Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-05-12

have been promulgated at different T-rloSSS
have come to nguate the baIs<>of issue
and discount asN&ell as ths>savings banks
and other instituttsus OF NE same charac-
ter
THE Mexican law he continued, has
attempted to lay down the exact nature of
the institutions of credit: to give them an
exact definition which Will determine their
essential character and has made perma-
rent provision for their creation and for
the principles under which they are TO
carry on their business 1t has classified
as institutions of credit in the strict sense
of the word ard worthy of forming the
subject of a special law those which act
as Intermediates between persons who pos
sess capital and others who need it. besides
clearly laying down the distinction that eX-
lists between the different classes OF securi-
ties and evidences of debt Ih!ch each insti
tuition may put into circulation.
Liberty OF Banks.
In accordance with these principles.
Mr. Casasus went on, The law has given
preferent attention to the enactment of
regulations that govern everything relat-
ing to banks of issue, mortgage banks and
agricultural banks, and Is based on two
fundamental principles-the liberty of the
banks and the Intervention of government
in the constitution and management. At
first sight there seems to be some incom-
patibiity between these two principles.
but nevertheless experience has shown US
While the fact has been recognized by the
Mexican legislature that the nations trade
and industry and agriculture require for
their development that tire banks should
enjoy absolute liberty. So that they may be
able to offer an abundance of capital at
low interest. 1t has at the same time UNI
derstood that the banking business cannot
be allowed to enter into full and free com
petition and that the representatives of
the public have a right to overlook their
proceedings in order to prevent excuses
with their resulting dangers.
The Mexican law. therefore. has au-
thoriZed the creation of banks of issue, as
well mortgage and agricultural banks
throughout the country, regulated the oper-
ations which each is allowed to carry on
and exactly laid down the rules for the
Issue by each one of the securities OF evil
dences of debt which distinguish each class
of bank. and at the same time has created
a permanent staff of inspectors. whose spe-
ctal business 1t Is to overlook the fulfill
ment of these provisions. From a practical
point of view the experiment has put an
end to the struggle that had been main
tanned between the apparently opposite
principles-the liberty of action on the part
of the banks and the government of mo-
nopoly. y bank failure is such rarity
as to be almost unknown in Mexico, and
commercial failure is also novelty.
Comparative Statistics.
Under the law 1 have mentioned con-
tiuued Mr. Casasus, many banks of issue
have been opened IN the different states OF
the republic. as we'll as a powerful trade
and agricultural development bank, while
several new mortgage banks are about to
be opened.
AT the close Of the year 1895, De-
cember 81. the share capital of all
the banks of issue then in Mexico
amounted to s35,55O.000. of this sos
100000 was paid up. Add to this the
amount of reserve and precautionary funds.
which was S5,720.047, and we reach a total
of 2S730.047. The development since has
been something wonderful. The paid-up
capital has increased to $40. ia 900, and
with the reserve and precautionary funds
the total capital is S60.6So, 1860. or an in
crease of 40 per cent. In January, 1897,
the paper discounted amounted to S47 $50,
1868. In March. 1900 they came to S123,
0SO, 4SI. As
THE circulate ton of bank notes has follow
ed the same upward movement. From an is
sue of Si7 1861 Jos it has reached S6.,.1S2.J49,
an Increase of so per cent. and the debtor
account current has increased from nearly
S220on,oo0 to over $4,000 900
I'VE are anxious and are striving for
closer commercial relations with the United
States said Mr.. Casasus, in conclusion.
I'VE send "A great quantity of our gold to
Europe in exchange for imports, which we
would much prefer buying in the United
States If our trade was more thoroughly
solicited. We are making many things
now, however. that we formerly bought
abroad. We have now 1877 cotton mills in
operation. and our manufacturing indus
tries are rapidly increasing. Oh, yes. the
future of Mexico is assured. One needs not
be an optimist to realize that.