The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-03
Commissioner Harden's Report on the
tiOns of the Islands.
SPANS ISSUE OF BONDS
CUSTOMS RECEIPTS OF MANILA
PLEDGED FOR $4O,OOO,OOO.
Facts of Interest Concerning Circu-
IatiOn, Banks, Exports and Inn
ports and Principal Industries.


WASHINGTON, Dec. 2-Ar. Edward w.
Harden, who was appointed in August last,
an honorary commissioner of the United
States to make an investigation of the
financial and Industrial conditions in the
Philippine islands, has made his report to
the secretary of the treasury, in the course
Of which he says:
Silver is the basis of the currency in the
Philippine islands. There is no gold in gen.
eral circulation and has been none for more
than twenty years The Mexican dollar of
date previous to 1877 is current in the
Islands, and it is practically the only money
III general circulation. The Spanish govern
ment, IN the summer of 1897 coined $6,000,-
no of silver in a local currency, which was
sent 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 cir
culation notes based on silver, of which
there was outstanding, on Sept. 80, 1898, ap-
proximately, $2,5CO,000.
THE currency of the islands was original
~ gold, in pieces of 81, 81 and "a, with the
Mexican silver dollar and the old Spanish
silver dollars, the latter circulating TO a
limited extent only. Previous to 1875 the
silver was often at a premium over gold.
When sill n began to depreciate in value
the gold coin was rapidly exported and re-
placed by the Mexican silver dollar which
has, for 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 it's place so rap
idly, that the Spanish government took
steps to stop the export of the one and the
import of the other. In the spring of 1873
an edict was issued from Madrid prohibit
ing the import of all silver dollars bearing
date subsequent to 1877 This law was
maintained until the control of the islands
passed to the United States.
THE amount of money needed for the
trade and commerce of the Philippine
islands fiuctuates in the different seasons
In the height of the sugar season-say from
February to June, when large amounts of
sugar are eXported-there is a sharp in
crease in the demand for money. For the
ordinary needs of the country little money
is used, as the credit system is in vogue
throughout the islands, and therefore no
great amount of money is needed for pay
ment of wages to the laboring classes. In
the Off season, when exports are light, the
demand for money would be so small that
the circulating medium would be found to
be much more than sufficient for the needs
of the country. The fluctuating demand for
money in different seasons of the year re-
suited in widely fuctuating rates of ex-
change and in the continued flow of money
either to or from the islands.
SMUGGLING ENCOURAGED.
1.-THE law which prevented the importation
of the Mexican dollars of a date subse-
quent to 1877 proved great hardship to
the business interests, and would have been
a greater evil had it not been for the lax
ity Of the officials which permitted and en-
couraged smuggling. 1t was not uncommon
for the dollar to go to premium of 10 or
IL per cent, and thus would Immediately
start the flow of silver towards the islands,
which would be continued until the demand
was met and the rate of exchange was re-
dIced to a point which would cause SNUG
Cling to cease to be profitable. The SNUG
Cling OF silver into the ISLANDS was a recog-
nized industry. 1t was carried on largely
by the rich 'mestiZoS or Chinese half
castles. There was a regular system for the
hri, oir,cr in Of hn Of
the Spanish laws was to make money dear
during the season when there was big de-
We'll as the merchants and bankers. have
been robbed from year to year through the
effects of the law in force. After the occu-
patton of Manila by the American troops
permission was given the banks to import
silver freely, and the result has been to
keep exchange rates on more stable basis.
THE Spanish government kept no statls-
tics of currency or finance, and the bank
eTS can give only estimates of the most gen.
eral character The most careful estimate
of the currency of the islands is, therefore,
likely to be incorrect. There are SOOO,O0O
people in the Islands according to the estl-
mate of the Spanish government, OF whom
only a small fraction live in the territory
contiguous to Manila and Iloio. When
money once leaves these centers 1t passes
out of the knowledge of business men, and
1t is impossible, therefore, to form any cor
rect idea OF the amount of money now in
the islands. There is Sc 100000 in Philippine
dollars coined by the Spanish government
and sent out year ago, of which only
small percentage is now in Manila: It IS es.
timated there is in circulation $10,OO0O0O of
subsidiary coins, the 10-cent, 20-cent-and 90
cent pieces, which have been reCoined from
Mexican dollars by the Spanish govern
ment. The estimate of the Mexican dollars
now in circulation, as given by one of the
best inf Hcn led BANKERS nix Go oh IN the
81, 500 eco of notes of the Banco Espanol Fill
Pine now in circulation constitutes the cur
f feta of ff from tag s @ Goo to s &c. SPEAK
ing roughly, for the entire islands, or, APP
proximately, S. per capita for the total pop
ulation of the islands. 1t must not be over
looked that these figures are given on sill
yer basis and that, therefore, In hgurlng
on our own standard all of these figures
must be cut in two.
BANKING INSTITUTIONS.
"Three banking institutions do the bank
ing business of the Philippine islands. aside
from that done by the large commercial
houses which buy and sell exchange, and
to limited extent carry on the business
which legitimately belongs to banking in
situations OF the three banks, the two
most important are branch concerns, the
third being a local institution controlled by
Spaniards and natives.
There is in Manila a savings institution
and public pawn shop which is practically
under control of the church. 1t is called the
Monte do Piedad.' 1t was established to
make loans TO the poor people and has done
a good work during the few years it has
been in existence. 1t has been fairly sue
cessful and has proved to be a source of
profit to those who are interested in it.
Under the charter of the Banco ESpanol
Filipino it is permitted to issue bank notes
in amount equal to three times it's capital
stock. The present capital of the bank is
81 ,500,000 and it's note issue may, therefore
amount to $4,500,O00 On Sept 80 there was
in circulation, as previously stated, approx
mately 81. 500, 600 of these notes. These notes
are issued on silver basis and are payable
on demand to bearer. The charter requires
that there shall be maintained in cash and
paper which can be realized in ninety
days, a sufficient amount to cover it's out
standing obligations in bank notes. deposits,
and accounts current. There must be main
tanned in the banks vault silver in amount
equal to at least one-third of the notes in
circulation.
THE question of the future currency of
the islands is one which is Of vital i'm
portanee to all business men in the islands.
The best informed men in Manila are unani-
nous in their opinion that under present
conditions the silver currency is the only
one suited to the islands. great deal of
the trade of the Philippines is with China
and Japan, the Straits Settlements, India and
Australia. In China and Japan and in India
the whole trade Is ON silver basis. though
Japan has adopted the gold standard, nav
ing, however, as the basis of its currency
a gold dollar which is, approximately, worth
only so cents, and its currency therefore in
effect is on a silver basis. the same as China
and India. The natives of the Philippine
islands are conservative to q degree in the