The immediate aftermath
By the end of 1915 the Estado de Sonora and Villista currencies were worthless and Carranzista money accepted with reluctance. American coinage, however, circulated on an appreciable scale, above all in mining.
After the major American companies resumed mining operations in June 1915 George Young from Cananea, Williams from Nacozari and Budrow from El Tigre individually argued with Calles for the desirability of paying in silver or its equivalence. Calles, whilst eager to enforce the circulation of Carranza’s currency, agreed to the scheme as a temporary measure but said he would appoint a commission to look into the matter. By paying in silver the mining companies forced the government to pay its own employees in silver, which in turn led to some troops being paid in the same manner. Young was able to write in December 1915 that their action had resulted in making the silver peso the circulating medium of northern Sonora almost to the exclusion of other currency. To change the currency, he argued, would upset the economic situationCCCC papers, letter from Young to Ricketts, 22 December 1915.
At Ures in December 1915 municipal taxes were being paid in banknotes since no other currency was in circulationAGHES.
In May 1916 Carranza named Adolfo de la Huerta governor in place of Calles who was to remain in charge of military operations. In his Informe to the local Congress, de la Huerta complained:
It was vital to get the economic situation back on course by bringing it as quickly as possible into line with financial conditions in the rest of the Republic, and I soon learnt that whoever tried to do this in Sonora would have to suffer all the bitter reproaches and the strongest protests on the part of the inhabitants of a region such as this that had a deep antipathy for the Ejército Constitucionalista currency and a marked repulsion towards the financial system that the revolutionary government, through dire necessity, had imposed. As our people were used to carrying out all their transactions in specie while the Revolution, for its part, needed to maintain the infalsificable currency at its official rate, I had to undertake a formidable struggle to bring Sonora into the general scheme of the Republic, and it was unjust that General Calles, who had fought so hard in his native state for the Constitutionalist triumph, should take on this new task, so positively distasteful but so vital for the success of the Revolution, and so I had to resign myself to obeying the orders of the Jefe Supremo....at the same time as, as a friend, avoiding countless obstacles from General Calles over this action, so very essential to avoid the economic imbalance that the use of the dollar and of silver in one of our states would cause to the rest of the countryAntonio G. Rivera, La Revolución en Sonora, Mexico, 1969.
By June 1916 Mexican officials in Sonora were declaring that the monetary situation was grave and anarchy certain unless Calles, the military commander in the state, obtained some immediate adjustment. Calles was expected in Hermosillo for a conference with Governor Adolfo de la Huerta, out of which would come either a solution of the financial problems or a definite break between Calles and Carranza. Arrivals from Cuchuia and Fronteras reported that soldiers were mutinous over being paid in the new Carranza currency. “When the official paymaster visited the camps, scenes of disorder followed. One captain, upon receiving his pay in the currency, tore it up, spat on it, then ground the pieces under his heel, cursing the paymaster and demanding real money, according to men who claim to have been eye witnesses.” It was reported that Calles would demand of de la Huerta that exchanges be established with ample funds to redeem all Carranza currency in gold, or that the customs houses should be empowered to exchange gold and silver for the currency at the rate of 10 cents gold on the pesoAlbuquerque Journal, 7 June 1916.
On 21 July Calles practically repudiated the Carranza currency, when he issued an order that no merchant would hereafter be forced to accept it in exchange for goods. Since Adolfo de la Huerta had been governor of the state merchants had been compelled to accept Carranza currency at the stated rate of 10 cents gold on the peso, although it could be purchased on the American side of the border for less than half as much. As a result merchants all over the state were forced out of business, while company stores which remained in operation perforce allowed their stocks to run down to the minimum. An order from the Mexican treasury department, waiving both consular and customs duties on the importation of Mexican silver coinage, indicated that the order of General Calles was given with the sanction of the national government. Payrolls at Cananea, Nacozari and El Tigre had been met for several months with silver money or its equivalence in gold. Soldiers were receiving their wages in the almost worthless Carranza infalsificables at the rate of 10 cents gold on the peso and it was not known whether they would also be paid in silver, but it was believed that the new order would cause discontent among the soldiers as it completed the destruction of any value that the Carranza money in Sonora had hadAlbuquerque Journal, 22 July 1916.
In a circular (núm. 39) on 24 July 1916 de la Huerta told authorities to punish people using foreign currency and to make shops publish their prices in oro nacional and accept Constitutionalist currency.
By August few stores in southern Sonora were doing any business owing to being forced to take fiat money. Those which were operating had allowed their stocks to run down to a very low point and but for the municipal warehouses where foodstuffs were sold to the poor at bargain prices, suffering would have been intense. Rumours reaching Cananea that the mining companies of that district would be forced to discontinue paying employees in Mexican silver and pay in Carranza currency caused a lot of arguments. Meetings wereheld by Mexican employees who determined they would go on strike before accepting the currencyAlbuquerque Journal, 22 August 1916.
In September it was rumoured that Carranza’s order that his new infalsificable currency should be used in all business transactions in every part of Mexico would not be enforced in Sonora. According to a report, de la Huerta had decided that the people could continue to do business with any sort of money they wished although the Carranza currency must still be accepted where tendered. It was thought that to force the use of the currency would mean strikes in Nacozari, Cananea and El Tigre, as well as all other camps where silver was being paid. The employees were understood to have met and decided that they would resist any attempt to change the silver standard in the various camps by a walkout. Such strikes would mean that the government would have to employ troops, and bloodshed and looting might be expected to follow. A verbal message said to have been received by Agua Prieta merchants from Calles, the military commander of Sonora, instructed them that they must accept the Carranza issue at its government-made value of 10 cents gold on the peso, but should set their prices sufficiently high to prevent themselves from being wiped out. Acting on this authority merchants raised their prices substantially. They were said to have adopted the plan already in use further in the interior of the state of quoting articles at a very reasonable price for gold or silver money but to quote a price of several hundred pesos for the same articles where the Carranza currency was offered. For that reason nothing was marked and no prices quoted until the merchant learnt what kind of money his customer hadTucson Daily Citizen, 5 September 1916.
In July 1921 the El Tigre mining company sought permission to continue to pay its workers with American money for amounts below twenty pesos because of a shortage of Mexican coinsAGHES, Fondo Oficialidad Mayor, tomo 3441. Other companies also experienced similar trouble and the use of American coinage, although prohibited, was common.
The Compañía Bancaria Mercantil y Agrícola de Sonora
To fill the banking vacuum after the revolution the Compañía Bancaria Mercantil y Agrícola de Sonora, S.A. was established by Francisco Suárez Elías, General Plutarco Elías Calles and other shareholdersFrancisco S. Elías y Hermanos, S. en C., Hilario G. Gabilondo, Edgardo J. Gabilondo, Rafael Gabilondo, Roberto P. Pesqueira, and Ignacio Soto from the north of Sonora in 1917. The bank was capitalised at $200,000 (2,000 share of $100 each).This Compañía Bancaria Mercantil y Agrícola de Sonora, S. A. reformed as the Banco Mercantil y Agrícola, S.A. Refaccionario with a capital of $500,000 (oro nacional) (5,000 shares of $100 each) in 1927.