The Indispensable Service of Banks: Commercial Transactions, Industry, and Banking in Revolutionary Mexico AURORA G ´ OMEZ-GALVARRIATO GABRIELA RECIO Revolutions have important social, political, and economic consequences with which entrepreneurs have to cope to keep their businesses going. This may involve high transaction costs due to the violence that emerges as a result of armed conflicts. In this article we examine the effect that the Mexican Revolution (1910-1920) had on the banking sector and ultimately on bank clients, since revolutionary policies forced most banks to close their doors from 1915 to 1921. By focusing on a major textile firm, the Compa˜ n´ ıa Industrial Veracruzana, S.A., we observe that companies used nonchartered banks, which spread in the absence of government regulation, and foreign financial institutions, so that daily business operations could continue amidst the revolutionary upheavals.  The Author 2007. Published by Oxford University Press on behalf of the Business History Conference. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org. doi:10.1093/es/khm022 Advance Access publication February 10, 2007 AURORA G ´ OMEZ-GALVARRIATO is Professor in the Department of Eco- nomics of the Centro de Investigaci ´ on y Docencia Econ ´ omicas and Peggy Rockefeller Visiting Scholar at Harvard University, David Rock- efeller Center of Latin American Studies during 2006–2007. Contact information: DRCLAS, 1730 Cambridge Street, Cambridge, MA 02138. E-mail: agomez@fas.harvard.edu. GABRIELA RECIO is at Centro de Estudios Historicos, El Colegio de Mexico. Contact Information: El Colegio de M´ exico, Centro de Estudios Hist ´ oricos, Camino al Ajusco 20, Pedregal de Sta. Teresa M´ exico, D.F., Mexico. E-mail: grecio@alumni.ksg.harvard.edu. We would like to thank Gustavo del Angel, Ken Lipartito, and two anonymous referees for their comments on earlier versions. All errors are, of course, entirely ours. 68