The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1880-05-15
The Currency Question.

To the Editor Of The Pacific Commercial Adueraiser:
Sm-The position taken by a leading article In
the last Gazette on the currency question, II I I'M
derstaud it correctly is this
United States gold is the best coin we can have,
both for our standard and our currency, because II
has q fixed and permanent value. and because Il Ia
the most convenient coin with which to pay our for
eign debts.
It recognizes and admits the difficulty Of payipr
our debts abroad with that coin, and always ksep-
ling enough of IL in Circulation for our current bust
ness; and as the remedy Sor this difficulty suRReptg.
that we had better not ino6: any foreign debts. or
at least keep them within such moderate bounds.
that the coin we might at any time require to pay
them would not be in such quantities as would serf-
ously effect the circulating medium.
1t further offers some good advice on the general
subject of running in debt, and observes, s there Il
no sound reason why we should not pay what we
owe, or else take the consequences. Hence we none
that the remedy which all desire in some form. win
be found in returning to solid gold, even II that shall
serve to prevent inflated speculations."
But is not this just what we all want TO do, II we
can, " to return to solid gold % The point under
discussion now is, ] think. as TO just how we shall
manage it. We have the law Of 1876 on the statute
book, and Cor which l voted myself, and which I be-
lieve embodied the main principles and features ad-
vocated by the merchants ut the time, and which "a
was hoped would give US a U. s. gold currency. Ia
has remained there nearly four years, and has re-
suited in a total failure, for there has not been Ieaa
U. s. gold in circulation for thirty years past than
since this Act has been in existence. Il seems futile
for one to say the limits for silver payments were
made too liberal, and for another 10 say they were
made too stringent. II seems rather time 10 enquire
whether the principles Of the Act may not be wrong,
rather than the details.
In considering this question, tho recommendation
Of the Gazette, although good in the abstract, may
perhaps be left out Of consideration, for to say moth
ing of the circumstance that Ia making laws il II
usually assumed that men will NOT always act with
prudence, rather than that they will, the question Of
how much our people should run into debt seems not
to be a pertinent one, for = balance against US and a
demand for coin for export may very well arise With
out any one going into debt q dollar. But even II
this were not 30. this young country, with lie dearth
of capital, but magnificent productive powers. will
hardly consent to eschew the benefits Of the vast svg-
tenn Of credit, or transfer of capital from where Il In
plentiful to where ii is scarce, and which we may AL
most cay, keeps the world moving to day, in order 70
be able to obtain, even so desirable an object 90 Q u.
s. gold currency.
lam inclined to think. indeed the result shows
it, that the error we all made in the Act OF 1876.
was in expecting TO be able TO get a coin and keen
it in circulation at q nominal value which was be.
low its real value here. We declared that 81 u.
5. gold coin should pass for one dollar. whilss
no one could get it here or bring il here for iess
than Sl.03 U. S. gold coin. No principle seems 10
be better settled in this branch of political econo.
my than this, that you must not make your coins
too heavy or too valuable il you wish 10 keen them
in circulation. The sovereign was I believe once
in England made overweight, with the idea of
having a very sound gold basis. II paid 10 melt
them up and get "a larger number OF soyerelRns in
exchange for the bullion. or 10 export them. and
the Minis was kept employed for some years In the
p%rohtless occupation OF keeping mp the supply Of
coin for current use. Ii has been by many good
authorities considered a mistake that the British
Government makes no charge for coming gold. Il
is contended that The cost Of coming shonld be de-
Quoted from the weight Of the sovereign. Now the
cost of introducing a coin into the country for cnr-
rency purposes, seems as legitimate a charge "A
that of turning the bullion into coin. We cannot
deduct from the weight of U. S. gold coin. SO the
only alternative would be TO add to its nominai
value. BY the Act OF 1876 we not only virtually
made our coins too heavy. but enacted that those
who required them should send for them. and nav
the carriage themselves.
There is no doubt that at first blush, a proposal
to amend the law of 1876 50 that one dollar OF u.
5. gold shall be considered equal to $i.O3 Of our
money, would be likely TO be met with little favor
it is convenience the general public are seeking
not Inconvenience, which it no doubt would be 10
have to add IS cents, 80 and 60 cents 70 the e5.
$40 and $50 pieces, respectively, bat we have I
think now arrived at that point when we must eth
er pass U. S. gold at its real value here. or aban-
don the idea OF introducing il at all. Will IL be
more convenient, in u broad view of the whole
question, to have . U. S. gold currency passing at
its real value, that is With the 5 per cent. added, or
whatever II may be than that it costs to Il, or
to go on as we are, without any gold at all
The advantages which would seem to be prom
ised by such a change are the following, and We
should not forget that the best practicable scheme
is only that one which has fewest objections
By this plan we should have every chance of
obtaining a full proportion Of u. S. gold amongst
our circulating medium. The gold Will pass al q
value (ts true value bere) which will probably
keep it here when ever we get 1t.
We shall not only have our currency on a strict
gold basis theoretically, but practically. At
present the inconsistent state of the laws and Of
the facts is a reproach TO US. Our money would
then in a certain sense q think the true sense) be
available to pay our debts abroad, hut would be
current here at such a figure that il would not 70
away from u.s. as the Gdzette's article well ex-
presses II, with such fatal facility"
The plan will bring U. 5. gold into something
like a fair relation in value to the large amount Of
our silver now in circulation, the excessive pres
ent difference in the value Of which and u. S..
gold has helped to keep the gold away. This
silver might then well continue to pass for SUBJ
sidiary payments at its present current value.
And finally, while the plan adheres strictly tc q
gold basis, it would not have a tendency 10 make
money scarce just when it is most wanted. III
would assist somewhat in bringing money here.
and in the legitimate development Of the resources
Of the country, without causing financial distress
amongst the general public, who may be merely
carrying on their usual amount Of business, and
who may therefore be in nowise TO blame or re-
sponsible because our coin Is called for, when
that development was being pushed perhaps i'm
prudently, by other parties.
The only other alternative l see for getting ont
Of our currency difficulties would be to have a
coinage of our own (Which however presents some
di61culties), but the plan now suggested would
prepare the way for ii, If an Hawaiian coinage
were ultimately found desirable, for ii would, I
think, be a mistake 10 make our Hawaiian gold
coin of the full weight and 6neness Of the u.s..
gold coin of the same denomination. bnt the extra
cost of coinage, carriage, ETC.. should be deducted
from the weight-wbich would probably be about
the proportion of SI03 Hawaiian to SlO0 U.S..
gold. w. L. GREEN. q