes. By this time both Eulalio Gutiérrez and Roque Gonzaléz Garza had condemned Villa’s continued and indiscriminate printing and for Carranza to acknowledge any Chihuahua currency was tantamount to writing a blank cheque.