The army, by direction of the secretary of war, ceased to pay in United States money, and its paymasters were given credit at the Insular Treasury, where they obtained the necessary funds in Philippine currency.
The government also authorized, in addition to the coinage of silver, the issuance of paper money in two, five, and ten peso notes. All of the coins and bills were readily interchangeable with the United States coins in common use, the dollar being worth two pesos, the half dollar one peso, the twenty-five cent piece a half peso, the ten-cent piece a peseta, the five-cent piece a media peseta and the cent two centavos.
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. It is usually wise, when practicable, to obtain funds for necessary governmental purposes by the imposition of taxes which are willingly paid.
Mr. Taft resigned the governorship of the Philippines to become secretary of war, his resignation taking effect January 31, 1904. He had performed a monumental work for the Filipinos, and for humanity at large, during his years of service in the islands, and carried with him the good will of most of the people whom he had so faithfully, efficiently and self-sacrificingly served. He had at one time very gravely impaired his health by hard work, and when the opportunity came to satisfy a lifelong ambition by accepting appointment as a Justice of the Supreme Court of the United States, he had passed it by, in order to perform his duty to the people of the Philippine Islands. As secretary of war, and as President of the United States, he availed himself of every opportunity which these high offices afforded to help the Filipinos, and to increase the prosperity of their country. They have had no better friend, and no other friend whom they have ever had has been so useful to them. One more proof of his real greatness is afforded by the fact that to-day, after being reviled by many Filipino politicians whom he befriended, who have succeeded to a large degree in making the common people of the Philippines consider him their enemy, his interest in the people of the Islands is as keen, and his eagerness to help them is as great, as in the early days when they acclaimed him their deliverer.
General Luke E. Wright, a democrat of Memphis, Tennessee, was appointed by President Roosevelt civil governor in Mr. Taft’s place. He rendered his country and the Filipinos most distinguished service. It is one thing to build up a great government, with numerous political appointments at one’s disposal, and another to stand by and keep it running smoothly and efficiently, when a lot of disappointed politicians, who have seen their last hope of political preferment go a-glimmering, are throwing sand into the bearings of the machine. This latter class had begun to plot against Governor Taft before his resignation took effect, but their machinations were rendered fruitless by the wave of regret raised by his coming departure.
They now devoted themselves, with a good deal of success, to injuring Governor Wright, who declined to be dictated to, in the matter of appointments, by the Federal Party, and aroused the ire of many politicians by occasionally telling the Filipinos unpalatable but wholesome and necessary truths relative to their fitness for immediate independence.
General Wright, whose title had been changed from governor to governor-general on February 6, 1905, went on leave during the latter part of that year, fully expecting to return and resume his work in the Philippines, but the islands were not to see him again. He resigned, effective April 1, 1906, to become United States Ambassador to Japan. In my opinion, the acceptance of his resignation at this time was one of the gravest mistakes ever made in the Philippine policy of the United States. The islands were deprived of the services of a very able and distinguished man, thoroughly conversant with their needs, who had the courage of his convictions, and whose convictions were thoroughly sound.