Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1898-12-12
ssc'Y vAxoeallp's OBSERVATIONS.
informal Report on Porto Rico's Currency
and Farming Conditions.

Washington, Dec. l1.-7Assistant Secre-
tary Vanderbilt who Is not expected here
now until Dec 20, In his second informal
report of his. observations In Porto Rico,
says that the history of the currency SIT
uation is about this:
1.-The island. some Is years ago. was
using American currency. At the time Of
the emancipation the Spanish govern
ment found the value OF silver declining
and IL discovered that IL would be profit-
able TO make payment in Mexican dollars,
and in that way the currency. was
brought to a silver basis The heavy
payments for crops made redundant
currency and much Of It was shipped
away.
Eventually the government decided on
coinage for the island, making fur
Their profit by debas!ng the silver In the
peso. The silver in the peso Is 800 fine.
The Spanish government gave this new
To redeem It at the Bank Of Spain al
Madrid at 95 In gold. and 1 understand
that some Of the coins have been re-
deemed at that rate, although compara-
lively few Of them have oeen carried back
To Spain.
One of the American commanders re-
ports to me that a condition that must
be taken into account is the ownership
OF most of the plantations. They are
nearly all owned by Spaniards: a great
many of them by Spaniards residing N
Spain. This has resulted, instead OF an
apparent balance Of trade considerably
in favor of the island, in d real balance
against the island. The great sugar
plantations. owned by people residing IN
crop Of sugar At an extremely iow labor
cost. The sugar has been sold abroad
and practically the whole return for II
has remained abroad. creating no de-
mana for exchange against the island.
About the only thing that has been
imported Is little calico, and while the
trade returns show a large excess Of eN-
ports. the value OF these exports never
return in any form 10 the island. When
the American troops landed II was
thought an easy temporary solution 81
the situation to Tx the rate OF exchange
as between American dollars and pesos
AT two for one. That worked sltisfac-
lorily for Il 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.
tween two extremes, on the one hand the
fixing Of the value of the peso at the ex-
act value of the bullion. and on the other
giving an equivalent value equal To the
nominal rcdeemabie rate of IS. with the
Spanish government.
AN army officer with whom | talked
is also in favor of an Immediately forced
substitution of our currency for the pres
cnt Porto Rican currency and thinks this
might be done by military order fixing
the rate Of exchange. The question rs.
what rate should be fixed 1t Is not be-
lieved the average rate of exchange for Il
series of years should be taken. Exchange
dealers have controlled tne situation with
little reference to the actual balance of
trace. 1t would be a hardship on the
debtor class to have the peso too high,
and the debtor class X the whole working
population of the island. There is a great
amount of small debts. No one seems -
work without the spur of a debt behind
him, and to compel the repayment OF
these debts in coinage more valuable
than that in which they We're contracted
would be a great hardship.
1t is believed by some that to under
value the peso, guased by the average
near being just. 1t would enable the
small debtor class to more easily meet
their obligations, and even If the exact
bullion value We're taken as Il basis stu
offer ample profit To the money lenders
for they have oppressed the borrowers
with an ingenious variety of methods. IL
was suggested 10 me that with respect
TO the issues of the Spanish bank they
might be redeemed in our money at the
same rate of exchange which we nix on
the peso.
III that rate is low. tnen the bank can
better attempt the redemption. The voi-
utne of the currency is reported to be
smaller than is generally estimated
While the original currency was from s.
0o0,eo TO 6,000Oo0 pesos, ii is thought by
some that there may not now be more
than 100000 that would be exchanged
Attempts are now being made to col
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 levies Oh
the municipalities "a municipality covers
not only a city but a district, a certain
amount that must be collected for the
support of the government. The num-
cipality adds to that further sums for
local expenditures The scheme of taxa
tons by which this total amount is col
lected varies in the different municipali-
ties. 1t is quite the reverse from our in
ternai revenue taxes, for little if any
thing Is laid on the manufacture of spirits
and tobacco.
The best opinion is that the iudicious
introduction Of our internal revenue sys-
tenn and the abandonment of the Spanish
system would be wise. The rising of
taxes on spirits would be popular move
ment and the abandonment of other
forms of taxes would give the new scheme
further popularity. II is thought by some
that for the present we are collecting too
much revenue, for the reason that up TO
this time there has been practically no
expenditure.
There has been a good deal of dis
turbance and destruction of property IN
Aguadilla, the province at the northwest
corner of the island, and in Mayaguez It
Is thought that 100000 worth of properly
has been destroyed in Aguadlla and that
practically nothing could be raised there
this season..