Note 40 — ANDA’S MEMORIAL, 1768

“As fractional currency was always exceedingly scarce in Filipinas, recourse was had, in order to remove the difficulty, to the proceeding of cutting into bits the pesos and half-pesos. It was undoubtedly for this reason that to the coins thus made were applied the Tagal names of kahati (kalahati, “the half”) for two reals, that is, the half of a half-peso; and sikapat (si-kaapat, “the fourth part”) for one real, or the quarter of a half-peso; and so on—and, for the same reason, this was called in Castilian moneda cortada [“cut money”]. These fragments of coin bore a stamp which indicated their value, and which was placed on them in Manila; but, as the stamp did not indicate the exact size of the piece of coin, the various hands through which it passed diminished the amount of metal as much as they could, thus reducing it to its least possible size. Governor La Torre published an edict on April 25, 1764, in which, with the object of mitigating the bad results of this, since ‘not only the Sangleys, but the Indians and mestizos, are unwilling to accept the cut money, on account of its debasement,’ he made the decision (certainly a contraproducente [i.e., a measure producing effects contrary to what were intended]), to compel ‘all the cut money to pass current for its value according to the stamp on it.’ This remedy was evidently profitable for those who debased the money, because it was compulsory to take the money by its stamp, its debasement being treated with indifference. The term ‘milled money’ was applied to coin of proper standard and manufacture, full and exact weight, with milled edges; the Chinese exported it, plainly because it alone could be accepted in the regions to which they carried it, but this did not occur with the cut money, which could only be accepted as bullion outside of Filipinas. Then, as now, was verified the natural phenomenon of the expulsion of good money from a country by that which is debased, because no one outside desires it, as it is not current by law.” (Pardo de Tavera, note 39, pp. 101, 102.) ↑