or bearer, it is 2 cents specific; but if payable to Mr. Conant or order, it is ad valorem. Regarding the various rates I do not remember, but it practically stops all order checks being issued, so the Government does not get the money, as the people use bearer checks and run the risks involved. The stamp duty on an order check for $10,000 would be $8.

Q. The bearer checks pay only 2 cents while the order checks pay a high price ad valorem? A. Yes; a prohibitive duty.

Q. What taxes are paid by your bank to the government of the Philippine Islands?-A. 6.35 per cent on profits.

Q. Do you pay on your real estate?-A. We have none. We rent our quarters.

Q. Does the tax on net profits and the stamp tax comprise all the taxes you pay to the insular government?-A. There is the tax on salaries of 2 per cent.

Q. Well, that is rather to be paid by the men who receive the salaries? A. Yes; they are supposed to pay them, but as a matter of fact, the bank pays the tax. We pay the urban tax.

should pay that, but do not, and we pay it.

Q. How much is that?-A. I do not recall.

Q. Have you further suggestions to make?-A. No.

The landlords

Q. You do not object to the 6.35 per cent on net profits?-A. No. Q. That is easily ascertained, I suppose?-A. Yes; because we balance our profits every half year.

Q. The tax, I believe, is figured on your net profit. You figure your net profits entirely separate from those of the main bank?-A. Yes; each profit by itself.

Q. There is a tax here, I believe, upon corporations. Do you pay anything under that law? The tax is levied upon the capital of corporations, but I presume your capital being issued elsewhere, you do not pay anything on that here?-A. No; we use our deposits as capital. I am not aware of a tax on the capital of corporations and think you must be mistaken.

EXHIBIT No. III.

Interview with Mr. W. Adams Oram, acting agent of the Hongkong and Shanghai Banking Corporation at Manila, September 24, 1901.

Mr. CONANT. Mr. Oram, you have read the report of the Philippine Commission, I suppose, in regard to the coinage requirements here. I don't refer to any particular action of the commission to meet temporary conditions here, but their general recommendations in regard to a Spanish-Filipino dollar?

Mr. ORAM. Yes, sir; I am acquainted with their views on the matter. Q. What is your view in regard to it? Is it in favor of such a plan?-A. I am in favor of the sound silver dollar as being the least liable to disturb trade and best suited to the requirements of the country in general.

Q. You mean the free coinage of the silver dollar?-A. It woulp practically amount to that. Much would depend upon the methop the Government adopted to supply us with the new coinage. We

might import bar silver if they would accept it for coinage into dollars. We think that, being so close to silver-using countries, and with the prospect of China especially being a silver-using country for a long time to come, a sound silver dollar of the same weight and fineness as the Mexican or British dollar is the best dollar.

Q. Practically, then, you are not in favor of making an effort to maintain a fixed relation between the gold and silver dollar?-A. The dollar that you propose to make would be more or less of a token dollar; that is, not intrinsically worth the value it passes at.

Q. You think, then, that a dollar of the same weight as the Mexican dollar would be the best?-A. Yes; the same as the Mexican and the British dollar.

Q. You think that such a dollar would promote commercial relations with silver-using countries?-A. Yes, sir.

Q. Then, naturally, you do not favor the introduction of the American currency here?-A. No.

Q. What effect would it have upon prices and wages?-A. It would, I think, tend to enhance both prices and wages.

Q. And would it also have any particular effect on labor and retail prices here; would it tend to raise prices?-A. I think it would have that effect to some extent.

Q. I am speaking of introducing the American gold dollar. Would the native be satisfied to receive an American 10-cent piece where he receives a peseta now?-A. I think he would become accustomed to it. I don't see any great difficulty in introducing the scheme, but I consider that it would be better for the good of the country to remain on a silver basis, with a dollar of the same weight and fineness as the Mexican dollar.

Q. If that is your view, then why is it desirable to change at all from the present conditions?-A. Because present conditions are untenable as a permanent system of currency. Banks here are bound by law to open accounts in either United States or local currency, but have great difficulty in convincing the public that they are only entitled to demand repayment in the currency they originally deposited.

Q. When did the coinage of the British dollar begin?-A. In 1894; in Bombay.

Q. Do you know how many of these have been coined?-A. No; when they first began the coinage Eastern banks guaranteed to take a certain amount, but whether it was two million or three million per annum I don't remember; but that arrangement has been done away with, because the Eastern banks now take just about as many as the mint can turn out. Although there was some objection to them at first, the Chinese take them very readily now.

Q. From an economic point of view, then, the only advantage of a separate dollar here would be the better facilities for turning bullion into coin. Exchange would still be liable to rise and fall with silver bullion?-A. It must, of course.

Q. Do you not consider that a disadvantage in trade with gold-using countries?-A. A stable currency undoubtedly has its advantages, but with the facilities now given to merchants by bankers for settling their exchange forward the speculative element is practically eliminated and the danger of fluctuations is considerably lessened. You will have fluctuations whether on a gold or silver basis, but they are liable to be more limited on a gold basis. We have recently seen a rise in rates

in Japan of between 2 and 3 per cent owing to the dearth of gold, but now gold has come in, and exchange has gone back to where it was before, and is remaining steady.

Q. If the plan of the commission had a supplementary provision providing for a gold reserve, the same as they have in British India, do you think this would change the relations between the Philippines and other silver-using countries?-A. If the plan of the commission is adopted you must have a gold reserve, otherwise how would you redeem your token silver dollars?

Q. Is there any other objection to such a project, if it is certain that proper measures will be taken to maintain a par between gold and silver at a ratio fixed upon?-A. I can not mention any further special objection. On general principles I consider that it would be better for the trade of the country to remain on a silver basis.

Q. You are familiar with the system in Java? A. Yes; though I have never been in Java. They are on a gold basis there, but one great danger with their currency is that the silver 24-guilder piece is intrinsically worth only about half its gold value and is consequently counterfeited to a large extent.

Q. The system of the United States is substantially the same?-A. Yes; so far as the silver dollar is concerned.

Q. Do you believe, if a gold-reserve fund was established, that there would be any tendency on the part of the Chinese or Filipino natives to hoard the gold or bury it?-A. The Chinese would not do that; I can not answer for the Filipinos.

Q. I have been told that the Chinese carry away a great deal of gold; that is, when they leave the country.-A. A Chinaman leaving the country always carries everything he has.

Q. It is a question whether a gold reserve would be subjected to a constant drain any more than silver would be. You don't think there would be any material difference?-A. Well, of course it would depend a great deal upon the balance of trade. If no other remittances were available, gold would probably be exported.

Q. How is the gold standard working in Japan?-A. Not very satisfactorily.

Q. Do you attribute that to the coinage system or to lack of capital for new industrial enterprises?-A. They do not seem able to retain the necessary gold reserve.

Q. They should obtain more gold by increased foreign loans?-A. Yes, sir; but I don't know how far their credit would go in that way. Q. Would any hardship be caused to interests in the Philippine Islands if the Mexican silver dollar should cease to be legal tender after a certain period, say two years, and the Government refused to change them at the rate of 2 to 1?-A. Certainly not; the time is ample. Q. In reference to the situation in Java, where the banks sell gold at its par value in silver, do you think such a step could be taken here in maintaining the parity of the token coin?-A. The Government's guarantee to exchange the token coin at 2 for 1 is the only step necessary to maintain its parity.

Q. Suppose there was issued an excessive quantity of silver dollars and more was issued than the business of the country required; the tendency then would be to affect the value of silver and make it lower and affect exchange as compared with gold?-A. The value of silver

used only as a token coinage in a country on a gold basis would not fluctuate. If there was at any time more silver than the country required, it would probably be turned in to the Government in exchange for gold.

Q. Now, if the Filipino treasury exchanged silver from some business man for a draft on a bank in New York or San Francisco, or upon the United States subtreasury in one of those cities, it would be the same as cash to him?-A. He would probably sell it to one of the banks.

Q. I am asking, if a man obtains a draft on the United States and remits that draft to the man to whom he owes money, whether the treasury would not by that means tend to maintain the parity of silver? A. You would become bankers then. The transaction would not affect the parity of silver.

Q. I don't think that is desirable as a rule, but it might be useful in certain cases. It would, in your opinion, affect the legitimate business of the banks?-A. I think it would.

Q. What would be the effect under the natural laws of exchange if you were to exchange gold in the United States for silver? Would it not maintain at par the local currency if we were on this gold basis with the token dollar?-A. The operation would not be a suitable one. If these islands are on a gold basis with a token dollar, the Government will be the only importers of silver.

Q. We were referring to importing gold if silver was scarce.-A. The Mint not being open to free coinage, the Government makes itself responsible for the silver supply. Banks, at times, might import gold to pay for the token dollars.

Q. How do you think the people would regard a new silver coin, without regard to basis? Would there be any difficulty in its introduction? A. I don't know sufficient about the native characteristics, but I should not think so. If it were in China, I would say yes.

Q. But there have been here at least three different silver dollars in common use.-A. From which it is fair to infer that they would take it without any hesitation.

Q. What would you say in regard to the device on the new coin? Would you have it as near like the Mexican as possible, or widely different, so that there would be a distinction?-A. I should suggest one widely different.

Q. Do you think it would be a source of gratification to the people to have a distinct coin?-A. It might be so, and it would serve to prevent its being passed on other people for the Mexican dollar.

Q. There would be this advantage in the token coin, would there not, that the Government would be able to keep the coinage up to the standard and redeem the worn coins?-A. Yes; if they promised to redeem worn coins at their full value; otherwise they would remain in circulation.

Q. Do you think any distrust would follow the introduction of a token coin if it was a trifle lighter than the Mexican coin?-A. I should not think so. The natives are used to it. The Spanish-Filipino dollar is about 8 per cent less value than the Mexican.

Q. The people have never made any discrimination against that?A. No; I never heard of any trouble at all.

Q. No discrimination would be made by the banks so long as they knew that the American dollar was exchanged for its face value in gold?-A. No, sir.

Q. But they would discriminate against it if there was free coinage of silver and no reserve of gold?-A. Why should they discriminate? Q. Because they could not sell it in the foreign market?-A. If it was full weight there would be no question of discrimination.

Q. Under the free coinage of silver it would be an absolute necessity to have the coin of the same weight as the Mexican?-A. Yes, sir. Q. If it was of a lower weight it would tend to drive out the Mexican and fall to bullion value? A. Yes, sir.

Q. Do you think of any other considerations in regard to coinage?— A. I have nothing else to suggest.

Q. What do you think of the supply of coin here and its sufficiency?-A. That, of course, is a very difficult question to answer in the present condition of the country. It is next to impossible to form an estimate of the amount of produce that has to be financed for. The sugar season begins next month and present estimates give it at one to two million piculs. I don't think we have sufficient dollars in the place at present.

Q. Well, coinage by the American Government, whether free coinage or token coinage, would enable the government to keep up the supply to better advantage than under the present system, would it not?-A. In case of the adoption of a gold standard with a token silver dollar the responsibility would be thrown entirely upon the government. At present the government has no responsibility whatever. I have not heard of any complaints about the present system. The bankers are the importers of the coin and make it their first care to see that there is enough money in the country for the requirements of trade.

Q. If business increases will there not be a demand for more currency of some kind?-A. Yes, sir; I should think so.

Q. United States currency is in considerable demand in places?— A. Yes.

Q. But if you had had no introduction of American currency there would have been a greater pressure for money?-A. Things would have gone differently. After the American Government came there was a large exportation of Mexican coin.

Q. Do you think if a separate coin were authorized under either system that the new coins would tend to supersede the American currency to some extent?-A. I think there would always be a large demand for silver, because the natives are accustomed to it.

Q. Do you think it would be advisable for the Government to issue silver certificates, in order to enable men who handle fair amounts of money to carry paper, instead of coins?-A. I should hardly think so at present, because there are no banking facilities in the provinces, except at Iloilo and Cebu. Until the country is more developed there is no field for further banking in the provinces, and without banks large silver certificates would be unsuitable to the requirements of the people.

Q. I am speaking of Treasury certificates in the place of silver dollars.-A. I think that the natives in the country would have difficulty in getting rid of them, especially as they have no banking facilities.

Q. But would not certificates be of some benefit in small denominations around the cities, say, for instance, in Manila?-A. Up to $500 they would be very useful.

Q. As low as $5, but fully secured?-A. They would be very use