The Republican. [volume] (Oakland, Md.) 1877-current, 1898-11-17
CUBA'S MONEY CRISIS.
The Island Facing Serious Financial
Condition.

everything, from the government of
the island to the future of the tobacco
industry, has either reached crisis
or is making all possible haste to get
in that condition.
One of the most serious is the money
crisis. The worst of this particular
one is that it affects so many persons
whose slender resources have already
been sadly depleted by war, blockade
and the accompanying business stag
nation. In Cuba therelative exchange
values of gold, silver and paper mon
ey are fixed by arbitrary 'sbandos,"
or schedules, issued from the treas
ury department and authorized by.
the captain general. The paper
money of the Weyler iss ue has con-
tinued to fall in value so steadily that
it is now worth only about eight cents
on the dollar and has PRACTICAL disap-
peared as a factor in exchange.
Gold, as everywhere, is the scarcest
of the three kinds of money, and is be-
ing boarded. The ordinary business
of Cuba is carried on in silver. A
characteristic kink of Spain's finan-
cial system is the maintenance of a
separate system of coinage for each of
its colonies. Porto Rico, the Philip
pines and Cuba have their own silver
coins, all of which are different from
the silver currency of Spain. A silver
pesto OF Porto Rico, for example, is as
valueless in Cuba as it is in Spain, and
a peseta that is worth 20 cents in Ha-
vana would be worth nothing more
than its bullion value in Manila
This is all very well for the Spanish
government. A separate coinage for
each colony enables it to unload a
much larger amount of product of its
mints than it could in the case of a
uniform coinage, which would carry
the silver from one Spanish possession
to another as the law of supply and
demand required. The more minting
that Spain does the greater her prof
its between the face value of the coin
and the bullion value of the silver.
But it is not so pleasant for the colo
nies. In Cuba especially, where all
| business and movement of capital are
at a standstill, there is just now about
three times as much silver money as
there is any use for, without any con
stantly ebbing flow of the tide of sup
ply and demand to take it away from
! the island. The result is naturally a
great depreciation in the price of sill
yer coin. The peso contains about as
much silver as the American dollar,
and yet were it left to its own re-
sources, without any government
stiffening, it would pass, so Havana
bankers will tell you, for considerably
less than fifty cents.
1t is to offset this natural result of
drugging the market with silver that
the ''bandosn are issued from the
palace. They set an entirely arbitrary
and art ificial value ON the silver coins.
The monetary system, like everything
else in Cuba, is military. The word of
the captain general is law. When he
says in his biweekly schedule that a
/ peso is worth G5 cents in gold, no one
in the entire island thinks of question
| ing the financial acumen of the decis-
ion. They proceed to pay 65 cents in
/ gold coin, although it's intrinsic ex-
change value may not be worth more
! than 40 cents.
All over Cuba and Porto Rico are
little shops called ''casas de cambios,"
houses of exchange, where the colo
NAL money is bought and sold and
speculated with in a small way. The
men who run these exchanges do not
make their calculations on any basis
Of business of the country or foreign
exchange, but simply as to the knowl-
/ edge and secret information which
thay have, or think they have, of the
condition of the treasury department.
But every one in Cuba realizes that
''the government" and the captain
general are going to stop pretty soon
and with them will stop all the "ban-
dos" which falsify the value of the
currency. What will be the result?
Silver moneyinCuba will Immediately
after Americas occupation drop to it's
real exchange value. The sufferers
will be the people of Cuba who have
been transacting business on the arti-
fetal basis of the "bandos." Unless
some special concession is made by the
Spanish government, and the Spanish
government is not given to making
concessions to Cuba, the silver cannot
be sent back to Spain any more than
it can to the United States. Probably,
too, the United States will be desirous
of introducing its own currency into
the island and may, as it did in Porto
Rico, do little artificial arranging of
values itself in order to force the CO.
lonial silver currency out of the coun-
try. 1t seems almost. impossible for
| i