November 18, 1897.]
porters and consumers generally have always been in favour of fixity.
4-In considering the subject of fixity of ex- change it has been our endeavour to do so mainly in the light of local business experience, and with this in view, we have investigated the latest published trade figures for this colony, and now record the conclusions we are led to.
5.-The years 1890 to 1896 have been selected for examination as the period-
(a) shewing the most marked decline in the price of silver.
(b) including the repeal of the Sherman Act in America in 1893, and the closing of the In- dian Mints, on 26th June, 1893, and
(c) affording the latest and most reliable sta. tistics.
6. It is believed to be a prevailing idea amongst some Chinese merchants in the Straits, that the effect of the fall in the gold value of the dollar has been to enhance local prices of produce sold by them, and that they therefore, as sellers, have benefitted by the decline; but if the course of prices from 1890-1896 (Appendix D) is studied, it will be seen that, on the whole, producers have not only not benefitted, but are actually in a worse position, with a dollar below 2/- than they were when the value of that coin was above 3/-.
CHINA OVERLAND TRADE REPORT.
13.-The importer of European goods has therefore only just maintained his trade as measured even in dollars, whilst his margin of profit has shrunk through the consumers' inabi- lity to pay the increased prices required by the fall in exchange.
14. He has further to reckon with increased expenditure, and thus the present condition of affairs has become acutely serions, and points to a still further and speedy decline of our once flourishing import trade with Europe, a position of matters for which, in view of the importance of our trade with the mother country, an early and thorough remedy should be devised.
15.-It may be here mentioned that, with the view of meeting the inability of the native con- sumer to pay sufficiently high prices, goods of lower quality, and of reduced weight and measure, are now being more freely introduced, a feature likely in the long run to prove de- trimental to the trade of the colony,
Netherlands India, Increase $5,528,000=24 per cent.
16.-The bulk (see Appendix G) appears as exports to other gold standard countries, having merely passed through our hands. Had the quantities and gold prices of these imports remained stationary, they would have shewn an increase of 37 per cent.-the difference in ex- change between 1890 and 1896—whereas the increase is only 24 per cent although the quantities in 1896 were distinctly larger than
in 1890.
17.-It may further be remarked with refer- India, that the increasing uncertainty of our ence to our import trade from Netherlands exchange appears to be neutralising the ad- vantage of our natural position and shipping facilities, and tending to prevent the trade from coming past Java and Celebes ports. With fixity of exchange, this trade should be capable of enormous expansion; in 1896 it reached $27,984,000 out of our total import trade of $186.196,000.
7.-Those who have followed the course of the Singapore produce markets during the period referred to, cannot but admit that prices are, really, only temporarily affected by any fiuctuations in exchange, ie., that a sudden drop, or a rapid rise, merely causes a temporary rise or fall in the value of any article of pro- duce, and that, eventually, prices do readjust themselves according to the usual laws of sup. ply and demand. On the other hand, it has to be admitted that the effect of the decline in exchange-more rapid, as a rule, than the cor- responding fall in the gold value of produce in Europe and elsewhere—has, undoubtedly, been to enormously stimulate production, and this
British India, Increase $6,135,000=24 per cent. has naturally been a source of profit to the
18.-Shewing that we remain buyers of their colony, and to the Peninsula, although the in- dividual producer may have suffered. The sub-products in spite of falling exchange. Opium, gunnies and Indian food stuffs are absolute committee have therefore to take this intó con- sideration in their recommendatious, and, in necessities, and roust be had at any cost. suggesting fixity, the aim should be to give the dollar such gold value as ruled when the trade of the colony was in the most flourishing con- dition as regards volume of exports.
8.-Appendix F gives some details regarding the movements of various articles of produce during the years under review, and the to al exports of those articles in each year, from 1890/1896. From these figures it will be seen that the year 1896 generally shews the largest exports, and the average value of the dollar for that year was as nearly as possible 2/21.
9-From the trade statistics published by Government, and from the Singapore and Penang Exchange Market Reports, the figures given in the various Appendices have been taken, and the following remarks are based
thereon:-
10.-Imports (Specie excluded) have increased
As follows:-
1890 S141,435,000 1896 $186,196, 00
an increase of $ 44,761,000
of this only
8.12.624,000 was from gold stand- ard countries, the remainder 8. 33,564,000 being from silver standard countries, -8 45,188,000=31 per cent. (the slight difference in these figures being caused by the omission of the Inter-Settlements trade figures.)
Taking first the increase from gold standard countries $12,624,000.
United Kingdom, Europe, America, and Aus. tralia, Increase $961,000-3 per cent.
11. This becomes a decrease of 34 per cent. when the difference in exchange between 1890 (38. 54d.) and 1896 (2s. 24d.) is taken into ac- count.
12. Since 1896, a further fall in exchange, of about 17 per cent., has occurred, and if, follow- ing on the experience of the previous seven years, the trade overturn in dollars does not increase, a still further falling off in the sterling value must be expected in our import trade with these countries.
|
19.--Fixity of exchange, especially if at a higher rate than the present dollar value, would undoubtedly benefit the trade with British India.
389
Japan, Increase $3,056,000=411 per cent. 27. This large increase is due chiefly to the development of the Japanese coal trade, and, in a smaller measure, to the import of manufactured goods.
British North Borneo, &c., Increase $1,389,000 58 per cent,
28,-Due largely to the additional quantity of sago flour exported from Borneo,
Cochin China, Increase $2,830,000—100 per
cent.
29. Of this $1,526,000 is due to rice and $998,000 to fish.
Siam, Increase $3,711,000-35 per cent. 30. Of this $3,477,000 is due to rice. 31-Reviewing the whole of our import trade, as above detailed, we have arrived at the con- clusion that fixity of exchange would, on the whole, be decidedly advantageous to the import
trade of these Settlements.
32.-Exports have increased as follows Total 1890 $116.511,000
1896 161,777,000
an increase of $45,266.000
of this
the remainder
[countries
33,113,000 is to gold standard 11,010,000 being to silver stand- ard countries $ 44,123,000-41 per cent. (the slight difference in these figures being caused by the omission of the Inter-Settlement trade figures.)
We take first the increase to gold standard countries, $33,113,000 as follows:-
United Kingdom, Europe, America, and Aus- tralia, Increase $17.514,000-37 per cent.
33. These countries are nr chief customers for Straits Produce, so called.
34.-The dollar totals if converted into ster.
ling, viz.:
1890 $46.450.000 a1 3/54-£7,983,000 1896 63,964,000 at 2/21= 6,962,000 · shew a marked decrease whereas quantities (Appendix E.) shew a very large increase in almost all the leading articles of produce.
35.-Although these figures skew an increase in dollar totals, it is our opinion that more work is being done for less profit or at all events without any corresponding increase of profit and the higher cost of living must also be taken into consideration.
36. The constant fluctuations in exchange We now come to the increase from silver
thoroughly upset and disorganise this business, standard countries, $32.564,000.
Malay Peninsula, Increase $16,711,000=77 per | and, from a merchant's point of view, there can be no doubt that the elimination of this element of uncertainty would be generally hailed with much satisfaction.
cent.
20.- All imports from the Peninsula neces- sarily passing through the ports of the Straits Settlements, these figures deserve particular attention, shewing as they do, with exceptional clearness, the development of a country under the influence of a depreciating enrrency.
21 The increase is largely due to one article, namely, Tin.
Native States being practically the measure of 22.-The condition of the tin industry in the their prosperity or adversity, some enquiry into the circumstances of that part of the population dependent on this industry, may be instructive. 23-It is alleged that tin miners in the Native States were more prosperous in 1890 than in 1896, and that any temporary advance in the dollar price during that period was than corresponding counteracted by a more increase in the cost of labour and food, and was lost through over production. In 1896 many miners were forced to suspend operations and from investigations, your Committee are led to believe that deprecition of the dollar has not benefitted the producer, except temporarily, and that fixity of the dollar. if at a reasonably low rate, would better serve the miners, by ensuring more steadiness in the price of tin, as well as in the cost of labour and food.
Hongkong and 1 hina, Increase $1,867,000=31 per cent.
24.-These imports may, in the main, be taken as representing the requirements of our Chinese population.
25.-As this population has not grown 31 per cent. during the period in question, it may be assumed that this increase represents the en- hanced cost of imports from these countries, and this appears to be borne out by local ex- perience.
26.-The adoption of a gold standard would probably not injuriously affect this trade.
'
37. The producer has much difficulty to con. tend with from the same cause, as will appear from Appendix D, which shews monthly prices from 1890 to 1896 of the leading articles of pro- duce.
Netherlands India, Increase $14.750,000-83 per cent.
38.--This expansion of trade with a gold stand- ard country. in spite of the decline in the value of the dollar, is, in considerable measure, due to Java having required to import rice to compen- sate for short crops, and, in some further mea- sure, the increase is doubtless also due to the
advantages of our natural position and shipping facilities, already mentioned in connection with our import trade with Netherlands India.
British India, Increuse $840,000—11 per cent. 39 merely shews that a depreciating dollar has given us but little assistance in this direc-
tion.
Turning to the increase to Silver Standard Countries. $11,010,000.
40.-It may be remarked that the increase, with exception of that in the case of the Malay Peninsula, have been insignificant and require little comment.
Malay Peninsula, Increuse $8,033,000—78 per
cent.
41 corresponds with the increase in Imports (77 per cent.).
42.-Hongkong and China, Increase 81,446,000 11 per cent.
Japan, Increase $134,000=40 per cent. 13-1s really of insiguificant volume although the percentage is large.
4-British North Borneo, &c., Increase $592,000—30 per cent.
Siam, Increase $1.387,000—19 per cent,