d issue to meet its expenditures in suppressing the
revolution, and later on the departments of Antioquia, Bolivar, Cauca,
and Santander were authorized to issue paper money for themselves.
This suicidal policy continued until February 28, 1903, when,
according to an official statement, the outstanding paper circulation
was:--

Pesos.
National government issues 600,398,581
Department of Antioquia 35,938,495.60
" " Bolivar 18,702,100
" " Cauca 44,719,688.70
" " Santander 750,000
--------------
700,598,865.30

So great was the depreciation of this currency that before the end of
the war 100 American gold dollars were quoted at 22,500 _pesos_. The
declaration of peace brought the exchange rate down to the
neighbourhood of 10,000, where it remained, with the exception of a
short period during the Panama Canal negotiations, when it fell to
6000. This depreciation (10,000) was equivalent to a loss of 99% of
the nominal value of the currency, a paper _peso_ of 100 _centavos_
being worth only one centavo gold. International commercial
transactions were based on the American gold dollar, which was usually
worth 100 _pesos_ of this depreciated currency. Even at this
valuation, the recognized outstanding circulation (for there had been
fraudulent issues as well) amounted to more than L1,400,000. In 1903
Congress adopted a gold dollar of 1.672 grammes weight .900 fine
(equal to the U.S. gold dollar) as the monetary standard created a
redemption bureau for the withdrawal of the paper circulation,
prohibited the further issue of such currency, and authorized free
contracts in any currency. Previous to that time the law required all
contracts to specify payments in paper currency. Certain rents and
taxes were set aside for the use of the redemption bureau, and a
nominally large sum has been withdrawn from circulation through this
channel. On the 1st of January 1906, another monetary act came into
operation, with additional provisions for currency redemption and
improvement of the monetary system. A supplementary act of 1906 also
created a new national banking institution, called the Banco Central,
which is made a depository of the public revenues and is charged with
a considerable part of