Page:Mexico and its reconstruction.djvu/109

Rh produced in the country which the government could coin, it would not allow to be exported. It had to be sent to the mint. Gold bearing ore could be exported only if an equivalent value in gold was returned to Mexico. Silver could be exported only if an equivalent of 25 per cent was returned in gold. Evidently events had turned in such a way that the creation of a metallic basis for the currency could be accomplished much more easily and quickly than would have been the case in normal times. By June, 1918, there were reported to be 250,000,000 silver pesos in circulation in the republic.

The next development was the monetary decree of November 13, 1918, induced by the continued rise in the value of silver. The old pesos were withdrawn and a new series issued about three-fourths the size of the old ones, weighing 18½ grams of which 14½ were pure silver. New subsidiary coins were also issued. The gold basis for the currency was not disturbed. In the process of the change from one basis to the other large amounts of the coins of the old issue were melted down and sold as silver by those who had hoarded them. The transfer from the old to the new currency does not seem to have involved serious difficulties to local commerce.

A review of the financial problems that confront the republic must include at least a brief mention of the more recent banking developments. Before the revolution the banking system of Mexico was based on the law of 1897, which divided financial institutions into