The Carranza “loans” from the banks inevitably shook their credit and with it the credit of every business man and business organization, and inevitably the credit of the Mexican government itself. Banknotes dropped in value and although they never reached the low mark touched by government paper, their fall to 75, to 50 and finally 30 per cent of their face value reduced in like manner the value of all bank deposits, and finally brought banking transactions to a stand-still. The process of final destruction of the banks began with the edict of September 26, 1915, abolishing out of hand the Huerta concession which had allowed some of the banks to issue additional paper currency to cover the Huerta “loans.” The banks were required to bring their reserves up to the old basis in forty-five days, and despite the blow to their credit, this was accomplished. On November 10, however, another Carranza edict reduced the recognized bank reserves by requiring that silver coins be estimated at their bullion, instead of their face value. This storm was weathered, in its turn, and nothing further was done for nearly a year, although during that time the breach between Carranza and the banks was continually widening. An edict of September 15, 1916, required that the banks should have in their vaults within sixty days enough gold and silver to redeem at par every banknote which they had in circulation, currency which had been issued under concessions allowing a banknote circulation twice the total of the bank reserves in metal and bankable paper. The decree also prohibited the banks from doing business with the public until the conditions set down were fulfilled. In other words, liquidation of notes and deposits was stopped, and the life blood of banking, the active turning over of funds in the course of business, was cut off. Finally, on December 14, 1916, the _coup de grace_ was given, and the banks were officially closed to all business excepting the collection of bills receivable in the depreciated currency of the banks themselves. Thus by a series of cumulative blows the whole Mexican national banking system which had been built up under Diaz was destroyed utterly. At the time the final blow was given, banknotes were accepted at about 30 per cent of their face value, and had apparently reached stability. Bankers assure me that had they been allowed to operate, even under the conditions then prevailing, they could eventually have pulled themselves and much of the business of the country out of the hole. It is also interesting to remember that the franchises of the Banks of Issue were to expire in 1922, time sufficient, under careful government leadership, for them to wind up their affairs and furnish a solid financial basis for the erection of some new form of national currency.