New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-11-07
.HUERTA'S FINANCIAL
MOVE ST|RS MEX|CANS
Disturbed by Decree Making
5O-Cent Piece and Bank
notes Legal Tender.
FEAR RIOTlNG MAY RESULT
Expected Rise in Prices OF
Necessaries of Life Likely to
Cause Discomfort Among
Lower Glasses.
fBy Cabl. 10 The Tribune. ]

INV Gable TO the 1rlOuHe'
Mexico City, Nov. presidents OF
this city have been thrown into graz
uneas,ness nv General Huerta's decree
declaring 5O-cent pieces and banknotes
unlimited legal tender. 1t Is feared
the measure will complicate the hnan-
cial situation and lead to a business
crisis possibly also provoking popular
riots IL az is probable, the prices OF
prime necessities are considefao'
raised.
The 5O-cent piece is purely token
coin and OF an alloy considerably m
,or,or IN that of the Mexican dollar
ord neso. for while the latter contains
O oo7 narts in 10000 OF pure silver. the
,o-cent niece contains 800 parts IN
1000.
According to /. while the silver
neso is en- unlimited legal tender, the
5O-ce piece is n legal tender only UP
TO twenty pesos. BY the decree Issued
under the special powers assumed ny
him in the finance department, Huer'a
makes the 5O-cent piece an uniimi'ea
legal tender. and az II is the coin useu
In minor commercial transactions, re-
tail dealers are sure to try TO pro-cc'
themselves by increasing prices OIL 'he
nncessaries OF life, which in turn VIII
cause discomfort and perhaps rioting
among the lower classes. Cost OF nv
ing already has been considerably IN
creased here since the financial strin'
gency began.
In regard TO banknotes, it is Thought
that the inhabitants OF the federal us
trict in which the capital Is situated
are better off than the inhabitants OF
some OF the states. for while the for-
mer will only be obliged to accept as
legal tender notes Of the Nauonai
Rank OF Mexico and Bank OF London
and Mexico. the inhabitants OF other
states will be required. in addition. to
accept the notes Of various state BANKS.
The National Bank Of Mexico and the
Bank OF London and Mexico are con-
trolled by French capital. They are
thought to be solid and capably man
aged. but the status OF some OF the
state banks has been impaired by pro-
longed disturbances and the Interrupt
ton OF economic activities during the
last three years.
Huerta's decree provides that the
banks must continue TO hold the legal
reserves OF cash as security for their
note issues. In this respect the Ma
tional Bank Of Mexico and the Bank OF
London and Mexico are governed by
their special charters, the former being
entitled TO issue notes TO three times
the amount OF cash on hand. but che
state banks are bound to hold in cash
an amount equivalent to one-haf OF
the amount represented by their notes
in circulation. plus deposits payable on
demand.
II is recognized that, while In the
present circumstances the government
has the right to supervise the circula-
ton OF the banks. II may be difficult
to secure exact compliance with these
conditions. I is pointed out that
Huerta's decree releasing the banks
from the obligation OF redeeming on
demand their notes already issued
practically amounts to a retroactive
measure, and all retroactive legislation
is forbidden by the Mexican constitu-
| ton.
Government and banking officials.
discussing the new currency measure.
say the temporary legal tender char
acter given to banknotes must not be
COMPOUNDED with paper currency, as the
banknotes will continue TO be guar
anteed by "A legal stock OF cash, while
paper currency has nothing behind II
but the ultimate credit OF the Issuing
institution. They say the measure Is
designed to protect the nations STOCK
OF specie. which henceforth will remain
| i'm reserve in the chief banks.
| II is declared that despite the recent
punitive legislation against the melt
ing down OF pesos for shipment abroad
as bullion the practice as continued
! and the officials say that there was nc
! means to prevent II as long as the
| banks stood obliged to redeem thei'
notes in pesos. Henceforth. they say
spectators will be unable to get al
the nations reserves Of specie, which
were threatened with depletion. They
affirm that there Is no cause Tor alarm
over the new system.
|