In 1878 the Spanish government, hoping to check the heavy exportation of gold currency from the Philippines, passed a law prohibiting the importation of Mexican dollars, but allowed the Mexican dollars then in the islands to continue to circulate as legal tender. When the American troops arrived, there were in circulation the Spanish-Philippine peso and subsidiary silver coins; Spanish pesos of different mintings; Mexican pesos of different mintings; Hongkong dollars, fractional silver coins from different Chinese countries, and copper coins from nearly every country in the Orient. Although a law had been passed prohibiting the introduction of Mexican dollars into the islands, they were being constantly smuggled in. Fluctuations in the price of silver affected the value of the silver coins, and the money in common use was in reality a commodity, worth on any given day what one could get for it. These conditions affected most disastrously the business interests of the islands. Merchants were forced to allow very wide margins in commercial transactions, because they did not know what their goods would actually cost them in local currency upon arrival. The most important business of the local banks was in reality that of exchange brokers and note shavers. They hammered the exchange rate down and bought silver, then boosted the rate skyward and sold. The American army brought in a large amount of gold, but this did not remain in circulation long, as it was exported by the different business concerns, or hoarded. United States silver money had a limited circulation during the early days of American occupation, but it passed at less than its true value. An effort was made under the military administration to keep the ratio of exchange at two to one by the purchase from the public of all United States currency offered at that rate to the banks. For a long time the banks refused to carry private accounts in United States currency, but when it was offered for deposit it was changed into Mexicans with a heavy charge for the transaction, and an account opened in Mexican currency to the credit of the depositor. If the depositor afterward desired to get United States currency, he gave a check for it at the then existing rate of exchange. Such conditions were intolerable, and the commission passed an act making it an offence to refuse to accept for deposit the currency of the sovereign power, but this did not remedy the fundamental difficulty. There came a heavy slump in the price of silver. The Insular government lost a very large sum because of the decrease in value of its silver coin.