The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1884-12-24
Honolulu, Dec. 10th, 1881.
JUDICIARY DEPARTMENT,
Honolulu Dec. llth, 1881.

Honolulu Dec. llth, 1881.
To His Excellcncy PAUL NEUNANN, Attorney
General:
SIR:-The Justices Of the Supreme Court
had the honor yesterday 10 receive from yUu 4
| communication wherein our opinion is asked
on question arising upon ths "Aci TO regu-
late the Currency" passed by the Legislature
of 1881.
Assuming that the request emanates from
His Majesty's Cabinet, we proceed to answer
the question stated, which is, in short, whether
the fourth Section of the Act is in conflict with
| Section five, or as you have stated it, 'Does
the last sentence in Section !, wherein the
Minister is directed to carry out the provisions
in the same manner as is provided in Section
| 5, forbid or permit the substitution of United
States gold coin for Hawaiian silver"
In order to understand and properly solve
the question presented, the nature of the money
in circulation in this kingdom al the time the
! Act was passed must be understood.
1t consisted Ufsilver coins of Mexico, France,
the United States and of many other nations,
| as well as of a large amount of Hawaiian sill
yer coin recently introduced.
Looking at the Act as a whole, the design
Of the law is apparent. 1t was TO make
United States gold the circulating medium of
this country.
Section prescribes that United States gold
coin shall be the standard and legal tender for
the payment of all debts in this kingdom.
Section 2 allows the silver coin of the United
States and of the Hawaiian Kingdom to be
| legal tender for any amount not exceeding ten
dollars in any one payment.
By Section all other gold and silver coins
are receivable at the Government Treasury in
payment of Government dues, duties and taxes
at rate not exceeding their bullion value and
could be disposed Of at a discount by persons
holding them and having dues to pay to the
| Government.
The next five Sections of the Act provide for
two methods by which the silver in circulation
was to be reduced in volume and replaced with
United States gold.
In the first place, by force Of the first part
of Section 5, Immediately on the approval of
| this Act, that is, from and after the 18th day
Of July, before the LIST of December, the time
when the Act in other respects went into effect,
| the Minister Of Finance was required TO ex-
change, during sixty days after a notice to this
purpor, silver coins of all nationaiites except
ing those of the United States and of Hawaii,
for Hawaiian coin, dollar for dollar. If the
entire public had awaited itself of this proyis-
ion, it is apparent that all the heterogeneous
silver in circu3 alton would have flowed into
the Treasury and no silver coins remained in
circulation but those Of the United States and of
Hawaii. This action was required to be taken
| Immediately on the passage of the Act.
The last part Of Section requires the Min
| lister of Finance to arrange for the sale of the
Heterogeneous silver thus received and all sill
yer coins then in the Treasury, except Hawaii
an coins, and the delivery Of their proceeds
| into the Treasury-gold coins of the United
States.
Section makes further provision to enable
persons whose tenders for the purchase of the
silver coins mentioned in Section 5 were ac-
copied, to deposit Government Bonds as seeu-
| rity for the delivery of the gold proceeds of
the sale. Section enacts chat the loss incl
dent to the conversion of silver into gold sha II
be borne by the Treasury.
Now Section 4, although appearing in the
Act earlier than Sections and 6, would be-
come operative after the act of calling in the
heterogeneous silver had been accomplished
and might naturally have come later in the Act
than Sections and 6. But we presume it
was placed thus early in the Act as it has a
permanent force and effect. 1t reads as fol-
lows:
whenever it shall appear, that there is
such an excess of silver coins in circulation as
disturbs the equilibrium between gold and
silver coins under the provisions of this Act,
the Minister of Finance, in order to restore
such equilibrium, shall replace sufficient silver
coin from any silver coin which may be in the
Treasury, as Government realization or on de-
post on account of any silver certificates, with
gold coins of the United States in the same
manner as hereafter provided in Sections 5, 6
and of this Act"
To state it more fully: Whenever (that is,
at any time in the future) it shall appear that
there is such an excess of silver coin in CirCu-
latiOn, (that is, in general circulation in the
community as disturbs the equilibrium be-
tween gold and silver coins under the provis-
ions of this Act, Chat is, whenever there is
more silver in circulation than will suffice for
the payment of debts of ten dollars or less in
amount,) the Minister Of Finance is required
to replace silver coin in the Treasury sufficient
in amount to restore the equilibrium, whether
this silver coin lays in the Treasury as the
general funds of the Government or is there on
deposit to meet silver certifcates) with gold
coins of the United States. The Act also says
that the method in effecting this is to be that
prescribed in Sections 5, 6 and of the Act.
That is TO say, the Minister Of Finance must
arrange through advertisement for tenders for
the sale of this silver coin in lots of not more
than $4,000 each. 1t is to be noticed that
coins with gold coins, which is to be invoked
at any time in the future, and as often as the
contingency Of Redundancy of silver in circu-
lation shall arise.
1t is also plain that by the terms of this Sec
ton the nature or nationality of the silver
coin which must be replaced with gold is not
specified
The Section speaks of it as "any silver
com, also coin on deposit on account of
any silver certificates" and Hawaiian silver
coins are not excepted froUi the operation of
the authority 10 convert. In reason there
could be no distinction made, the evil to be
remedied being an excess of silver coin.
In order to avoid in this Section a repetition
OF the manner in which this replacing Of silver
with gold is TO be done, the Act says briefly,
That the Minister shall conduct this replace
ment IN the same manner as hereinafter pro-
Tided IN Sections 5, 9 and Z of this Act" Bat
as we have above suggested, this requires
merely that the TPOdRS 0perdldi shall be the
same as that pursued in replacing the silver
required 10 be replaced by Section 5, and does
not require that the subject matter 4. G. the
silver coins) upon which this method Of ex-
change is to be pursued shall be identical with
that mentioned in Section 6.
We lind no contradiction in these Sections
and are of the opinion that Section Of the
Act permits the Minister of Finance to substi-
tute United States gold coin for Hawaiian sill
yer coin, and requires him to do SO whenever
the contingency Of an excess of silver shall
arise,
In examining the statute for the purpose of
answering the question submitted by His Ma
jesty's Government, we have observed pos
sible danger in the conversion of Hawaiian
silver into American gold. This coin for con-
version into gold is worth only its bullion
value. The intendment is that it shall be
taken to San Francisco and melted. But we
see nothing in the statute TO prevent a pur-
chaser of this coin at say so per cent, from
putting it into circulation here if be can obtain
his gold otherwise to pay for it
We trust that our sense Of this danger will |
be considered justification for going beyond |
the subject matter of the letter aud Offering a /
suggestion. II seems to US that the Minister
of Finance should make the sales of coin under
conditions which will efectually prevent such /
treatment of the coin sold.
We have the honor to be
Your obedient servants,
(Signed,) A Francis JTrDD