Chapter Icontinued

II. Republica Filipina Money System

• May 1, 1898, Battle of Manila BayComm. George Dewey with Asiatic

Squadron warships, blockaded and sank the poorly maintained Spanish fleet

• June 12, 1898, Phil. IndependenceGen. Emilio Aguinaldo declared Phil.

Independence despite presence of Gen Dewey

• Pres. Aguinaldo, as provided under Sec. 68, Sub.sec 6 of the Malolos Constitution, issued currency by special legislation

• November 26, 1898, Malolos Congress passed a law which authorized the Government to issue paper currency worth P3 million

• June 1, 1899, PD issued in Tarlac, authorized the Sec. of Finance to issue notes in denominations of P1, P2, P5, P10, P20, P25, P50 and P100

• Army arsenals in Malolos managed to stamp only copper coins worth 2 centimos

• There were more paper money (papel moneda) which used Spanish text such as un peso followed by enclosed “$” sign

• Upon the surrender of Pres. Aguinaldo to the American Military Government in 1901, the Republica Filipina notes were demonetized

III. American Colonial Money System

• On August 13, 1898, 3 months after the Battle of Manila Bay, Maj. Gen. Wesley Merritt landed with 11,000 American troops and took Manila

• On August 26, 1898, Maj. Gen. Elwell Otis assumed after Merritt, with additional 5,000 troops

• In early February 1899, the Filipinos rebelled against the US Military Government, which led to arrival of more US military troops

• In May 1900, Maj. Gen. Arthur Mac Arthur assumed post after Maj. Gen. Otis

• The extensive occupation of the country required substantial expenditure on soldier pay and procurement of local materials and supplies

• US military government brought from San Francisco, $5,030,500 worth of gold coins, $500,000 paper currency and $273,800 worth of silver, nickel and copper coins

• 3 commercial banks operated: Banco Espanol Filipino (monopolized the issuance of banknotes), HSBC (big English bank with wide branch network) and Chartered Bank of India, Australia and China which operates to determine bank rates

• On August 19, 1898, in an effort to relieve the scarcity of Mexican silver peso, the 3 banks requested Brig. Gen. F V Greene the authority to import Mexican silver pesos, duty free, and committed to keep the exchange rate at 2:1 Mexican peso : US dollar

• On March 2, 1903, the Philippine Coinage Act was enacted by the US Congress which established a standard of value and provided for a coinage system in the Phils.

• The importation of the Mexican pesos by the 3 banks continued until January 14, 1904

• Under the coinage law, the Phil. Government exercised its discretion at buying silver bullion and coining for domestic use subsidiary coins in denominations of 50, 20, 10 centavos, all with copper alloy up to 100 for every 1000 parts y weight while the other 900 is of pure silver metal

• On October 10, 1903, the US Congress enacted the Phil Gold Standard Act (Act No. 938) that placed the new currency system on the Gold Exchange Standard

• Main provisions:

–Setting up a separate and trust fund in the Insular Treasury, called Gold Standard Fund–Creating the Division of Currency in the

Bureau of Insular Treasury