The evening times., 1899-05-03
Porto 11cAH FINANCES.
Reorganization I'm Line With thu
New Order of Things.

Reorganization I'm Line With the
New Order of Things.
San Juan. Porto Rico May 3.-Poro Ri
can finances are undergoing species OF
Reorganization in keeping with the new
order of thinga. The war has left Its i'm
press upon this important branch OF the
public economy In manner to bring about
an entirely new arrangement in the pre-
| viously existing system Of monetary regu-
lation. The history of Porto Rican finance
| past and present has many points of Gu
riosity and interest. Its readjustment to
meet future exigencies involves conditions
in which many Americans will be vitally
| interested.
Before 1876 little use was made of banks
! in the ordinary exchange of business. I'm
porters held directly together instead OF
operating through banks. When a valua-
BILE cargo was disposed Of. instead of SELL
| ing one bill to a banker there were some
times as many as fifteen or twenty small
| bills sold against 1t to importers for the
| liquidation of debts. In the larger trans
actions direct connection was maintained
| with Madrid, London, and New York
banks.
In 1876 a society called the Credito Mer-
catnil de Puerto Rico was organized by
residents of the islands. 1t was in effect
banking association and continued in
! existence until 1888. when negotiations
were placed upon foot in Madrid to found
the Banco Espanol de Puerto Rico. which
eventually succeeded 1t.
During the unsettled condition Of affairs
| in the island violent fluctuations took place
In the money market. Between 1890 and
1895 the Banco Espanol regulated the ex-
change and managed to keep 1t generally
almost uniform. After that the demands
OF the Spanish government upon its colo
nies became more pressing, affecting the
supply and demand in the island to such
| an extent as to occasion a serious disturb
! ance in the markets.
The Banco Espanol, realizing its liability
| to be misunderstood by the people. with
| drew entirely from the exchange business
refusing also to act as the agents Of the
! Spanish government in the collection Of
revenues. After that the market went
wild.
| AS a sample of the remarkable fiuctua-
tion in January, 1897. rates ran from 80
| to 1.l5 pesos to the pound sterling, steadily
| increasing until June and July, when they
ran from SIS to s.i5. or thirty points. In
| the United States the highest variation Is
six points. or 4.S4, to 4.9O. During 1887 in
| Porto Rico it ranged from TO to $50 or
eighty points. In April, 1898, during the
| war scare. from SIS to 11.00 and for the
variation roughly estimated in American
money Of 120 gold in the pound sterling.
Mexican money was used exclusively in
the island until 1895, when the provincial
specie was issued by the government. 1t
! consists OF one and two centavos in Span
ish copper coin. through which holes were
punched to mark their depreciation. the
same specie in circulation in Spain being
of greater value. The government PAID
| $4,000 for the job of thus mutilating the
| $1,000 placed in circulation in this char
| acter. The other coins are of silver Of
the denominational value OF five. ten, twen-
| ty. forty centavos and one peso 100 CEN
! tavcs) Paper bills are in fives. tens.
| twenties. ffties and one hundred and two
hundred dollars. The amount of provin-
cial money in circulation is about 81, 000.-
| coo.
From the beginning OF the American oc-
| cupation the rate OF exchange for Ameri-
can money varied from 2.10 to 2.2O in July
1898. gradually declining until January
! 1898. when from 1.5O II rose again to 1.6i.
! where it now stands. On February the
President fixed the value OF Porto Rican
money at l-66 e-3. Until that time the
postoffice and custom house accepted this
specie only at the rate Of two to one. "'he
Presidents order fixed the value for the
payment OF existing contracts, public and
private. but did not make II obligatory
upon shOpkeepers and laborerS to take
American money.
II came at a time when crops were being
! moved and currency was being shipped
into the interior to pay laborers who are
accustomed to a silver specie and do not
yet understand that the American silver
dollar Is worth nearly 20 per cent more
than the Porto Rican silver dollar Of the
same size.
Thus the latter has to certain extent
| retained its scarcity value. the cash rate
at this time being l.6i instead OF l-56 2-3.
as directed by the Presidents order. Fur
thermore, owing to the Porto Rican money
| value. duties are being paid in the custom
house exclusively in American money.
which is given as a reason why they are
unable there to carry out the provision Of
the order which directs that they shall
retain convenient supply for exchange
for United States money.
There has been considerable speculation
during the unsettled period OF the local
money market. and it is claimed that the
alleged scarcity is due to its boarding IN
some quarters for speculative purposes.
The leading banking houses in the ISL
and are the Banco Espanol de Puerto REQ
and the Banco Territorial y Agricola. both
of San Juan They are sound and reliable
institutions, their bonds paying from to
10 per cent.