The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-12
PORTO RICAN POVERTY
RETURNS FOR ITS EXPORTS HAVE
ALL BEEN GOING TO SPAIN.
How the Money Changers Have Been
keeping the Poor with Their
Noses to the GrindstOne.

WASHINGTON, Dec. n.-AsSistant Secre-
tary Vanderlip, who is not expected here un-
til Dec. 20. in his second informal report of
his observations in Porto Rico says that
the history of the currency situation is
about this THE island twenty-five years
ago was using American currency. At the
time of the emancipation the Spanish gov
eminent found the value of silver declining,
and it discovered it would be profitable to
make payment in Mexican dollars, and in
that way the currency was brought to a
silver basis. The heavy payments for crops
made a redundant currency and great deal
of it was shipped away. Eventullx the gov
eminent decided on a coinage for the island,
making further profit by debasing the sill
yer in the peso. The silver in the peso is
900 fine. The Spanish government gave this
new peso certain redeemability by Offer
ing to redeem it at the Bank of Spain, at
Madrid, at % in gold, and 1 understand
that some of the coins have been redeemed
at that rate although comparatively few
Of them have been carried back to Spain.
lone of the American commanders reports
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 Span
iards residing in Spain. This has resulted,
instead of an apparent balance of trade
considerably in favor of the island, in
real balance against the island. The great
sugar plantations, owned by people residing
in Spain, have, year after year, raised a
crop of sugar at an extremely low labor
cost The sugar has been sold abroad and
practically the whole return for it has
manned abroad, creating no demand for eX-
change against the island. About the only
thing that has been imported is q little
Calico and while the trade returns show a
large excess of exports, the value of those
exports never returns in any form to the
island. When the American troops landed
it was thought an easy temporary solution
. of the situation to fix the rate of exchange
as between American dollars and pesos at
two for one. That worked satisfactorily for
a little while, but the exchange dealers soon
found that they could make more profit
able rate of exchange, and our ratio there
fore became ineffective and imperative. The
settlement of the question lies between two
eXtremes-on the one hand the fixing of the
value of the peso at the exact value of the
bullion, and, ON the other, giving it an
equivalent gold value equal to the nominal
redeemable rate of 50, which the Spanish
government fixed.
AN army officer with whom 1 talked is in
favor of an immediate forced substitution of
our currency for the present Porto Rican
currency, and thinks this might be done by
military order fixing the rate of exchange.
The question is, what rate should be hxed.
1t is not believed the average rate or eX-
change for a series of years should be taken.
Exchange dealers have controlled the situa-
ton with little reference to the actual bal
ance of trade 1t would be a hardship on
the debtor class to have the peso too nlgh,
and the debtor class is the whole working
population of the island. There is great
amount of small debts. No one seems TO
work without the spur of a debt behind him,
and to compel the repayment OF these DEBTS
in a coinage more valuable than that IN
which they were contracted would be q
great hardship. 1t is believed by some that
to undervalue the peso, gauged by the aV-
erage exchange rate would work much less
hardship and would really come very near
being just. 1t would enable the small
debtor class to more easily meet their oDll-
cations, and would, even II the exact bullion
value were taken as basis, still oner am
pie profit to the money lenders, Lor tney
have oppressed the borrowers with an IN
genious variety of methods. 1T was sug-
gested to me that with respect to the issues
of the Spanish bank, they might ne re-
exchange which we fix on the peso Ii tnat
rate is low. then the bank can better At
tempt the redemption. The volume OF the
currency is reported to be smaller than Is
generally estimated. Wnlle the orlelndl
currency was from 100000 to 6'OOoOO0 pesos.
it is thought by some that there may now
be not more than 100000 that would be ex-
changed, -.
internal taxes but at present armed guards
have to be sent with the collector Inc
scheme of taxation is something like this;
The central government levied on the nI-
inequalities Ga municipality covers not only
4 CITY. but DISTRICT certain amount that
must be collected for the support OF the
government The municipality, adds to that
further sums for local expenditures, the
scheme of taxation by which this total
amount was collected varies in the dinerent
MUNICIPALITIES. 1t is quite the reverse from
our internal revenue taxes, for little, IL any
thing. is laid on the manufacture OF spirits
and tobacco. The best opinion is that the
indicious introduction of our internal reVe-
nue system and the abandonment OF the
Snanish system would be wise. The raising
az taxes on spirits would be q popular
movement and the abandonment OF other
forms of taxes would give the new scheme
further popularity. 1t is thought by some
that. for the present, we are coilectlng 100
much revenue. for the reason that up 10 TINS
time there has been practically no expehdl-
ture. -, = 7;..t
ance and destruction of property in Aqua
Giila. the province at the northwest corner
Of the island and in Mayaguez. 1t IS
Thought that a half million dollars worth of
nronertv has been destroyed in Aguadlla.
and that practically nothing could be raised