The San Francisco call., 1898-12-03
CONDITIONS IN
 THE PHILIPPINES Commissioner Harden'S
 Investigation.
SILVER MONEY CIRCULATED
SYSTEM CAUSES SMUGGLING
 OF THE WHITE METAL.
Four Principal Industries of the Isl ands Are Hemp, Sugar, Copra and Tobacco-Room for
 Cordage Plant.
Special Dispatch to The Call.

Special Dispatch to The Call.
 WASHINGTON, Dec. 2. = Edward Harden, who was appointed in Au- gust last an honorary commissioner of the United States to make an investi- gation of the financial and industrial conditions in the Philippines, 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 general circulation and 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 Span ish Government in the summer or leSi coined S6,OO0,000 of silver in local cur which was sent to tne eigb5 l5iahas tban the Mexican dollars, 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 circulation notes based on silver, of which there was outstanding on September 30, 1898, approx imately, g, 800 900.
 The fiuctuation in the demand for money in different seasons of the year resulted in widely fiuctuating rates of exchange, and in the continued flow of money either to or from the islands. The law which pre- vented the importation of the Mexican dollars of a date subsequent to 1877 proved a great hardship to the business interests and would have been a much greater evil had it not been for the laXity of the offi- cials, which permitted and encouraged smuggling. It was not uncommon for the dollar to go to premium of 10 or F per cent, and this would immediately start the flow of silver toward the islands, which would be continued until the demand was met and the rate of exchange was reduced to point which would cause smuggling to cease being profitable.
 k The smuggling of silver into the islands was recognized industry. It was carried on largely by the rich ''mestizoS, or Chi nese half-castes. There was a regular sys- tenn for the bringing in of these coins.
 After the occupation of Manila by the American troops permission was given the banks to import silver freely, and the re- suit has been to keep exchange rates on a more stable basis.
 There are eight million people in the islands, according to the estimate of the Spanish Government, of whom only small fraction live in the territory con- tiguous to Manila and Ililo When money once leaves these centers it passes out of the knowledge of business men, and 1t is impossible, therefore, to form any correct idea of the amount of money now in the islands. 1t is estimated there is in cir culation SIG, GOO of subsidiary coins, the have been recd1ned from Mexican dollars by the Spanish Government, The esti- mate of the Mexican dollarsl now in cir culation,. as given by one of the best-in-1 formed bankers in the islands, is from s2O OO0, ,0oO. to s25 900 900. This. with the S2, 800 900 of notes of the Banco Espanol the currency of the islands. This would make a total of from $40 900, 900 to s4500O,- OOO, speaking roughly, for the entire isl the total population of the islands. It must not be overlooked that these figures are given on a silver basis and that, therefore, in figuring on our own stand ard, all of these figures must be cut in two.
 Three banking institutions do the bank ing business of the Philippine Islands aside from that done by the large com mercial houses which buy and sell eX- change. and, to a limited extent carry on the business which legitfmately belongs to banking institutions.
 The question of the future currency of the islands is one which is of vital inn portance to all business men of the isl- ands. The best-informed men in Manila are unanimous in their opinion that under present condition the silver currency is natives of the Philippine Islands are con- servative to a degree in the matter of their currency, and it would be a long and tedious task to educate them to dollar which would be worth twice that now in circulation. Notwithstanding the Amer jeans have force of 15,O0O soluAers in Ma the islands will believe in nothing but silver. All the soldiers when they are paid in gold take their money to one of the banks and exchange it for local cur rency. The native will take the Mexican dollar, worth less than 50 cents in gold, in preference to the United States dollar, worth 100 cents- If the United States re- tains the Philippine Islands a special coinage of silver dollars, might be minted for circulation in the archipelago, the same as the British dollar was put in cir culation in the Straits Settlements, in Hongkong and in other ports where Brit ish interests predominate.
 Practically all of the export and import trade of the islands Is in the hands of foreigners. There are a few Spaniards engaged in trading, but the bulk of the business, in a commercial way. is done by British, German, Belgian and Ameri- can citizens. These men do not meddle with the insurrection, and they have been able to maintain friendly relations not only with the Spanish Government off, cials, but with the natives as well.
 The most reliable figures that can be obtained on exports from the islands for Hemp and sugar were the principal arti- cles of export. Tobacco and copra were also exported in large quantities.
 There ar. are no no official M figures 4btainable Islands. One of the larger importing houses, which keeps statistics of imports and which has practically complete fig ures. of all goods shipped into Manila has kept records which show the impor- tation of goods to the value of ST 400 .OOO during the year 1897 Taking these figures in favor of the islands of S23, ,999 290. that being the excess of exports over imports
 The four principal industries of the islands In the order named are hemp sugar, copra and tobacco. The hemp in, dustry supports a large proportion of the population of the southern part of I11- zon and islands to the south, and. accord ing to the opinion of those most familiar with the trade, there Is no danger of an overproduction. It is all exported and there would seem to be room for the es tablishment of a plant for the making of cordage. There is practically no rope manufactured in the Philippines.