The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1862-10-23

THORsbAY, OCTOBER %, 1867

IHCHSDdIr DC OBER - l9O=
E.ehan=e.-A oil friend, whose waits are ai~ays vel
come, sends u a few lines o a THAT Is just now a n interesting
topic Of discussion not only hero but abroad lie writes;
ExcHASsz-FExNtN Or DlscOUsr-
"Uadsr rhsL Sang, RezoairH, lire or die ?"
Ms, Zorro. u ass yoar : g .s @@:1Ei1I.- E e Sssr IL ad IL ~oG p.
s - 1eS.r. 5-rT u p p rg,%sTs .. :" siSs AZ = m M M E[.@ mum IN.
ssead Of b. BINS AZ 10 much di-.ouHt This would "byiat- The
marset For eSamPle-If I ~sat to .cu a q. :. Trrasary Note
he.- ., t5o @seG - D. h'f mo Sas - o. c sagsl 8 a la a aTssHl. ~ 4 az
22i pr cent di-eount, o. :. !on.uIar rates. the purchaser,
ii want % invest tn. amosnt G7,T5OJ in whaI=rs' Bills,
NaatI-Eet, Eigarto~n or HoImss' Hole, Tor what my dollars"
thu r-alized ill boy. At - pr cent premium / get DuI
Goti, er Dollars. hr wafeh g1tiT is thu synonym in this
oth-rs b-.Hies mau.y-chsngerst ~ being at 50 much premium.
Tbs e The manner In The monef mlrts Of ne intel Sat, and
Tolerate states since New Orsans and Memphis were tak-nJ
qarnee, I ash merely for Information ~TOOTs.'
We are rllI Of the opportunity to make a few remarks on this
;nt. subject, AMI agree with our correspondent that there exists
some - mistiness1 among outstlers ab1ut II, and not among them
only, but insiders too There never vas a subject more difficult
20 comprehend than this same one Of turning dollars into paper
and paper into dollars anil to this day the ~isest and sharpest
are at hggerheads about gold, silver and paper money.
We my premise, what AL vial admit, tha' gold, sHUeT and
bills Of srehaags are or may become articles u merchandise,
just a. much as -four, sugar. aad moasses, ami ike these they
ructaats in value according To their scarcity or the demand for
them a.
Just now, GoH is an article o. merchandise in New York,
worth, on the nss Of October, rs per cent premium. as COM
pared With currency, which now consists there Of paper money.
In other words. $1,000 in gDtI is worth 3 ,23O in bank bills.
TIE causes tina. have produced this inequality in value have be-
fre been stated by us- The $50 paid in this instance -
bocnty paid sr the con and very properly called premium
IN san FnncIsco and other ports, Mexican Dollars are and
have long been a article Of merchandise for export to Asia,
worth, as compared with currency, say 10 per cent more or, in
other ~ors, If We wish to buy 1000 Mexican dollars, we will
have To pay 81, 100 in currency. The 500 bounty paid here is
also a premium.
Wow as gold AMI silver become articles Of merchandise, 80 do
IN Eth
bills IRE now in New York, qqoted Oct l, at LIS, equal toa
premium Of Is per cent as compared with currency. No holy
objects To the quotation, or fails 10 understand what it means. 50
when It is at par, We quote it at par, and every one understands
that the draf is worth wherevet It's payable, just what it has
cost, dollar for dollar. Now WHEN exchange is at a discount,
that Is, worth fssS than CURRENCY. Il is proper that It should he
90 quoted Our mode Of quoting exchange is therefore the
proper zoe. and thes anne that holds in san Francisco, New York
and elsewhere.
Cold Is not ut n premium heretnor can it become an article
% merchandise, while il remains our chief circulating medium.
Bills Of exchange are an arEi; of merchIn iise, and when 4
drah is sold It is proper to quote. II as tie article sold, with the
rate IL sells for, be IL Is per cent. RiScOHHt, par, or 10 per cent.
premium
This Is certainly simple enough, and just as clear as it would
b. 20 quote the sale in any othsr kay. What causes the " mis-
tness," Is the method % computing the discount. Now, there
ae two methods Of dtscounting.
lst-BaHkers' Discount (usel by bankers in dIscounting
notes, anil not properly applicable to exchange is obtained by
deducting the rate Of discount Groel the face Of the draft. For
instance, a dnr for $1,000 is called Gr at 20 per cent The cash
value Ofthe drat il obtained BY d+iucting the discount, or 500,
from the face Of the bill, thus:
sI.OCO-hee % the biH.
10 discount at 20 per cent. 1
8 500 cash value of the bill.
2t-Ths method Of computing discount common with ship
chambers, Is what has been termed msrchants'or true dis
count. and Is obtained by dividing the face Of the draft by the
nte Of discount agreed on For instance, in 4 Gun for $1,000
ut 20 per cent discount
100 $1,000 G8aa s5--eash value.
s zee
eco sc. &c
Between these two methods Of computing discount, Il will be
noticed there is a difference IN the above bill OF So 50, the
buyer Of the drat, according to the first rule. paying only
$500 for il, but according to the Last, sSJ3 u. In other parts
Of the world, bankers dBeouH: IS seldom applied to exchange,
and should not be here When exchange is quoted here at a dis
count, IL should always be understood to be according to the
= suaI process Of reckoning it, unsIer the second rule stated
above The same process Of reckoning discount on exchange
is in use, so far as &c know, in every other port.
Our correspondent may be correct in say ing that the quota
lion Of exchange would be more intslIisfbI-, were it quoted, even
when az a discount - It now IS. as at . much premium on the
dollars advanced but so long i bills and not dollars are the
article % merchandise here, and the custom Of the whole world
IS settled on the present mode, we shall not presume to attempt
he change, even should outsiders continue 20 be mistided by
he quotations. In closing. we repeat, that when exchange is
quoted by Us, as af a discount, the usual mercantile discount is
u~tenled, unless otherwise stated.
When parties II applied to for money, it would undoubtedly L
the better way to fix on the rate of premium for the money /
For instance, if $1,000 are wanted. let the rate Of
AtHAtsAA ~ AAAG1s w. - VI - ~ NGhl- LE loim vi t=o
iatiou wOuLI be explicit, and no doubt more satisfactory to both
PARTIES Whenever this mode OF doing business prevails, quo
ations can be made to conform to it.
Corrosive have already called attention several times to
his new product, and from accounts received from various
are encouraged to hope that We may soon be enabled
% refer to it IS one Of our exports. From Messrs. MeIchers &
we learn that COton-brokers- and merchants in Bremen
in the opinion that the cotton produced on the Hawaiian
Stands, Judging by a small sample forwarded by a Bremen
in HOnoguIuJ is Of \ fine quality, fit for use, solid Of fibre
mi toerabIy long. II il most Similar to the Chinese and East
indian cotton and worth about - tn 20 per cent less than
American bat it viii be a question whether the Hawaiian cot
Oh will be a. white, good and clean in quantities, as in the
ample sent. The main point to be observed in preparing cot
on ar export, with a view Of profitable result, is that the arti-
le IS clean Of seeds it does not matter 30 much If it is not per-
clean OF leaves though a clean article OF a white color
eFtainiy fetcheS the highest prices. Bremen being after Liver
col the principal cotton market, viii afford the best facilities 3
Or a quick aud profitable sale oI-iEis article, and the quality !
{ the Hawaiian cotton is particularly well adapted for that s
larket- c
The information embraced in the above will be Of service to !
use Interested in cotton. We may add here that Messrs. ]
Iechers \ Co will purchase, to a. limited extent, any island c
offered fr sale b
Saw FRAScrco- Oar alyiees from that port by the caIera- .
are To the 5h inst The Yankee arrived over on the after &
sn % the 3D. 10 days passage Would leave again about the b
tn No other vessel is expected before her, that We are aware 4.
From our private sdyices, date. Oct. I, We quote
:" Since the departure Of the Comff for your port our marke. -
ISLAND produce has experienced no change, quotations re
lining the same Business generally - active the fall trade
last few days Is without special interest On the Potomac G
ere hasFfrn no fighting beyond occasional skirmishes with "
e enemy Ntare entirely in the dark a. TO the contemplated \
Of Mcclellan, Oua here T. good reason for believing 4
At he Will not long remain ale. Eu6 sill pufinu@ 4 main :