The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1898-12-06
PHILIPPINE FINANCES
A Full Report on the Monetary, Bank
Ing and Business Features of h
island by n Special Representative
Of Our Government

Washington, December 2--Mr- I'd
ward W. Harden. who was appointed
in August last as honorary commits
sioner Of the United States to make
an investigation of the financial and
industrial conditions in the Philip
pine islands. has made his report 20
the secretary of the treasury, III ;he
curse of which he says:
Silver is the basis of the currency
in the Philippine islands There is no
gold in general circulation, and has
been none for more than twenty years.
The Mexican dollar Of a date previous
to 1877 is current in the islands and il
is practically the only money in gen
eral circulation. The Spanish govern
ment, in the summed of 1897, coined
200, 600 of silver in a local currency
which vas sen to the islands These
dollars are lighter IN weight than the
Mexican dollar, but the scarcity OF
money in the Philippine islands caused
them TO be quickly absorbed. There is
a local note issuing bank called the
'Banco Espanol Filipino which has in
circulation notes based on silver, OF
which there was outstanding IN Sep
TENDER 80, 1898, approximately 81, 500
900.
The currency Of the islands was
originally gold, in pieces of $500 and
$500, and with the Mexican dollar ard
the old Spanish silver dollar, the lat
ter circulating to a limited extent only.
Previous to 1875 silver was often at a
premium Over gold. When silver began
to depreciate in value the gold com
was rapidly exported and replaced by
the Mexican silver dollar, which has
for a long time been in general use
throughout the orient. Gold became SO
scarce through the export of the gold
coin, and the silver was taking Its
place SO rapidly, that the Spanish gov
took steps to stop the eN-
port. In the spring of 1878 an edict was
issued from Madrid, prohibiting the
import of all silver dollars bearing a
date subsequent to 1877. This law was
maintained until the control Of he
islands passed to the United States.
THE amount of honey needed for
the trade and m of the Phil .
ippine islands f~iuctuates in the differ
ent seasons. The f~iuctuatiOn in the de-
mand for money in different seasons Of
the year resulted in widely f~luctuating
rates of exchange and in the continued
flow of money either to or from the
islands. The law which prevented the
Importation of the Mexican dollars of a
late subsequent to 1877 proved a great
hardship to the business interests ana
would nave been a much greater evil
had it not been for the laxity Of the
officials which permitted and encOur-
aged smuggling. 1t was not
for the dollar to go at d premium of
10 or II per cen and this WOul i'm
mediately start the flow of silver to-
wards the islands which would be con-
tinued 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 a recognized industry. 1t
was carried on largely by the rich
'mestizo,' or Chinese half-caster. There
was a regular system for the bringing
in of these coins.
After the occupation of Manila by
the American troops permission was
given the banks to import silver free
ly, and the result has been to keep eX-
change rates on a more stable basis.
The Spanish government keeps no
statistics of currency or finance and
the bankers can give only estimates
of the most general character. There
were $4,000, 900 il Philippine dollars
coined by the Spanish government and
sent out a year ago, of which only d
small percentage is now in Manila. It
is that there is in circula
ton $40, 600, 900 Of subsidiary coins. The
estimate of the Mexican dollars .low
in circulation, as given by one of the
best informed bankers in the islands,
is from $40, 900, 900 10 So, coo. 900. This
with the 81, SOC, 900 Of notes Of the EancO
Espanol Filipino, now in circulation.
constitutes the currency of the Stands.
This would make a total of from $40
900, 900 to s45, 900, 600, speaking roughly,
for the entire islands, or approximately
$500 per capita for !he total pOpula-
ton of the islands. 1t must not be
overlooked that these figures are given
on a silver basis, and that, therefore.
in figuring on our own standard all of
these figures must be cut in two.
Three banking institutions do the
banking business of the Philippine
islands aside from that lone by the
large commercial houses which buy
and sell exchange, and, to a limited ex-
tent, carry on the business which legit-
imately belongs to banking institu-
tiOns.
Under the charter of the Banco Es-
panol Filipino, it is permitted to issue
bank notes in amount equal to three
times its capital stock. The present
capital of the bank is 81, 500, 600, and
its note issue may, therefore, amount
to 81. 500, 900.
The question OF the future currency
of the islands is one which is of vital
Importance to all business men in the
islands. The best informed men in Ma
Mia are unanimous in their opinion
that under present conditions the sill
Yer currency is the only one suited to
the islands. The natives of the Phil
lppine Stands are conservative to a
degree in the matter of their currency
and it wOuld be a long and tedious
task to educate them to a dollar which
would be worth twice that now in cir
culatiOn. Notwithstanding the Ameri-
cans have q force of Is. 900 soldiers in
Manila, who are paid in gold, the peo-
pie of the islands will have nothing
but silver. All of the soldiers when
they are paid in gold. take their money
to n of the banks and exchange it
for local currency. The native will
take the Mexican dollar. worth less
than 80 cents in gold, In preference TO
the United States dollars worth 100
cents. If the United States retain the
Philippine islands a special coinage Of
silver dollars might be minted for cir
cufation in the archipelago.
There is an issue Of $40. 900. COO of