Paper Money of Sonora

.. by Simon Prendergast

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Home The History El Banco de Sonora

First attempts to establish a bank

First attempts to establish a bank in Sonora

It was not until 1897 that Sonora finally saw its own state bank though before this date there had been some unsuccessful attempts.

First attempt

On 8 July 1881 a concession (decree núm. 107) was granted to Robert R. Symon (a Briton who already held the concessions for the mints at Alamos, Hermosillo, Culiacán and Durango)Symon reestablished the Hermosillo mint in 1851 and the Alamos mint in 1862, His company was Symon y Camacho. By 1882 Symon was residing in New York, Eduardo D. Adams, José María Ortez and Rafael Ruíz to establish an institution under the name of the Banco del Estado de Sonora. It was to have a capital of 100,000 pesos and was authorised to issue notes of voluntary acceptance and payable on sight (billetes de curso voluntario, pagaderos a la vista al portador), to a total of twice its existing capital. The notes could be in denominations of five, ten, twenty, fifty, one hundred, five hundred and one thousand pesos. In return the bank had to grant the state government an unsecured annual credit of up to 20,000 pesos at an 8% rate of interestLa Constitución, 21 July 1881.

As the concessionaires could not meet these obligations, the concession was declared null and void and on 29 July 1882 a new concession (decree núm. 52) was granted to the same people. The terms of this new concession were more advantageous as now the total value of the issue could not exceed three times the capital, and notes could also be issued in denominations of twenty-five centavos, fifty centavos and one peso. However, the annual credit was increased to 50,000 pesosLa Constitución, 5 August 1882.

By September 1882 the company had remitted its proposed statutes and was expected to start business in the near futureLa Constitución, 20 September 1882. A correspondent to an American paper wrote "I had the exceeding good fortune while on the train to meet a most polite and well informed Mexican gentleman – Jose M. Ortiz, of Alamos, Sonora, Mexico, a brother of the governor of Sonora. ... Senor Ortiz says he and his brothers have also recently founded a bank in Sonora with a capital of $500,000, one-fifth of which is held by Boston parties" ((Las Vegas Daily Gazette, 24 September 1882) but there seems to have been some delay. In April 1884 the Commerce Act put banking under federal control and the concession became ineffectual.

Second attempt

On 30 August 1889 a concession was granted by the Secretaría de Hacienda y Crédito Público to Ricardo Uruchurtu, as nominee for the company that he represented, to establish a bank of issue in Hermosillo. The bank would have a capital of at least 500,000 pesos and the right to issue notes in denominations of five, ten, twenty, fifty, one hundred and five hundred pesos up to the amount of its exhibited capital, though not so as to exceed three times its metallic reserves. The new bank was granted various exemptions from taxes by the state congress on 7 December 1889 (decree núm. 15)La Constitución, 13 December 1889.

Uruchurtu was an employee of Ramón CorralHe managed Corral’s flourmill and electrical plant, ‘El Hermosillense’ and it is tempting to see him as the power behind this application. However, Uruchurtu failed to provide the required $30,000 in Deuda Consolidada bonds within six months and so the contract lapsedletter from Secretario de Hacienda Limantour to Uruchurtu, 16 March 1897.

Further attempts

In May 1892 a Tucson newspaper reported that Juan. D. Castro (i.e. Juan de Dios Castro) and Enrique Detegan (sic, probably Detegau) had agreed to establish a Banco de Sonora. The terms of the concession were:
(1)    the bank would have its head office in Hermosillo and could establish branches or agencies in Sonora, Sinaloa and Baja California;
(2)    the concession would last twenty-five years;
(3)    the bank would have a capital of at least $600,000, divided into 6,000 $100 shares;
(4)    the bank had to exhibit 40% of this capital within six months to be able to start operations, and the remaining 60% within the following three years;
(5)    the bank could issue notes up to an amount three times its holdings in cash or bullion, or, at the most, three times its paid-up share capital;
(6)    these notes could be of $1, $5, $10, $20, $50, $100 and $500 values. The total amount of $1 notes could not exceed 10% of the total amount issued;
(7)    the bank would guarantee its issue, a third with a deposit in cash or Deuda Consolidada bonds and two-thirds with acceptable guarantees;
(8)    the bank had four months from the date of its concession to organise its statutes, and a further two months by which to start operating;
(9)    the concessionaires had to deposit in the Banco de México a surety of $30,000 in Deuda Consolidada bonds, to be returned once the bank started operationsFronterizo, Tucson, 7 May 1892.
For some reason or other this contract lapsed.

In May 1893, Luis E. Torres informed Limantour that various “friends of Sonora” were seeking to establish a bank, had gained President Díaz’ approval, and engaged Emilio Pimental to negotiate the concessionCONDUMEX, Colección Limantour, caja 50, legajo 13159, letter Torres to Limantour, 10 May 1893.  Limantour replied that Díaz had decided to commission a study on banks of issue and would then reward concessions in accordance with its findings. The study would not be ready before the next session of Congress, but once it had been completed, Limantour assured Torres, his group would have preferenceCONDUMEX, Colección Limantour, caja 50, legajo 13161, letter Limantour to Torres to Limantour, 25 May 1893. In June 1893 Ramón Corral was supporting this venture from Hermosillo and wrote to Limantour, informing him that Carmen Ortega would be the principal shareholderCONDUMEX, Colección Limantour, caja 16, legajo 4099, letter Ramón Corral to Limantour, 22 June 1893.  However, Limantour had already written to Torres, stating that the matter of local banks of issue was a delicate one, because it concerned the issue of bank notes and also the government’s close relationship with the Banco Nacional. The government needed to find a formula that could apply to all potential banks of issueCONDUMEX, Colección Limantour, caja 50, legajo 13165, letter Limantour to Torres, 17 June 1893.

Next, in July 1895 Torres wrote to Limantour introducing and recommending Rafael Ruíz, who wanted to present his plans to establish a Banco de SonoraCONDUMEX, Colección Limantour, caja 50, legajo 13183, letter Torres to Limantour, 12 July 1895.  This was probably the plan that came to fruition when in 1897 Sonora finally welcomed its own state bank, as one of those authorised by virtue of the Ley General de Instituciones del Crédito.