Aaron S. Daggett to Randall L. Gibson, June 5, 1884

Mr. Daggett to Mr. Gibson.

Sir: I have the honor to acknowledge the receipt of your excellency’s note of the 3d instant, in reply to mine of the 31st ultimo, suggesting the justice of the collection of Hawaiian customs duties hereafter in United States gold coin or its equivalent.

Your excellency assumes that I “have been misinformed as to the facts in regard to the subject-matter” of my letter, and then ventures the extraordinary declaration that “silver and silver certificates are not and never have been received by the Hawaiian custom-house in payment for import duties except for fractional amounts that are not represented in United States gold coin.”

Allow me to assure your excellency that I am perfectly informed as to the methods by which the “gold checks” of Messrs. Bishop & Co. have for years past been issued to shippers for silver, have been received at their face value in the payment of customs duties, and, on presentation, have been cashed in silver or silver certificates. The checks are purchased by shippers for silver, and in silver or silver certificates are they cashed into the treasury, and the word “gold,” playfully mentioned on their face as the medium of their redemption, represents nothing beyond the agreement of the Government with Messrs. Bishop & Co. that payment will not be exacted in that currency.

Customs duties, under existing regulations, may be paid as follows: The merchant, having an account with the bank of Messrs. Bishop & Co., the medium through which the customs authorities largely deal with shippers, may sell his gold for Mexican dollars worth 87½ cents, may deposit those dollars at their face value, may draw his check thereon to the amount required, and receive from the bank in exchange therefor a “gold check” of precisely the same amount, with which he may pay his customs duties. These “gold checks “are turned into the treasury, and, on presentation to the bank, may be cashed either in Mexican dollars or in silver certificates of the Government, which may be issued at par on a deposit of Mexican dollars.

Thus the shipper is practically enabled to pay, and the Government may actually receive, his customs dues in Mexican dollars, and while it may be true that “silver and silver certificates are not and never have been received by the Hawaiian custom-house in payment for import duties except for fractional amounts that are not represented in United States gold coin,” your excellency omits to mention that the collector of customs, who sternly demands gold from the occasional small shipper who pays to him directly, is authorized to accept from the larger and more important importer the “gold checks” of the bank, which are at once redeemed into the treasury in silver or silver certificates, and the obligations of the bank to meet its “gold checks” in gold are canceled as fast as made, by the redemption in silver and return of the checks.

Your excellency also omits to mention the purpose of the adoption of a resolution by His Majesty’s cabinet council, on the 15th ultimo, requiring the payment of customs duties in United States gold coin” on and after the 1st day of June, 1884,” the enforcement of which resolution has since been deferred. If silver was not then received for customs duties, why was their payment in gold required after the 1st day of June?

“Debased coins” are such as have been punched, bored “sweated,” or intentionally mutilated to such an extent as to deprive them of any portion of their intrinsic value. Thus, the value fixed upon a punched dollar by the United States Treasury is 65 cents, a punched half-dollar 35 cents, and a punched quarter-dollar 15 cents. While such mutilations are unusually common among the coins quite freely circulating here, I beg your excellency to relieve me of the intention of stating that such currency constitutes the bulk of the silver legal tender of the Hawaiian Islands. While such mutilated coins may not be accepted at the Hawaiian treasury, they are easily convertible in small sums into a currency for which the bank’s “gold checks “may be obtained at par.

As your excellency admits the arrangement with the Messrs. Bishop & Co. by which their so-called “gold checks “are received for customs duties, and as I have shown that such “gold checks” are issued for silver of low commercial value, and in such silver or its certificates are redeemed into the Hawaiian treasury, I respectfully resubmit to His Majesty’s Government the request embodied in my note of the 31st ultimo; and, in doing so, permit me to say that I do not present the matter in the form of a demand either on the part of my Government or myself. The acceptance of foreign silver above its commercial value in the payment of customs duties cannot but operate as a disadvantage to American commerce not contemplated at the time of the ratification of the treaty of reciprocity between the United States and Hawaii, and the continuance of the treaty relations now happily existing between the two countries must depend largely upon the disposition and efforts of both to carry out the spirit no less than the letter of their mutual covenants.

I have, &c.,