New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-12-07

OF fuctuation, the greater the range for possible
profits.
IL is highly important that American capital
should find obstacles IN It's transfer ard from
Porto Rico II the United States and the island
alike reap the benefits which ought TO flow
from their proximity their new relations. and from
ire enterprsing commercial sp.ri, OF our people.
wide difference in the rate OF exchange occasoned
by the OF differing and unrelated currency 10
f serious obstacle the transfer Of capital. asit
is 10 legitimate industry. The obstacle can and
ought 10 ba removed
Il Is therefore suggested that at the proper time.
action be taken by Congress to assima,e the cur
rency OF Porto Rico to that Of the United states.
far and so rapidly as this can be done without
unduiy disturbing existing conditions and contract
relations In Porto Rico. This II IS believed. can
be accomplished by making customs dues In tho
island payable In American money. yet receiving
the silver pesos and centavos fixed relation TO
dollar The limited amount OF Porto Rican
money would thus find an important avenue where
a uniform value on the basis arranged would De
realized This would probably be broad
enough give the assurance needed to keep the
peso and It's minor subdivisions current through
the island at the custom house valuation. II any
doubt should arise 10 the suinciency OF such
provision, IL could be made the duty OF the Secre-
! tary OF the Treasury 70 give American coin IN
direct exchange for the Porto Rcan coin at the
custom-house ratio whenever in his opinion It
! should be necessary do In order 10 MAINTAIN
the ratio established
The necessity OF securing stability 10 the peso ID
fully recognized by all parties in Porto Rico. al
though opinions differ to the ratio which ought
be observed In relating IL 20 American money.
Suggestions have also appeared in favor or an
immediate and coercive exchange OF the insular
coins for our money upon a ratio 10 be determined.
While this could be made operative 20 introduce
American money and American terms OF account at
earlier period than by the course above recon-
mendod. It is open to some objections II would
Ft,cfor f-tn min ~
minded people and excite suspicion to the purity
Of our intention. II would create immediate
deficit for the difference between the bullion value
OF their coins and the price for which they were
exchanged. This deficit would have TO be faced
and provided for az once. while by the slower
process that deficit would be spread over period
OF years and could be easily met.
l have far spoken If silver coin were the
only medium OF exchange In Porto Rico Such Is
the fact. The Spanish Bank OF Porto Rico.
holding a franchise from the Spanish Government.
has privileged issue It's notes TO the extent
Of three times its capital and the note issues OF
! this bank at one time outstanding have been as
high as $50. 90 pesos. Under the circumstances
! now existing the notes Of the bank are NOT IN
favor and II is not improbable that It's affairs VIII
be llqudateG. This being so. the function which
it has in the past discharged should be assumed
and prosecuted. within proper legal limitations. oy
some one bank organized with ample capital.
with the right 10 establish branches al convenient
points and to issue It's own notes 10 circulate as
money. or II this should not be favorahy con-
sdered. then extending 10 the Island tho
rights and privileges OF the National banking sys-
TEN might merit approval
THE NEW BOND ISSUE
Under The canton Of Loans and Currency" on
M 20 d Of this report will be found particulars I'm
the way Of information) to the issue OF sS'""'""
per cent bonds authorized by the act OF June 10
1893 When the bill was reported. which atter
amendment became the law. some doubt was ex-
messed by those best acquainted with euch mat
! tArs whether bonds bearing low rate as per
ron, could be sold except at a discount Ihele
u-era substantial facts cited in support or such
op,nion The then recent declaration OF war WIN
Spain had disturbed the always sensitive coho'
tons OF trade and finance. The morbidly timid
aong our eastern and northern coast were IN
state Of more or less alarm. The simpler minoed
depositors in savings banks made Withdrawals OF
their funds; the commercial banks IN the larger
cities sympathetlcaly suffered through 1858 ot
! cash reserves to savings institutions The rate o,
interest rose the price Of securities declined Even
old issues OF United States bonds fell 10 point
ubero they would yield the investor from 81 10
3 q per cent per annum upon an Investment 'ne.
made Such was the condition or the nnahciai
market in the latter part Of April ana the earhe'
part Of May last
o,aa ~ insure a successful negotiation OF the new
/ loan AZ 8 per cent which It is well 10 note mat
factor was the self-interest OF National panHs
,rhose institutions as a whole then enjoyed An I'M
availed-ot privilege under the law 70 issue nearly
siCo OsO 900 in circulating notes True the conoi-
ton precedent the exercise OF such pri'hese
uas the 6eposit Of United States bonds, tho
price OF which in the public market had so a.
vanced as 10 destroy the motive OF proht Tor tno
exercise OF the privilege Owing 70 the feature OF
the Natona Banking act which restricts mo
issue Of circulating notes 90 per cent OF the face
,yal a q
interest bond az par when used for the purpose IN
dicated yields better returns TO the banks taan
d, or ; per cent bonds al the rate OF premium then
or now prevailing II is demonstrable that tho
per cent bonds AZ par would afford 70 National
banks the means OF obtaining through circulating
notes a profit OF substantially IA per cent on the
amount invested That this profit would furnish
a sufficient motive for the banks as a whole to
take I'D 500 10000 bonds need not be argued: II
"a selt-ey.dent These conditions practically IN
sured the successful negotiation az par Of the loan
/ AT the rate OF per cent. This was quickly par
ceived in The money market. and, Joined TO easier
conditions in genera, finances II operated 10 es,ao-
lish prospective premium on the ahucipa'eo
issue-in fact the moment when the act was
annrovcd the whole issue OF 100000 could have
been sold al a premium OF probably 2i2 per cent
! This could hardly have been foreseen ana IL was
/ evidently the opinion OF Congress also that wide
distribution Of the obliga lions among 'ne people, AZ
the uniform price OF par. was OF more Vaiue 10
public interests than the realization OF poss'o'e
! bonus from small groups OF professional dealers
The discriminating mandate OF the la" was thus
expressed.
TIL. bonds authorized by this section shall Do
first offered AT par as a popular loan. under such
regulations prescribed by the Secretary OF tho
Treasury As will give opportunity 70 the citizens
OF the United 70 participate IN the suoscrip-
tons 70 such loan and in allotting said bonds the
several subscriptions Of individuals shall be hrst
accented and the subscriptions for the lowest
amounts shall be first allotted"
bedient TO the fair spirit OF the law. the Treas
ury Department sought by every means 10 extend
the opportunity for subscription 10 all the people
| I-ratoa Gta sxaras