4.32 cents per pound, and the total value of sugar exported was $26,500,000 out of total exports slightly exceeding $67,000,000. This excellent showing in the sugar industry, compared with former years, was due to the modern mills erected in the islands in recent years largely as a result of free admission of their sugar into the United States. The immense advantage of the American market to the Philippine products is the more appreciated as the development of the islands results in a greater ability to take advantage of it. The currency system in the islands. The rehabilitation of the currency system of the islands was completed during the period covered by this report. It will be recalled that when the situation was most tense, in 1921, Philippine currency was at about 16 per cent discount compared to the standard. The reserve funds in the United States provided for the purpose of maintaining the standard had been dissipated. The first step in remedying this situation was to provide the necessary funds in the United States. As reported in the last annual report, Congress authorized a material increase in the limit of indebtedness of the Philippine government. The Philippine Legislature authorized the sale in the United States of bonds covered by this increase and by this operation the necessary funds were provided. These bonds are made absolutely tax exempt in the United States, and the Philippine government, as a consequence, was, notwithstanding the depression, enabled to sell its bonds on about a 4 per cent basis. Since the sale of these bonds, the currency of the Philippine Islands has been at par with the gold standard. It is obvious, therefore, that the rehabilitation of the Philippine currency system was due entirely to the advantageous market in the United States for Philippine government bonds. By the method of issue and the tax-exempt privilege, the Philippine government was enabled to borrow at 4 per cent interest the necessary funds which under other circumstances could not have been borrowed at 10 per cent, even though the customhouses of the Philippine government were placed in the hands of administrators selected by the underwriters of its bonds. While this condition has been not fully appreciated throughout the Philippine Islands, it is a grave error to assume that it is unknown to Filipino business men. On September 30, 1923, there was on deposit in banks of the United States, in round numbers, $31,500,000 of Philippine government funds, of which $22,500,000 composed the gold deposit in the reserve funds for the protection of the island currency. While this rehabilitation of the currency reserve fund has materially increased the public debt of the Philippine Islands, it should be borne in mind that Philippine investments made with the funds which it was necessary to replace have not by any means proved an entire loss. The Manila Railroad Co., which represents an investment of approximately $12,000,000, showed net earnings for the last calendar year and for the first six months of this year of slightly above 10 per cent on the investment. The investment of approximately $20,000,000 in sugar centrals, through the Philippine National Bank, will show for the last sugar crop earnings that would more than cover the interest and sinking fund charges on an equal face value of Philippine government bonds outstanding. In fact, the Philippine government could Under an act of Congress approved August 29, 1916, as amended by an act approved May 31, 1922, it is provided that the entire indebtedness of the Philippine government, exclusive of those obligations known as Friar Land bonds and of bonds not to exceed $10,000,000 in amount, issued by that government, and secured by an equivalent amount of bonds issued by the Provinces or municipalities thereof, shall not exceed at any one time 10 per cent of the aggregate tax valuation of its property. It is further provided that the entire indebtedness of the city of Manila shall not exceed 10 per cent of the aggregate tax valuation of its property, nor that of any Province or municipality a sum in excess of 7 per cent of the aggregate tax valuation of its property at any one time. The assessed value of taxable real property of the Philippine Islands as at December 31, 1922, was $739,500,000; that of the city of Manila as at May 31, 1922, was $110,582,829. The following is a statement of the bonded indebtedness of the Philippine government on June 30, 1923: The following is a statement of the bonded indebtedness of the cities of Manila and Cebu on June 30, 1923, the bonds of which were sold through the Bureau of Insular Affairs: Sinking funds have been provided by law for the retirement of the above-mentioned bonds at or before maturity. RAILWAY BONDS. The bonds of railroads guaranteed as to interest by the Philippine government outstanding are: Manila Railroad Co. (southern lines) 4 per cent bonds, due 1939. Total.. $12, 781, 000 1, 122, 000 1,500,000 8, 549, 000 23, 952, 000 COINAGE. The new coin received during the year amounted to P35,191, and on December 31, 1922, the total amount in circulation and available therefor was P39,721,493.91, consisting of the following: Pesos.... 50 centavos.. 20 centavos.. 10 centavos. 5 centavos. 1 centavo. centavo.. Total.. P22, 357, 825.00 6, 273, 829.00 5, 139, 281.60 3,801, 392. 10 1,006, 863. 60 1,090, 642.97 51, 659.64 39, 721, 493. 91 1 The payment of the principal of this issue of bonds is also guaranteed by the Philippine government. |