Unfortunately the silver value of the new peso was such that when the
price of silver again rose, its bullion value was greater than its
money value, and in consequence coins of this denomination were hoarded
and exported. It proved necessary to prohibit their exportation,
and to issue new coins of less bullion value, but this was the only
really serious difficulty attending a fundamental reform which put
the currency on a sound basis. The original pesos were recoined and
a handsome profit made on the transaction.
No one who has not lived in a country where the circulating medium
is constantly fluctuating in value can fully appreciate the enormous
benefit conferred on the Philippine Islands by this important reform.
Another reform of far-reaching importance was the readjustment of the
burden of taxation so that it should bear lightly on the necessities
of life, and heavily on its luxuries. This was a complete reversal
of the scheme which we found in force, under which wheat flour and
kerosene oil paid very heavy import duties while cigars and champagne
were lightly taxed.
We imposed export taxes on certain products of the country. Such taxes
are objected to by many political economists, but were approved of by
the Filipinos, who strongly opposed the imposition of a logical and
very necessary personal tax to provide funds for the construction
and maintenance of highways and bridges.
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