Aaron S. Daggett to Randall L. Gibson, May 31, 1884

Mr. Daggett to Mr. Gibson.

Sir: When the reciprocity treaty of 1875 was ratified by our respective Governments the legal-tender currency and unit of commercial value in the Hawaiian Kingdom, as fixed by Chapter XXVII of the sessions laws of 1872, were the dollar of the United States and its subsidiary subdivisions. Chapter XLI of the sessions laws of 1876 repealed that statute, and, among other currency regulations, provided that the gold coins of the United States should be the standard and legal tender in the Kingdom, and that thereafter all duties on Hawaiian imports should “be paid in the gold coins of the United States or their equivalent.”

For reasons not plainly apparent, the law of 1876, so far, at least, as it relates to the payment of customs duties, has not been enforced, but duties on Hawaiian imports have been and are still being paid and received in the debased silver coins of all countries, and accepted by the Hawaiian customs authorities at rates from 10 to 20 per cent, in excess of their real commercial value and as much below their equivalence with the “gold coins of the United States.”

I am prone to believe that the great injustice to the commerce of the United States caused by this deviation from the provisions of the law of 1876, as also from the provisions of the statute which that law repealed, must have escaped the observation of His Majesty’s Government.

If so, I need but direct your excellency’s attention to the fact that the character of silver now being received for customs duties was selling yesterday at a discount, in exchange for United States gold, of 10 per cent, below the value at which it is accepted by the Hawaiian customs authorities in the payment of import duties, arid to the further fact that the acceptance of such silver in the payment of customs charges operates substantially as a reduction of duty rates to shippers to the extent per cent, of the discount, and to the same extent are the products of the United States entitled to free entry deprived of the benefits accorded them by the treaty of 1875. In other words, the shipper who pays his duties in silver purchased at 90 per cent, for gold, in reality pays ho duties at all.

Permit me to say that the liability to customs charges of the wares of all other nations is an element of the treaty equally essential with the exemption from duty of certain products of the United States. Hence, since the Hawaiian Government could not in good faith directly remove all duty charges from foreign imports, it will scarcely be claimed that it may do so indirectly by accepting in the payment of duties debased silver at from 8 to 10 per cent, above its current value. In view of the increasing rates of exchange, and the manifest contravention of the spirit of the treaty of 1875 in the acceptance by the Hawaiian Government of debased silver at rates above its value in the payment of import duties, I respectfully present the matter to His Majesty’s Government, and, in a spirit of great friendship, ask that measures may be taken either to enforce the law of 1876, or in some other manner acceptable to His Majesty’s Government provide for the payment of duties on foreign imports in the “gold coins of the United States or their equivalent.”

I am, &c.,