The evening times., 1898-12-03
HARDEN'S REPORT
ON THE PHILIPPINES
SILVER THE BASIS OF CURRENCY
There Is No Gold in Circulation and
Has Heen None for More Than
Twenty Years.

! mere is NO Gold in Circulation and
| Has Heen None for More Than
| Twenty Years.
The report of Edward w. Harden, hon
| orary commissioner of the United States
to make an investigation of the financial
and industrial condition in the Phi.ippines
| has been fled with the Secretary of the
Navy. Among other things, the report
! says:
| Silver Is the basis of the currency in
the Philippine Islands. There is no gold in
| general circulation, and has been none
10, more than twenty years The Mexican
dollar of q date, previous to 1877 is current
! in the islands. and it is practically the
| only money in general circulation The
81 anlsh government in the summer OF
| 1897 coined S. C0J,353 Of silver in a local
currency, which was sent 10 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 n
local note-issuing bank called the Banco
Espanol Filipino. which has in circuIa-
ton notes based on silver. of which there
was outstanding en- September 50 1895 an
proximately s2,5G0.GoO
The currency Of the islands was orig
! inally gold, in pieces of 81, 81 and $4 with
I the Mexican silver dollar and the old
| Spanish silver dollars, the latter circulat-
Ing to limited extent only. Previous to
| 1870 the silver was often at a premium
over gold. When silver began 10 depIeci-
ate in value the gold coin was rapidly ex-
| ported and replaced 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
| It's place 50 rapidly, that the Spanish gov
eTnnent took steps to stop the export of
the one and the import of the ether. In
the spring of 1873 an edict was issued from
Madrid prohibiting the import Of all sill
yer dollars bearing a date subsequent To
| 1877. This law was maintained until the
control of the islands passed to the Unit
| ed States.
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 increase in the demand for mon
| ey. For the ordinary needs of the coun-
| try little money is used, as the credit syS-
| tenn is in vogue throughout the islands
! and there Is therefore no great amount
| of money needed for the payment of
wages to the laboring classes. In the off
; SEASON, HIen exports are uSIl. the uc-
! mand for money would become so small
that the circulating medium would be
| found to be much more than sufficient for
/ the needs of the country The huCtuation
| Ia the demand for money in different sea
sons of the year resulted in widely fuct-
uating rates of exchange and in the con
! tinued flow of money either TO or from
the islands. The law which prevented the
importation of the Mexican dollars Of a
I1fp SlIhSaglrgnt a 1N1T nFpNG6 a
! hardship TO the business interests, and
would have been a much greater evil had
it not been for the laXity of the officials
which permitted and encouraged SNUG
Cling.
1T was not uncommon for the dollar to
go TO premium OF 10 or y 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 a
point which would cause smuggling to
cease being profitable. The smuggling of
silver into the islands was a recognized
industry. 1t was carried on largely by
the rich Mestizos.' of Chinese half
castes. There was regular system for
the bringing in of these coins.
The result of the laws was to make
money dear during the season when there +
was big demand for currency. and the
producers as we'll as the merchants and
bankers have been robbed from year TO
year through the effects of the law in
force.
After the occupation of Manila by tFe
American troops permission was given
the banks 10 import silver free'y. ard
the result has been TO keep exchange
rates on a more stable basis.
The Spanish government kept no sta
tistics of currency or finance. and the
bankers can give only estimates of the
most general character, The most care
ful estimate of the currency of the ISL
ands is therefore likely to be Incorrect. |
There are S.Gd0000 people in the Islands |
according TO the estimates of the Span
ish government of whom only small
fraction live III the territory contiguous
to Manila and Iloilo. When money once
leaves these centers it passes out of the
knowledge of business men. and it is i'm
possible. therefore, to form any correct
idea of the amount of money now i'll the |
islands. There is $1,000 coo in Philippine
dollars coined by the Spanish govern
ment and sent out Il year ago, of which !
only a small percentage is now in Ma
rila. 1t is estimated there is in circula- |
tion sl0,000 600 of subsidiary coins the To- |
cent, 20-cent and 50-cent pieces, which |
have been recoined from Mexican dollars |
by the Spanish government. The esti- |
mate of the Mexican dollars now In circu- !
lation, as given by one of the best-in- |
formed bankers in the islands is from |
$50, 600 10 $4,000 0GO. This, with the |
900 of notes of the Banco Esranol |
Filipino now in circulat tion constitutes |
the currency of the islands. This would |
make a total of from $40 100000 to $45 CO., |
900, speaking roughly. for the entire ISL |
ands, or approximately s. per capita for |
the total population of the Islands 1t |
must not be overlooked that these fig
ures are given on silver basis, and |
that therefore in figuring on our own
standard all of these figures must be cut
in two