Randall L. Gibson to Aaron S. Daggett, June 3, 1884
Mr. Gibson to Mr. Daggett.
Sir: I have the honor to acknowledge the receipt of your excellency’s letter of 31st ultimo, in which you express the opinion that there has been a contravention of the spirit of the treaty of 1875 between this country and the United States of America in the acceptance by the Hawaiian Government of debased silver at the rates above its value in payment of import duties, and ask that measures may be taken either to enforce the law of 1876 or in some other manner to provide for the payment of duties in the “gold coins of the United States or their equivalent.”
In reply, I have to assure your excellency that you have been misinformed as to the facts in regard to the subject-matter of your letter. 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. The Government has for many years past permitted the substitution of what are known as “gold checks” for actual coin. These are checks on the bank of Bishop & Co., bearing on their face the promise of that firm for their payment in United States gold coin. An arrangement has also existed for many years between the Hawaiian treasury and Bishop & Co. for forbearance on both sides to demand gold for payments due from the one to the other until after a reasonable notice. The numerous drafts on the treasury which Messrs. Bishop & Co. have to present are in this way set off against the gold checks for which they are responsible (including bonds and coupons falling due). In this way the Government and the bank have acted the part of a clearing-house for innumerable transactions, and saved the community much inconvenience, and the gold coin, which would otherwise have been in use, much wear and tear. Your excellency will therefore perceive that the Government has all along enforced the law of 1876, and taken measures to provide for the payment of duties on foreign imports in gold coins of the United States or their equivalent.
I note that your excellency calls the silver coin which is legal tender here “debased silver.” I am aware that there is a small amount of foreign coin in circulation which is below weight through long wear or from being mutilated. This will occur in any country, and no one is obliged to accept such deficient coin as money. As to the bulk of the silver circulating here as legal tender, I submit that the term “debased silver” is not applicable to it. Some of it is United States silver, some is of more intrinsic value than the American coin with which it is rated to pass, and the rest is legitimate coin of foreign countries, passing at a conventional value which suits the convenience of the public.
I have, &c.,