Evening star., 1898-12-06
u. s. FL NAN CE S
Continued from Thirteenth Page)

wide difference in the rate of exchange, oc-
casioned by the use of differing and unre-
lated currency. is a1serious obstacle to the
transfer of capital, it is to legitimate
| industry. The obstacle can and ought to be
removed. ~
1t is therefore suggested that at the
proper time action be taken by Congress
TO assimilate the currency of Puerto Rico
| to that of the United States, so far and so
rapidly as this can be done without unduly
disturbing existing conditions and contract
relations in Ruerto Rico. This, 1T is be-
lieved. can be accomplished by making Gus
toms dues in the island payable in Amer
1can money, yet receiving the silver pesos
ana centavos at a fixed relation to our dol
iaf ihe limited amount Of Puerto Rican
money would thus find an important ave-
nue. where a uniform value on the basis ar
ranged would be realized This avenue
would probably be broad enough to give the
assurance needed to keep the peso and its
MINOR subdivisions current through the is-
land at the custom house valuation. If any
ooubt should arise to the sufhciency of
snch a provision, 1t could be made the
auty of the Secretary of the Treasury to
give American coin in direct exchange for
the Puerto Rican coin at the custom house
ratio whenever in his opinion 1t should be
necessary so to do in order to maintain the
ratio established
From information fairly TO be relied upon,
II appears that the island coins have had
value in domestic exchanges and in the
| purchase of sterling bills considerably
above their bullion value, measured by the
world price for silver 1t would seem
Just and wise to adopt this local value in
the establishment of a fixed ratio to the
United States standard. To adopt the bull
non value of the currency in fixing such
ratio would seriously disturb existing con-
ultlonS IN the value of wages and work in
justice to contract relations between debt
ors and creditors
subject to correction from a better
khowledse, l think all interests would
meet in giving a fixed value of lG62s
to the peso-that is to say, the peso shall
be maintained at the value of 90 cents, first
by receiving it in payment for customs al
lhat prlce; second, by giving for it, when
required, American money at tnat rate of
exchange 1t IS by a similar process that
our own silver money has been kept on d
parity with our gold coins.
Inc present Puerto Rican coins carry the
empiems of Spanish sovereignty. Whether
or not additions to the coinage be made
new coins should be struck, of the same
weight and 1neness, upon which should be
imprinted proper enbems of our new rela-
tons, and these should be substituted for
the old. BY melting up the old as they
come in and by paying out the new such a
substitution can be easily and quite rapidly
erected. Gradually, custom and use would
establish American money, whether of sill
Yer, gold or paper, as the medium Of ex-
chanSe and payment.
Then 1t may be expected that the pres
eht fuefto Rcan money will not be called
for, American money and American terms
OF account and payment having super
Sefed those now in use. Then upon the
soVernment-either of the island itself or
upon the United States government, as
may be determined-the loss will fall result
ing from the redemption of the Puerto
Rlcah CONS at an generalization. If the
peso be rated at 90 cents. as herein sug-
gested, and if the bullion in the coin re-
mains at its present value of 10 cents and
lastly, II the amount of the silver money
referred to be correctly estimated a $500
900 pesos. the loss would amount to 81 100
"A nn.aV ha t1n
ultimate cost of relieving the island from
the greVous ills of bad currency system
The benefits would be Immediate, and it
may be hoped, would be continuous for all
time. The cost, when it began to be ex-
perienced, would be distributed over Sc
ries of years, and might easily be covered
by proper appropriations from the reve-
nucs of the island.
l have so far spoken as if silver coin were
the only medium of exchange in Puerto
Rico. Such is not the fact. The Spanish
Bank Of Puerto Rico, holding a franchise
from the Spanish government has been
privileged to issue its notes to the extent
of three times it's capital. and the note
issues of this bank at one time outstanding
have been as high as $3.50 900 pesos. Under
the circumstances now existing the notes
of the bank are Lot in favor. and 1t is not
improbable that its affairs will be liqui-
dated. This being So the function which
it has in the past discharged should be as
sumed and prosecuted, within proper legal
limitations, by some one bank organized
with ample capital, and with the right to
establish branches at convenient points and
to issue It's own notes TO circulate money.
Or. If this should not be favorably conSid-
cred, then an act extending to the island
the rights and privileges of the national
banking system might merit approval.
CURRENCY AND BANKING.
In submitting my report, / feel it my duty
to impress upon Congress. as best 1 may
the important subject of currency and
banking reform.
1t is the misfortune of evil conditions 10
produce arrangement and hinder progress
which. If long continued so accustom the
subject of them to their existence as to
create in him apathetic Indifference to need
full and healthful reforms. Indeed it is a
familiar fact that individuals, families and
nations ignorantly suffer under the illu-
sion that the very source of their affliction
is itself an agency for good. Something like
this has marked our financial history for
thirty years. Making progress IN spite of
all Obstacles and embarrassments to COM
merce and industry, we ascribe the advance
ment to the causes which have really ham
pered and disconnected the forward and
upward movement. With a financial system
condemned by the judgment of the most
experienced and wise, both at home and
abroad, it's evils illustrated in daily busi-
ness, and emphasized in recurring panics
we fail, with an oDtuse timidity to face the
questions which must be met and rightly
be established upon enduring conditions of
security
The arguments against government issues
of paper money as a medium for CONNER
cial exchanges have been fully made and
need not be repeated in detail Its rigidity
its failure 10 meet demands where demand
is most urgent, the dependency of the whole
industrial structure upon the state of the
revenue and public eXpenditure-these are
important links in that chain of argument
Even in a state of foreign war, the civilized
demand of both contestants is for due re-
spect to private property and individual
contract relationships. How much more IN
a state of peace, in a free state, should
private rights and contract relationships be
given immunity from the incidental, though
serious, effects now suffered through per-
turbations in government finances. The
menace to our domestic affairs, several
times recurring from a threatened change
in the standard under which they are car
ried on, and foreign trade settled, has
been a companion evil-perhaps the greater
of the two
The cure for these evils is not difficult to
find 1t lies within the easy range Of con-
gressional action. Nor is the remedy one
to inflict even temporary pains or penalties
on the body polite The healthful stimu-