(403) Untold Stories: Volume 1 Issue 4: Last Revision: 07/21/05

 Numismatic Mysteries and Myths of the Mexican Republic

Part One: Background Information

Mexican Republic Mysteries and Myths

Today there are many mysteries and myths that collectors of the Mexican Republic Period coins encounter while pursuing the complex numismatic world of this epoch.  These mysteries and myths pervade all series of Republican coins from the lowly coppers to the exalted gold crown sized coins.  Over the next few months we hope to bring a few of these mysteries and myths out in the open.  We will try to examine them closely in order to shed some light on the mysteries and myths by identifying their sources, the reasons behind them, and maybe even provide a few answers as to why they have evolved.

The Mexican Republic Period of Mexican Numismatics began in 1823 with the introduction of the Hookneck Style coinage at the Mexico City Mint where the first Mexican Republic Hookneck 8 Escudos were produced.  The last coins recognized as true Republican coinage, were minted in 1909, again at the Mexico City Mint, and consisted of silver Cap and Ray Style or Liberty Cap 1 Peso. Between those two events many fascinating coins were produced at the 14 Republican Mints.  Much of the coins’ history and their exact mintage figures are still shrouded in mystery and myth.

The Influence of Spanish Methods in early Mexican Republic Numismatics

In order to get a clear picture of why and how certain things happened in the new Republic of Mexico, we must travel back to earlier times, when the Spanish Crown wielded total dominance over much of the New World.

The first coinage system of the Mexican Republic was a carryover from Spanish Colonial times.  The system consisted of copper coins that were produced by the Federal Government and some State Governments, all of which were fractional Reales.  There were six silver coins: The ¼, ½, 1, 2, 4, and 8 Reales.  Finally we find five gold coins that consisted of the ½, 1, 2, 4 and 8 Escudos.  Just as their earlier counterparts from Colonial Epochs, those coins were all divided into eighths, not tenths, as were the first United States coins.  The large silver 8 Reales and gold 8 Escudo coins of the Mexican Republic soon took the place of the Spanish Colonial coinage as the world’s major trade coinage. In fact, Mexican silver and gold were legal tender in the United States of America until 1857 and a good portion of the rest of the world even after that.         

The Spanish Crown kept track of mintage figures by weight not denomination, which was normally the case in the United States mints.  This early accounting weight, another carryover from Colonial accounting practices, was used by the Mexican Republic and called a Peso and represented approximately one ounce of silver.  Historically the value ratio between silver and gold had been 16 parts (ounces) of silver to 1 part (ounce) of gold or a 16:1 ratio. 

Thus the early Republican Mints’ accounting practices used mintage reports that were stated in Silver Pesos, no matter if they were copper, silver or gold.  This is sometimes confusing for the beginning collector of Mexican coins, but it is rather simple once you understand that it took 16 Pesos of gold to make one 8 Escudos, 8 Pesos of gold to make one 4 Escudos and so on down to 1 Peso of silver to make a tiny ½ Escudo.  However, it took only 1 Peso of silver to make one 8 Reales or ½ of a Peso of silver to make one 4 Reales and so on.       

There is another carryover accounting practice from Spanish Colonial times that is confusing for many collectors of Mexican Republic coins: Many of the Republican Mints did not use the “calendar year” for accounting!  No, those mints used “fiscal years” when reporting mintage figures.  The Old Spanish Colonial fiscal year began on July the 1st each year and ended on June 30th the following year. 

Today, there is still some confusion as to when certain Mexican Republic Mints changed the date found on their coins:  Did the date change on the calendar year or on the fiscal year?  There is some evidence that different mints used the fiscal year, while others used the calendar year to change dates.  By the way, there is also some confusion as to the dating method used in the early years at the U.S. Philadelphia Mint; it seems that this mint used the fiscal year to change the dates on its coinage until sometime in the 1820s .    

The assayer’s initials are another Spanish Colonial carryover adopted by the Mexican Republic.  The initials could stand for one man or two, but in the later years (most decimal coinage) of the Republican Period we see coinage with a single initial used.  The assayer’s initials were struck on all silver and gold coinage produced in the Republican Mints and were “a sign” that the coins carrying those initials were guaranteed by the assayer. This individual assayer (or assayers) initials validated the coins produced under his or their control were of the correct weight and fineness; the penalty for creating underweight or lesser fineness coins was severe, sometimes death.  While most coins in the early Republican Period carry two initials, there are a few instances where we find three initials in some issues from the Durango Mint for 8 Reales in 1849 though 1852 (JMR) and again in 1877 (JMP). 

Another Spanish Colonial carryover that greatly influenced Mexican Republic Numismatics was the practice of leasing mints to individuals or companies. That practice started in the late Colonial Period and was authorized by the Spanish King. That practice provides Mexican Numismatics with many of the mysteries and myths that prove so troublesome for the collector of Mexican Republic coins. 

Smuggling Becomes a Gigantic Problem

Within a few years after the conquest of the Aztec Nation by the Spanish Conquistadors, silver and gold began flowing back to Spain in huge quantities.  In order to enhance production of the newly found wealth the Spanish Crown granted concessions to Spanish Noblemen authorizing them to mine and refine the silver and gold found in the Spanish Overseas Provinces of the New World.  Because they were to receive a percentage of all precious minerals produced in the New World, the Spanish Kings desired to control and know exactly how much precious minerals were produced in the mining and refining operations,    

During the early 1500s the Spanish Crown decreed that 20%, or 1/5, of all precious metals found in the New World were to be remitted to the Crown.  Greed at all levels of the Spanish hierarchy soon raised its ugly head and the Spanish Kings decided that it was imperative to start minting coins in the New World in order to eliminate or at least reduce smuggling which had reached epic proportions.  Scholars of that time believed it was impossible for the officials of Crown to control the smuggling of gold and silver from the New World without a accountant appointed by the Royal Court, so in 1536 a mint was established at Mexico City to help control the smuggling.  

Soon after the minting operations started in earnest at Mexico City, it became illegal to ship un-coined silver or gold from Mexico, except for the King’s fifth and some jewelry pieces.  Many historians believe this was the reason so many giant gold chains have been found in the wrecks of the Spanish treasure ships.  They were much too heavy to be  worn around the neck of the nobles, instead they were wound around the midsections of those highborn Spanish gentlemen in order to hide their wealth from the king’s tax collectors. 

Forced Loans by The Spanish Crown  

And finally one last trait the Spanish Crown used was “forced loans.” That practice continued for the first sixty years of the Mexican Republic and undoubtedly caused more problems that it solved. We will cover those “forced loans” in depth in a later article, but suffice it to say those “forced loans” was the source of many of the mint's problems and I believe they led directly to a good number of the mysteries and myths during the Mexican Republic Period.

The Foreign Influences in the Early Republican Mines and Mints

The Mexican War of Independence caused the Mexican Republic's have to begin from scratch. Many of its greatest patriots died in the ten year long conflict, and what little commerce there had been before the war was in complete disarray. Many of Mexico's largest haciendas had been razed ground and due to mining inactivity a good number of Mexico’s most important mines were flooded.  Additionally the leaders of new Republic agreed to accept all of the public -- including foreign debts -- and private debts caused by the war.  Soon after that the Mexican Congress made a well intentioned but near fatal decision. They voted to oust the Peninsulares or Gachupines (people born in Spain) from Mexico. Harold Dana Sims (The Expulsion of Mexico’s Spaniards 1821-1836: 1990) informs us about the many financial problems facing the Federal Government. One of the worst was that the expelled Gachupines were allowed to take profits that had been accumulated over a three centuries time frame. That single decision was a primary reason there was a complete collapse of the Mexican economy.

The old Mexican Colonial economy was based heavily on mining and agriculture and the War of Independence had almost completely destroyed both.  The large and moneyed landowners, whose chief business was farming and ranching, for the most part were seemingly able to recover faster than did the miners. Many of the Gachupines, who were giant landowners, were allowed to put their properties into what we today call Trusts in order to make repairs and then later sell those properties to foreign investors at elevated prices.

Many of the greatest mining operations weren’t so lucky.  A goodly number of the highest producing silver mines were completely flooded and that was before Mexico had any of the giant steam powered pumps of that day. As was normally the case “hard money” was king!  Cash in the form of silver or gold coins was in short supply in Mexico. Moreover at that time there were no true banks in the fledgling Republic. Thus Mexico found it exceedingly difficult to secure loans from foreign countries. Another huge problem for mine owners was that their largest source of loans from the past was fighting to maintain its very existence.  In colonial times the Catholic Church of Mexico had been not only the banker for many mine owners, but also the largest supplier of workers.  Many prominent people in the new Republican government wanted to take away not only the non-tax paying privilege of the Church, but also wanted to seize its revenue producing properties that it had taken over by foreclosing on delinquent loans.

Mine owners had hard assets but much of them were under water, sometimes hundreds of feet of water.  They didn’t have the hard cash the British merchants wanted for the steam powered pumps, thus began the British financial influence in the early Mexican Republic and its mining operations.

The British King, George IV, saw all of the political and economic chaos as an opportunity to secure some of Spain’s treasure trove without another costly war in the New World.  He encouraged not only the great banking houses of London to loan money to the new Republican government, but also urged that engineering companies and foundries also become involved there. Thus we see a great influx of British citizens and companies which came to Mexico during the 1820s and 1830s.  Later we will elaborate on two of the more fascinating gentlemen from Great Britain, Marshall and Manning -- I have nicknamed them the M&M guys -- and how they became the lessees of two of the great Mexican mints, Guanajuato and Zacatecas.                        

The Roving Banditos

Shortly after the Mexican War of Independence was began in earnest the countryside saw law and order all but disappear.  Civil order was nonexistent as marauding groups of armed men claiming to be solders, but who were in essence nothing but freebooters, began a reign of terror with the singular goal of gaining personal wealth in a time of disorder.  Those men declared themselves colonels and generals of the Republic, but most were nothing but thieves. 

The roving bands held up individuals, stagecoaches and intercepted ore and bullion shipments being transported to Mexico City from distant mines and refineries.  In fact Robert Wilson (Mexico & Its Religion: 1855) tells us that during his travels in Mexico during the 1850s, he came upon an impregnable abandoned fortress that once was the depository for over 40 Million Pesos in specie awaiting shipment to Spain.  During the war, such an amount of coinage would have been at least two years of production for the entire country.  During the War of independence the highwaymen became such a problem that the Spanish Colonial government authorized mints to be established in outlying cities near the great mining centers of Mexico.  Those cities included: Chihuahua, Durango, Guadalajara, Guanajuato, Oaxaca, Real Del Catorce and Zacatecas. Later all would become Republic Mints.

Data from historical documents proves the roving outlaw bands didn’t go away after the War of Independence; they only became stronger and inflicted more pain and misery on the people and commerce of Mexico.  The mines, ore refineries and the mints continued the practice of gathering large shipments of ore or coinage to be transported in large armed caravans.  That was witnessed and documented by Robert Wilson in 1851 when he encountered eight wagons, drawn by 12 horses each, full of coins that were being escorted by a group of military lancers.     

The Mexican Republic Mints

As far back as the 1600s a Royal Mint had been authorized by the Spanish Crown for city of Guadalajara, but it would take the Mexican War of Independence to cause the construction of that and other mints outside Mexico City.  Continuing operations of most of the new Republican mints were the direct result of foreign companies that were involved in the new mining operations. It began after the Mexican Congress finally realized they had to have to foreign financing, if the country was ever to be solvent again.   

New Minting Operations Need High Quality Steel and Minting Equipment

One of the most important missing ingredients needed for large minting operations was high quality tool steel and because the prior to the War of Independence the Spanish Crown had not allowed steel in any quantity to be manufactured in any quantity, it was almost impossible to find any locally.

That lack of steel presented another opportunity for European countries and companies to become involved in the mineral wealth of Mexico.  Most of the Royal branch mints established during the War of Independence had been slipshod operations; many made only hand-punched coins, some only cast coins and few had any true coining presses.     

The old Royalist mints needed new equipment if they were to meet the desired quotas from the mines taken over by Europeans.  Richard Doty (The Soho Mint & the Industrialization of Money: 1998) gives much insight into how the Soho Mint and its owners became involved in minting operations in Chihuahua, Culiacan, Guanajuato, Mexico City and Zacatecas.

We know for a fact that some Americans were also involved in several mints and there are indications that France and Belgium had citizens and companies that either owned leases or supplied minting equipment, dies or other products needed by the new Republican mints.

In Summary

I hope you can begin to understand some the problems facing not only the new Republican Government but also the new foreign investors, mint lessees and mine owners during this very unsettled time.  On one hand the Mexican Federal Congress hated having to look to Europe for financial help, mining equipment, minting equipment and even simple things such as tool steel and dies.  On the other hand they realized that without foreign help the economy and the country would die before it ever had a chance to really get started.

Unfortunately the Mexican Federal Congress kept passing laws that were contradictory.  First they encouraged foreign investors with by passing liberal laws for them, but then they passed laws saying foreign investors couldn’t own properties which it was felt, would allow them more than marginal profits.  They passed laws saying all coinage had to be made with matrixes or dies produced in Mexico City, yet the Mexico City Mint hardly had the resources to produce their own dies let alone those for nine additional mints. Congress also passed laws saying it would no longer tolerate foreign investments in agriculture, mineral production and minting.  However when the wheel hit the road they knew such laws couldn’t and wouldn’t be enforceable.  So problems kept piling up causing the downfall of more than one Federal Government and even whole political parties, leading to several major conflicts and internal wars.

Furthermore the Mexican Government squandered or lost most of the money loaned to it by the great London banking houses, money that was supposed to be used to rebuild the infrastructure of Mexico. By 1836 it only owed interest payments but also principal payments and was again bankrupt and dissolute.

Those were just an inkling of the problems that led to the Mysteries and Myths we hope to cover in our articles.      

What Specific Mysteries and Myths Are We Looking For?

The Mexican Republic mints struck millions, if not billions, of coins during their histories.  Those gold and silver coins fed the engines of commerce and industry all over the world. At least hundreds of millions of silver 8 Reales were shipped to the Far East.  In China the 8 Reales were the preferred coin of trade and for many years and all Chinese merchants had to pay their taxes in famed Mexican "piece of eight" because they were the only coins the Imperial Chinese Government believed to consistently be of full weight and fineness.

British Trading Houses secured millions of 8 Reales which were then shipped to India and places far and wide across the British Empire.  Some of those coins entered directly into commerce, while others were dumped into the melting pots to create Indian Rupees or other coins.

Millions of 8 Reales, 8 Escudos and minor reales were shipped to the United States of America.  Once here many of the 8 Reales and 8 Escudos were melted at the New Orleans or Philadelphia mints to make U.S. coinage, while other coins, primarily the minor silver reales were absorbed into U.S. commerce until 1857.

Here are a few of the more perplexing mysteries of the Mexican Republic Period we will attempt to cover in the next few issues of Mexican Coin Magic:

  1. What happened to the large quantities of gold and silver minted at certain mints during those chaotic years? 

  2. Why do some coins have secret letters and marks hidden on them and what do they mean?

  3. Why were there so many foreign individuals and companies involved in minting Mexican Republic coins?

  4. Why did the Mexican Republic have so many different mints?

  5. Who built and maintained all of the Mexican Republic Mints?

  6. Where did all of the different Mexican Republic die styles come from and why?

  7. Why are some assayers initials so excessively rare today?

  8. Why do we find so many 8 Reales with Chinese Chopmarks on them from certain mints and time frames and almost none from others?

  9. Why did precious metal production drop so drastically during certain years in some mints? 

  10. Why are some denomination coins so difficult to find in high-grade?

The Mexican Republic’s Missing Gold

In the following parts of this series we will attempt to point out where some of the largest recorded production quantities of gold seem to have disappeared from certain mints.  First, let me warn you that when it comes to actual stated production records I have serious doubts about all of the “Official Mint Records.”  From some historical documents, we know that there was rampant fraud in more than one of the leased mints.  For instance in Culiacan, Guadalupe y Calvo and Durango fraud led to several lessees having their leases rescinded early and subsequently awarded to others or either the State/Federal Governments taking control of those mint operations.

One of the major problems with the “Official Mint Records” during the early days of the Republic was the method by which the production of gold and silver was recorded.  There are indications that the lessees were responsible for the record keeping. This was different than the way the Spanish Crown handled that record keeping function. During the Colonial Era the Spanish Crown appointed an “accountant” who was responsible only to the king’s authority to produce the “Official Mint Records”.  This was an important position as the “certified accountant” made sure the Spanish Crown received its portion of the production.  By allowing the individual mint lessees to make the production reports to both the state and federal governments the Mexican Republic in essence allowed the “fox to guard the henhouse.”

I feel sure no mint lessee ever overstated gold or silver production, but there is a good chance that production figures were often understated.  Now using a small mint, let’s take a sneak peak at a one problematic instance where reported gold production doesn’t match surviving gold coins.          

The Alamos Mint:

The “Official Mint Records” indicate there was no gold production in this mint until 1868, yet the most common gold coin for the Alamos mint is the A 1864 PG 8 Escudo. This brings up several questions:

Now for an even greater mystery: 

·      The largest single year of reported gold escudo production (18,512 Pesos or 1,157 8 Escudos) during the Escudo Era for the Alamos Mint occurred in 1871!  When was the last time you saw an Alamos 1871 8 Escudo?

One final thought; the Alamos mint was a small mint when compared to some of the other Mexican Republic mints and its total gold production, during its entire history, doesn’t amount to some other mint's single year production figures.  

Let us know [MexCoinMagic@aol.com] if you would like more tall tales about the Mexican Republic’s missing gold?  Next time we will look at a few more strange happenings at different mints and maybe we can amaze you with even more interesting stories surrounding the mints and the people behind them.

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