The Birmingham age-herald., 1913-04-12
Claim Withholding Official
Recognition by United
States Has Baneful
Influence
MEXICAN TREASURY
REPORTED TO BE IN
WOEFUL CONDITION
Continuation of Military Operations
in Restoring Peace Practically
mpossible-Rebels in Control
of Several States-Situa-
tion Very Uncertain

Mexico City, April 11.-That the with
holding of official recognition of the Uni
ted States has materially weakened the
1Inerta government is the opinion gem
orally expressed by the public and pri-
Sately admitted In certain Mexican Of
ficial circles
The new rebel movement has made
greater progress than has the provisional
government in suppressing insurgency,
and it is no longer a secret that the
condition of the treasury is such as will
not permit the continuation of military
operations much longer. This has been
publicly admitted by the Mexican minis
ter of the interior. Garcia Grandos
The chamber of deputies has not ap-
proved the proposed foreign loan. but its
failure to take up this matter is said to
be due TO desire to avoid further EN-
harrassment to the finance department
which so far has been unable to arrange
for the .flotation of the loan, notwith-
standing recent assurances to that effect
from London. 1t is assumed by the gov
ernment that its inability to issue the loan
is due directly to non-recognition by
Washington.
Blame United States
Editorial writer's comment upon this
phase of the situation and there has be-
gun a propaganda In the local press tend
ing to place responsibility for the fate
Of Mexico on the United States.
Further complicating the financial diff
ficulties of the government is the steady
increase in the exchange rate which
within week has mounted from prac-
tically parity, to 220 and that rate is only
available to favored patrons. In an eff
fort to check the upward tendency of
the exchange rate the minister of finance
is urging Congress to authorize an in
crease of 10 per cent in the export tax on
gold This has brought Afexicans to the
rralizalieL TINT even the, national CUR
rency is no longer maintained on a gold
basis.
Business conditions in Mexico are re-
flecting seriously the revolutionary dis
turbances. Smelters at Monterey, Vea-
dena and Torreon have been closed for
lack of fuel. At San Luis Potosi the
smeiters are running ON half time and
at Aguas Calientes to third of their
capacity At Chihuahua and Matehuala
the mills are running on full time.
Transportation facilities remain serious
" crippled since the railroads to the sea-
board and Matamoros are the only out
lets.
Rebels practically control the states
of Sonora, Coahuila and Durango in the
north, while the situation in the south
where Emiano Zapata still Is i'm control,
has not materially changed In Neuvo
Leon the federals are slowly reganing
possession of the railroad TO Laredo on
the Texas border, but the rebels, pushed
hack from this line of communication,
are extending the zone of operations far
10 the eastward. -
So uncertain is the situation in the
state of Durango that the government
itself Is unable to say whether the state
capital is held by government forces.
There is no communication between
Durango and Mexico City either by rail-
road or telegraph.