Consul Cusack-Smith to the Marquis of Salisbury.

No. 52.]

[Navigator Islands, October 16; confidential, 52; section 1.]

No. 1.

My Lord: With further reference to my No. 50 of the 15th instant, I have the honor, to inform your lordship that, although the currency question is still awaiting final settlement, yet satisfactory progress has been made.

On the 12th of August the municipal council passed a resolution adopting the rate of exchange for gold coins fixed by the consuls in May, 1890, and admitting American, [Page 518] Chilean, British, and German silver, which, however, was only to be legal-tender up to the amount of $10.

This resolution would have enabled the German silver mark to flood the country, as it has done in Tonga, to the great inconvenience of all British traders.

I therefore proposed the following amendment at the consular board, and induced my German colleague to give it his support, and the consuls passed it unanimously:

“That the currency in use and the rates of exchange be for the present—

The United States gold coinage,

The British gold coinage, the sovereign to be equal to $4.86 United States coin.

The German gold coinage, the 20-m ark piece to be equal to $4.76 United States coin.

Only United States silver and Chilean, at the rate of $7 to the $5 United States coin, to be accepted, and without limit.

That this met the difficulty, for the time being, at all events, is proved by the fact that the municipal council, with the sole exception of the president, were unanimous in adopting the amendment in lieu of their own resolution.

This rate of exchange is only for the purposes of all taxes and duties, etc., in the municipality, and does not interfere with the right of traders to employ any coinage most suitable to their requirements.

King Malietoa having, by letter to each of the consuls, complained of the action of Baron Senfft von Pilsach in refusing to accept the decision of the Samoan Government reported in my No. 50, and having asked our advice, we, in a joint letter on the 25th August, forwarded to the King a copy of the rates of exchange and the currencies adopted by the municipal council at the suggestion of the consular board. In this, as in all other matters, the consuls have worked together with the most perfect harmony and unanimity.

I have, etc.,

T. B. Cusack-Smith.