.901 fineness. It sold abroad by weight usually at a slight discount as compared to bar silver though occasionally it had a premium for export to the Far East where it circulated as coin.[1]
By Presidential decree of March 25, 1905, and the monetary law of December 9, 1914, the Mexican monetary unit was declared to be the silver peso the value of which was fixed by the law at the equivalent of $.4985 in United States gold coin. This legislation placed Mexico among the countries using the gold standard.
Those in control of the government in the first years of the revolution avoided the use of paper money but a more radical policy was adopted to furnish funds to finance the revolution headed by Carranza. On April 26, 1913, to help pay the expenses of his army Carranza, by decree, authorized the issue of $5,000,000 Mexican in paper since known as the Monclova issue. These bills were to pass at face as legal tender. Those who refused to accept them faced jail sentences.
As often has been the case when governmental authorities have yielded to the temptation to issue fiat money, it became in this case impossible for them to summon the resolution not to do so again. It was an easy way to meet expenses. The bills issued were poorly printed and counterfeits soon appeared from all directions, including United States ports. Even the official issue
- ↑ Reports from Her Majesty's Diplomatic and Consular Officers Abroad, Commercial No. 36 (1883), . . . Part VII, . . . Report by Lionel E. G. Cardan on the trade and commerce of Mexico, gives a good description of the conditions in the early eighties of the last century.
