Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1898-12-12


RETARY VANDERBILT ON THECUR-
RENCY QUESTION, IN OUR NEW
ACQUISITION-AN' INN E D IATD
FORCED SUBSTITUTION OF OUR
CURRENCY SUGGESTED BY AN
ARMY OFFTCER-THE TAXATION
PROBLEM.
Washington, December 11.-Assistant
Secretary Vanderbilt. who is not ex-
pected here until December Goth, in his
second informal report of his observa-
lions in Porto Rico says that the history
of the currency situation is about this:
THE island some twenty-five years
| ago, was using American currency. AT
| that time of the emancipation the Span
ish government found the value of sill
yer 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 redundant currency, and great
| deal of it was shipped away. Event
| ually the government decided on a
coinage for the island, making a fur
Their profit by debasing the silver in
the peso The. silver in the peso is
| 900 fine. The Spanish government
gave this new peso certain redeem
ability by Offering to redeem it at the
| Bank of Spain at Madrid at 95 in gold,
and l understand that some of the
| coins have been redeemed at that rate,
although comparatively few of them
| have been carried back to Spain.
Zone of the American commanders
! reports to me that condition that
| must be taken into account is the own
ership of most of the plantations. They
are nearly all owned by Spaniards; a
great many of them by Spaniards re-
| siding in Spain. This has resulted, in
stead of an apparent balance CT trade
considerably in favor of the island, in
a real balance against the island. The
great sugar plantations, owned by peo-
pie residing in Spain have, year. after
year, raised crop of sugar at an eX
| tremely low labor cost. The sugar
has been sold abroad, and practically
the whole return for it has remained
| abroad, creating no demand for ex-
oaly thing that has been imported is
a little calico, and, while the trade re-
turns show a large excess or exports,
1.-THE value of those exports never re-
turn 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 satisfac-
| torily for little while, but the ex-
| change dealers soon found that they
could make a more profitable rate of
exchange, and our ratio, therefore, be-
| came ineffective and imperative. The
| settlement of the question lies between
| two extremes: on 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 redeemabIe rate
of 90, which the Spanish government
| fixed.
can army officer with whom l talk
| ed 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 fixed?
! 1t is not believed the average rate Of
exchange for series of years should
| be taken. Exchange dealers have
| controlled the situation, with little
| reference to the actual balance Of
| trade. 1t would be hardship on the
| debtor class to have the peso too high,
| and the debtor class is the whole
| working population of the island.
| There is great amount of small
| debts. No one seems to work with
out the spur of debt behind him, and
| W COuptl IHo repay HeHL vi lHeS0
| debts in a coinage more valuable than
| that in which they were contracted
would be a great hardship. 1t is be-
| lieved by some that to under-value the
peso, gagged by the average exchange
rate, would work much less hardship.
| and would really come very near be-
| ing just 1t would enable the small
| debtor class to more easily meet their
| obligations, and would even, if the ex-
| act bullion value were taken as a
| basis, still offer ample profit to the
money lenders, for they have op-
pressed the borrowers with an ingen-
| ious variety of methods 1t was sug-
! gested to ME that with respect to the
| issues of the Spanish bank, they
might be redeemed in our money, at
the same rate of exchange which we
fix on the peso. If that rate is low
then the bank can better attempt the
redemption. The volume of the cur
renct is reported to be smaller than
is generally estimated. While the
original currency was from FIVE to six
million pesos, it is thought by some
that there NAV not now be more than