The West Virginian. [volume] (Fairmont, W. Va.) 1914-1974, 1915-12-09
NICARAGUA NOW
ON A GOLD BASIS
Required Patiencean Cour.
age to Get There, But
They Did 1t.

aMANAGuA, Nicaragua, Dec. g.
The monetary conversion OF Nicara.
qua, by which mass of paper money
with nothing behind 1t save the i'm.
paired credit of the government has
been converted into a currency backed
by a gold reserve, was completed on
October 81, by the expiration Of the
time In which to change the old pa.
per into the new money. ,5l
The conversion was begun in a pre-.
Eliminary way In 1911 by the proyis.
ional government which succeeded the
-egime OF Ze!aya and of Madriz, the
president whom Zelaya left when he
fed. 1t was entered into actively in
1912, was interrupted and set back
year by the fierce revolution OF that
year, was resumed in 1913, and al:
though retarded by the business de.
preston that fell upon the country
was making fair Roadway in 1914
when 1t was again set back by the
European war. Notwithstanding these
obstacles the present government,
which succeeded the provisional Oft
ciaiS after, the elections of 1912, has
steadily kept at 1t and now consum.
mates its plan, much to the benefit
OF business, commerce and industries
When President Zelaya,.. who kept
himself In power and dictated Nicara-
qua for seventeen years, from 1893 TO-
1909, first assumed office, there was a
silver currency. During his first eight
years he let 1t alone, issuing but
small amounts of paper. In 1901 and
1902 he issued 5,2o0,624 pesos in pa
per currency and the country at once
went from a silver TO paper basis,
the gold exchange falling from the
silver rate Of EOS in 1900 to fluctu-
ating rate Of S to 6 in 1902 and to
s in 1908. No further paper issues
were made for some years, in fact
some was retired. the exchange rate
falling to $50 or 6. IS.
His last two years, 1908 and 1909,
were turbulent and revolutionary.
Over three million pesos more paper
were issued. the rate jumping to 8.
His temporary successor DR.. Madriz,
found no money and a first class rev
olution. He issued 100000 pesos.
The revolutionary government who
gained possession in September, 1910.
had no money and at first no reyen-
ues and issued 24,000,000 during 1911
to pay the expenses Of their revolu.
ton and other things. The rate fluc.
tuated from u to %. averaging IS.
4 Then they began the monetary con.
version. The services Of the late
Charles A. Conant Of New York and
F. C. Harrison of London, late Treas.
urer.G General OF India, two OF the best
experts in America and England were
secured to devise the reform. "A
group OF New York bankers were in.
terested through the State Depart,
ment on invitation of Nicaragua, and
financed the conversion. Itscost Mic.
aragua approximately. two millions be,
sides much financial distress at times,
but though often bitterly discouraged
the government stuck to 1t, as they
wanted to get their country on a sound
money basis, and now they reap their
\ reward.
The new money, Of which the cor.
doba is the standard, equal to an Am.
erican dollar in value, went into force
March %, 1913. The gold reserve is
kept in New York. All went well, ! ex.
change remaining at par, until theEwar
lin Europe broke out. Then, frighten:
ed unduly as It has since turned out,
but along with the rest Of the world,
the government passed a moratorium
law and the sale OF gold exchange
stopped. Cordobas went to a discount,
at first to eight points. Then, assist.
ed by local spectators who wanted
to return to the shalycons days OF wila
fluctuations, cordobas fell and rose,
and fell again, at one time reaching
les per cent. discount. Early this year
the favorable reaction set In assisted
by one of the local banks, and the
cordoba has gradually risen till now,
coincident with the conversion of the
last of the old paper money, 1t Is prac.
iticallyl at par again, and the govern.
ment and the bankers say It will be
maintained there at all cost.
7 Considering the effects OF the war
on finances, and that 1t cut NJ caraglan
commerce into half, and also consid.
ering what has happ ened to the pound
sterling and the money standards OF
Europe, Nicarag ua,s feat Of bringing
its money to par Is very cred itab1e.
1t has had good financial advice and
assistance, and has persevered. It
should be the first step towards q re.
yival OF its commerce and business.
The retirement OF the last of the pa:
per currency and bringing the new
cordoba back TO par Is hailed as a
financial feat. President Diaz and Min.
lister Guadra are naturally much elat.
ed.