The morning news. [volume] (Savannah, Ga.) 1887-1900, 1898-12-12
PORTO R!CAM CURRENCY PLAN.
OVER VALUATION OF PESO A HARD
SHIP ON DEBTOR CLASS.

Immediate Forced Substitution or
American Currency-The Secrc-
tary'S Recommendations.
| Washington, Dec. 11.-Asslstant Secre-
/ tary Vanderlip, who is not expected hero
until Dec. 20, in his second informal re-
port of his observations in Porto Rico,
says that the history of the currency sit
uation is about thus;
! "The island twenty-five years ago was
using American currency. At the time
of the emancipation the Spanish govern
ment found the value of silver declining.
and It discovered It would be prohtable
to make payment in Mexican dollars, and
in that way the currency was brought to
a silver basis. The heavy payments for
crops made a redundant currency, and
great deal of 1t was shipped away.
Eventually the government decided on
coinage for the island making a further
| profit by debasng the silver In the peso.
| The silver in the peso is 800 fine. The
Spanish government gave this new peso a
| certain redeemabiity by offering to re-
deem it at the Bank of Spain at Madrid
/ al % in gold, and l understand that some
rate, although comparatively few of them
have been carried back to Spain.
"One of the American commanders re-
! ports 10 me that a condition that must
| be taken into account is the ownership OF
most of the plantations. They are nearly
| all owned by Spanlards; a great many of
them by spanlards residing in Spain. This
ha I'M NJ haI
ance Of trade considerably in favor OF
the island, in real balance against the
| island.
1.-THE great sugar plantations, owned by
people residing in SPAIN have year after
year, raised a crop of sugar at an ex-
tremely low labor cost. The sugar has
been sold abroad, and practically the
whole return for 1t has remained abroad,
creating no demand for exchange against
the island. About the only thing that has
been imported IL a little calico, and, while
| the trade returns show a large excess OF
exports, the value of these exports never
return In any form TO the Island.
when the American troops landed it
was thought an easy temporary solution
| of the situation to fix the rate OF exchange
as between American dollars and esos,
at two for one. That worked satisfacto-
rly for little while, but the exchange
dealers soon found that they could make
| a more profitable rate OF exchange, and
our ratio, therefore, became ineffective
and imperative. The settlement Of the
question lies between two extremes; on
the one hand, the fixing of the value OF
the peso at the exact value OF the bull-
ion, and on the other, giving Il an equiv
alent gold value equal 10 the nominal re-
deemabe rate Of s., which the Spanish
government fixed.
IAN army officer. with whom / talked,
is IN favor OF an immediate forced substt-
tuition of our currency for the present
Porto Rican currency. and thinks this
might be done by military order fixing the
rate Of exchange. The question Is, what
rate should be fixed 1t Is not believed
the average rate OF exchange for a series
Of years should be taken. Exchange deal
ers have controlled the situation with little
reference to the actual balance of trade
; 1T would be a hardship on the debtor
class to have the peso too high, and the
debtor class is the whole working popu-
lation Of the island. There Is a great
amount of small debts. No one seems TO
work without the spur of a debt behind
him, and to compel the repayment OF these
debts i'm a coinage more valuable than that
in which they were contracted would be
"A great hardship.
1T Is believed by some that to UNDER
value the peso, BduReu Dy the average
exchange rate, would work much less
hardship, and would really come very near
being Just. IL would enable the small
debtor class TO more easily meet their OBJ
legations, and would even, if the exact
bullion value were taken as basis, stlll
offer ample profit 10 the money lenders.
for they have oppressed the borrowers
with an ingenious variety of methods. It
was suggested to me that, with respect
10 the issues OF the Spanish bank, they
might be redeemed in other money, at the
same rate OF exchange which we fix on
the peso. If that rate Is low, then the
bank can better attempt the redemption
"The volume of the currency Is reported
to be smaller than is generally estimat-
ed While the original currency was from
100000 to 100000 pesos 1t is thought by
some that there may not now be more
than 100000 that would be exchanged.
Attempts are now being made to cof-
lect internal taxes, but at present armed
guards have to be sent with the collector.
The scheme Of taxation is something like
this: The central government levied on
the municipalities Ga municipality covers
not only city, but a district, a certain
amount that must be collected for the
support Of the government. The munich
pality adds to that further sums for local
expenditures.
The scheme of taxation by which this
total amount was collected varies in the
different municipalities. 1t Is quite the
reverse from our internal revenue taxes,
for little, II anything. is laid on the man.
ufacture of spirits and tobacco The best
opinion is that the judicious Introduction
of our internal revenue system and the
abandonment Of the Spanish system would
be wise. The raising of taxes on spirits
would be a popular movement, and the
abandonment of other forms of taxes
would give the new scheme further popu
larity. Il " thought by some that, for The
present, we are collecting too much reve-
nue. for the reason that up to this time
there have been practicaly no expendi-
lures.
"There has been a good deal of disturb-
ance and destruction OF property in Aqua
dina, the province az the northwest corner
OF the island. and IN Mayaguez IL is
thought that q half "a million dollars
worth Of property has been destroyed Ia
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