New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-12-03
REPORT ON THEPHILIPPINES
FINANCIAL AND INDUSTRIAL COND1-
TONS IN THE ISLANDS

THE CURRENCY BANKING FACILITIES AND
TRADE s1ATIsTrcs-REsULT OF COMMITS
sroNER HARDEN's INVESTIGATIONS
Washington. Dec edward W Harden. who
was appointed In August an honorary commits
sioner Of the United States 10 make an invesu-
cation OF the financial and industrial conditions
in the Philippine Islands. has made his report 10
the Secretary Of the Treasury. in the course OF
which he says:
Silver Is the basis OF the currency In the MI
ppne Islands. There is gold in general CIR
culaton. and has been none for more tlai
twenty years The Mexican dollar OF date
previous to 1877 is current in the islands ana ~
is practically the only money in general circula-
ton. The Spanish Government in the suiiililei
Of 1897 coined S6.WD.OOO of silver In locdL GU
rency. which was sent to the islands. THESE
dollars lighter in weight than the MeNi iC,
dollar. but the scarcity of money In the fhhip
pine Islands caused them TO be qulcky az
sorbed There is local note-issuing bank calieu
the Banco Espahol Filipino, which has IN clcu-
ation notes based On silver. Of which there was wa,
outstanding on September ~. ls"e. approx
n1atey $2,50ONO IL,
The currency of the islands was orisinally
gold in pieces Of ST. 50 and 81. with the Mexican
silver dollar and the old Spanish silver dona,s'
the latter circulating TO limited extent on.s
Previous to 1878 the silver was often AZ d pc
MUM over gold When silver began 10 depre
ciate in value the gold coin was rapidly eNPo.teu
and replaced by the Mexican silver dollar' VII"
has for a long time been in general use through.
out the Orient. Gold became so scarce mus
the export OF the gold coin. and the silver "as
taking it's place so rapidly that inc .pa pa ~
Government took steps to stop the export oi NY
one and the import of the other In me s sp
Of 1878 an edct was issued from Madrin pro-
hibting the import Of all silver dollars pcni Iil9
date subsequent to 1871 This la" was No., -
tanned until the control Of the ISLANDS pasSeu ~
the United States. .5o
Tho amount ~ money needed FOR the trade
and commerce Of the Philippine Islands nuc'u
ates In the different seasons. In me neIe Ia
the sugar seasor-say. from February 10 JUN
when large amounts Of sugar are export
there is a sharp increase In me nsihdnu 49,
money For the ordinary needs or the count,
little money is used. the credit system - ~
vogue throughout the islands. and there II
therefore no great amount Of money neeueu loi
the payment 81 wages 10 the laporihg rlaS. 20
In the Of season. when exports are ns,i' .hat
demand for money would become 50 snall '''d.
the circulating medium would he found 70 pe
much more than sufficient for the needs oi . .
country The fuctuation in the demand TOY
money in different seasons or the year resu,' ~
in widely 1uctuating rates OF exchange ana III
the continued flow of money either 20 OF lrun ,
the islands. The law which prevented ,le IN
portation Of the Mexican dollars Of date sun
senuent 10 1877 proved great hardship 10 thN
business interests and would have been a mucn
greater evil had it not been FOR the laNl'y o,
the officials which permitted and encouraged
smuggling. .
1t was not uncommon for the dollar n go 70
a premium Of 10 or IL per cent and this would
Immediately start the flow ~ silver toward the
islands which would be continued until the
demand was met and the rate Of exchange was
reduced to a point which would cause smuggling
to cease being profitable. The smuggling OF
silver into the islands was recognized indus
try II was carried on largely by the rich
"Mestizos" or Chinese half-castes. There was
a regular system for the bringing In Of these
coins
The result OF the laws was TO make money
dear during the season when there a big
demand for currency. and the producers "a
we'll az the merchants and bankers have been
robbed from year TO year through the effects
OF the law In force
RESULT OF AMERICAN OCCUPATION
After the occupation OF Manila by the Ameri-
can troops permission was given the banks 70
import silver freely and the result has been 70
keep exchange rates on more stable basis
The Spanish Government kept no statistics
OF currency or finance. and the bankers can
give only estimates of The most general char
acter The most careful estimate of the cur
rency Of the islands is therefore likely to be in
correct There sO0O00O people in the
islands. according TO the estimates Of the Span
ish Government OF whom only & small fraction
live in the territory contiguous TO Manila and
Iloilo. When money once leaves these centres IL
passes ont Of the knowledge of business men.
and it is impossible therefore. to form any
correct idea of the amount of money in the
islands There is Sc 600 in Philippine dol
lars coined by the Spanish Government and
sent out year ago. Of which only small per
centage is in Manila. 1t is estimated there
is In circulation S1oOOOOO Of subsidiary coins.
the 1O-cent 2O-cent and 5O-cenr pieces. which
have been recoined from Mexican dollars by the
Spanish Government. The estimate Of the Mexi-
can dollars now in circulation. as given by one
Of the best Informed bankers in ;he islands il
from S2OOOOOO0 to S25OO0OO0. This. with the
50 100000 Of notes II the Ranco Espahol
Filipino now in circulation. constitutes the cur
rency Of the islands. This would make a total
Of from S4O00Ooo0 70 S45.OW,oW. speaking
It, al,
S. per capita for the total population Of the
islands 1t must not be overlooked that these
figures given on silver basis. and that
therefore in figuring on our own standard all Of
these figures must he cut In two
THE BANKING INSTITUTIONS
Three banking institutions do the banking
business Of the Philippine Islands aside from
that done by the large commercial houses.
which buy and sell exchange. and to a limited
ertent carry on the business which legtimately
belongs to banking institutions. or the three
hanks the two most important branch con-
Germs the third being a local institution con-
trolled by Spaniards and natives.
There IL In Manila savings institution and
public pawnshop. which is practically under the
control Of the Church II is called the Monte
dc Piedad" II established 70 make loans
10 the poor people and has done a good work
during the few years II has been In existence
II has been fairly successful and has proved
TO be a source Of profit 10 those who are inter-
ested in IT.
Under the charter of the Banco Espafol Fill
n,no II Is permitted TO issue bar knotes in
amount equal 10 three times its capital stock
The present capital Of the hank Is SlJWWo
and it's note issue NAV therefore amount 10 ~
800 600 on September 30 there was In circu-
lation as previously stated. approximately
100000 OF these notes. These rotes are
issued on silver basis. and are payable on de-
noand 10 bearer The charter requires that there
shall be maintained in cash and paper which
can he realized on in ninety DAYS suftcient
amount TO cover its outstanding obligations in
banknotes deposits and accounts current
There must be maintained in the banks vaults
silver In amount equal 70 az least one-thlrd or
the notes in circulation
QUESTION OF FUTURE CURRENCY.
The question OF the future currency OF the
u.hic - is ~ 10 all