The San Francisco call., 1899-12-14
PHILIPPINES
ABSORB GOLD
LIKE A SPONGE
Financial System of
the Islands.

Among the passengers on the Zealandla
was Major Charles Mcclure, who was
chief paymaster on the staff of General
Otis. He is now at the Occidental Hotel,
awaiting orders from the War Depart
ment.
Major Mcclure went out TO Manila with
General Merritt. and since his arrival
there he has handled over eleven millions
OF dollars in Government money, which
means double that amount In the coin or
the islands.
The premium on American gold is ex-
actly 81 O5. but II wss not always so high
and the attempts of the paymasters TO
keep Up the premium occupied good part
OF their time while in Manila
According 10 Major Mcclure. American
gold was always eagerly accepted by the
Manila banks and 10y the tradesmen, but
they were somewhat shy OF the American
silver money. At first they would not pay
the premium. and II was only when IL was
proved 10 them that the value OF the sill
yer dollar lay not IN the metal Of which
il was made but In the stamp II bore that
they would take il al the same rate as
gold.
The banks in the islands and in Hong
kong are all run on a silver basis, and
THAI. too. caused endless trouble. The
banks would accept gold from the Off
GERS and men, but they would accept IL on
q silver basis. and when II came 10 draw
Ing money out. II the depositors wished
TO have gold they had TO pay IRON m . TO-, 10
per cent premium for il. one OF the cap
tains brought his company funo OF Sz4OO
10 the HongkOng Bank in Manila and was
credited with deposit OF S4SVV IN lslana
money Next day he wished 10 draw
some out and IL was offered 10 MN IN
silver. He refused 10 accept the silver
on the ground that his deposit had been
IN gold. but he was told that mace no oil-
ference: II he wanted gold he would have
10 paw s per cent premium for II. Then
he demanded mis- deposit back just as ne
had had Bis gold all right, but he would have
TO pay high for II II ne wanted 70 &c, IL
out The captain appealed TO Major NC
Clure and he sent Tor the prYNos. ma "a :
shall Together they reasoned with the
bank officials and finally the captain got
his money back in gold. less IS the bank
kept for itself. for what reason no one
In was 90 with every deposit. A deter
mined eGort was made 10 have IL SO the
Officers and men OF the army could oe-
rosit their gold in the banks and draw IL
out again. but the banks would not agree
10 any such arrangement They We're
working on silver basis, they said, and
any one who wanted gold would have 10
This state OF affairs led TO the estab-
ushment OF a safe deposit by the paymas-
tiers department. 4 strong room was wa
Ger or man who wished could leave his
money and his valuables there. At one
time there were nearly 1000 deposltors:
Each mans money OF valuables were tied
I'D in a little canvas bag, and whenever
he drew any out he had u make note
OF the fact on a tag attached TO the bag.
There was a clerk 10 keep track OF the
bags. but no books could be kept. so each
man had 10 keep his own. II worked just
as well as bank and was much less ex-
pensive.
AS a matter Of fact whenever the banks
got hold OF any OF the army gold IL was
! Shipped out Of the country at once. Major
/ Mcclure made a deposit OF nearly $3.50 ,00t
| on one occasion, and when he went back
/ after IL a few days later $50 900 had been
/ sent TO Hongkong and $4,000 had been
| sent 10 London. He drew out the remain
/ der. He devised way Of getting gold
without paying the premium, however
/ and after that there was not much trou.
BILE.
Exchange on America and England il
rather high in the islands. and drafts or
| the ub-treasuries in this country were
] correspondIngly valuable First be-
! cause they were as good as exchange anc
| could be secured for nothing, and second