Omaha daily bee., 1898-12-03
FINANCES OF PHILIPPINES
Silver is the Basis Of the Currency Used OF
the Islands.
VALUE OF EXPORTS LAST YEAR Sal, ,s42, ,4aO
Hemp Industry Leads in Importance
and Others Are Sugar, COpra and
TObaccO-NO Danger of over
PRODUCTION.

and Others Are sugar, COpra ana
Tobacco-No Danger of over
PRODUCTION.
WASHINGTON. Dec. 2.-Edward Harden.
who was appointed in August last an hon.
orary commissioner of the United States to
make an Investigation OF the financial con-
ditions in the Philippines. has made his re-
port 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
general circulation and there has been none
for more than twenty years. The Mexican
dollar Of a date previous to 1877 is current
in the islands, and It Is practically the only
money in general circulation. The Spanish
government in the summer Of 1897 coined
S6.000,o 900 Of silver in 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 circu-
lation notes based on silver, Of which there
was outstanding on September 30, 1898, ap-
proximately $2,5o0,000.
The currency Of the islands was originally
gold, In pieces Of 81. 81 and 81, and the
Mexican silver dollar and the old Spanish
silver dollars, the latter circulating to q
limited extent only. Previous to 1875
silver was often at q premium over gold
When silver 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 its place go rapidly
that the Spanish government took steps to
stop the export and the import Of the other
In the spring Of 1873 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 the islands passed to the United
States.
Fluctuating Money System.
The amount Of money needed for the
trade and commerce Of the Philippine ISL
ands 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 il
In vogue throughout the islands, and there
10, therefore, no great amount Of money
needed for the payment OF wages to the
laboring classes.
In the off season, when exports are light,
| the demand for money would become 90
small that the circulating medium would be
! found to be much more than suficient for
the needs Of the country.
| The fuctuatioh In the demand for money
IN different seasons Of the rear arseulssa -
widely ductustinE rates OF exchange ana in
| the continued now Of money either to or
from the islands.
The law which prevented the importation
Of the Mexican dollan Of date subsequent
to 1877 proved a great hardship to the busi-
ness interests and would have been a much
greater evil had 1t not been for the iaxity
Of the officials. which permitted and en-
cou1ged smuggling. 1t was not uncommon
| for the dollar to go to q premium Of 10 or 10
per cent, and this would Immediately start
the flow Of silver toward the islands, which
would be continued until the demand vas
met and the rate Of exchange was reduced
to point to cause smuggling to cease to be
profitable.
silver Smuggling an Industry.
The smuggling Of silver into the island,
was recognized industry. 1t was carried
|
half castles. There was a regular system
for the bringing in of these coins. TIL.
result Of the Spanish laws was to make
money dear during the season when there
was a big demand for currency, and tn,
producers ae we'll as the merchants an6
bankers have been robbed from year L
year.
After the American occupation of Manils
permission was given the banks to import
silver freely, and the result has been Il
keep exchange rates on q more stable basis
The Spanish government kept no statistics
Of currency and finance. and the banker,
here only give estimates OF the most gen
eral character. The most careful estimates
Of the currency Of the islands, therefore, ar,
likely to be incorrect. There are 5000. 90,
people In the islands, according to the esti
mate Of the Spanish government, OF whom
only a small fraction live in the territor!
contiguous to Manila and Iloilo. WheI
money once leaves these centers 1t passe
out Of the knowledge Of business men, an,
1t is impossible to form any correct idea o
the amount of money now in the islands
There is $6,eio,Ooo in Philippine dollar
coined by the Spanish government and sen
out year ago, OF which only small per
|, centage is now in Manila.
1t is estimated there is In circulation
SIC, 100000 Of subsidiary coins. 10-cent. 20
cent and 50-cent pieces. which have bee
! reconed from Mexican dollars by the Span
, ish government. The estimate OF the Mexi
can dollars now in circulation. as given b
: one OF the best informed bankers In tn
island, is from $50. 100000 to $4,000, ,OOt
This. with the $2,5OO.OOO Of notes of tn
; Banco Espanol Filipino now in circulation
! constitutes the currency Of the islands.
Five Dollars Per Capita.
This would make a total Of from $40. 900.
, 900 to 45,O00.000, speaking roughly. for tn
entire islands. or approximately IS per capt.
for the total population Of the islands.
must not be overlooked that these figure
arc given on a silver basis and that. there
, fore, in figuring on our own standard a
: these figures must be cut in two. Thre
r banking institutions do the banking bushes
;. OF the Philippines, aside from that done b
the large commercial houses. which buy an
. sell exchanges and to a limited extent carr
: on the business which legitimately belong
= to banking institutions. or the three bani
the two most important are branch concern
the third being local institution cOntrolle