No. 196.
Mr. Daggett to Mr. Frelinghuysen.

No. 106.]

Sir: I have the honor to apprise you that, on the petition of William R. Castle and other Hawaiian taxpayers, Chief Justice Judd yesterday ordered a writ of mandamus to issue restraining the minister of finance from accepting for the 6 per cent, bonds of the $2,000,000 loan act of 1882 any of the recently coined Hawaiian silver currency, the first installment of which, amounting to $130,000, arrived here from San Francisco on the 9th instant.

The loan act authorizes the issuance, for specific purposes, of bonds to the amount of $2,000,000. The bonds are to bear interest at the rate of 6 per cent, per annum, are to be issued at not less than par, and are made payable, principal and interest, “in United States gold coin or its equivalent.” As the bonds did not find ready sale, the Government finally entered into an arrangement with Mr. Claus Spreckels, giving him the privilege of taking the bonds to the amount of a million dollars and paying for them in Hawaiian silver coins at their face value. And it seems to have been further agreed that these Hawaiian coins should be made on the order of Mr. Spreckels, from bullion provided by Mr. Spreckels, and (as authorized by the Legislative Assembly of 1880) “be of equal weight and fineness with United States gold and silver coins of the same value.”

Provision was made for this coinage at the United States mints, and on the 9th instant the sum of $130,000 in Hawaiian silver coins, principally half-dollars, I believe, was received here by the agents of Mr. Spreckels, to be paid over to the Government for an equal amount in bonds. But the transaction was resisted by certains taxpayers, and a hearing on their petition resulted, as mentioned, in an order to the minister of finance from the chief justice to issue the bonds only for United States gold coin or its equivalent. An appeal to a full bench was noted, but it is not believed that the judgment will be disturbed.

Further shipments of the same coinage are expected, and the matter is attracting general attention.

I am, &c.,