The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1898-12-12
CURRENCY Of PORTO RICO
ASSISTANT SECRETARY VANDERBILT
SUBMITS INFORMAL REPORT.
Country Placed ON silver Basis
Through the Use Of Mexican Doll
lars Exchange Dealers Have

WASHINGTON, Dec. n.-Ass.stant Sec
rotary Eanderiip who is not expected hsre
until December 20. IN his second informal
report Of his observations in Porto Rico.
says the history OF the currency situation
is about this:
was using American currency. At the
time or the emancipation the Spanish gov
eminent found the value OF silver deciin-
ing, and Ii discovered it would be profit
ana IN that way the currency was brought
10 a silver basis. The heavy payments for
crops made a redundant currency and a
great dear OF IL was shipped away. Even
tuduy the government decided on a coin
age for the is.and. making a further proiit
by dehasing the silver IN the peso. The
SILVER IN the peso is $40 fine. The Spanish
government gave this new peso 4 certain
redeemabllity, offering 10 redeem 1t al the
Bank or Spain at Madrid at 50 in gold. and
l understand that some OF the coins have
been redeemed at that rate, although COM
paratively few OF them have been carried
back 70 Spain.
'One of the American commanders re-
ports TO me that condition that must be
taken into account is the ownership OF
most OF the plantations. They are nearly
al owned by Spaniards: a great many OF
has resulted against. instead OF an appar-
ent balance or trade considerably in favor
OF the island. in a real balance against
inc island. The great sugar plantations
Z
after years raised crop OF sugar at an
extremely low labor cost. The sugar has
been sold abroad, and practically the whole
return for It has remained abroad, creating
no demand for exchange against the ISL
ana. About the only thing that has been
imported is little calico, and while the
trade returns show large excess of ex-
ports. the value of those exports never
return IN any form to the island. When
the American troops landed it was thought
an easy temporary solution Of the situation
OF yah, A.f,x
American dollars and pesetas at TWO Tof
one. That worked satisfactorily for
little while. but the exchange dealers soon
found they. could make more profitable
rate OF exchange, and our ratio therefore.
became Ineffective and imperative. The
settlement or the question lies between
Two extremes; on the one hand. the fixing
OF the value of the peso at the exac, value
OF the bullion, and on the other hand.
giving ii an equivalent gold value equal
to the normal redeemable rate of IS. which
the spanish government fixed
An army officer with whom talked is
In favor Of an immediate forced substitu-
non OF our currency fer the present Porto
done by military order, fixing the rate of
exchange. The question Is what rate
should be fixed. 1t is not believed the
average rate of exchange for a series of
have controlled the situation with little
reference TO the actual balance OF trade.
1t would be hardship on the debtor. class
class is the whole working population of
the island. There is a great amount of
small debts No one seems to work with
out 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 We're contracted would be hardship.
II Is believed by some that to undervalue
the peso. gauged by the average exchange
rate, would work much less hardship and
really come very near being just. 1t
would enable the small debtor Class to
more easily meet their obligations and
would even. If the exact bullion value
were taken as a basis. still offer ample
profit to the money lenders. for they have
Gus variety of methods. It was suggested
TO me that with reference to the issues OF
the Spanish bank they might be redeemed
change that We fix on the peso. II that
rate is low, then the bank can better at
tempt the redemption. The volume of
the currency Is reported to be smaller than
currency was from five 10 six million
pesos. 1t is thought by some there may be
not now more than four million that
would be exchanged
Attempts are now being made to coll
Iect internal taxes, but at the present
armed guards have to be, sent with the
something like this:
The central government levied on the
municipalities "a municipality covers not
only city, but a district a certain amount
the government The municipality adds 10
that further sums for local expenditures
The serene Of taxation by which this to-
tai amount was collected varies in the diff
ferent municipalities. 1t is quite the re-
verse from our internal taxes for little If
anything IS laid on the manufacture of
spirits and tobacco. The best opinion Il
that the judicious Introduction Of our In
ternal revenue system ana the abandon
ment Of the Spanish system would be wise.
The raising of taxes on spirits would be a
a In M, ssfae
of other forms OF taxes would give the
new scheme further popularity. II is
thought by some that for re present we
are collecting too much reC,nue. for the
reason that up TO this time there has been
practically no expenditure.
There has been q good deal OF disturb
ance and destruction OF property In Aqua
dslla. the province at the Brthwest corner
OF the island. and in Mayaguez. 1t Is
thought half a million dollars worth OF
property has been destroyed in Aguad!ua
and that practically nothing could be
raised there this season"