NEW CURRENCY

Timaru Herald, Volume CLVIII, Issue 23258, 20 July 1945, Page 6

NEW CURRENCY

“Victory” Fe&3? In Philippines Laundresses Receive First Pay-out IN THE PHILIPPINES. I I have watched the currency of a [ nation sprout from a washtub. Econoj mists and financial wizards may sneer j nut I stand by the statement. I nave ! seen it happen, writes an Austra.iaii ’ ■-•on espondent. ! I have seen a country suddenly denuded of money, and watchea th: growth ol a new currency, from the j nrst coin spent until it b. came estaolished almost throughout the nation. And the first com (actually it was a note) was paid to a laundress. I All this happened in the Philippines. Immediately me Americans lancted on ' Leyte the Japanese Mickey Mouse” invasion currenc.y became vaiuel ‘ss except as souvenirs. With them tho ! Americans had brought millions of | dollars’ worth of newly printed "VieI tory” pesos, with the pre-war value ;of two pesos to the dollar. But how j was it to be distributed? We asked ourselves that question ; and so did tlie Filipinos. They had ! practically nothing to sell —the JapaI nese had seen to that —and we had I plenty of pesos, but nothin-; or. which jto spend them. Here was a stalemate. - which, however, was settled when the I first soldier handed the first bundle of j dirty clothes to the first Filipino I woman prepared to do his washing. ' That was the first “Victory " peso spent. I Most of the laundresses did not want ! money. They could not buy anything I with it, so they wanted food. Somej times we had sufficient to spare from our own stocks to give them some, but ; at other times we were short, so thev had to take money. Gradually money began to take on I its true value. A few small stores opened, with pitifully meagre stocks—a i few clothes saved from the Japanese. I tinned food and biscuit scrounged from the Americans, a bunch or two of bananas which the Japanese had overlooked in their locust-like raids on primary produce. Prices were terrific, but the laundry money began to change hands. Then tuba 'a native beer) and queer native-distilled spirits made their appearance. More money changed hands, but the after-effects of the native liquor were so disastrous that prohibition was declared. Money More Plentiful Ceiling prices for goods were fixed, and, in consequence, black markets arose. Money was becoming more plentiful. Filipino labourers now were being employed by the Army and the Philippines Civil Affairs units. They I were being paid with "Victory” pesos. Food and clothing were beginning to come in from America, and by the time we left for the Luzon invasion, less than three months after we landed on Leyte, the new currency which had first been planted in a washtub had taken firm root on the island. It was the same when we landed on Luzon. The laundresses received the first new peso. "How are we going to earn the new money?” asked a bright, well-educated Filipino girl in Dagupan when I told her that the old Japanese money was no good. I explained that in Leyte the Army had used local girls as typists. “I can't type.” she replied. "Well, take in soldiers' washing.” I said. Undoubtedly that sounded brutal, and the girl, snorting disdainfully, stalked off. but the advice was good. | For instance, the Filipino who collects my washing in Manila formerly held a lucrative position with the local electricity company. That job. like the electric light, is out. But my friend the Filipino has 11 children, seven of them under 12 years, and they have to eat. So his wife and two eldest daughters, who formerly were in a position to employ domestics of their own. now cheerfully do the washing collected by the head of the house. And our clothes have never been better laundered in the Philippines. . Manila Transition Although the first of the new money actually spent on Luzon was for laundry, the position is different in Manila. In spite of the fires which destroyed most of the shopping and i business centres of the city, enough goods were saved to enable a small proportion of normal trading to continue. In consequence, the transition from Japanese to the new currency was more rapid. As soon as the news of the Leyte invasion reached Manila the value of Japanese invasion currency became lower and lower, until bv the time we reached Manila it. was worth practicallv nothing. The Japanese had ! continued to churn out millions of I Desos on paper, but. only a verv small i minority of Filipinos were left with ! anv great quantities of it on their I bands. They knew it would soon be ; worthless, so got rid of it as quickly as possible. A few tried to pay long ; outstanding accounts with this inflated currency, but the Filioino business man was not so gullible as to accept it. In fact, for a couple of months before the Americans arrived, a system of barter had almost superseded currency as a means of doing business, f had a spare coat which you needed, and you had some food which I needed. sb we exchanged. Barter is still going on. Prices are

sky-high. Ceilings set by the authoriI ties are disregarded, and as much business is being done in an exchange of commodities as in purchase by money. Cigarettes have a parti-ularlv high ‘ value. A packet of 20 has a trade worth of approximately 6 - in Australian money. Naturally the reason behind it all is the old law of supply and demand, but supplies are now beginning to pour into the Philippines and new crops of primary nroduce. safe from the clutching hands of the Jaoane.se are appearing. With the increase cf supplies the barter system will die out. and monev will gradually set+l° down into its right value. But it will have spread, as I said before, from -he washtub.