2 8o The National Geographic Magazine 



ing the deposited coin in the Treasury 

 "to be held and used for the payment 

 of such certificates on demand, and for 

 no other purpose," thus supplying for 

 public convenience government notes 

 representing silver coin actually held by 

 the government as against the notes. 



Under this provision certificates have 

 been engraved, printed, and delivered 

 at Manila representing 10,000,000 silver 

 pesos. Of these, 4,000,000 were in 

 10-peso notes, 4,000,000 in 5-peso notes, 

 and 2,000,000 in 2-peso notes. This 

 work was admirably done by the very 

 considerate and public-spirited cooper- 

 ation of the Bureau of Engraving and 

 Printing. The 10-peso notes bear the 

 engraved vignette of President Wash- 

 ington ; the 5-peso notes, of President 

 McKinley, and the 2-peso notes of the 

 Philippine patriot and poet Rizal. 



The cost of material, engraving, print- 

 ing, transporting, and insuring the ten 

 million pesos of silver certificates has 

 been $39,365-36. 



Issue of Certificates of Indebtedness. — 

 The money for the purchase of bullion 

 and expense of coinage was furnished 

 in part from the general funds of the 

 Philippine Government and in part by 

 the issue of certificates of indebtedness 

 under the authority of section 6 of the 

 Philippine coinage act of March 2, 1903. 

 That section provides that in order to 

 maintain parity between said silver Phil- 

 ippine pesos and the gold pesos provided 

 for by the act, the Philippine Govern- 

 ment may issue temporary certificates 

 of indebtedness to the extent of $10,- 

 000,000, or 20,000,000 pesos, running 

 not more than one year and bearing 

 interest not to exceed 4 per cent ; and 

 it provides that the proceeds of such 

 certificates shall be used exclusively for 

 the maintenance of said parity, except 

 that a sum not exceeding $3,000,000 at 

 any one time may be used as a contin- 

 uing credit for the purchase of silver 

 bullion. 



Under these provisions certificates of 

 indebtedness payable one year after date 

 and bearing 4 per cent interest have been 

 issued and sold in the United States 

 to the amount of $6,000,000. Three 

 million dollars thereof, issued specific- 

 ally for the purchase of bullion, were 

 sold on the 20th of April, 1903, at a 

 premium of 2.513 per cent. The other 

 $3,000,000 thereof, issued specifically 

 for the creation of a gold reserve fund 

 for the maintenance of parity, were sold 

 on the 25th of August, 1903, at a pre- 

 mium of 2. 24 per cent, making an aver- 

 age premium of 2.3765 per cent and 

 making the interest charge to the Philip- 

 pine Government for the use of the 

 money borrowed for one year 1.6235 

 per cent, or in round figures \S/% per 

 cent. 



These sales were made upon public 

 advertisement for bids, and the extraor- 

 dinarily favorable result was due not 

 merely to the credit of the Philippine 

 Government, but to the fact that the 

 Secretary of the Treasury authorized 

 the War Department to announce that 

 the certificates would be received by the 

 Treasury Department as security for 

 the deposit of United States funds in 

 the national banks under certain speci- 

 fied conditions. 



Competition between the two depos- 

 itaries of insular funds in the city of 

 New York, which maintain branches 

 in Manila, had been previously invited , 

 and as the result of this competition 

 the $6,000,000 thus borrowed by the 

 Philippine Government at 1 y% per cent 

 per annum was deposited with the Guar- 

 anty Trust Company of New York at 

 3^ per cent interest on daily balances. 



The ultimate result of the two trans- 

 actions is that the Philippine Govern- 

 ment will have obtained the money to 

 carry through the new coinage without 

 any interest charge, and will make an 

 interest profit on the indebtedness con- 

 tracted for that purpose. 



