Consul Cusack-Smith to the Marquis of Salisbury.

No. 50.]

[Navigator Islands, September 21; confidential, 47; section 2.]

No. 1.

My Lord: I have the honor to report that a certain amount of friction has arisen over the settlement under section 4, Article vi, of the Berlin treaty, as to what is to be the recognized equivalent of the United States dollar in the currencies.

The Samoan Government has wisely decided that the gold currencies of America and Great Britain shall be admitted as equal in value.

The silver money of the United States and Great Britain shall be the only silver currencies admitted.

All other currencies shall be expelled from Samoa.

Baron von Senfft, the advisor to the King, refuses to permit this decision of the Samoan Government to be considered law, but the Samoan Government have up to now stood firm.

Baron von Senfft gave the natives to understand that unless, according to his direction, the Samoan Government admitted the German silver marks, the German Government would retire from the Samoan treaty.

He did not use the exact words, but so the natives unfortunately understood him.

No doubt the question will be settled before I can write again, and with ordinary tact upon the part of Baron von Senfft no difficulty need have arisen.

I have, etc.,

T. B. Cusack-Smith.