Daily capital journal. (Salem, Or.) 1896-1899, 1898-08-13
COLONIAL MONEY.

the present administration is called
upon 70 face IS the question Of a cur
rency system for our new possessions
particularly Porto Rico.
The money OF Porto Rico Is silver
and the peso is now worth about 4C
cents ia American money. IL will be
necessary 10 give the island stable
rate OF exchange, that is TO give the
money OF the island fixed value, in
terms OF gold An administration
journal states that there are' sew
eral ways OF doing this. One way is
TO buy up all the pesos and retire
them, putting American dollars into
circulation 10 their place; but IL Is
objected that this would be demOral-
Izing To business. Another plan
would be TO effect the displacement
gradually, by giving the peso an arti-
fetal value OF, say, forty-hve cents
and KEEP IL there by policy of con =
vertibillty at that rate, IL being ex-
pected that In time the peso would be
apt to seek the treasury, and the
American SILVER at It's nominal yalua-
tlon would come into use.
Another plan, said to be most fa-
vored by Secretary Gage, Is to retain
the silver pesos of Porto Rico so that
they will represent just what they do
now In value, both TO the native
Porto Rlcan and the American. one
side of the coin will be marked zone
peso" and the other Will be marked
40 cents" This will be Porto Rican
money on one face, and American
money on the other, but kept lixedly
at the present bullion value OF the
silver without adding big premium
with United States credit behind IL.
The secretary propose TO make gold
the standard.of value and the medium
Of exchange The silver will be subsl-
diary coin, though silver Accent
piece will be the size of an American
dollar in the states. The gold coins
will be stamped Ia the same way, SO
as TO be perfectly plain To the Porto
Rlcan and to the American, and easily
handled in exchange. The gold coin
will be l0.peso piece on one side, and
Il fourdollar piece on the other-ten
pesos TO the Porto Rican and four dol
lars to the American.
1t will be an interesting and In
structiye entertainment TO watch the
gyratlons OF the governments la its
attempt TO find solid ground on which
to found currency system for "the
colonies" without recognizing some of
the economic truths which are now
denied by Secretary Gage, The
objection TO the first plan given
above Is that 1t would demorallze bus
inesss by changing the status OF all
debts. To arbitrarily raise the value
of the peso TO that of the Amer lean
dollar with which IL corresponds in
size, would more than double every
existing debt payable Ia pesos. This
Is clearly recognized even by Secre.
tary Gage; yet the American dollar
has already gone through the process
of artificial dolbllng of value, by the
OF gold. The difference
Is that the process has been extended
over a term OF years, and, having
lived through IL, we propose TO con
tinue 1t indefinitely. Fortunately for
the Porto Rlcans, however, the artl-
iicial "ralslngn OF the figures on
note Is acknowledged TO be unjust TO
the debtor, when IL is done all at
once.
The objection to the second plan Is
that the aft-quoted Gresham law
would seem 10 preclude .he driving
out OF the 40 cent pesJ by the 100
cent dollar. OF course the rohblng of =.
debtors, by raising the value of the :
peso FROM accents TO 45 cents, would !
TO a small matter In the eyes OF :
honest money! men.
The third plan, favored by See.
Gage, is probably the best thai q
could be Formulated, under the cir |
IL would undoubtedly i
work smoothly so long as bullion val. ,
ae'of 'the peseo would not rise \
above It's nominal value. II how y
ever, the runors OF the early opening +
II the Indian mlnts should prove h
reliable, the gold price OF silver q
sould rise, and coin stamped ON II
'ne side, zone peso" and on the q
'ther side, "forIy cents" would in /,
Iced be an ''object lesson and a h
pectacle for gods aud men. a
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