The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1898-12-12
IS ON A SILVER BASIS
Vanderlipis Report on the Our
rency in Porto Rico.
THE BALANCE OF TRADE
Non-Resident Proprietors Kept he'll Prof.
Its OF the Island in ~spain-The Cur
rency Deoased-Debt Il tie
Only Spur TO Work.

washington. Dec. l.-AsSiztant H-
rotary vanderlip. who IS not expeo.ed
here until Dec. 20. in his second infor-
NAL report Of his observations in Porto
Rico. says the history Of the currency
situation is about this:
The island. some % year ago. wac
using American currency. At the ;ime
OF the emancipation the Spanish gov
oun the value Of silver de-
clining and It discovered IL would be
profitable 20 make payment in Mexican
dollars. and in that way the currency
was brought to the silver basis. The
heavy payments for crops made n re-
dundant currency and a great deal OF it
was shipped away. Eventually the guv-
eminent decided on a coinage for the
island, making a further proht by oe-
basing the silver in the peso. The fl-
Yer in the peso is 900 fine. The Span
ish government gave his new pso
a certain redeemability, Offering TO -
deem IL at the Bank OF Spain at Mao
rid at 50 in gold. and I understand that
some OF the coins have been redeem,l
at that rate. although comparative
few OF them have been carried back 10
Spain.
'One OF the American commands
repor To me that a condition thet
must be taken into account il the own
ershfp Of most OF the plantations. They
are nearly all owned by Spaniards a
great many of them by Spaniards zoe
siding in Spain. This has resulted. in
stead of an apparent balance OF trade
considerably in favor Of the island. n
a real balance against the island TIE
great plantations owned by p'O-
pie residing In Spain have raised a crop
OF sugar at an extremely low labor cost.
The sugar has been sold abroad and
practically the whole return for II has
remained abroad. creating no demand
for exchange against the island. About
the only thing that has been imported
Is a little calico, n while the tmle
returns show "a large excess OF exports,
the value Of those exports never return
in any form TO the island. When the
American troops landed 1t was thought
an easy temporary solution Of the sit
uation TO hx the rate of exchange as
between American dollars and pesetas
at two for one. That worked satisfac-
torily for n little while. but the eN-
change dealers soon found they could
make a more profitable rate Of eN-
change. and u ratio, therefore, be-
came ineffective and inoperative. The
- AA' - "
two extremes; on the one hand. the fix
ing OF the value of the peso at the exact
value of the bullion. and on the other
hand. giving II an equivalent gold value
equal TO the nominal redeemable rate
Of IS. which the Spanish government
fixed.
An army officer with whom I talked
IS in favor OF an immediate forced sub
stitution OF our currency FOR the present
Porto Rican currency. and thinks 10
might be done by military order. fix
ing the exchange. The question h..
what rate should be fixed. II is not be-
lieved the average rate Of exchange
for a series Of years should he taken.
Exchange dealers ave controlled the
situation with little reference to the
actual balance OF trade. IL would be a
hardship on the debtor class to have
the peso too high. and the debtor class
Is the whole working population Of the
island. There IS "A great amount Of
small debts. No n seems TO work
without the spur Of a debt behind him,
and to compel the payment OF these
debts i'm n coinage more valuable than
that In which they were contracted.
would he a hardship. n Is believed hy
some that to underValue the peso.
gagged by the average exchange rate.
would work much less hardship and
would really come very near being just.
II would enable the small class 10 more
easily meet their obligations and would
even. IL the exact bullion value were
taken as a basis. still offer ample profit
80 the money lenders. for they have
oppressed the borrowers with an IN
genious variety OF method. II was sug-
gested to me that with respect to IS
sues Of the Spanish bank they might
be redeemed In OUT M at the same
rate OF exchange which we fix on the
peso. II that rate H. low. then the bank
can better attempt the redemption. The
volume OF the currency Is reported 20
he smaller than Is generally estimat-
ed. While the original currency was
from six 60 eight millions. IL Is thought
by some there may not now be moro
than -four millions that would be cN-
changed.
Attempts are now being made 20