PUBLIC LAND SALES IN PUERTO RICO. lands are not to be found in this category, but there are some that could be made into coffee plantations. The committee on public lands has an office and a secretary in the building devoted to public offices in the capital. Its records and surveys are very incomplete and there is no way by which the land-seeker can go to this office and obtain information as to what lands are still unoccupied. But when one discovers a certain tract of land which is reputed to be in public ownershipcrown lands they have been till recently-he goes to the office, ascertains the fact, "denounces" it to the secretary and pays for a survey. Then it is appraised by a committee, and the land is sold to the buyer under a system of annual payments which are by no means burdensome. Lands obtained in this way usually are cheaper than adjoining properties held in private ownership, but as I have said, there is not a large quantity to be had, and until a careful island survey is made there will be no way to tell what land could be secured thus. The land-transfer system of Puerto Rico is quite simple and satisfactory, far more like the Australian system or the Torrens law than what is found in most of the United States. All titles run back to the old Spanish grants, given as rewards for some service to the monarch, often of enormous extent and conflicting. But a silence of twenty years invalidates any claim to land in Puerto Rico, so that there is little litigation on land titles in the courts any more. Most of the titles now need to be investigated only as to the last twenty years and that is simple enough. In ten minutes one may trace the AND LAND TRANSFER. condition of the title to any piece of land. The law SYSTEM OF TITLES requires that all incumbrances must be recorded without delay. These records for any piece of property are spread on one page usually, though some that have been transferred frequently have turned to a second page. The items never are scattered, however, and all the items are to be found in the one place. A transfer of land must be certified before a notary and then the regis tration, with a moderate fee, completes the record. CHAPTER XXX. THE FINANCIAL SYSTEM AND CONDITIONS OF THE ISLAND. Circulating Medium of Puerto Rico-Military Rates of Exchange for American Money-Commercial Law Stronger than Military-Floating Debt of the Island -Mortgages on Real Estate Where the Financial Magnates of the Island Stand-The Laborers and Their Relation to the Financial System-How Spain Gave Puerto Rico a Distinct Coinage of Its Own-Bank Notes the Only Paper Currency-How the Banks of Puerto Rico Were Organized-The Course of Foreign Exchange-The Land Bank of Puerto Rico. HE changing of the system of coinage and finance of Puerto Rico to that of the United States, as no doubt will have to be done at the very beginning of reorganization, will be by no means a simple problem. How this change is to be effected with the least harm to any one is the question which, more than any other, troubles the people of the island. Their values are expressed in silver at present, and always have been, the silver now a depreciated currency. For a circulating medium they have the special coinage made for them in the Spanish mint, of silver to the amount of 7,000,000 pesos, or whatever portion of that still remains in the island, a little fractional copper coin, and the large amount of notes issued by the Banco Espanol de Puerto Rico, which pass at par with silver. The people understand quite well that with the intimate commercial relations rapidly forming between the island and their new mother country, they cannot be left to do business with a depreciated currency, and the change to the American standard must come soon. They understand equally well that the silver coins at present in circulation, with the portrait of Alfonso, the Spanish arms and the mark of the Madrid mint cannot be left in use, but must be withdrawn by CHANGE IN IS NECESSARY. the United States and a substitute provided. Furthermore, they recognize that the notes of the Spanish bank will have to be called in unless some special favor is accorded them, which is not expected. They have no complaint concerning the fact that there is to be a change, but the manner of the process is of great concern to them. In the beginning, the military authorities at Ponce declared an arbitrary rate of exchange for money of two pesos for one American dollar. This ratio had no semblance of validity from any point of view. The bullion in the peso was not worth near 50 cents, measured by the market price of silver. On the other hand, the exchange value of the peso of Puerto Rico in the markets of the world, low as it had been forced by the unnatural condition of war, was far more than 50 cents, while its average value for the last few years was nearer 75 cents. But the military order was issued, and the military authorities started in to make it effective. It was soon evident that in purchases in the shops of Ponce the order had no value at all. Merchants would not sell their goods at any such ratio. When a price was made to a customer in pesos it meant pesos, and if he tried to settle the bill with half the number of American dollars the sale was declared off, as it should have been. When a carriage driver was helpless, having given the service before payment, sometimes he had to accept American dollars at "two for one," but there always was a rankle in his mind, for he knew that the money would not buy him as much as it should. FICTITIOUS RATIO The custom-house, which was the only place where American officials had anything to do with money, started to encourage the rate by accepting pesos or dollars interchangeably at the two-for-one rate and paid out the coins on the same terms. The result was that every man with an American dollar went to the custom-house with it and obtained two pesos until the cash box was overflowing with dollars and the coins of Puerto Rico were not to be had. AT THE CUSTOM-HOUSE. The banks and money-changers of Ponce knew better than to accept a fictitious ratio based on nothing. They had a fluctuating rate, based on exchange on Europe as modified by local supply and demand. At times one could get 1.90 pesos for a dollar, but the rate usually was far below that, 1.75 being the rate at which the greater portion of the exchanges were made. In Guayama, where there were fewer Americans and a more rigid military commander, the effort to establish this rate met with more success. If one boarded at a hotel and the bill was rendered to him in pesos, he could pay it with half the number of dollars. Even the stores there yielded to the same condition at times. Up in the country, at such towns as Cayey and Caguas and the neighboring villages, American money was not accepted at all when I was there, except by force of superior authority, which was seldom invoked. In San Juan, the capital, the rate had no influence whatever. Merchants made prices in pesos and required payment in pesos unless the dollars were offered at their actual value in the course of commercial exchange. The same was true of the hotels and other business concerns. As for the banks on which American drafts were drawn, their rates were as low as 1.65 and 1.70 for dollars, and they claimed this to be as much as they could afford to pay in their dealings with the American banks, with which they had to settle ultimately. The usual rate at the moneychangers' was 1.70 or 1.75. BECOMES If the volume of money in circulation in Puerto Rico were the only thing to be considered in shifting the currency system from the depreciated silver of Spain to the gold standard of FLOATING DEBT the United States, there would be much less of a A COMPLICATION. puzzle about it. If it were necessary, or expedient, the United States might even afford to redeem the pesos at par in dollars and stand the loss of, perhaps, $3,000,000 as a matter of convenience in making the change. But there is a very large floating debt in the island-probably about 50,000,000 pesos, though the estimates run from 40,000,000 to 75,000,000—and there is where the trouble lies. Some conditions are becoming apparent that seem almost anomalous in the light of financial opinions as we know them at home. As things are in Puerto Rico, it has become the interest of all debtors to have the peso depreciate as much as possible, expressed in terms of American dollars, and the creditors, on the other hand, are trying |