Villa's sábanas

Although Carranza tried to keep control of the Constitutionalists’ finances, in view of the distance and independence with which the military leaders operated, he felt obliged to permit some of them to print their own paper money.

Villa had received some funds from Carranza and asked him once more for money following the capture of Ciudad Juárez on 15 November 1913, but Carranza did not even answer Villa’s telegram.

In Chihuahua there was a dire shortage of money. People were hoarding silver, as people always do in times of crisis. Much of the paper money had been taken away by the retreating members of the oligarchy, and many of the notes that had been accepted until then as legal tender, such as those of the Banco Minero, were now being rejected by merchants and businessmen because it was not clear whether the new government would honour the old notes.

The first of Villa’s troops entered Ciudad Chihuahua on 1 December 1913. Villa entered on 8 December and two days later, on 10 December, as Provisional Governor, decreed that the Tesorería General del Estado issue paper money to support his division and revive the economy of the state. Carranza immediately sent two emissaries, Luis Cabrerra and Elisio Arredondo, to Chihuahua to convince Villa to rescind his decree. Villa received them with great courtesy and listened attentively to their case that Carranza should handle all financial and economic matters of the revolutionary government. When the two men had finished, Villa told them to tell Carranza that he would print his own money and not beg for any more handouts¹. Carranza later claimed that he gave Villa permission to issue ten million pesos to pay for the costs of the war within the state of Chihuahua².

The notes were put into circulation on 12 December with the government warning that in future only they and those issued by Carranza would be guaranteed by the Constitutionalist government, whilst other private issues (including presumably banknotes) were subject to risk until such time as it was possible to force the issuers to redeem them³.

John Reed describes it as all done in a cavalier manner.

Villa himself said: ‘Why, if all they need is money, let’s print some’. So they inked up the printing press in the basement of the Governor’s palace and ran off two million pesos on strong paper, stamped with the signatures of government officials, and with Villa's name printed across the middle in large letters. The counterfeit money, which afterwards flooded El Paso, was distinguished from the original by the fact that the names of the officials were signed instead of stamped.
This first issue of currency was guaranteed by absolutely nothing but the name of Francisco Villa. It was issued chiefly to revive the petty internal commerce of the State so that the poor people could get food. Yet almost immediately it was bought by the banks of El Paso at 18 to 19 cents on the dollar because Villa guaranteed it.
A decree ordered the acceptance of his money at par throughout the State. Another decree ordered sixty days’ imprisonment for anybody who discriminated against his currency.
Still the silver and bank bills refused to come out of hiding, and these Villa needed to buy arms and supplies for his army. So he simply proclaimed to the people that after February 10 Mexican silver and bank bills would be regarded as counterfeit, and that before that time they could be exchanged for his own money at par in the State Treasury. But the large sums of the rich still eluded him [until he called their bluff]⁴.

The effect of issuing these notes, known as sábanas (bedsheets) from their size and plain backs, was that merchants closed their stores or asked different prices for their goods depending on the currency offered, and the notes were immediately blamed for an increase in prices. As Reed states, Villa needed to legislate to enforce their acceptance. According to an American newspaper, In Ciudad Juárez, the sábanas’ value was established “upon a Mauser and Winchester basis. In the first two weeks of its appearance in the border city it was looked upon with doubt and at first was refused by the merchants and even refused in the gambling halls. Probably the first case on record which established a market for Villa money is the fact that one of Villa’s officers tendered a fifty dollar bill for use at the roulette table. It was promptly refused and a bullet was accepted by the dealer instead. There were at that time several other cases where the value of Villa’s money was established over the sight of a rifle barrel. As a result it rapidly came into general use and public favor in Juárez and Chihuahua⁵”.

As the banks in Chihuahua had refused to reopen, on 10 January 1914 Governor Chao gave people thirty days to exchange their banknotes for sábanas and other Constitutionalist currency⁶. Even when this period expired, State Treasurer Vargas continued to allow the poorer people to exchange their notes⁷.

On 4 February Carranza told A[drián] Aguirre in Ciudad Juárez that he could not send the quantity of notes that he wanted and that while they were waiting for the new issue the government in Chihuahua could continue issuing notes to cover the costs of the army. These would then be exchanged for the new issue⁸.

On 28 February Carranza (decree núm. 21) at Nogales made the paper money of six states (including Chihuahua) that had his approval to issue notes forced currency throughout the territory controlled by the Constitutionalists.

On 11 April Villa wrote to Carranza from Torreón that, as his troops had grown to 15,000 men, he had ordered the state government in Chihuahua to continue issuing paper money to cover their costs. He hoped that these would later been redeemed with Carranza’s Constitutionalist paper and asked when Carranza would begin making the remittances that he had offered⁹.

Signatories on the sábanas

The sábanas carry Villa’s name as Provisional Governor, and the signatures of Manuel Chao, as Interventor, and Sebastian Vargas hijo, as Tesorero del Estado.

Manuel Chao: Chao was born in 1883 in Tuxpan near Tampico. When he was seventeen his father took him along on a trip to Durango. He decided to stay, taking a teaching post in Durango, and later taught in several towns in Chihuahua. He also supplemented his wages by setting up a shop along the railway yard near the town of Baqueteros, Chihuahua. He took up arms for Madero in 1910 and in 1912 organised a ‘Regimiento Hidalgo’ of irregulars to fight against Orozco but when Huerta usurped the presidency he led his regiment into revolt and seized control of the south of the state.
Carranza considered Chao to be the best of all the Chihuahuan revolutionary chiefs, more educated and socially acceptable than the rest and seemly more in tune with Carranza’s own ideas and orders.
In late September 1913 Chao met with other revolutionary chiefs gathered at Ciudad Jiménez to plan the attack on Torreón. Carranza recommended the election of Chao as the overall leader but the others chose Villa. When Chao attempted to assert his authority Villa faced him down and Chao with his brigade retired to Parral.
Chao helped Villa in his attack on Chihuahua. The two seemed to have no difficulties in co-operating in military matters but whenever a political question arose Carranza favoured Chao and was often openly disdainful of Villa.
When Villa’s División del Norte occupied Ciudad Chihuahua Carranza instructed that Chao be named provisional governor of the state. Villa ignored Carranza and named himself governor and Chao returned to Parral. However, after the defeat at Ojinaga on 31 December 1913, Villa realised that he could best serve as a military commander and resigned as provisional governor on 7 January 1914, turning the office over to Chao.
However, Villa was still annoyed so when he returned to Chihuahua in mid-April, without consulting Carranza, he ordered Chao as his military subordinate to take command of his troops and depart for Torreón. Chao ignored the order, whereupon Villa ordered his summary execution. Carranza, however, countermanded the order and confirmed Chao as governor. He resigned the post in May because of disagreements with Villa.
He later served as governor of the Federal District for a few days, and then as governor of Guanajuato (January 1915).
Chao lost his life for supporting de la Huerta in 1923.

Sebastian Vargas: Sebastian Vargas came from a liberal family, as his father was a deputy in Abraham González’ legislature of 1912, Presidente Municipal of Ciudad Juárez for a few weeks after Madero's accession and a president of the state senate. He was born in Ciudad Juárez, and held the post of Recaudador de Rentas there in 1911 and 1912. After Huerta’s coup d’état he joined the Junta Constitucionalista in El Paso, and wrote to Carranza on 2 June 1913 offering his services and asking for a job¹⁰. Villa appointed him State Treasurer (Tesorero General del Estado) of Chihuahua on 9 December 1913 and he held the post until 21 August 1915, when he was arrested by the Carrancistas on capturing the city¹¹.
He subsequently retired from politics and died in 1946.