Case ID: us-ct-cl_8/html/0209-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CLAY'S CASE. John Randolph Clay v. The United States.
    
      On the Proofs.
    
    
      A minister of the United States ‘in Peru is paid his salary by means of drafts drawn on London, which, by direction of the Seeretm-y of State, he sells from time to time to bankers in Pera. Se receives for them Bolivian half-dollars, the customary currency of Peru. The Bolivian silver dollar is of less value than the American silver dollar. The American dollar has no commercial value in Peru, and the mint value of the Bolivian dollar in the United, States 
      
      is fluctuating and exceeds its intrinsic, vahee. But the accounting officers of the Treasury adjust and settle the minister’s accounts upon the basis of the mint value of the Bolivian dollar at the time of suoh settlement.
    
    A foreign -minister of the United States is entitled to receive his salary in the money of the United States or its actual market equivalent. Where the Government resorts to the commercial usage of paying a diplomatic agent abroad by means of bills of exchange drawn on its bankors in London, to be negotiated by him at his station, the foreign money which he receives should be reckoned at its current confmereial value at the time and place of payment in the coin of the United States. In the absence of a current commercial value the payments must be deemed to have been made on the one side and received on the other at the real or intrinsic value of the coin used.
    
      The Reporters’ statement of the case :
    The following facts were found by the court :
    1. The claimant was the diplomatic representative of the United States to the republic of Peru from August, 1847, to April, 1861.
    2. He was entitled to a yearly salary of $4,500 during a part of this time, and to a salary of $9,000 during the remainder of bis term of service. By arrangement with the Secretary of State, be received bis salary by means of drafts drawn upon a banking firm in London, and be sold these drafts from time to time to bankers in Peru, and was paid for them in Bolivian silver half-dollars (the customary currency of Peru while he was there) or their equivalent.
    3. The Bolivian silver dollar (two half-dollars) is of less value than the American silver dollar. In consequence of this difference, the claimant sustained a loss. The Bolivian dollar from 1846 to 1861 had no commercial value in this country, there being no regular exchange between the two countries; and the American dollar had no commercial value in Peru. The bullion or mint value of the Bolivian dollar during- the claimant’s term of service varied from 74.4S cents, in 1847, to 78.4 cents in 1861. The intrinsic or real value of the Bolivian dollar daring the same period was 74.4 cents.
    4. The accounting officers of the Treasury adjusted and settled the claimant’s accounts under the private act or Joint Resolution 20th February, 1861, upon the bases of the bullion or mint value of the Bolivian dollar at the time of such settlement, viz., at the rate of 78.4 cents. The difference between sucb adjustment and an adjustment on the basis of-the intrinsic or real value of the Bolivian dollar is the sum of $3,273.57.
    
      Mr. JEJdicin L. Stanton for the claimant:
    In the discussion of this case we shall discriminate between the different modes of estimating the value of a foreign silver coin in this way: (1) By its legal value, we mean the value which the law affixes to it; (2) by its commercial value, we mean that which is affixed to it by the custom of merchants ; (3) by its bullion or mint value, we mean that which is measured by the price that will be paid for it in American money at the mints of the United States; and (4) by its intrinsic or real value, we mean that which depends upon the quantity of silver it contains, as compared with the quantity of silver in an American silver dollar.
    The Comptroller settled this claim upon the basis of the bullion or mint value of the coin in question. This was error : because that is an arbitrary and fluctuating value, depending neither upon the actual worth of the coin nor upon the value which it has in commerce, but upon the price which the officers of the mint happen to be paying for silver bullion; and because that is no measure of its value at Lima, and obviously it is upon the basis of its value at Lima, where he received and used the money, that the petitioner is entitled to a settlement. The mistake of the Comptroller is made manifest by the fact that he adjusted the account at 78.4 cents, the bullion or mint value of the coin when the settlement was made; whereas its bullion value during Mr. Clay’s term of service was sometimes as low as 74.48 cents, and varied from that to 78.4 cents, being below the latter figure during all but four years of the fourteen he served.
    As this coin had no legal and no commercial value, (as compared with the money of the United States,) its intrinsic or real value, (expressed in the silver coin of the United States,) which is fixed by the quantity of silver it contains, is the proper standard of settlement of this account. That value is the same at all times and places, for if it were to be ascertained in France or in China or in Peru, to-day or a hundred years hence, the simple question would bo, What is the proportion between the quantity of silver in the American dollar coined in 1847-61, and that in the Bolivian dollar in use in Peru during the same period? and the answer to that question would be the same whenever and wherever asked, to wit: The American dollar weighed 412.5 grains, of which 900 thousandths was pure silver, and the Bolivian dollar (two half-dollars) weighed 414.72 grains, (twice 432 thousandths of an ounce,) of which 667 thousandths was pure silver. As 1,000 is to 900, so is 412.5 grains to 371.25 grains, the amount of pure silver in the American dollar. And as 1,000 is to 667, so is 414.72 grains to 276.62 grains, the amount of pure silver in the Bolivian dollar. Hence, as 371.25 is to 276.62, so is 100 cents (the American dollar) to 74.4 cents, the Bolivian dollar.
    Mr. Clay is therefore entitled to recover the amount deducted by the Comptroller on the ground that 78.4 cents, and not 74.4 cents, was the true value of the Bolivian dollar. This amount is $3,273.57.
    
      Mr. Assistant Attorney-General McMichael for the defendants.
   Nott, J.,

delivered the opiniou of the court:

The facts in this ease are not disputed, and the only question of law is, at what rate the Bolivian money paid to the claimant for his salary as minister to Peru should be reckoned in the settlement of his accounts.

It is clear that if the Government resort to the commercial usage of paying a minister abroad by means of bills of exchange drawn on its bankers in London to be negotiated by him at his station, the foreign money in which he is paid should be reckoned at its current commercial value at the time and place of payment, in the coin of the United States. He is entitled to receive his salary in the money of the United States, or in its actual market equivalent. The supposed value of the foreign coin in the market or in the mints of the United States does not furnish a standard, for the minister cannot avail himself of it, but must resort to the market of the place where he is.

In the absence of a current commercial value of American coin at the place of payment, the payments must be deemed to have been made on the one side and received on the other at the real or intrinsic value of the coin used. The mint value of the coin in the United States does not furnish a standard, because it is a distant and arbitrary value, of which the payee cannot avail himself.

The judgment of the court is that the claimant recover the sum of $3,273.57.

Duaice, Oh. J., did not sit in this case, and took no part in the decision.