The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-25
PHILIPPINES WANT
AMERICAN DOLLAR
Movement for the Abolition
of the Peso Started by
Business Men.

MANILA. Oct. 2s.-The continued rise
In the value OF American exchange and
the advance In local interest rates TO as
high as IL per cent has led TO move
ment among business men In the Philip
pines for the abolition Of the peso as
the medium Of exchange and the estao-
lishment Of the American dollar. Action
by Congress will be necessary 70 bring
this about At the present time the
banks in Manila are buying United
States checks at q premium of 6h per
cent and are selling exchange on New
York at from to ~ per cent. the pre-
diction is made that the rate VIII reach
10 per cent. unless steps are taken to
prevent 1t.
II Is understood here that cablegrams
have been sent to Washington asking
that some steps be taken to check the
fall In the price OF the peso anu ss p :, !
ton will be ready for Congress wheh IL
assemblies In December. Briefly this Pc
tition will recite:
The peso should be abolished as the
medium Of exchange In the Phiiippine
Islands.
The Philippine Government should be
refused permission to issue any more
currency with the peso as the basis
An act Of Congress should estaplish
| the dollar as the legal medium OF ex-
change.
| Congress should establish In Manila
either a sub-treasury or branch OF the
! Federal Reserve Bank. through when
business men may purchase united
States exchange at a rate not to exceed
the cost Of the transmission OF United
| States currency to the ISLANDS.
The reasons for the decline In value
! of the peso are several By law or Con-
gress 1t is established as having value
of fifty cents American gold. The So
called gold standard fund established In
| Washington to maintain this one to two
parity Is said to be badly depleted, Tor
reasons which are not exactly clear
here Also the silver bullion stored in
the vaults at Corregidor to form the
basis of the guarantee behind the peso
is very much depleted, largely owing
to the sale of the silver to India and
other countries because of the high
premium which the bullion attracted.
And on top of all this the Philippine
Government faces big deficit and IN
ability to market it's bonds. The eX-
penses of the Government have increased
steadily and new sources or revenue
ton to providing for the deficit of this
year which is protected by certificates
of indebtedness, against which bonds
have been issued which the Chase Ma
tional Bank in New York has been un-
able to market on per cent. basis
and seeks authorization by the Legisla-
ture of higher rate.
The pet schemes of the Philippine
Government, the National Development
Company and its subsidiaries, the Ma
tional Petroleum Company and the Ma
tional Coal Company, have proved
heavy burden to the Government and
will require the investment of huge add
tional sums before they will be able to
make any return whatever. II Is even
doubtful whether coal or petroleum can
be extracted in paying quantities. 1t is
too early to condemn either venture as
n failure, but the fact remains that
much money remains to be found and
expended before the question can be
! answered.
Foreseeing further financial troubles
for the Philippine Government and the
prospect of a stir greater decline in the
local value of the peso IN the face OF the
guarantee of the United States Govern
ment business men urge that the law
be changed and the dollar be made the
medium of exchange.
In order TO stop the drains upon Il
and In an effort to curtail credits. the
Philippine National Bank has raised its
interest on new and renewal loans to IL
per cent. in the face Of n strong protest
by the Philippine Chamber of Commerce,
which says to the Council OF State that
the usury laws OF the Philippines pro-
vide that interest on secured and unse-
cured loans shall not be more than IL
and IA per cent. respectively. and there
fore brokers and merchants using he
money loaned by the national bank at
the new rate will have TO resort to usury
rates to cover expenses and reasonable
margin of profit. The protest also says :
This sudden advance represents an
increase OF over 80 per cent. over exist
ing rates. which on the face of II appears
excessive and unwarranted by the ex-
listing trade and commercial conditions
of the country. BY way of Justification
Il is argued that the new high interest
rates will prevent the money of the ISL
apds from being invested IN foreign
tfade centres, where higher rates OF in
terest prevail The existence OF the sit
uation sought to be remedied is seriously
questioned"
II is understood that the proceeds Of
the sale OF certificates OF Indebtedness to
the Chase National Bank aggregating
S6.000.000 were exhausted in six weeks
, and the gold standard fund In no wise
: improved Meantime the demand for
gold exchange continues in the face OF a
constantly increasing trade balance.
I