The Washington times., 1916-05-21

American financial interests IN mex
leo arc concerned. and the diplomats
are taking interest, on account Of the
newest financial plan that has been
undertaken by the Carranza govern
meDt
Dispatches from Mexico City and
other POINTS. supplemented by infor-
nation that has been received In
Washington have caused great
anxiety. On one side 10 the fear-that
Csrranxa 10 preparing to mobilize the
hard money resources Of Mexico. pos
sibly with the view 70 getting ready
for war: on the other. the fear that
no may take liberties with tenking
In his country. IN fash
ion calculated to threaten bankers
with rericus losses.. '.'.''
Need Of Gold Reserve.
As the Carranza monetary plan IL out
lined here. on the basis Of information
from various sources. II Is understood
to be something Hike this:
First, 1t IL realised that the present
depreciation of Mexican paper money Is
one OF the worst features In the Next
can situation. 30. very naturally the
effort to be made to reorganize the
money .
serve large enough to maintain the gold
basis. This would In itself be most
laudabie performance. and one In which.
II there were q government In Mexico
able 10 command general confidence.
Carranza might reSsonAbiy expect the
support Of foreign and conservative eie-
ments.
ton does not command that confidence:
| 10 a.. kaf ha nj N
In all the present currency Issues. ana
to substitute for them a national circu-
lation. based on q reasonable gold re-
The first problem is to get the stock
of gold for q reserve. II II not known
how much gold coin and bullion the
Mexican government has In Its possess
sion at this time; but the amount 10
presumed to be small.
Foreign Trade Prospers.
On the other hand there 10 a good
| deal Of gold still in Mexico. The coun-
| try's foreign trade has prospered quite
marvelously. considering the turbulent
domestic conditions Of the last four
years. Gold has been forced into hid
\ ing. but has not left the country In
very great quantities. There are some
produced more new gold than II has ex-
| period, and that IL II could only be
brought out of hiding there would be
| an ample supply OF the yellow stuff.
plus the big stock of silver. which
| ford solid metallic base for a reason
4 able money system.
The other day dispatches from Mex
leo reported that the federal treasury
authorities. under the lead of Louis
Cabrera. minister of finance. had called
on all banks In the country for very
| detailed statements showing their exact
| conditions. and, among other things, the
| amounts of cash and of silver coin and
bullion on hand.
| Retirement of Issues.
Some OF the banks are reported de-
i termined to oppose making detailed
showing, because they fear the mex
l'step.. This step. 1t 10 understood. will
be the retirement OF present paper Is
i sues and tho substitution OF a new issue
| OF $500. 900 or $500 0O0, 900. to be based
on a gold reserve: This gold reserve
II In gathered, Is to be secured by the
banks: requiring each Institution TO put
| up a certain proportion of gold or sill
| yer. and take In payment for It the new
note issues. The banks don't want e
part with their metal money In such
an exchange: there Is not by any
means enough confidence in the sta
1 bility OF the Carranza regime.
The problem 10 not to provide tn,
| gold but to make sure that after Il wal
| gathered into the federal strong box al
a reserve against the new notes.
would stay there. II 10 generally be
lieved that Carranza himself is entitled
TO all confidence In the honesty OF hi
intentions. but to very little in his ad
ministrative capacity, or In the honest,
Of his subordinates.
Suspicion of Graft.
Despite all efforts to the contrary, tn,
impression IL that a good deal OF graz
Ia going on. and that many of the In
tuentiai subordinates OF Carranza ar,
doing everything possible to feathe
i their own nests, against the time whel
| his regime will break down, and the
will want to get out OF the countr,
with their aooumulations, as Diaz did
and as Huerta more recently did
Nobody believes, apparently, tina
Carranza himself has any notion o
this sort. Whatever else may be sal
OF him as a ruler, he Is believed to b
honest and to want to serve his coun
try. He merely doesn't know how. Blu
> the idea that he Is piling up a privat
: hoard In Havana, Madrid, London, O
, New York. and intends to go where hi
treasure 10 whenever Mexico gets to
Ihnk A hs,lA hin. q Antariais.a1 In N