came to an end, there was a sum amounting to nearly $10,000,000 appropriated by the home government to settle the bill, and the money was distributed in various ways without letting the slave holders get any great part FREED THE SLAVES. of it. Many years were occupied in the distribution

BANK FOUNDED ON MONEY THAT

of the fund and the closing of the deal, but the last item in it all was the establishment of the Spanish bank of Puerto Rico. Former slave holders were given one share in the bank for each slave they had held, and the money which might have gone to them in cash was thus employed in starting the bank. The details of the story are a bit complicated, forming one of the picturesque incidents in the history of finance in the island, but the essentials are as above.

The bank devotes itself altogether to a current commercial business, paying no attention at all to country investments or farm loans, which are left to the Agricola bank. It does a large business in commercial discounts and short-time personal credits after the fashion of city banks at home, carries a large number of deposit accounts for merchants and capitalists and makes loans on city property in San Juan. The bank rate for discounting commercial credits is 9 per cent. If anyone is surprised at the rate of discount charged by the Spanish bank, the comparison should be made with the private banks in San Juan, which charge 12 per cent for the same service or with the banks in country towns, whose rates usually are 18 per cent.

The Territorial and Agricultural bank partakes more of the nature of what we know as a loan and trust company than of a bank in ordinary commercial business. It is almost exclusively a land bank, carrying current deposit accounts, it is true, but doing no discount business at all, no foreign business and little in the way of short-time personal security loans. The terms of the charter permit the bank to buy and sell mortgages, to issue mortgage bonds payable to bearer, to make loans on growing crops and to make loans for a maximum of ninety days on personal security.

CHAPTER XXXI.

AMERICAN OPPORTUNITIES IN PUERTO RICO.

Foreign Investments in Business under the Spanish Regime-Exodus of Spanish Investors Probable-Extent of German Influence in the Island-Few Local Manufactories-Wages of Mechanics-How Laborers Live-Rents in the CapitalInsurance in Puerto Rico-All Calculations made in Pesos-The Postal Telegraph System of Puerto Rico-The Shoe Trade of the Island-Political Conditions-The Newspapers-The Star Spangled Banner in an Island CathedralSchools-Volume of Trade of Puerto Rico According to the Latest Official Reports.

P

UERTORIQUENANS themselves control a larger proportion of the property and the investments in the island, measured by value, than do the people of any foreign country, but this predominance is due to the large number of small holdings rather than the ownership of many large concerns. Most of the commercial and industrial undertakings of great extent or capital are under the control of foreign investors, if indeed they were not originally planned and established by them.

As might be expected, Spanish capital has been invested in the island to greater extent than that from any other foreign country, and after the Spanish come the investors of Germany, France, Great Britain and the United States in the order named. It is a characteristic of the first that in most instances the Spanish investor is a local resident, watching the administration of his own enterprise, which is likely to be a small one, but a profitable one if in the cities, or a large and profitable one if in the country. Many of the commercial houses in retail and wholesale trade are Spanish, the best hotels are Spanish, some of the capital invested in banks and mortgage loan companies is Spanish.

It is probable that more of this line of investments will be on the market for sale to Americans than any other. The German, the

Frenchman, and the Englishman, assured of improved and more honest forms of government, with lighter taxation under the rule of the United States, are looking for higher profits than they have had in the past. They have no OPPORTUNITIES. sentiment involved in the matter, and will stay unless

SOURCE OF MOST
BUSINESS

they get prices which make it imperative to sell. But the Spaniard living in Puerto Rico is not callous. He feels that a transfer of his allegiance will be a grief, and if he can sell out to fair advantage, or even at a sacrifice, he is going to do it. I found some Spanish gentlemen in busi ness who are going to remain and become American citizens, but I found more who are going back to Spain if they can.

The cities are a small part of Puerto Rico, and it is in the hills and the valleys of the island that the Spaniard has most of his property. Furthermore, it is there that most American investors are likely to look for bonanzas, irrespective of whether or not there are such to be found. Most of the plantations which will go on the market— sugar, coffee, tobacco, cacao or whatever they may be-will be those of Spanish owners. They will be just as much cheaper than those of the German or French or English proprietor as the measurable difference between the sentiment of the Spaniard who wants to withdraw his capital from the island and go home to Spain, and the other investor who sees prosperity in the change of administration and is all the more anxious to stay.

It is not to be forgotten that one of the chief causes of irritation in Cuba and in Puerto Rico has been this same element of Spanish residents. Whether they have been carpet-bagging officeholders or mere investors, it has been quite well understood that their only intention in the island was to make all the money possible and then go back to Spain to spend it. They have not been settlers as we understand the word, with the purpose of establishing a home and a household where their property was. They have stripped the people dishonestly, or the land honestly, and then have gone to Madrid or Paris or Vienna to spend the proceeds. There will be two influences upon such plantation owners, or haciendados, to induce their departure and the placing of their places on the market. One will be their own senti

SPANISH RESIDENTS A CAUSE OF IRRITATION.

ment, the other their fear that the people of the local communities will some day take an opportunity to resent past years by violence to person or property.

Puertoriqueñans are a primitive people, with primary ideas of the administration of justice, and little training in the art of forgiving their enemies. It may easily happen that the rights of property will some day be forgotten by a plantation village in the hills, if the plantation belonged to some Spanish officer who had been notable for the severity of his administration or the oppression of his local rule. There are grievous stories told me, well authenticated, which cannot be told in detail. It is enough to say that the haciendado, often a Spaniard, has been a local magnate, with a rule, in fact, far greater than the letter of the worst law would countenance. It has depended upon the character of the man himself whether or not his people were pros

WELCOMED

perous and contented or oppressed almost to the WHY PUERTO RICO limit of endurance. These and many others were THE AMERICANS. the things which stimulated the people of Puerto Rico to welcome the Americans as they did, in every town where Spanish authority had been withdrawn, and they are the things which will act to throw the larger part of Spanish investments on the island into the market, at lower prices than would be accepted for the corresponding holdings of any other element of the population.

In the cities, the Spaniard who keeps a retail store, whether it be of groceries or dry goods or any other staple, feels that he may be the subject of a virtual boycott as soon as there is any one else with whom to trade, not necessarily an organized movement, but simply an inclination to buy from American merchants when they come into the field.

Just now that may not be a very large opportunity for American merchants, but in time it will be one of the best for a few of the right sort. Under the present conditions, with a total population in the island of less than 900,000, and no large cities, the purchasing power of the people is small and their demands equally small. The element of population which lives after the European and American fashion is almost infinitesimal to the whole. An American grocery store or dry-goods store would be out of place to-day in all but three or four

of the cities. But as the American population begins to enter the ́island it will demand the same comforts and supplies with which it was familiar at home, and by contact will teach the people of Puerto Rico to want things of the same sort. Then the retail store, kept by a man who is keen enough to understand local conditions as well as those of American trade, will find business waiting for him. The few who are in that line first, and learn first, are the ones who are sure to be successful.

CHANGING CON

DITIONS IN

The American retail store opened in San Juan to-day, for instance, if properly run, would be successful. It would get all the best class of business by commanding it. Good service, the best goods, careful and attractive display of the stock, and, most important of all, the "one price" system, are things that would surely win their way. On almost every article of general local consumption, the United States can undersell the markets as they have existed. Long credits will have to go in time, both wholesale and retail, and if the local merchants cannot adapt themselves to the changing conditions they no doubt will have to go too.

RETAIL TRADE.

Some of the keenest of them are recognizing all these facts already, and are saying that they would like to sell out before they are crowded out, this applying to Puertoriqueñans as well as Spaniards. They admit that the American merchant is keener in trade than themselves, and they fear the result of competition with him. I have had this expression of opinion from merchants in groceries, dry goods, shoes, furniture, hardware and drugs. Some of the best stores in the island capital could be bought now to advantage, and it is undoubtedly the best city in the island.

The interests held by German, French and English or Scotch investors will not be for sale to Americans except at a distinct profit to the owners. They have anticipated the probable effects of American administration in Puerto Rico, and their prices have risen materially. Inasmuch as they have the advantage of experience in the island, the American investor is not likely to do as well with a given property in the beginning as they can do, and the price, consequently, is likely to be too high for dividends unless he looks well to the future: