The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1883-12-19

The recent case brought in the Supreme
Court to test the validity of an issue of
$4,000 OF Government Bonds. under the
Loan Act of 1882, does not affect in any
way the currency of the Kingdom. Silver
half dollars or dollars can still pass cur
rent, as they have heretofore passed, for
any amount, Us long as the bank and the
treasury agree with the merchants in re.
ceiving silver instead of L. S gold.
No question was raised in Court Us TO
the requirement of the legal tender Act.
which makes the L. s. gold dollar the
standard of money in this Kingdom, sill
yer coins being legal tender under that
Act only for small debts and for certain
proportions of larger debts
The real points of that case are. how
ever. SO vitality important that they ought
to be thoroughly understood. The case
involved first, the question whether the
receipt Of 100000 silver half dollars, each
worth little over 80 cents in [. S. gold
IN exchange for an issue of Sl30,0O0 of the
Hawaiian Government bonds was an issue
Of such bonds below par" and therefore
within the prohibition of the Loan Act
which declares that they shall not be is
sued below par.
payable in L. S gold coin or its equiva
lent The court held that unless the
bonds are issued for the full amount Sc
cured 10y them, they are issued below par.
following a similar decision made by the
Supreme Court of New York in a case
brought many years ago against the State
Of Illinois, on certain bonds of the latter
State which had been sold in such way
that the interest upon them was made to
commence running some los DAYS before
they were paid for. In the case of the
Illinois bonds, the method followed in dis
posing of them caused loss to the State
OF about $4,000. In the case in our Su-
preme Court upon the proposed issue of
Sl3lOOO for half dollars, II Is computed
that there would have been a loss of some
$4,000
In other words, our court has by its writ
oil mandamus simply required the Minis
ter OF Finance to do what the statute re
qures, namely, to issue the Government
bonds only at par
1t Is difficult 10 see IN what manner the
country can be embarrassed by such de
clslon. The Loan Act. as observed by the
Chief Justice, authorizes the borrowing of
money on y for certain specific purposes.
and not for current expenses II the
present Government has been unable TO
place Hawaiian bonds at par. it is not be
cause of any want Of credit which the
nation can obtain but because the gen
tlemen who have been undertaking TO ad
minister the Government have not been
able to obtain the confidence Of the mon
eyed men of the country.
The second point which this case has
brought out is perhaps vastly more i'm
portant than the first, and that is. that IT
Is the right of the tax payers and citizens
OF tins country TO apply to the courts to
prevent illegal application of the public
funds. The Chief Justice in making his |
rulings on the first of the above points |
had the words of the statute before him. |
which he was bound to follow. and also the |
only Judicial precedent which was cited. |
On the second point, as we understand, |
he distinguished counsel for the Govern |
nent cited four cases, but the great prp
of authorities to the contrary,
including the high authority of the u. S.
supreme Court, which were cited by the
petitioners counsel, correctly set forth in
he opinion of the court, the law of that
portion Of the case.
1t Will be seen that the rulings thus
made had nothing to do, as intimated by
he T. c, l., with any "preconceived" or
'toregone conclusions of the Chief JUS
ice, for they were upon points which. so
or as we can learn, had never before been
discussed here.
Until this case shall have been decided
y the full court on appeal, we reserve
urther comment upon it.