The Twin Crises (Problems of the Balance of Payments and Banking) of 1913 and their Effects on Currency and Banks

Abstract

This article is an account of the major effects wrought by the Mexican civil war (1913-1916) on the currency and on banking activity, particularly in 1913, when the economic problems resulting from the  coup d’état that brought Victoriano Huerta to power first began. These problems include the disequilibrium in the balance of payments that turned into a banking crisis, which concluded with the abandonment of the gold standard and the establishment of bank notes as legal tender. The civil war and the deterioration of the economy continued progressively during the following years and at the end of the 1920s resulted in the bankruptcy of the majority of the banks comprising the Porfirian banking system.