New-York tribune., 1919-02-07
Carranza Acts
To Settle Oil
Controversy
Calls Special Session of
Mexican Congress to Con-
vene Early in April
To Ref und De b t
Expects Offer of Funds at
Conference With New
York Bankers Next Week

Rafaclo Nieto, Mexico's Acting Sec
retary OF Finance, who had just reaahed
this city to confer with local banking
groups on loan for the purpose of re-
FUNDING the Mexican national debt and
resuming interest payment, yesterday
revealed that President Carranza will
call special session of the Mexican
Congress early in April to act on the
oil situation.
Besides seeking to refund the en-
ternal debt of $250,000,00O and accrued
interest since 1914, Mr.. Nieto indicated
that the government would also like to
refund the debt of the National Rail
ways of Mexico, which had been prac-
tically run by the government since
1913. during which period no interest
has been paid on it's bonds.
81 understand" the Secretary told
The Tribune, "that a banking group
here will make an offer to me at con-
ference that has been arranged for next
Monday"
Terms Uncertain
Mr.. Nieto would not make public the
names of the firms in the group he re-
ferred to, and bankers identified in the
past with Mexican financing denied any
knowledge of the forthcoming meeting.
The Acting Finance Minister, in reply
to an inquiry, said that he did not know
specifically what terms bankers might
be willing to name, nor would he indi
cate the conditions on which the Mexi-
can government would insist
Mexico, the official said is fast get
ting away from paper money imitation.
"For the last two years." he declared,
paper money has been retired in Mex
leo and is no longer legal tender. Gold
and silver only are now accepted in dis
charge of debts In two years we
coined 100000 pesos (S100000) of new
Mexican money. Before that $4,000
pesos were in circulation.
I'VE have already retired more than
half of the paper money-at least $780,
900 pesos. We do it by requiring tax
payers to pay in addition to their taxes
the greatly deprecated printing press
money.
One Bank of Issue
an the future we shall have only one
bank of issue in Mexico. At the spe
cal session of our Congress, which will
be called early in April, the government
will propose the creation of a govern
ment owned bank of issue, with a CAPT
tai of $780, 900, which will have branches
in all the important cities. 1t will be
tr fxt,n ho
notes for every peso in gold on re-
serve"
Asked about the plan of the Car
ranza administration, which he repre-
sents, for the general reorganization of
the banking system of the country, the
Acting Secretary said that in essence
the new programme provided for spe-
cialization in banking, implying the or
ganization of mortgage banks, agricul-
tural, oil and mining banks in addition
TO the bank of issue. Foreign banks,
he asserted, will be permitted to estab
lish branches under the new law. but
the government insists that sufficient
reserves be kept in Mexico for "the pro-
lection of the depositors." In addition
to their specialties, banks will be per-
mitted to do a general banking busi-
ness, he said.
AS to the oil question, which has been
the central point of disagreement be-
tween the Mexican government and for
'egn interests, and was the cause of the
formation in New York recently of the
National Association for the Protection
of American Rights in Mexico, Mr..
Nieto said that he believed a solution
that would be just to all concerned
would be reached at the next session of
Congress. The main contention of the
foreign interests, he said, was that the
new plan for levying royalties on oil
properties, which the American oil in
terests characterize as being contisca-
tory, is that the new plan should not be
made retroactive. This request would
be met, he said, by exempting oil prop
critics that are already being worked
from the provision of the new Mexican
constitution, which declares that all
subsoil properties belong to the govern
ment, but indicated that unworked oil
lands would be treated much as new
enterprises under the new law which