Q. David Bowers
"And now I want the committee to reflect upon the population of the East. China contains two or three hundred millions of people-nearly one-fourth the population of the world-without a coin of count; and if we can give them a coin that will be absorbed into the mass of that population, and will serve as the coin of count, let me appeal to you, gentlemen-you who are so earnest in the desire to rehabilitate silver, and to put it on a level with gold=to consider the enormous outlet which you are opening up for our silver production, and for the absorption of that silver demonetized by the nations of the Old World; There is no field of silver consumption in the world equal to the field that will be obtained if we can make the people of China and of the nations south and west of China take the trade dollar, and do their commercial transactions with it as a coin of count instead of doing it on a bullion basis.
"Mr. MULDROW. How would the absorption of silver in China increase the volume of silver circulation in this country, which is the object of our legislation?
"Mr. DAVIS. We want to bring gold and silver on the same level-that is what we want now-:to increase the great foundation on which all business stands-to double the foundation. We can do that by increasing the consumption of silver in China, and thereby putting silver and gold upon a level. We do not want, as I understand, to enlarge our own standard of money unless we can maintain it.
"Now with reference to the effect upon our commerce. The circulation of the trade dollar in China has increased the value of the bullion product of the United States. According to the testimony of bankers, as given to the mint commission in 1876, it has increased the value of our silver bullion product at least 2% and probably more. On this point I will refer the committee to the Annual Report of the Director of the Mint for the fiscal year ending June 30, 1877. From page 46 to page 5.7 of that document there will be found the testimony of leading bankers relative to the purchase of silver bullion, &c. I read from the evidence to Mr. Tompkins, agent of the Hong Kong and Shanghai Bank of San Francisco.
"Q. What effect on the bullion-market here has the coinage of trade dollars had, in your judgment?-A. It has been of great benefit to the silver producers in bringing silver up in this market.
"Q. It has been the means of converting a large amount of silver into a convenient form for shipping?-A. Yes, sir. ,
"Q. They have, to a great measure, taken the place of the silver circulating in that country?-A. Yes, sir; they have not thoroughly supplied it, but they .are crowding it out of the market, and taking the place of it to some extent.
"Q. Trade dollars are now practically current in Hong Kong, Canton, Foo-Chow, Ah-Mow, and Ong-Chow?-A. Yes, sir.
"Q. And are working their way as far south as Singapore?- A.Yes, sir; the largest shipments are made to See-Kung for the purchase of rice.
"Q. How much do you think the silver market here has appreciated? How much benefit are the producers of silver deriving today from the mere fact that the government is coining trade dollars?-A. I should fancy fully the cost of transportation between here and London-2%.
"That is, he says, the silver bullion product of the United States has appreciated 2% in value by the coinage of the trade dollar. Now, I will read to the committee from the evidence of another gentleman, Mr. Hickox:
"Q. Would your testimony confirm that of Mr. Tompkins in regard to the additional value given to silver in the market here?-A. I think there is no possible question but that the trade dollar has made a very large demand for silver, which would have been a drug here. Formerly, the only means of getting silver to China was in refined silver bars, and those could only be handled by a few persons, by large importers and heavyshippers. Now the trade dollar forms the means of shipment for small dealers. They are shipped in amounts of $100 and upward, and thousands of them are carried away in the hands of passengers privately.
"Q. Then, in your opinion, the fact of the government coining trade dollars at the mint here has added to the value of the silver production of the United States very appreciably?-A. There is no question of that.
"Q. Mr. Tompkins stated that he thought that it had raised the value about the cost of the freight and insurance from here to London, which was about 2%. Is that your opinion? A. I should think that it had really made a value for the silver greater than that. If there were no trade dollars coined bar silver would take a range of certainly 4 or 5 and perhaps 6% below its present rate.
"So that, if these statements are true, and if our silver product amounts to 40 millions per annum, the coinage of the trade dollar has given to the United States a clear profit of $800,000 per year.
"The CHAIRMAN. You mean to the people of the United States?
"Mr. DAVIS. Yes, sir; to the producers of silver, besides making us independent of foreign nations, and making our own country one of the centers of bullion business instead of being simply a subsidiary feeder of the London market.
"There are two objections made to the coinage of the trade dollar, one of which I have already considered, and that is the fact that if it goes into circulation it discredits the silver dollar of 412-1/2 grains. I do not think that it is a valid objection because it is a matter which can be easily controlled by legislation. If Congress legislates to the effect that the trade dollar shall only be coined in limited quantities, and shall be kept under control of the government until it is put on board of a vessel and delivered only for export, I think you will get over that difficulty entirely.
"Now, with reference to the lack of mint capacity, there is a valid objection. Of course, if you coin five or six or seven hundred thousand trade dollars per month, just by so much less can you coin the standard dollars of 412-1/2 grains. We only point out to you the great value of this trade dollar to the country, and we ask you to restore the mint at New Orleans, or to build a mint at Indianapolis, or somewhere else, and take such measures as may be in your power to provide for what you may deem needful to the country at large. The trade dollar is an exceedingly valuable adjunct to the business of San Francisco, and the continuance of coinage will raise the value of silver from San Francisco by keeping open this outlet for our own silver, and it will leave the government free to save the transportation on silver from San Francisco to New York by purchasing at New York the silver which has been demonetized in Europe, and which is now offered for sale. The secretary of the Treasury expressed some surprise at the fact that silver is higher at San Francisco than it is at New York or London, but it is perfectly natural that it should be. San. Francisco is nearer the market. San Francisco is one of the centers of production. London is another center. London is as near to India as we are to China, and silver ought to be a little higher in San Francisco than in London, because the cost of transportation from London to India is about 1/4 to 1/2% higher than the cost of transportation from San Francisco to China. Therefore, silver ought to be a little higher in San Francisco than it is in London. It could not be otherwise by the legitimate laws of trade, because it takes less money to bring it into market.
"Mr. MULDROW. What is the difference in the value of silver at San Francisco and New York?
"Mr. DAVIS. I cannot tell you. I only know that silver is held higher in San Francisco today than it is in New York. The secretary of the Treasury is under the impression that there is a corner in silver out there. I do not know but that there may be, but I know that the production of silver is considerably less than it has been.
"The CHAIRMAN. About what amount of trade dollars would meet the demands of business? You say, limit the amount to the monthly demand.
"Mr. DAVIS. Let me repeat the figures of the shipment of trade dollars for the last year. I think it would average, at today's condition of the market, from $700,000 to $750,000 a month. But if the future is at all like the past, the demand will be very much larger if we continue coining the trade dollars as freely as the Chinese will take them.
"Mr. CLARK, of Missouri. Can we not coin them too freely?
"Mr. DAVIS. Yes, sir; but the figures that I give you are the figures of the trade dollars actually shipped to China during the calendar year. I telegraphed to the Pacific Mail Company at San Francisco to be sure and give the exact figures.
"Mr. CLARK, of Missouri. I take it that if the Chinese demand for trade dollars was equivalent to the supply, none of them would go to New York at all.
"Mr. DAVIS. No, sir; but allow me to say to you that there is a large surplus of the coinage of trade dollars over and above the shipments.
"Mr. BREWER. You mean that there have been more trade dollars coined than there have been shipped?