Report of the governor general of the Philippine Islands. [1908]

RFPORT OF THE INSULAR TREASURER. 633
provided the funds obtained, on such loans are used strictly for agricultural
purposes and the loan is authorized by resolution of the board of directors.
The law also authorizes the insular treasurer, with the approval of the
governor-general, to constitute provincial and municipal treasurers agents of
the bank. The period for which loans can be made can not exceed ten years,
and the rate of interest charged on any loan can not exceed 10 per cent per
annum. Fifty per cent of the capital is reserved for loans of p5,000 or less.
The necessary blank forms, books, etc., for the use of the bank are now
being prepared by this office, and a special effort will be made to have the same
organized and in operation at the earliest practicable date.
The act as enacted by the Legislature is attached as Exhibit A of this report.
DRAFTS ON PROVINCES.
In the treasurer's annual report for the preceding fiscal year reference was
made to the enactment of Act No. 1636 by the United States Philippine Commission, providing for the sale of telegraphic transfers and demand drafts
between Manila and the provinces and vice versa by the insular treasurer and
all provincial treasurers. The preparation of a suitable code to be used for
the purpose of transferring funds by telegraph required a greater amount of
time and labor than was anticipated, and the provisions of the act could not
be put into full force and effect until March of this year.
The rate of premium charged for telegraphic transfers and demand drafts
has been fixed by the secretary of finance and justice, in whom such authority
is vested by law, as follows: For demand drafts, one-fourth of 1 per cent; for
telegraphic transfers, one-fourth of 1 per cent, and in addition thereto, cost of
all telegrams in connection with the transfer.
One-fourth of 1 per cent is the commercial rate charged by the steamship
lines within the islands for transporting funds, so that they can now be transferred by means of demand drafts or telegraphic transfers at a lower rate than
they can be shipped over commercial lines, as the expense of money boxes,
packing, cartage, and insurance is completely eliminated for the remitter. The
rate as now fixed is uniform throughout the islands, although the cost of shipping funds, where shipments are necessary, varies. There are some ports to
which direct shipments can not be made, and in such cases transshipment becomes necessary at some convenient port. An additional charge is made for
this transportation from port of transshipment to port of destination. When
funds are shipped to interior provinces, such as Lepanto Bontoc, Nueva Vizcaya,
and Benguet, and to provinces located along railroad lines, the cost of shipping
varies from one-third of 1 to 1~ per cent; therefore it may become necessary,
at some future date, to increase the rate of premium to be charged for demand
drafts and telegraphic transfers on some provinces and at the same time to
reduce the rate now charged on others.
With the approval of the secretary of finance and justice first had receipts
from the sale of demand drafts and telegraphic transfers under this act are
disposed of as follows: All premiums collected by the insular treasurer are
credited to the gold standard fund; all premiums collected by provincial treasurers are credited to the province as miscellaneous provincial revenue.
Commercial firms and individuals quickly availed themselves of the opportunity of transferring their funds between Manila and the provinces and vice
versa by means of telegraphic transfers and demand drafts in lieu of making
actual shipments of cash, and the transfer of funds in this way has steadily increased. From April 1 to June 30, 1908, this office transferred, by means of
demand drafts and telegraphic transfers, funds to the amount of P234,502.45,
Philippine currency, to the provinces, on which premiums were received amounting to p586.26. During the same period the amount transferred from the
provinces to Manila, through provincial treasurers, approximated t215,000,
making the total amount transferred to and from the provinces during the
three months above named about P450,000, or an average of P150,000 per month.
In a number of cases there has been considerable delay in making payments
of telegraphic transfers on account of interrupted telegraphic communication.
This is particularly true with reference to those made between Manila and
Zamboanga, and vice versa; in some instances the mail advices of telegraphic
transfers sold at Zamboanga having reached the insular treasurer at Manila