Q. David Bowers
"Mr. DAVIS. Yes, sir. I hope that the committee will not determine to cut off this, which is a very valuable outlet for our silver product. It seems to me that it would be unwise as it would be to forbid shipping boots and shoes to the West
Indies, or calicoes to Mexico. If the coinage of trade dollars is discontinued, you cut off the only popular and valuable method we have ever had of shipping our bullion product to China. We have got possession of the market now. We have worked hard for it. We have spent a good deal of money and taken a great deal of trouble to establish the business. The coin has become popular in China; the Chinese like it, and if we cut it off the English and Japanese have trade dollars of their own, and stand ready with their mints to put their trade dollars in the market, and to get the same prestige there as we have got. And then, of course, whenever this country is fully supplied with the standard dollar, and we resume the coinage of the trade dollar, we have got to go through with the same contest again.
"Mr. MULDROW. How do the English and the Japanese trade dollars compare in fineness and weight with ours?
"Mr. DAVIS. I think they are about the same. The Japanese yen is the equivalent of our standard dollar, and the Japanese trade dollar and the Hong-Kong trade dollar are, as I understand, the exact equivalent of our trade dollar. I speak only from general information. If you find it absolutely necessary to cut off the coinage of trade dollars, and if the committee is unable to see any way to get out of the present condition of things without suspending the coinage of the trade dollar, let it be suspended but not abolished. Let it be suspended for a few months only, until those other mints are got in operation, but I pray that the committee will do no more than that.
"Mr. DWIGHT. How would the suspension of trade dollars for six or twelve months affect you?
"Mr. DAVIS. I do not think that the suspension of the coinage for six months would result in any very serious injury, but I should hope that it would be found possible to get one of these other mints in operation inside of that length of time, so that the San Francisco Mint could be allowed to resume the coinage of trade dollars and keep up this business which is so valuable to us.
"Mr. DWIGHT. I understand you to say that there have been more trade dollars coined than are really necessary; and if so, would not a suspension of their coinage relieve you?
"Mr. DAVIS. The secretary of the Treasury can tell you what amount of trade dollars there is on hand at San Francisco. I have here a newspaper slip, which came to me last night, showing the quotation of trade dollars at San Francisco at 97 and 98, and of Mexican dollars at 94 and 95, so that the trade dollar stands three cents higher than the Mexican dollar. I only mention that to show you what a character our trade dollar has obtained. As a businessman it seems to me that it would be unwise to throw that advantage away, and to let any other people come forward and take it. I think that we should maintain the fair ground of vantage which we have now in the bullion business, and not be remanded back to be the mere subsidiaries=the mere handmaids-of the London market and of the London bankers. This is a matter of vital interest to our people.
"I thank the committee for the opportunity which is given me and for the patience with which it has listened to me.
"Mr. WREN said: Mr. Chairman, if the coinage of the trade dollar shall be continued, its coinage should be regular, and the secretary of the Treasury or director of the Mint should, at no time, suspend its coinage for any considerable period, for the reason that, whenever its coinage is suspended for any great length of time, it rises in value from 3% to 5% in the San Francisco market.
"The committee will readily see how easy it would be, if the power to suspend were uncontrolled, for "corners" to be made for speculative purposes. This has happened in San Francisco more than once, although I presume the director of the Mint never intended that such a result should follow a suspension of its coinage. I presume, of course, that he is honest, and did not intend that any such result should follow the suspension of its coinage.
"The trade dollar is selling today in the city of San Francisco at 97 and 98 cents for exportation to China, six cents over its bullion value in London; and for 99 cents in New York, seven cents over its bullion value in London.
"It seems to me that, with these facts before us, nothing further is requisite to show the importance of the continuance of this coinage, with a proviso, however, that the coinage shall be regular.
"I think that the suggestion of the chairman, however, on that point was most excellent, and for a reason additional to that given by him. As I understand his reason for the suggestion, it was for the purpose of preventing the circulation of the trade dollar in the eastern states, thereby preventing confusion and embarrassment incident to the use of the trade dollar and legal tender at home, possessing different values.
"I think the trade dollar will soon be above par for exportation to China and the East Indies. Of course, when that occurs, none will come east.
"Mr. CLARK, of Missouri. Can you give any reasons why there have been shipments of trade dollars to New York?
"Mr. WREN. I cannot, although I have heard two reasons given. One was that some 2% or 3% could be made by their shipment here, but precisely how I never heard. Another reason I heard given was that trade dollars were sent to New York for the purpose of influencing adversely legislation on the silver question. You will all recollect that the newspapers which were opposed to the passage of the silver bill, made a great ado about the inconvenience of the trade dollars which had been shipped to the eastern states. Whether they were shipped here with any such object in view or not, I of course do not positively know. I believe no shipment was ever made before those made just prior to the passage of the silver bill, and none has been made since; at least none to any considerable amount.
"At the price at which the trade dollar is now selling, both in San Francisco and in New York, and at which it will probably sell in the future, it seems to me highly improbable that any eastern shipment is liable to occur again.
"If the views taken by the silver men are correct, and silver bullion-after the law shall be in operation a sufficient length of time to affect the market-shall rise to 58 or 59 pence per ounce, English standard, the trade dollar will certainly rise with it and be above par, and all motive to ship it east will cease.
"And now, in relation to the trade with China. Dr. Linderman wrote a little book, entitled 'Money and Legal Tender,' which was published only last year, and, I believe, in the latter part of last year. He devoted one chapter of this book to the trade dollar, the reasons of its coinage and the results of its coinage; and it seems to me that no stronger case can possibly be made out in favor of the continuance of its coinage than those given in this book. If the book had been written two or three years ago, conditions might have changed, so that what he said thenwould have no application at the present time; but he brings the whole matter almost up to the present date in his book.