The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1879-08-23
IMITATION

In times Of money scarcity, caused, it may be,
by either commercial disaster or new enterprises,
there are many who Immediately jump to the
conclusion that relief lies in an enactment Of the
legislature by which%he issue ola certain amount
Of paper money Is legalised. This short cut to
prosperity has been 50 often tried, and with such
melancholy results. tina; it may be expected that
economist Of the inAationist class will gradually
become extinct but that time has not come yet,
and Judging from the signs Of the times Will not
come for several years
The Hawaiian Islands are unfortunately Attic
ted with a debased coin currency. which has had
its logical injurious effect. This currency con-
sists Of the silver f~Ye-franc piece, used from early
times for a dollar, the American silver hall-dol-
lar which was in 1872 made legal tender for all
payment without limits, and in 1876 was made
with other American silver COINS legal tender for
payments of fifty dollars, and a small percentage
OF large payments, Mexican silver dollars and
English sOyereigns, gold, made by the Privy
Council equivalent to five dollars. These make
up the bulk Of our staying currency, and are all
considerably below our legal standard, which is
the American gold dollar. OF course with such
a currency made legal for the greater part of the
money transactions Of the community, there is
no way Of keeping American gold in the country.
To do this /: must be made the only legal tender
for all payments over a very small amount-say
five dollars. Still this deprecated currency an
swers our purpose tolerably well its value is in
trinsic to a large extent,-that is to say, though
a sovereign is not worth FIVE dollars, it's legal
rate, vet ii is worth four dollars and about
eighty-six cents, and this corresponds pretty
nearly to the intrinsic as compared to the legal
value Of five franc pieces, Mexican aud American
dollars and half dollars, and this gives our work
ing>chTrency a decent consistency and steadiness.
THE profit of sugar culture under the ~reciproci-
/ty treaty have stimulated enterprise in that field
ITO an extent beyond the capacity Of our available
capital. In this dilamma, the Hawaiian Gdzstte
proposes that our capital be augmented by the
creation Of a paper currency. The writer in that
paper does not state any place for its issue, secur-
ity and redemption OF the proposed currency, but
quotes the dangerous experiment made by the
United States as a last resort in a desperate emer-
gency. and which has for seventeen years been a
disturbing influence in values in that country.
Nor does the writer appear to recognise the differ
ence between the American greenbacks and the
national bank notes, nor make any suggestion as
to the character of the proposed currency, wheth-
er 1t should be a government note or something
in the nature of an American bank note.
The currency of the United States was estima-
ted about a year ago by DIR. Linderman, late
director of the mint. to be 81 ,043 600 900, of
which only 1858, 200, 900, or about "a per cent,
was gold and silver coin. The circulation of
treat Britain was estimated last year by Mr..
Ernest Seyd to be 1881 500 900, of which S615,
600 900, or ~ per cent. were gold and silver
coin and bullion. In France with a circulating
medium Of 81 ,742, 0O0, 900, "A per cent, is metallic
ard 20 per cent paper, as in England. More
over the Bank Of England holds a reserve Of Sll3,-
900 900 against a note issue of S157, 500 900,
leaving S44. 500 900 unprotected, while the
Bank OF France holds S416 900 900 against an
issue OF S442, 900 900, leaving only $4,000 900
uncovered.
1t would seem that if we are to initiate the
financial system Of other nations, we had better
select those Of France or England, in which the
security OF the paper money is practically per-
feet, and the perturbations of value reduced TO
a minimum. But still there are perturbations, and
is 1t worth while for us TO encounter unknown
risks for the sake of numerically increasing our
'~capital2 Our government is not a borrower at
present. and has no need of credit. The issu-
ances of an authorised credit paper by q bank
would tend both to further depreciate the
body Of our currency and to introduce perturba-
tions in value which would be disastrous to all
business enterprises. The depreciation of such
paper would drive away all coin, except small
change, even our poor sovereigna, five france
pieces and Mexican sun-dollars would have to 60.
The introduction of such leg ~islation wonld be
extremely dangerous in this country. The legisla-
ture could not be relied on for the necessary En-
AohSieA " ooANAJ oN Nhy
on a slippery and complex financial system of this
character, and we should be exposed to the ulti-
mate fate of similar experiments in San Domingo,
where government requirements were promptly
supplied by an enactment creating a new lot of
money out of paper and ink, and the currency
became as common as the leaves on the trees and
worth as much.
Hawaiian silver certificates are popular and
convenient as money, and do not require to be
made a legal tender because they pass readily
upon their representative value. OF course they
do not satisfy those minds that agonise to see one
dollar by some dexterity made to perform the
work Of two. But the coin reserve that keeps
the silver certificates at par is not idle nor a tax
upon public profits, it is on the contrary a kind
Of insurance fund that secures the acquisition of
profits. The loss of interest on these reserves is
Insignificant when compared with the disasters
caused by fluctuations of a credit currency.
We are unable to see any relief in the some
what vague propositions of the writer in the Ga
zette, but rather danger to all kinds of business
enterprise, and also Workmen and those of small
means. If the present is a critical time, that is
the greater reason for not tampering with our
currency.