Question & AnswerQ&A (Act No. 938)
The primary purpose of the Gold-Standard Fund is to maintain the parity of the silver Philippine peso with the gold-standard peso as provided in the Act of Congress approved March 2, 1903.
The Gold-Standard Fund consists of proceeds from certificates of indebtedness issued under section six of the Act of Congress approved March 2, 1903, profits of seigniorage made by the Insular Government, profits from the sale of exchange between the Philippines and the US, and all other receipts in the Insular Treasury related to currency functions.
No, the Gold-Standard Fund cannot be used to pay general expenses or appropriations of the Insular Government, except for expenses related to the purchase of bullion, coinage, transportation, currency circulation, and authorized financial transactions to maintain the currency parity.
A Division of Currency is created within the Bureau of the Insular Treasury to manage the Gold-Standard Fund and currency matters.
The Chief of the Division of Currency is appointed by the Civil Governor with the advice and consent of the Commission, and receives an annual salary of six thousand pesos (Philippine currency).
Duties include examining the books of the Treasurer and Auditor to report on segregating the Gold-Standard Fund, noting receipts and withdrawals, keeping separate books for currency operations, and submitting monthly and annual reports to the Insular Treasurer and Secretary of Finance and Justice.
The Secretary of Finance and Justice has final authority to determine the method of segregation in case of disagreement among the Chief of the Division of Currency, the Treasurer, and the Auditor.
The Insular Treasurer can exchange Philippine currency for US currency and drafts, exchange US treasury notes and certificates for Philippine currency, exchange US gold coin or bars for Philippine currency with an approved premium, and withdraw or deposit currency as needed to maintain parity.
Such certificates are not reissued; they are retained by the Treasury for future destruction. When accumulated in sufficient amounts, a committee destroys them by burning in the presence of authorized officials, and the Treasurer is credited accordingly based on the committee's written report.
The Treasurer of the Philippines and provincial treasurers must exchange Philippine pesos on demand for subsidiary silver coins and minor nickel and copper coins offered in sums of ten pesos or multiples thereof, and vice versa.
All duties of the Chief of the Division of Currency are performed under the supervision of the Insular Treasurer, who has custody and control of all insular funds including the Gold-Standard Fund.