File No. 812.00/20149 Consul Canada to the Secretary of State [Telegram] AMERICAN CONSULATE, Vera Cruz, December 26, 1916, 4 p. m. Reactionaries entered town of Soledad on the Mexican Railway about 27 miles from Vera Cruz yesterday, defeated Carranza forces and took ammunition stored there. CANADA File No. 812.00/20157 Vice Consul Blocker to the Secretary of State [Telegram] EAGLE PASS, December 27, 1916, 6 p. m. A report considered reliable received this evening states Torreon garrison falling back along Coahuila and Pacific Railway towards Saltillo and are now at Parral [Parras], while reinforcements sent to their relief are at Hipolito on Central Railroad which runs parallel to Coahuila and Pacific. Both commands are destroying track as they retreat. General Salazar seems to be in command of Villa troops and apparently has demoralized Government troops to extent they are destroying track from fear being followed. File No. 812.00/20172 Consul Garrett to the Secretary of State [Telegram] BLOCKER LAREDO, December 28, 1916, noon. Conditions in Mexico are growing worse daily. The Villistas are rapidly gaining in strength and activity and it looks like they would soon have control over northern Mexico. Have received information that it is their intention to capture Monterey in the near future. An attack on Nuevo Laredo is scheduled for January first. Several important families closely connected with de facto Government arrived here yesterday, including the family of the Governor of Coahuila and the widow of Jesus Carranza, which shows that the Carranza authorities realize the gravity of the situation. GARRETT File No. 812.00/20173 Vice Consul Blocker to the Secretary of State [Telegrams] EAGLE PASS, December 28, 1916, 4 p. m. General Peraldi, commanding garrison at Piedras Negras, confidentially concedes fall of Torreon after receiving a message this morning from Saltillo announcing its fall. No details were given. Late this afternoon the General received information which he terms unofficial that the defeated garrison joined by reinforcements at Hipolito are advancing on the city and he expects its recapture. Consulate has information that the Government troops are still destroying track between Torreon and Hipolito; also between Torreon and Parras; that no advance has been made to recapture city but to the contrary. Rumors are current in Piedras Negras this afternoon that Governor and cabinet at Saltillo are packing up archives preparatory to leaving for border should Villistas advance that way; also that Carranza adherents are leaving from fear of attack on the state capital. Passenger train arrived and departed for south today but tickets were only sold to Saltillo. While communication between Saltillo and San Luis Potosi is open nothing but military trains are operating. File No. 812.00/20178 BLOCKER EAGLE PASS, December 30, 1916, noon. Official telegram received this morning by General Peraldi commanding Mexican forces Piedras Negras from Saltillo announces recapture of Torreon yesterday by Government troops of command. of General Murguia, combined with former garrison of Torreon which [had] fallen back to Parras upon death of General Tamaltias, their commander, but after being reinforced by troops from Hipolito they again entered city, uniting with Murguia's forces that had come from Chihuahua. No details were given other than notice that Villa levied heavy war loan on city and is believed to be marching toward Durango City. Mexican Railway officials also claim that a through Mexico City train will arrive here this afternoon, the first train from south of Saltillo since capture Torreon. BLOCKER FINANCIAL AFFAIRS. SEQUESTRATION OF THE NATIONAL BANK OF MEXICO AND THE BANK OF LONDON AND MEXICO BY THE DE FACTO GOVERNMENT. GOOD OFFICES OF THE UNITED STATES. File No. 812.516/108 The Secretary of State to Special Agent Silliman [Telegram] DEPARTMENT OF STATE, Washington, December 18, 1915, 6 p. m. Department reliably informed National Bank of Mexico is being compelled to pay its bills of exchange in gold, while it has been obliged to accept current paper money for nearly two years. Payments mentioned in metallic currency will result in ruin of bank. Further, such action may cause the ruination of Mexico's credit abroad and create chaos in Mexico. Place the foregoing immediately before General Carranza and impress upon him the urgent necessity of giving the greatest consideration to all cases of this nature, which may cause the de facto Government great embarrassment in its efforts to rehabilitate the country financially. LANSING File No. 812.516/111 Mr. Parker, representing American interests, to the Secretary of State [Telegram] MEXICO CITY, December 21, 1915, 5 p. m. 192. Banking situation is becoming more serious. Am informed that, acting on instructions received from Carranza, courts were authorized to accept judicial demands against banks of issue to force them to make immediate redemption of their bank notes in specie. The National Bank of Mexico has already received judicial demand for such redemption, but I am reliably informed that the action in this case has been stopped by order of Carranza until he arrives at Querétaro. Therefore such suspension is only temporary. Bank officials state that the desired redemption is impossible at present because of general acceptance of fiat money, but that if allowed sufficient time bank can redeem all notes in specie. Bank further protests against immediate redemption on ground that some twenty-five million pesos of its notes are held abroad; and as the metallic reserve, which it has in full, is by law required to be only fifty per cent of its emission, the local holders of its notes would exhaust the reserve before the more distant holders could present their notes, or even learn of the action taken. I am given to understand that the bank is entirely solvent, but that in the present circumstances would probably be obliged to close its doors temporarily if such demands are later enforced. Courts are feared because there is no federal court to which to appeal and no supreme court for final decision on constitutional proceedings. I understand that other banks in the Republic are in similar circumstances, although no formal demand has yet been made for specie redemption. The closing of these banks would aggravate an already serious economic crisis, as during the last ten days five more State banks have been put out of business by virtue of the decree of September 29. The French Minister, dean of the diplomatic corps, stated to me yesterday that the general opinion of the diplomatic corps is that the present Government is greatly exceeding its authority in issuing decrees and other instructions which have the force of law, and that in such cases as the one in hand, where the consequences are farreaching and would entail unavoidable and heavy loss, most energetic representations should be made in order to avoid the disastrous results and the establishment of dangerous precedents. Further, diplomatic corps does not consider that a Government can be considered as constituted in Mexico when several of the Cabinet Ministers have not been yet appointed and when the Chief Executive has been for more than three months and is still at a distance of one thousand kilometers from the capital with hardly any means of communication. If the Department deems advisable to make representations in that case matter, I have to suggest that they be made directly and immediately to General Carranza. PARKER File No. 812.516/109 Special Agent Silliman to the Secretary of State [Telegrams] SALTILLO, December 21, 1915, 5 p. m. Department's December 18, 6 p. m. National Bank of Mexico. General Carranza said this morning that the real fact in regard to the Bank of Mexico is that it is being required, as all other banks of issue in the country are being required, to redeem its own bills in Mexican silver as required by law and as stated on the face of the bills; not, however, in gold. This is in accordance with the order giving banks of issue forty-five days to comply with provisions of banking law. This order was afterward extended, but is now in force. The General was reminded that many banks had been directed to increase their circulation under Huerta and afterward had been deprived of their metallic surplus through forced loans and other illegal methods beyond their control by the Huerta Government and also by the revolution. When the General was informed that the Department feared the enforced resumption of immediate specie payment might result in the ruination of Mexico credit abroad and cause chaos in the country and that the Department reconsidered [?] the greatest consideration in the matter urgently necessary the Chief replied that it was not the intention of the de facto Government to be inconsiderate; that due consideration and a fair hearing would be given in each particular case, but that the banks had been taking undue advantage of the present situation and that in justice to all concerned the matter must be justly regulated. SILLIMAN File No. 812.516/110 SALTILLO, December 22, 1915, 6 p. m. Matter of bank situation again discussed fully with First Chief this morning. Unable to obtain any further expression than that conveyed in my December 21, 5 p. m. SILLIMAN File No. 812.516/111 The Secretary of State to Mr. Parker, representing American interests [Telegram] DEPARTMENT OF STATE, Washington, December 24, 1915, 5 p. m. 196. Your 192, December 21, 5 p. m., relative bank situation. Repeat same to Silliman, Saltillo, to whom appropriate instructions are being telegraphed. Keep Department fully informed. LANSING File No. 812.516/110 The Secretary of State to Special Agent Silliman [Telegram] DEPARTMENT OF STATE, Washington, December 24, 1915, 2 p. m. Your December 22, 6 p. m., relative bank situation. Parker being instructed to repeat to you lengthy telegram on this matter. Immediately upon its receipt lay matter before Carranza and urgently request, in view of the serious consequences that may result from the de facto Government's attitude in this matter, that the banks be given sufficient time to meet the requirements of the order. LANSING File No. 812.516/113 Special Agent Silliman to the Secretary of State [Telegram-Extract] SALTILLO, December 27, 1915, 2 p. m. Department's December 24, 2 p. m. Chief left Saltillo for south on twenty-second. Does Department desire that I proceed to his headquarters and take up this matter with him. In conversation with the Chief as an illustration the impossible situation that would result if the city of Saltillo, the State of Coahuila and the Republic of Mexico were required by their creditors to meet their obligations within sixty days, was used. It was suggested that the banks be allowed at least one year, better three years under the circumstances, to resume specie payment. He could not see that the illustration was apt nor would he concede that the banks should be allowed further time. He stated as before that they would be given a fair hearing. He said that he wanted to establish one only national bank of issue. It would seem apparent that the banks in simple justice should be given a reasonable time to comply with the decree, as the Department has been appealed to the case is so delicate and important that it requires our most careful cooperation and teamwork. I greatly fear that the most energetic diplomatic representations may fail of the mark. It should be borne in mind that the National Bank of Mexico is largely French capital, the Bank of London and Mexico largely British, and the state banks of issue largely Mexican and Spanish. The Chief has intimated on a number of occasions that he wished interests to make their own representations, that representations should not assume an international form until direct representations to the Mexican Government have been unsuccessful, that foreign representations should be limited to the nations of the persons making the representations. Therefore, and in view of all the circumstances, it is most respectfully suggested to the Department that a commission representing the banking interests meet the Chief and state the case fully. I could arrange the meeting, make the introductions and be of such further service as may appear appropriate. Mr. Nieto of the Department of Hacienda should be present; in the absence of Mr. Cabrera it is also respectfully suggested that Arredondo and Cabrera who I understand is in Washington should 106413° F B 1916 45 |