The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1895-05-09
Paper Of Chief Justice Judd Before
Social Science Club.
REDUNDANCE OF wHIIE METAL.
Gold Is Hoarded-At = Per Cent.
Premium-LOGisIAtIon Needed 30 Put
Metals on Equal Basis - Keep
Silver Subsidiary Coin.

At the last session of the Social
Science Club, Chief Justice Judd
read the following essay entitled,
"Recent Phases of the Silver Cues
ton :"
On the 18th of January, 1854, read
before this Association a paper on the
"Silver Question and Hawaiian Cur
rency." In that essay / stated my
opinion that the then recent importa-
ton of large amount OF Hawaiian
silver coin, in the face OF an Act OF
Legislature making United States
gold the standard and legal tender,
"betrayed the grOssest ignorance OF po-
litical economy" / also predicted that
when this Hawaiian silver coin got
into circulation it would postpone in
definitely the resumption of gold pay
ments. Let me here rehearse the his.
tory Of this piece OF statecraft: The
coinage of this Hawaiian silver was
done without the sanction OF any law
of this country. King Kalakaua and
his premier, Gibson, evidently relied
for their authority upon Article 80 of
the Constitution, which read that
"the King coins money" These ex-
Founders of the Constitution did not
consider the rest of the article, that
reads "and regulates the currency by
law" This article merely expresses
the principle that the State alone, and
not private individuals, establishes
what shall be- the medium of circula-
tiOn and standard of value. The
"King" means the State-through its
Legislature. Mr.. Claus Spreckels re-
ceived in installments one million
dollars in United States gold from the
Hawaiian Treasury and substituted
therefor one million dollars in Hawai-
ian silver. The particulars of this
transaction have never been made
public. 1t was probably a gradual
process, and was effected by deposit
ing the coin and receiving certificates
of deposit therefor at par. These GER
tificates were paid out through Spreck-
els bank as cash. At any rate, the
seignorage on this transaction must
have been at least $3.50, 900, which Mr..
Spreckels pocketed. Kalakaua and
Gibson either did not know that the
difference in actual value between
gold dollar and a silver dollar was
then about 20 cents, or they would
have made a bargain by which the
Government should share in this
profit. 1 do not impute to these now
deceased personages that they would
have insisted in personally sharing
the transaction they would have been
answered: "Will not five dollars in
silver purchase i'm Honolulu as much
as five dollars in goId?"-and that
would end the discussion.
During the first six months Of 1884
there were imported here of Hawaiian
silver one million dollars worth In
nominal value, in denominations as
follows: $500,000, in dollar pieces;
$3.50, 200, In half-dollars; $I25,0OO, in
twenty-five cent pieces, and $25, 900 in
that year to "Regulate the Currency"
authorizing among other provisions
the sale of silver coins, other than
those of the United States and Hawaii
and 1924, ,355.3 81 of such silver was
sold as bullion, for which $44l III was
received in United States gold, the
loss being 1894 per cent. This Act
established the gold coins of the
United States as the standard OF value
and the legal tender Of this country.
The standard silver coins of the
United States and OF Hawaii were
made legal tender in payment of sums
of ten dollars and under. There was
also a wise provision in this law
the replacing OF silver
coins with gold, "whenever it
shall appear that there is such
an excess Of silver coins in cir
culation as disturbs the equi-
between gold and silver
coins," the treasury to bear the loss Of
such exchange, and the sale OF the sill
yer to be made upon public advertise.
ment of sixty days calling for tenders.
Most unfortunately for the country,
Mr.. Gibson secured large majority
in the legislature of 1886 and among
other disastrous legislation he secured
the passage Of an act which repealed
the portions of the act of 1884 which
allowed the sale of redundant silver.
This act deprived United States silver
Of its quality as legal tender, but re-
tanned the gold standard and repealed
all provisions by which it could be en-
forced.
Now what is the present condition
of affairs? Our exports are sold abroad
for United States gold Byan amicable
and convenient arrangement the ex-
pOrters Sugar factOrs) who have ex-
for sale furnish it to local
bank, which undertakes TO import
from time to time such amounts of
United States gold as may be thought
sufficient TO supply the needs OF trade.
l do not know whether this agreement
is any more definite than as above
stated. Still, gold is in demand and
silver is plentiful. Two per cent. is
for gold. Enterprises whose
receipts are from local sources, and
are largely In silver,