The crisis of 1935

A small group of low-value notes bears testimony to a period in Mexico’s history when it was confronted by a shortage of coins and the consequent effect on daily business. The United States passed its American Silver Purchase Act on 19 June 1934: this caused to price of silver to increase and as a result, in Mexico, silver coins began to be hoarded to be remelted at a profit.

On 25 April 1935 the Mexican government reacted with a series of reforms, changing the fineness of its coinage, and withdrawing silver coins from circulation. It had ordered 50c coins (tostones) and $1 Banco de México notes from the United States but until these arrived the sudden shortage of small change led many commercial organisations, particularly Chambers of Commerce, to agree with the local banks to issue scrip in the form of bearer cheques (cheques al portador).

On 3 May it was reported that the Lotería Nacional was proposing to issue $200,000 in letras de cambio for $1 and $2, payable in the $1 Banco de México when they arrivedEl Informador, Año XVIII, Tomo LXVII, Núm. 6357, 4 May 1935 but it seem that this idea was overtaken by the one for cheques.

On 4 May, the Secretaría de Hacienda issued a notice that vales or cheques issued to overcome a shortage of change would only be valid when issued ‘to the bearer’ by firms that had current accounts with the banks. In addition, their acceptance was entirely voluntaryEl Dictamen, 5 May 1935.

In Mexico City on 6 May a group of bankers agreed with the Secretaría de Hacienda to issue $500,00 in one and two pesos chequesLa Opinión, Puebla, Año XI, Tomo XVII, Núm. 4005, 7 May 1935; El Informador, Año XVIII, Tomo LXVII, Núm. 6360, 7 May 1935. Three banks, the Banco Capitalizador de Ahorros, the Banco de Comercio and the Banco Nacional de México issued cheques to a common design. The first tranche of $500,000 in $1 cheques of the Banco Nacional de México and Banco de Comercio were ready by 8 MayEl Siglo de Torreón, 8 May 1935.

El Banco Capitalizador de Ahorros

In Puebla the Banco Mercantil de Puebla, Banco Nacional de México, and Azúcar, S.A. as well as the local branch of the Banco Capitalizador put out a notice that they would accept these chequesLa Opinión, Puebla, Año XI, Tomo XVII, Núm. 4032, 3 June 1935.

El Banco de Comercio

El Banco Nacional de México

Lotería Nacional

On 3 May it was reported that the Lotería Nacional was proposing to issue approximately $200,00 in letras de cambio, payable in banknotes of the Banco de México on 20 MayEl Dictamen, Veracruz, 4 May 1935: El Informador, Año XVIII, Tomo LXVII, Núm. 6357, 4 May 1935.

Loteria Nacional 1

The Lotería Nacional issued $1 cheques, dated 20 May 1935, drawn on Banco Mexicano, S. A. These were signed by [        ] as Director General and [        ] as Cajeroillustrated is CNBanxico #10826.

On 16 May Secretario De Hacienda Narciso Bassols instructed the federal Oficinas de Hacienda and the Correos y Telegrafos to accept the $1 and $2 cheques that various institutions had issued, without limitation. A similar instruction was sent to the Ferrocarriles NacionalesEl Dictamen, 17 May 1935.

When the crisis passed most of these cheques were redeemed and so survivors are extremely rare.