stry
and commerce had been paid for the most part in the early part of
the year, our chief sources of revenue were from the custom house,
the sale of stamps and stamped paper, and the sale of such licenses as
the law allowed (amusements, liquor saloons, etc.), for the benefit
of the city of Manila as distinguished from the general revenue. I
estimated the total at about $500,000 per month.

The expenses of administering the military government of occupation
(apart from the expenses of the army) will consist of the current
expenses of the office at the Provost Marshal General's office and
its various bureaus--at the custom house, internal revenue office,
and other offices--and the salaries of interpreters and minor employes
who are anxious to resume work as soon as they dare do so. An estimate
of these expenses was being prepared at the time I left, but was not
completed. It can hardly exceed $200,000 per month and may be much
less. This should leave $300,000 (silver) excess of income per month,
to go towards the military expenses of occupation.

As soon as it is decided that we are to retain the islands it will
be necessary to make a careful study of the sources of revenue and
items of expenses for all the islands, with a view to thoroughly
understanding the subject, before introducing the extensive changes
which will be necessary.

Currency.

The standard of value has always, until within a few years, been the
Mexican milled dollar. The Spanish dollar contains a little less silver
and, in order to introduce it and profit by the coinage, the Spaniards
prohibited the importation of Mexican dollars a few years since. Large
numbers of Mexican dollars remained in that country, however, and
others were smuggled in. The two dollars circulate at equal value.

All valuations of goods and labor are based on the silver dollar,
and a change to the gold standard would result in great financial
distress and many failures among the banks and mercantile houses in
Manila. Their argument is that while an American ten-dollar gold
piece will bring twenty-one silver dollars at any bank or house
having foreign connections, yet it will not buy any more labor or
any more hemp and sugar from the original producer than ten silver
dollars. The products of the country are almost entirely agricultural,
and the agricultural class, whether it sells its labor or its products,
would refuse to accept any less than the accustomed wages or prices