Paper Money of Chihuahua

.. by Simon Prendergast

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Offices and branches of El Banco del Estado de Chihuahua

The actual bank opened its head offices in the premises of the Banco Comercial Refaccionario at calle Libertad 401 on 21 September 1914LG papers, 3-G-3, announcement, 21 September 1914. One Director General was Federico Moye, who in his opening speech, pointed out that the bank was not a speculative but a beneficial institution with a program to aid the industrious worker. The manager was Andrés Pfeiffer who had previously been manager of the Chihuahua branch of the Banco de SonoraThe revolutionaries, or at least Silvestre Terrazas, had a soft spot for this branch. Terrazas corresponded with its last manager, W. C. Winegar and its accountant, Leon Escobar, for several years.. The bank’s board of directors consisted of Ignacio Perchez Enriquéz, Luis de la Garza Cárdenas, Tomás Gameros, Jesús María Dozal, Federico Moye and Sebastian Vargas hijo with Francisco Velarde, Teodoro Marquez García, Vicente H Arreola, Ricardo Dozal and Jesús R. Tafoya, the state accountant (contador de la Tesorería General del Estado), as substitutes. The bank's President and other Director General, Lázaro de la Garza, missed the ceremonyVida Nueva, 22 September 1914. Dr. Luis de la Garza  was born in Nuevo León. He opposed Díaz’s reelection in 1910, was presidente municipal of Ciudad Juárez in late 1912 but refused to support Orozco’s rebellion. He was Villa’s Secretario de Gobernación y Comunicaciones. He died in México City in 1927. Lic. Jesús María Dozal was a lawyer and served as Magistrado del Supremo Tribunal de Justicia and Visitador General del Poder Judicial during Villa’s regime. He died in 1944.. The bank’s cashier (cajero) was Miguel Espinosa.

On 5 October 1914 the bank established a branch in Ciudad Juárez in the former Banco Minero premises with A. Farias as managerEl Liberal, 8 October 1914; El Paso Morning Times, 3 October 1914. On 7 October Farias said that the bank would have $6m oro in gold or silver bars on deposit in New York, so that its notes would be backed with their equivalence in gold or silverEl Liberal, 8 October 1914. On 10 December the bank established a branch in Parral, under the management of Jésus R. TafoyaVida Nueva, 16 December 1914. The board-members (consejeros propietarios) were Adolfo Beber, Jesús L. Alvarez and Jorge Maul, with Cayetano Sáenz Pardo as substitute (consejero suplente). and on 15 December a branch in Torreón, with Eduardo A Zambrano as managerLG papers, 3-G-1, act of installation, 15 December 1914: variant is Leonardo Zambrano (La Voz de la Revolución, Durango, 2 December 1914) and Jesus Maria R. Rodriguez as cajero.

On 14 March 1915 Villa wrote to Lazaro de la Garza, as Presidente del Consejo de Administración, authorising the establishment of branches in Guadalajara, Durango, Saltillo, Monterrey and Zacatecas, with the object of helping small farmers. The bank was to have a monopoly in these citiesLG papers, 1-J-3, copy of a memo from Villa, Monterrey, to de la Garza, Monterrey(?), 14 March 1915. On 2 March Jose F. Sepúlveda was named manager at Aguascalientes and also charged with setting up a branch in ZacatecasLG papers, 3-H-21, letter from de la Garza, El Paso, to Vargas, Chihuahua, 2 March 1915. Sepulveda was also to help in setting up the Durango branch. It was suggested that before that he was to make a tour of Saltillo, Monterrey and San Luis Potosí, collecting all the foreign currency (todo el papel extraño) that was being quoted at 1½c to 2c above the Villista currency, to the latter’s detriment.The Tesorería could exchange this money and use it to pay for purchases from abroad (LG papers, 1-K-23: telegram L. de la Garza, Ciudad Juárez, to Villa, donde se encuentre, 2 March 1915). However, on 4 March Vargas replied that as there were already Treasury experts (revisadores y canjeadores de billetes nombrados por esta Tesorería) in both Monterrey and Saltillo,and Raul Madero had indicated that there was sufficient money ($10,000) in Monterrey to effect any exchange he saw no need for Sepulveda’s services in these two places (LG papers, , 2-F-24: no place. no date: 3-H-22, letter Vargas, Chihuahua to Lazaro de la Garza, El Paso, 4 March 1915)..

On 1 May, when Raymundo Navarro was in El Paso awaiting orders, de la Garza asked him if he was interested in the management of the San Luis Potosí or Guadalajara branchesLG papers, 6-E-76, telegram L. de la Garza, New York, to. Navarro, El Paso, 1 May 1915 and on 3 May Lázaro’s brother, José Garza Zertuche, told him the head office wanted his (Lázaro’s) recommendations for managers of the Saltillo, Aguascalientes and San Luis Potosí branchesLG papers, 9-B-40, telegram J. Garza Zertuche, El Paso, to L. de la Garza, New York. 13 May 1915.

On 24 May another branch opened in DurangoVida Nueva, 26 May 1915. The bank was exempted from Villa’s decree of 19 March 1915 suspending the payment of interest to banks.

So in summary, the bank had the following offices:

Chihuahua: opened on 21 September 1914 in the premises of the Banco Comercial Refaccionario at calle Libertad 401.

Ciudad Juárez: opened on 5 October 1914 in the offices previously used by the Banco Minero El Liberal, 8 October 1914 with A. Farias as manager.

Parral: in the offices of the former Banco Nacional de México, with Jesús R. Tafoya as manager, Juan Mejia Borja cashier (cajero) and Justino Cortes (contador)AMP, Gobierno, Jefatura Política y Presidencia Municipal, Correspondencia, caja 70, exp 2. The consejeros propietarios were Adolfo Beber, Jesús L. Alvarez and Jorge Maul and the consejero suplente Cayetano Sáenz Pardo (Vida Nueva, 16 December 1914).

Monterrey: José J. Gonzalez was appointed manager of the Monterrey branch. In late April 1915 he gave an interview to a Chihuahua newspaper, where he stated that the opening of the branch would give a big boost to the business life in Monterrey, as a very large number of people were waiting for it to open before restarting their business due to the lack of cash. Only the Banco de Nuevo León was open and doing nothing but the smallest transactionsVida Nueva, 29 April 1915. We do not know if it ever actually opened.

Torreón: in the Oficina de Express, in calle LibertadPeriódico Oficial, Chihuahua, 19 February 1916: variant is offices of former Bamco de Coahuila (La Voz de la Revolución, Durango, 2 December 1914). On 30 October de la Garza went to Torreón to set up the branchLG papers,1-I-18, Letter L. de la Garza, Chihuahua, toVilla, Zacatecas, 29 October 1914 and he asked for a Señor Rios from the Comisión de Agricultura to take on its management but Villa vetoed the move as Rios was needed at the ComisiónLG papers, 1-F-117, telegram Villa, Guadalupe, Zacatecas, to L. de la Garza, Torreón, 1 November 1914. The branch was inaugurated on 15 December, with Eduardo A Zambrano as managerLG papers, 3-G-1, act of installation, 15 December 1914: variant is Leonardo Zambrano (La Voz de la Revolución, Durango, 2 December 1914). Board members (consejeros propietarios) were Jesús María R. Rodriguez, Jesús R. Ríos and  Rafael Cárdenas Cisneros with Isidoro C. García as substitute (suplente). Rodriguez was the person commissioned to buy cotton and ixtle for the bank (LG papers, 3-H-45, letter of introduction L. de la Garza (?), n.p., to Hipolito Villa, Ciudad Juárez, 17 April 1915).. It was closed in February 1916 and  $96,818.95 transferred to the TesoreríaPeriódico Oficial, Chihuahua, 19 February 1916.

Durango: opened on 24 May 1915Vida Nueva, 26 May 1915. The manager was Ladislao Vallejo and the bank based in the former Banco Mexicano on the main plazaVida Nueva, 19 May 1915; La Voz de la Revolución, Durango, 23 May 1915. The branch validated some $20 notes before putting them into circulation.

Chihuahuan governor Fidel Avila praised the bank in his annual report for 1914:

One of the main propositions in establishing the bank was to help the poorer classes, so that the small farmers, who through lack of resources have since time immemorial had to lead a cramped existence, could achieve their hopes of working their own lands...We expect that in a short time the bank will be fully functional both in Chihuahua and in other statesInforme of Governor Avila, 1 April 1915.

On 2 July Moye gave his first report, on the bank’s activities up to 30 June. It had a balance of $364,333.10, audited by comisario Juan. B. Baca and the Interventor del Gobierno, Jesús Urías Gabaldón. Branches had been opened in Durango, Parral, Ciudad Juárez and Torreón and others would soon be established in Monterrey, Zacatecas, Aguascalientes, San Luis Potosí and Saltillo. The bank held $4,620,164.70 in deposits (Chihuahua $957,336.96, Torreón, $3,437,563.51, Ciudad Juárez, $164,609.91 and Parral $60,754.32). Moye claimed that the branch in Torreón, through its loans to big and small farmers, has had a significant impact in raising cotton production in the Laguna Comarca and saving it from ruinVida Nueva, 6 July 1915.

Because of the depreciation of Villa’s currency after his defeat at Celaya, within a year the bank found it could no longer operate. On 29 September 1915 it wound up affairs in the important branch of Ciudad JuárezLG papers, 6-F-110, letter from R. E. Navarro, El Paso, to de la Garza, New York, 29 September 1915 and on 14 October it issued a circular so informing all its clients, and in particular asking anyone with deposits to collect them as soon as possible. The next day the board, in its last session, entrusted all its books and funds to the Tesorería General del Estado, which established a banking section within its own offices to deal with the bank’s affairs. As no-one collected their deposits, on 23 November with a great deal of ceremony $3,352,842·50 in notes of the Tesorería General del Estado were sealed in a safe in the old bank’s premises.

In the Tesorería General's balance sheets

The Tesorería General published a monthly balance sheet in the Periódico Oficial. Under the heading ‘Banco del Estado’ the balances were:

deposits
(ingresos)
withdrawals
(egresos)
March 1914 3,664.30
April 1914 1,990.10
May 1914 100.00
April 1914
June 1914
July 1915
August 1914 2,000.00
September 1914 505,000.00
October 1914
November 1914 173,625.50
December 1914 1,912,195.58
January 1915 75,000.00
February 1915 5,559.97 500,000.00
March 1915 650.39 1,000,000.00
April 1915 2,000,000.00
May 1915 1,900,000.00
June 1915 15,100.00
July 1915
August 1915
September 1915 (2,255.88
American gold account)
143,821.23
(Gold Account 3,746.92)