Paper Money of Sonora

.. by Simon Prendergast

  • Increase font size
  • Default font size
  • Decrease font size
Home The History Early banking in Sonora

Politics and economics

Politics and economics in Sonora


At the turn of the century politics in Sonora was characterised by cronyism, exaggerated tenures in public office, and regional rivalries. Since 1883 the state had had a law forbidding the re-election of its governors so to circumvent this statute, a triumvirate managed the politics of the state. Between 1883 and 1911 Luis Emeterio Torres and his protégés Ramón Corral and Rafael Izábel rotated the office of governor among themselves.

This ruling clique managed the politics of Sonora with an iron hand. After 1891, all nine districts in Sonora had prefects appointed by the governor, who also controlled the presidentes municipales. By fraud, or because the corrupt nature of politics discouraged opposition, these petty bosses elected themselves over and over again. From 1879 to 1911, just seventy-four men, most of whom were friends or relatives of Torres, Corral, or Izábel, occupied the 208 seats of the sixteen state legislatures, each for a three-year term.


This was an era of expansion that until 1900 mainly benefited the mining districts of the northwest and western Ures, centred on Hermosillo, since 1879 the capital of the state.

Until 1900, both the old and the new economic groups looked to Corral for leadership. The coming of American investors and the Yaqui wars, which split businessmen and hacendados into opposing camps, the arrival of hordes of workers in the booming mining towns, and the growth of Guaymas and other commercial rivals of Hermosillo, upset the political balance.

From 1900, Corral could count on the support of only the older, traditional interests. Izábel was a land baron, the owner of four haciendas in the district of Hermosillo, where he and his neighbours, with modern farm implements, cultivated crops for sale on the domestic market. By 1910, Izábel and his band of hacendados were confronted with the formidable challenge of farmers in other regions of Sonora, particularly in the prosperous, labour-intensive, export-geared haciendas of the Mayo and Yaqui river valleys. In the end, Izábel and his clique of northwest hacendados lost their leadership of the state’s agriculture. Concomitantly, the coming of the railroads, which linked Naco, Cananea, and the mining camps of the northeast with Arizona, cost the Hermosillo oligarchy its place at the top of commerce and business.

By the 1860s, mints owned by British interests operated at Hermosillo and at Alamos. Very little of the silver processed at the mints remained in the state. The silver not officially exported ‘was smuggled out of the country in small coasting vessels and placed on board vessels at sea, to be sent to the United States and Europe’Annual Report of the Commercial Relations Between the United States and Foreign Nations, Washington, 1868. Many Sonorenses hoarded silver coins and used them in trade with foreigners. The outward drain of silver coinage had a detrimental effect on the Sonoran economy, creating a permanent shortage of hard currency, hindering commercial transactions, and ironically, increasing reliance on foreign imports. Attempts by the government to introduce copper coins to stimulate commerce failed miserably, being compared by most Sonoran businessmen to the ‘plague’.

District prefects repeatedly cited the lack of silver coinage as the principal reason for the depressed conditions of native commerceAGHES, carpeton 433, 1870-1871, reports of district prefect of Hermosillo and Guaymas. The lack of a bank of issue until late in the century also hindered business and meant large transactions had to be made in silver - Alfonso Iberri recalled the mule trains bringing coinage into Guaymas in the 1890sAlfonso Iberri, El Viejo Guaymas, Mexico, 1952. Also a stagecoach carrying 20,000 dollars in wages from Bisbee to Placeritos was robbed in 1898 (Néstor Fierros Moreno, ).

Since the late 1850s, a select group of merchants had profited from increased trade with the United States. Economic relations with the north provided the impetus for the formation of a new merchant and landed elite. Individuals who adapted to the growing trade with the United States represented both older established retailers, such as the Aguilar, Camou, and Ortiz families, who had been operating since the 1830s and younger upstarts such as Manuel Mascareñas and Luis Martínez, recent arrivals from the state of Durango. Markets in Arizona, whether civilian or military, provided them with new opportunities and increased revenues.


Until Sonora obtained its own bank, credit was tight and granted only to a tiny coterie of large merchantsLa Constitución, 1 October 1897.

Commerce in Sonora, as one American noted in the 1850s, operated on ‘the credit system’Thomas Warren Robinson, Dust and Foam: or, Three Oceans and Two Continents,  New York, 1858. Sonoran merchants received foreign and Mexican goods on consignments, never having, as Juan Robinson, Jr., pointed out, sufficient capital to purchase products outrightAGHES, carpeton 466, report of Juan Robinson, president of ayuntaminento, Guaymas, 8 March 1875. Even the customs house extended liberal credit terms to local and foreign retailers: Mexican merchants had a year to pay the full tax on their goods. although foreigners only had eight monthsGregorio Mora, Los comerciantes de Guaymas y el desarrollo económico de Sonora, 1825-1910 in IX Simposio de Historia de Sonora,  Sonora, 1984.

By controlling access to goods, the large merchant houses of Guaymas and Hermosillo monopolized trade in the state. To receive merchandise for resale involved entering into arrangements with these wholesalers. A handful of merchants dominated commercial exchange, functioning as intermediaries to Europeans and distributing goods on credit throughout Sonora and neighbouring Baja California, Arizona, and western Chihuahua. To assure adequate market penetration, they either sent travelling agents into the field, or they entered into secondary agreement with other small-scale merchants. They assumed the risk for lending to outlying areas and compensated for their investment by dramatically inflating prices on products. Liberal credit terms, or ‘el crédito de mi firma’ as the powerful Manuel Mascareñas often stated, compensated for the lack of specie and allowed the system to function. For instance, when Mascareñas sought to equip his recently acquired Hacienda Santa Barbara, he relied on lines of credit from other merchantsAER, Copiadoras Mascareñas (April/July 1886), April 4, 1886, Manuel Mascareñas to Don Antonio Hoyas. In a society as tight-knit as Sonora’s, a merchant's word represented his social worth.

Credit implied a degree of social trust and an adequate system of formal and informal controls to ensure that debtors made payments. When Mascareñas closed his store in Hermosillo in order to move to Nogales, he sent letters to all debtors asking that they pay their accounts. Several individuals in Nacori and Granada ignored his request. Mascareñas then contacted local merchants and his friends to exert pressure on the individuals who remained in arrears. This informal system compelled people to pay off their debts. If persons did not make payments, their reputations would be ruined, and they received no further credit from other merchants. These mechanisms of control implied the existence of strong ties between merchants of the area, cementing relations within this socioeconomic class.

The system of credit allowed merchants to acquire land, to become large hacendados in their own right, and to develop vertical production ties. Typically, agricultural producers received a line of credit from merchants based on the value of their projected harvests. Cattle, flour mills, and land also served as collateral. When Jesús Moreno of Magdalena borrowed money in 1886 from merchant Pascual Camou, he offered his land as collateralAER, Copiadoras Mascareñas (April/July 1886), December 26, 1886, Pascual Camou, Hermosillo, to Manuel Mascareñas. Unable to visit the area, Camou asked Mascareñas to inspect the ranches and determine the actual value of the land.. With a line of credit, hacendados and rancheros acquired items such as cloth and other consumer products with which they paid their labour force. This system produced tremendous advantages for merchants. First, since most rancheros and even hacendados desperately needed products, they sold their future crops at very low pricesJ. M. Luttrell, A Trip in Sonora, in Arizona Quarterly Illustrated (January 1881). Merchants like Camou, Escobosa, Mascareñas, and others thus acquired wheat crops at a decided advantage. They exported the flour to Sinaloa or Arizona where they made a hefty profit. When crops failed to materialize, which they often did, merchants foreclosed on vast number of properties, thus becoming significant hacendados themselves. The Camous, for example, acquired a large number of cattle ranches in this way, becoming large-scale producers and retailers of beef. As this credit system took root, debtor notes became a commodity that could be sold repeatedly by business interests. In one case, J.P. Camou reported acquiring a note that had been ceded first to the inheritors of the F. Aguilar estate and then to Rafael RuizAHMRUS, Cartas Camou, letter Juan P. M. Camou, Hermosillo, to Juan P. Camou, Guaymas, 2 April 1897.

This old credit system benefited the Europeans in commerce, and as a result, American suppliers who demanded cash for their goods remained uncompetitiveAnnual Report of the Commercial Relations Between the United States and Foreign Nations, 1870, Washington, 1871. The American ambassador in Mexico City complained that his countrymen did not have access to long-term credit in the United States, where money remained tight. German merchants operating in Mexico, he insisted, had the backing of large European banks who extended liberal credit termsExposición de la Secretaría de Hacienda de los Estados Unidos Mexicanos sobre la condición actual de México y el aumento del comercio con los Estados Unidos,  México, 1879. Americans required immediate payment for their goods, and when they did accept credit, it was usually short-term - in most cases less than thirty days. To compensate for granting credit and to cover the cost of transportation, Germans and others inflated the price of their goods. The arrival of the railroad in Arizona increased the availability of inexpensive consumer goods from the United States, providing American businesses with new advantages. Cheaper United States products displaced the Europeans and their credit system. Smaller, less capitalized merchants who depended almost exclusively on credit to supply their stores now found themselves excluded from a new important source of supplies. Only a small elite possessed the means to make the transition to the new cash system required by American suppliers.