The record-union., 1898-12-03

WASHINGTON, Dec. Edward
Mharden, who was appointed in August
last an honorary Commissioner Of the
United States to make an investiga-
4ion of the financial and industrial con-
ditions in the Philippines, has made his
report to the Secretary Of the Treas
Ery, in the course of which he says:
Silver is the basis of the currency in
fhe Philippine Islands. There IS no
gold in general circulation, and has
been none for more than twenty years.
The Mexican dollar of a date previous
TO 1877 is current in the islands, and 1t
is practically the only money in general
circulation. The Spanish Government,
An the summer of 1897, coined $4,000
900 Of silver in local currency, Wnicn
was sent to the islands. These dollars
are lighter in weight than the Mexl-
can dollars, but the scarcity OF money
an the Philippine Islands caused them
20 be quickly absorbed. There Is a
eocal note issuing bank called the
Banco Espanol Filipino, which has in
Girculation notes based on silver, OF
which there was outstanding on Sep
kember 80, 1898, approximately 81
100000.
"gThe amount of money needed for
tlIe trade and commerce of the Philip
pines fuctuates in the different sea-
Eons. In the hight 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 money. For the ordinary condi-
fions of the country little money is
used, as the credit system is in vogue
throughout the islands, and there is,
therefore, no great amount of money
needed for the payment Of wages to the
daboring classes. In the off season,
when exports are light, the demand for
money would become SO small that the
circulating medium would be found
more than sufficient for the needs of
the country.
The huctuation in the demand for
money in different seasons of the year
resulted in widely fluctuating rates of
exchange, and in the continued flow of
money either to or from the islands,
The law which prevented the importa-
tion of the Mexican dollars of date
subsequent to 1877 proved a great
hardship to the business interests, and
would have been a much greater evil,
had it not been for the laxity Of the
officials, who permitted and encouraged
smuggling. It was not uncommon for
the dollar to go to a premium Of 10 or
II per cent, and this would in1medi-
ately start the flow of silver toward the
islands, which would be continued un-
til 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 ISL
Rnds was recognized industry. It was
carried on largely by the rich Mostizos,
or Chinese half-castes. There was a
regular system for the bringing in Of
these coins. The result Of the Span
Ssh laws was to make money dear dur
ing the season when there was a big
demand for currency, and the pro
ducers, 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 Ma
nila byl the American troops permission
was given the banks to import silver
freely, and the result has been to keep
exchange rates on a more stable basis.
1T is estimated that there Is in cir
rulation $10,000,000 of subsidiary coins
the 10 cent. 20 cent and 80 cent
pieces. which have been recoined from
Mexican dollars by the Spanish Gov
ernment The estimate Of the Mexican
dollars now in circulation, as given by
one of the best informed bankers in the
islands, is from $40, 100000 to $25, 5,O00
DO0. This. with the $2,50OO00 of notes
of the Banco Espanol Filipina, consti-
tutes the currency of the islands. This
fof al Of
TO $45,O00000, speaking roughly, for