Mr. Van Valkenburgh to Mr. Seward.
Sir: In my dispatch No. 108, of the 23d ultimo, I informed you that, owing principally to counterfeits, the paper currency issued at Osaka by the Mikado’s authorities had become worthless. The stagnation in business in that city and at Hiogo, consequent on the discovery of those numerous counterfeits, was fortunately only temporary. The paper was promptly taken in payment of dues at the custom-houses at those two places; and it continues to this day to circulate, though at a depreciation, which has lately fluctuated greatly, with a downward tendency. At the latest date from Hiogo (the 14th instant) it was quoted at 45 to 50 per cent. discount.
This Osaka paper currency has been offered by foreign merchants in payment of duties at the custom-house at this port, but the Japanese authorities declined to take it.
There exists at present, both among the foreign and Japanese [Page 839] merchants, some apprehension that the local authorities at Yedo and this port will attempt a forced circulation of paper currency among the natives at an early day. That this apprehension is not unfounded is sufficiently evident already, though the success of such an experiment remains doubtful.
In the territories of Tokugawa metallic currency has, from time immemorial, been used in effecting exchanges; but in the Daimios’ territories paper currency, in the greatest variety, was almost exclusively used. The attempt to pass irredeemable paper in this part of Japan would be such a breach of custom, and so hazardous withal, that I hope it will not be made; and, so far as our merchants are concerned, I am inclined to think, as they are in possession of a general knowledge of the state of affairs in this country, that the best course will be to leave it to their option to take such paper (if issued) or not, as they may deem most consistent with their interests.
I have the honor to be, sir, your most obedient servant,
Hon. William H. Seward, Secretary of State, Washington, D. C.