The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1886-02-06
II FL e
SATURDAY {:
February 9Th.
ABOUT OUR CURRENCY. +"

What does the writer in the Bulletin"
mean by speaking OF ga currency that
viii not pay our debts abroad?" Is he
80 ignorant of the operations of inter
national commerce and finance that he
imagines the debts of one country to
another are paid in currency" that is
in specie, whether gold or silver, by direct
shipments? Does he not know that Ha-
waii is to-day creditor and not debtor
country, and that an average six weeks
shipment of domestic products the year
round, on the basis of the exports of
1885, would pay the principal of our
national debt? In round figures we ex-
port twice as much as we import.
We Therefore need not care what kind of
q currency we possess, our debts abroad
being paid by our produce exports.
Our "dull spell" was caused, not by our
currency, but by over importation and
fall in the price of our staple export.
Canada, for example, is a prosperous
country; but it practically has no gold in
circulation, only paper and silver, and
relatively small gold reserve in the
Treasury 1t has an enormous debt, but
it does not meet its obligations in
Currency" 1t pays its obligations with
its surplus products.
The illustration of Canada is good for
many reasons, but it is especially so in
citing case in point with which our
contemporary should be familiar. The
Dominion Government owed in 1884,
$252, 585, 745 national debt. This was
plus the debts of the provinces compos-
ing the Dominion, and of municipal
debts, which are considerable. The in
terest on the national debt is $4,000 900
yearly in round figures. But Canada
does not export gold to pay its debts, for
it has no gold in circulation; neither
does it export silver because its silver
coinage is confined to the necessities OF
its own internal trade; and it certainly
does not export its ''rag money" OF
which the great volume of its currency"
consists Yet it pays its debts, keeps
faith with the public creditor, and is
progressive country.
The currency of Canada consists of
ID bank notes; % Government notes;
(3) silver coin. The silver dollar of 100
cents is the monetary unit; average rate
of exchange, As. sterling. The value OF
the English sovereign is fixed by law at
81 S62S
The banking system of Canada is
copied from the Scotch banks, which are
considered by most bankers to be the
most perfect in the world. Cana
dian chartered banks are empowered
to issue notes to the amount OF the
subscribed capital, and no bank is
chartered with less capital than 100000.
Canadian bank notes are in denomina-
tions of s., $40, $40, $50 and 800. No
deposit is required to secure the pay
ment of the bank notes in Canada and
none is made In this essential particu-
lar the Canadian chartered banks differ
from the National banks of the United
States, which are required to deposit
United States bonds to 10 per cent in ex-
cess of circulation. BY law, bank notes
in Canada are made legal tender for any
debt.
The Dominion Government issues all
the 81, 81 and 81 notes. By Act OF Par
lament it is empowered to issue $6,000,-
600 in excess of the amount of English
gold coin held to secure repayment OF
these legal tender bills. And it is fact
that the Canadian Government has is
sued the maximum allowed by law, and
that there are now in circulation six
million dollars of Dominion notes in ex-
cess of gold coin held to redeem them.
Silver coin, 90 fine, is used for change.
In the States bordering on Canada, the
Canadian silver is at discount OF 20 per
cent, and American silver is likewise
subject to discount in Canada. Indeed,
American gold coin, as well as gold and
silver certificates and silver coin, are all
subject to discount in Canada if rendered
in payment of any obligation.
Such is the monetary system OF the
Canadian Dominion, rich and pros
porous country, which gets along very
well without gold or ''gold standard, "
which pays it's debts abroad, and has
abundance Of currency" at home for its
business requirements. AS matter OF