Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 2, 1878
No. 91.
Mr. Holcombe to Mr. Evarts
.
Peking , July 1, 1878. (Received September 2.)
Sir: Recurring to Mr. Seward’s dispatch No. 398, of February 7 last, inclosing a copy of a circular letter addressed to our consuls at the several ports, inquiring whether the trade-dollar is coming into circulation, and whether any official action may be taken which will increase the demand for it, I now have the honor to hand to you copies of the several replies which have been received.
From these you will see that the coin in question has obtained no circulation in China, except at Amoy, Canton, Foo-Chow, Swatowyand the Formosan ports. At these places, it seems to be preferred by the natives to the Mexican, and to command a small premium.
The burden of opinion would appear to be that no official effort to extend its circulation is advisable, unless it can be made a legal tender for the payment of customs dues at a fixed rate.
I desire to request your special attention to the remarks contained in the dispatches from the consuls at Amoy, Foo-Chow, and Ningpo as to the desirability of preventing, if possible, the “chopping,” or mutilation, of the trade-dollar. This practice, which had its origin in a rule made by mercantile houses in the south of China, requiring each firm to guarantee the genuineness of dollars paid out by affixing to each coin its “chop,” or Chinese firm-name, and which was done by stamping with a die upon the surface of the coin, has grown into such an abuse, that current dollars are defaced beyond all possibility of recognition, and not infrequently coins are found in circulation through which holes have been punched.
In some cases, indeed, there is good reason to believe that the die has been displaced by a gouge, and a small portion of the metal has thus been abstracted from the coin.
In this connection, I inclose a copy of a memorial upon this subject presented to the governor of Hong-Kong, in June, 1877, by the leading [Page 142] bankers and merchants of that colony, in which the evils of the “chopping” system are set forth.
It is evident that the mutilation and defacement of any coin tends largely to limit and interfere with its general circulation. Whether it is wise to undertake negotiations with this government, at the present time, looking to a suppression of this practice in China, so far as it affects United States coins, is a question for the Department to decide. I desire, however, to point out that steps in that direction, if entered upon at all, should be undertaken simultaneously in Peking and London, as the practice referred to is not more common in this country than in Hong-Kong, which, as you are aware, is a British colony.
I have, &c.,
Baron Von Soden to Mr. Lincoln.
Canton , June 22, 1877.
Dear Sir and Colleague: According to article of the treaty between Germany and China, payments due to the Chinese customs may be made in bars or in foreign coin, whose relative value to the Chinese sycee-silver shall be fixed by special agreement, according to circumstances, between the consular officers and the superintendent of customs.
The provisions of the article of this treaty have as yet not been carried out at Canton, inasmuch as the above-mentioned agreement between the German consul and the superintendent of customs there has never been entered into.
I have, therefore, lately been instructed to cause the relative value of the coins current at the Chinese customs to the Chinese sycee-silver to be fixed in the manner pro-Added by the article in question. The motive for the instruction is the following:
As regards the value of the Mexican dollar, the result of fifty-two assays lately made at the imperial Japanese mint, at Osaka was, that the fineness of Haikwan silver varies between 984.5 and 986.5, and that by far the greater number of pieces examined showed a fineness of 985.5, containing besides from 0.20 to 0.22 of gold. The loss incurred by melting 54,018.34 ounces was 83.03 ounces.
According to American assays, weight and fineness of the Mexican dollar are: the old Mexican dollar 415.68 grains troy, and .901 fineness; the new Mexican dollar (balance dollar) 415.68 grains troy, and 902.5 fineness.
By an assay made on the 23d December, 1873, by Her Britannic Majesty’s consulate and the Chinese authorities of Canton, the value of 100 old Mexican dollars was fixed at 63.9 Haikwan taels, and that of the new dollar at 64.8 Haikwan taels, that is to say, 100 Haikwan taels are 154.32 new and 156.49 old Mexican dollars.
This unfavorable proportion can only be traced to the fact that the loss sustained by melting, &c, of the dollars was more considerable than what it would have been in the event of a careful and conscientious manipulation.
The weight of 100 dollars being 72.67 Haikwan taels, and assuming the fineness of the tael to be 1000/1000 and that of the dollar 90/100—which is too favorable for the former and too unfavorable for the latter—$152.90 would have to be paid for 100 Haikwan taels.
It hence follows, since Mexican dollars are of an actual fineness, of respectively, 901 and 905, instead of 900, and the average fineness of Haikwan taels not being 1000, but only 985.5, that for every 100 Haikwan taels $4.06 are paid in excess of their value in new and $5.98 in old Mexican dollars.
All consuls of the treaty powers having a right, and in view of the above facts sufficient cause, to desire the relative values of the current coins regulated upon a sound basis, I embrace the opportunity, dear sir and colleague, to inform you of my intention of engaging the Chinese authorities to subject the different coins to a fresh assay.
As this is a matter of common interest to all foreigners, I beg to inquire if you will consent to act conjointly with me and our other colleagues, to whom I have addressed a similar letter.
It will be a matter for future consideration in what manner the new assay has to be carried out, in order to be just and reliable. Requesting the favor of an early reply,
I have, &c.,
Mr. Lincoln to Baron Von Soden.
July 5, 1877.
Sir: I have had the honor to receive your dispatch regarding a reassay of the current coins at this port.
I am fully convinced that such an assay would not prove beneficial to those whom I know it is your desire, as well as my own, to serve.
The assays heretofore made at this port of the American trade and Mexican dollar do not agree with the assays made in the United States of the same coins, these coins being declared here a little less fine than their true value, though, I understand, they are taken for customs duty and by all bankers and merchants at 90/100 fineness.
While it would be desirable to know the exact value of a Haikwan tael, I fear it is a thing not so easily ascertained, as I learn that by some strange arithmetical calculation, known only to those familiar with its working, the value of the Haikwan tael varies as much as the rates of exchange upon Europe or America.
I am, &c.,
United States Consul.
Mr. Denny to Mr. Seward.
Sir: In reply to your dispatch of the 5th instant, I have the honor to say that the American trade-dollar is not known as a circulating medium at this port. As you are aware, nothing will be received in payment of obligations in the interior but sycee silver or copper cash, and the same rule is also observed at this port in most all transactions. For this reason the larger proportion of Mexican dollars shipped to this port are converted into sycee, leaving very few in circulation.
The trade-dollar being of equal fineness with the Mexican and a trifle heavier in weight (its weight being 420 grains troy), and also more accurately and uniformly milled, there would be sufficient inducement for the Chinese to use it in preference to the Mexican, if coined money circulated here as it does in Western countries, by its nominal value rather than by weight or intrinsic value; but under the prevailing custom of circulating by weight alone, I do not see that any official action can be taken that would be of practical use to create or increase demand for our trade-dollars to any considerable extent in this part of the country. Greater familiarity with the new dollar will, perhaps, overcome the present strong prejudice of the natives in favor of the Mexican; but its circulation as a dollar would even then be limited, as the clean Mexican now is, to small transactions with foreigners.
I am, &c.,
Mr. Lord to Mr. Seward.
Sir: In reply to your inquiries relating to the introduction of the trade-dollar at this port, I have to say that it has not been introduced here to any extent whatever. It would have been a great blessing if it could have been introduced, for we are suffering very great evils for the want of it, or something like it. The Mexican dollar, the only coin (Chinese cash excepted) now current here, is so uncertain in its value and so liable to be counterfeited that there is for us no end of trouble. And this trouble has greatly increased of late. There have been several attempts made here to coin this dollar by natives, and the work produced was so well executed that only shroffs, or experienced money-changers, could detect them. The value of some of them was also quite fair, being only short some 4 or 5 per cent.
I think the trade-dollar, or any other invariably good and well-executed one, would find great difficulty in coming into use here, without official action. Bankers and shroffs control the currency here, and it is for their interest to have this as defective and difficult as possible, so as to gain from those who are ignorant. For this reason the newly-coined or bright Mexican dollar is usually at a discount here.
I am inclined to think that if an arrangement could be made with the customs authorities [Page 144] to take the trade-dollar in payment of dues and at a fair rate of exchange, it might he brought into use; and if, in addition, it could be made a penal offense for the Chinese to melt, deface, or counterfeit it, I think there would soon be a large demand for it.
The practical currency of this port now is the dollar. The tael is becoming more and more nominal, and the old method of keeping accounts and prices in cash is fast changing into dollars and cents.
I have, &c.,
United States Consul.
Mr. Bandinel to Mr. Seward.
Sir: In reply to your excellency’s dispatch No. 36, of the 5th instant, I have the honor to state: The trade-dollar has come into circulation at this port, but only to a very limited extent. It is sold at a premium, as a curiosity, to dealers from the interior, but can only be passed at a discount in general business. Official intervention would, I think, be undesirable, as tending to prejudice the Chinese commercial mind against anything thus recommended, unless, indeed, it would be proper to insist on the foreign customs taking them and Mexican dollars in payment of duties, tonnage dues, &c. At present they only accept dollars as matter of favor, not of right, and then at a discount on the market rate.
Dollars, with the above exception, are seldom used here, except for ships’ disbursements and at the foreign stores, the native currency of the port and district being sycee (small and in shoes), copper cash, and tiao notes.
I have, &c.,
Vice-Consul.
Mr. De Lano to Mr. Seward.
Sir: I have to acknowledge the receipt of your dispatch No. 52, making inquiries about the circulation of the American trade-dollar at this port.
In reply I have to say that the annual import of the dollar, say for three years past, has been from 10 to 20 lacs. It is eagerly sought for by the Chinese when not mutilated, and when brought up from Hong-Kong without having been subjected to the process of “chopping,” it is taken in preference to the Mexican dollar.
Upon first appearance of the trade-dollar here there was an effort made to place it at a discount of 2 per cent. as compared with the Mexican, but at my instance the Chinese authorities were induced to order it to be taken for customs duties at the same rate as the Mexican, also to issue public proclamations commending it to the people and forbidding its mutilation. This action had the effect to bring it into notice, and it is still looked upon by the natives with much favor.
I know of no official action which would tend to increase its circulation here, unless means could be taken to prohibit the chopping of it in Hong-Kong and Canton.
I am of the opinion that if official action could be, taken to place it at par with the Mexican dollar at Shanghai, Its circulation in China would thereby be increased fourfold.
I have the honor to be, sir, your obedient servant,
United States Consul.
Mr. Shepard to Mr. Seward.
Sir: I have the honor to acknowledge your several dispatches, Nos. 41, 42, and 43.
Referring to the first, I have to report, from inquiries of merchants and the bank I cannot learn that an American trade-dollar was ever seen in Hankow. The Chinese are very notional about “dollars,” and while the “sun” dollar is taken without question, the “scale” dollar is at a heavy discount. As you know, both are Mexican, and [Page 145] even the manager of the Hong-Kong bank tells me he does not know any real difference in their values. Intelligent compradores assert that if the trade-dollar were introduced the mandarins “would order it boiled chop-chop!” i. e., condemn it to be smelted. I have no doubt such would be the case, and I can, therefore, recommend no official action to create or increase a demand for it at this particular point. Its recognition as the standard at banking institutions and by native officials would doubtless pave the way for unquestioned circulation. I see no way to this result otherwise, except by the very slow process of gradual familiarity with the coin, extending from the great ports of Shanghai and Hong-Kong.
I am, &c.,
Consul,
Mr. Lincoln to Mr. Seward.
March 9, 1878.
Sir: I had the honor to receive your dispatch No. 31, of 5th February, 1878, regarding the weight and circulation of the United States trade-dollar, on the 4th instant.
Inasmuch as this coin is taken here at its actual fineness (900), I do not think it would be advantageous to have another assay.
Some months since, the German consul wrote me on the subject of assaying the coins in circulation here, as per copy of his letter marked “Inclosure No. 1.”
After due consideration and consultation with my colleagues, I wrote him as per inclosure No. 2.
Regarding its circulation, I wrote the Department some time since, as per inclosure No. 3.
I am convinced that the trade-dollar is gradually increasing in circulation; that it is better liked than the Mexican. I find that in cases where money is hoarded up or laid by by the natives the trade-dollar is invariably selected.
Believing inclosures Nos. 2 and 3 give my views fully on the subject,
I have the honor to be, sir, your obedient servant,
Consul.
Mr. Colby to Mr. Seward.
Sir: In response to the inquiry made in your No. 27, in regard to trade-dollars, I beg to say that there are none in circulation at this port, and from the best information I can gather on the subject, any effort to introduce them commercially would be attended with a considerable loss to the introducer, as they would not be received, except at a discount of at least 5 per cent. as Compared with the Mexican dollar, now in universal use here.
I am, sir, your obedient servant,
Consul.
Mr. Stahel to Mr. Seward.
Sir: Referring to your dispatch No. 107, I have now the honor to inclose copy of a letter just received from the vice-chairman of the Shanghai Chamber of Commerce, to which body I applied for information on the subject, being myself so little acquainted with matters in China.
I have, &c.,
Vice-Consul-General.
Chamber of Commerce to Mr. Stahel.
Your letter of 21st February on the subject of the introduction of the trade-dollar was briefly acknowledged on the 23d of the same month, and the committee has since gathered information which shows that there is no present prospect of inducing the natives to accept the coin, or of influencing official action on the part of the Chinese authorities to facilitate its recognition as a legal tender.
The dollar has been imported in small quantities and has failed to make its way, having always been refused at its full value, while application to the Tao-t’ai for assistance in introducing it has led to no result beyond a declaration of the inability of the officials to move in the matter, as the currency of this port for trade purposes is sycee silver.
Those parcels of trade-dollars which have been received have, therefore, been re-shipped to the south, where the coin is easier of exchange.
I have, & c.,
Vice-Chairman.
Mr. Henderson to Mr. Seward.
Sir: I now have the honor to submit the following in reply to the inquiries made in your dispatch No. 46:
The American trade-dollar is and has been for more than two years past in use at the ports in this consular district, though not so extensively as the Mexican. At present it commands a premium to buyers of one and a half cents at the cash shops in Amoy, and payers every where have a decided preference for it. One thousand American trade-dollars are 1.236/10 too heavy, or over the weight of 72, Amoy currency. But for the universal and unrestricted tendency of people who have payments to make to procure and use the worst dollar that will pass, they might, for aught I can see, become the exclusive currency. They are better than the Japan trade-dollars, and neither the “tael” nor “dollar Spanish,” have any existence in reality.
Any official action that would restrict or prevent the circulation of debased or mutilated coins, or those of lesser weight and value, would necessarily promote the use of the trade-dollar. Any measure of this kind would, however, encounter the opposition of the schroffs, money-brokers, and compradores, as well as those concerned for the moneys of other countries affected by it. If the Chinese Government could be induced to make it the only legal tender for customs duties, much would be gained for it, but this could not easily be accomplished, and might not be desirable. I have for a year past required all official fees at the consulate to be paid in clean trade-dollars, but the amount collected has been small, and no favorable influence of the plan can be perceived.
I am, &c.,