Q. David Bowers
"He says, on page 49, 'The United States silver dollar of 412·1/2 grains has never been well received in China, nor amounted to much as a coin in commerce, for the reason that its bullion value is less than that of the old Spanish dollar, and itssuccessor the Mexican dollar, both of which have played a very important part in the commerce of the World.'
"Commerce in China was carried on in Spanish dollars before the separation of Mexico from Spain; since the separation it has been carried on in Mexican dollars.
"Mr. Linderman gives his testimony to the fact already alluded to by Mr. Davis, that the dollar of 412-1/2 grains, notwithstanding we tried for years to carry on ,our commerce with China in that dollar, has never been well received there.
"For a series of years, from 1859 [sic] to 1873, the dollar of 412-1/2 grains was coined in this country, and I apprehend mainly for the purpose of carrying On our commerce with China and the Indies, because it had no considerable circulation in the East. It was found that it could not, be introduced into China to advantage in competition with the Mexican dollar, a coin with which the Chinese had been accustomed to carry on their commerce with the outside World.
"The great body of the Chinese people are semi-barbarous,' and it is no easy matter to break down a custom or prejudice they may have in reference to coin or anything else.
"I may remark here that the Chinese themselves do not coin money. They have no mint. They receive money by weight, or, as in the case of our trade dollar, and perhaps of the Mexican dollar, by count. The attempt was then made, as Mr. Davis has already stated, to carry on our commerce with China with bars of fine silver.
"All silver contains when melted down more or less of the base metals, usually antimony, lead, and copper. These metals or some of them are found in the lodes in which the silver is extracted almost universally. I may say in fact that there is no exception to the rule, so that, after the silver is amalgamated by the process used to extract it from the rock in which it is found, it is not in a pure state. These metals amalgamate with the quicksilver along with the silver. The amalgam is melted down into bars that range all the way from 500 to ,999 fine. These bars are assayed by the assayers of the various companies producing them, and they stamp them with their fineness, weight, and value. When these bars are exported, of course the parties purchasing them will not rely on the assay made by the producer, and are-assay is made to ascertain their value.
"Differences frequently, in fact almost universally, occur between the assays of the producer and the purchaser, and reclamations and troubles grow out of those differences, The committee can readily see from this how difficult it would be to carry on commercial transactions in bars of bullion as they come from the producer, the value of the bullion not being definitely settled.
"If; to remedy this difficulty, the bullion is refined ,at the government mints and the value of the bars is correctly ascertained and stamped upon them, a cost almost equivalent to coinage is incurred, and the bullion is still in an inconvenient form for handling and passing them from hand to hand.
"Now, the trade dollar is convenient to pass from hand to hand; both the buyer and the seller ate content to give and receive it at the stamped value thereon indicated, and, as I have already shown you from Dr. Linderman's book, they are received in China by count; at least, they are so received in very many of the cities and provinces of China, and are received in others by weight without assay, the Chinese people being satisfied that they are of the fineness, andin most cases of the weight which they purport to be, and which the government that has stamped them has certified they are.
"Mr. MULDROW. Why could not that be done in reference to silver bars also? Could they not be stamped by the government with their weight and fineness?
"Mr. BREWER. A silver bar is not so handy to circulate as the trade dollar is.
"Mr. WREN. I have already explained that the expense would be very nearly that of coinage; and besides, they would not be as convenient for circulation. The Chinese have no mints for coining, and if they received silver bars they would be compelled to send them abroad for coinage, You will, therefore see that the, trade, dollar is far more valuable-being ready for circulation from hand to hand-than silver bars could possibly he; but the best evidence of that is, that trade dollars command, and always have. commanded, a large premium over bullion in bars in San Francisco, the place there they are most wanted, the place from whence they are exported, and the place at which they areprincipally coined.
"Mr. CLARK, of Missouri, Both you and Mr. Davis have alluded to the point that-the value of silver would be increased by the coinage and exportation of the trade dollar. What other effect would it have on the commerce between this country and China? In 'other words, what good results, besides that of increasing the value .of silver, would it produce?
"Mr. WREN. One of the most prominent ideas that suggests itself to my mind is this: that it enables our merchants to make a profit on the silver bullion which they purchase for the purpose of having it coined into trade dollars, and it affords them a better and cheaper medium with which to carry on trade with China and the Indies than they would have if the coinage of trade dollars was abolished.
"Mr. DWIGHT. Are the trade dollars exported for anything except in payment of purchases made in China?
"Mr. WREN. I think not, to any extent.
"Mr. CLARK, of Missouri, As I understand you, the coinage Of trade dollars comes into competition with the trade dollars of England and Japan.
"Mr. WREN. Not only that, but our trade dollars are better received' in China than the trade dollars of either Japan or England.
"Mr. DWIGHT. That probably arises from their being worth a little more, and not costing the Chinese any more. "Mr. CLARK, of Missouri. Is there any antagonism between the cities of New York and San Francisco in their contest for the commerce of the world, which would cause it to be for the interest of the one to have trade dollars and for the interests of the other not to have them?
"Mr. WREN. I think not. I think the trade dollar is as important to the commerce of the city of New York as to the commerce of San Francisco.
"Mr. DWIGHT. Would not the Chinese take the standard dollar by weight?
"Mr. WREN. No, sir; except at a discount. They take the trade dollars by count; that is, they prefer them for dollars, as they purport to be on their face.
"Mr. DWIGHT. But would they not take the dollars of 412-1/2 grains by weight at the rate of their real value?
"Mr. WREN. They would hesitate to do so on as good terms as they take the trade dollar, because they have been accustomed to carry on commerce with foreign nations in 'dollars' of nearly the weight of the trade dollar, and all their business has been adjusted to that dollar. It is what they have been accustomed to for probably one hundred years or more.
"Mr. DWIGHT. As a matter of convenience I suppose they would prefer it, but would they not take a lighter dollar at its real value as compared with the heavier one?
"Mr. WREN. It appears that they would not and did not, if Dr. Linderman is correct, and I apprehend that he is. If they had taken the standard dollar at its weight, and if it had been as convenient a medium for the transactions of commerce with China and India as the trade dollar has proven to be, then the trade dollar would never have been adopted. The coinage of the trade dollar was authorized principally because those people would not take the dollar of 412-1/2 grains.
"Mr. DWIGHT. They would not take it, of course, at the same value as the Mexican dollar, while the trade dollar, being a little heavier than the Mexican dollar, they would take it.
"Mr. WREN. Most of the principal reasons for the passage of the act authorizing the coinage of trade dollars, and the results flowing from that coinage, are very clearly and fully stated in Dr. Linderman's book before referred to, pages 47 to 59 inclusive, and are, in my judgment, conclusively in favor of the continuance of their coinage, with proper restrictions."