PUBLIC RECORD OFFICE
Reference :-
C.O. 882
ALLY WITHOUT PERMISSM BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
5 PUBLIC RECORD OFFIC
OF THE
DON
Mr. J. H. Gether.
13 July 1898.
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COLONIAL CURRENCY COMMITTEE:
I have not as far as regards the quantity, but if you determine upon changing the standard you must take care that the people who have hitherto been using the old standard should not be penalised, and there is no harm, as far as the State is concerned, if the Straita Government receive in anticipation as many rupees as will probably be required, sending back to India after wards the equivalent in dollars to be turned into
ropees.
678. Your iden is then that these dollars would be melted and coined into rupees ?—Yes.
577. (Chairman.) What was suggested to us by a gentleman who was in favour of the change was that there had been always a great unwillingness to take rupees, but if you had a double rupee which might be regarded approximately as a dollar, that it would be taken as a dollar.
578. (Mr. Currie.) Unfortunately it will not work out as a dollar.
579. (Chairman.) A dollár is equal to 21 rupees about? Yes, when melted.
680. (Mr. Currie.) Do you not think it is very important, if any action is taken by the Straits Settle- ments, that it should have a coin which could always be used for remittance to India ?--Certainly, in my argument I assume that if it is brought within the Indian circle it means that it is in exactly the same condition n India.
581. Would not the Government of India have a word to say about that, because its whole object is to raise exchange, and to limit the production of rupees; they would object to an unlimited increase?—It would not be unlimited, because on and after a certain date the dollars would no longer be taken by the Government in exchange for rupees.
582. What I fear is that there would be a general exodus of Mexican dollars from all countries in the Enst But I would only give a certain time for conversion.
583. What sort of time-a week ?—I should say a fortnight ought to be enough.
584. (Sir R. Welby.) I think there have been iustances of that in different colonies. I remember one which Mr. Meade will confirm-British Guiana, where the Mexican dollar was demonetised, and I do not think any difficulty arose, in three weeks or a comparatively short time.
586. (Mr. Currie.) It must be a very short time, I think.
688. (Mr. Meade.) You allow the period which is necessary to take in the coins that are on the spot, and to prevent an importation as we have just done in the case of the Portuguese rupee in Ceylon ?-If your inquiry includes Hong Kong, the danger which you hint at would there be less, as regards China, any dollars which the natives there use are treated as merchandise, and in the interior they would not know of such a change, and if they did they would not understand it, and these dollars that they have used for convenience to carry about the country in lieu of silver sycee they would still retain.
587. (Mr. Currie.) Do you not think there is a large mass of dollars within reach of the Hong Kong merchants and bankers if there was a premium upon them ?----No,
6HH. You do not think no ?—No.
589. (Chairman.) Would there be special difficulties in making a change as regarda Hong Kong as com- pared with the Straits Settlements on account of the close proximity of Hong Kong to Southern China and the extent to which businem is done between the two in dollars ?—The same difficulty with regard to Singapore would be intensified greatly in Hong Kong, which is even more than Singapore a depôt and a dia. tributing centre.
59). It is a distributing centre to those who are in the habit of dealing in merchandise with dollars A Y, but these dollars, I may explain, a regards China are not treated as a legal tender; they are only
ed for convenience of commerce.
691. Yes, Lut if you had the double rupee and had it called the new dollar and had it linked with India in the way suggested, the scheme is that the value of that coin should not fall as silver fell ?—Yes, quite so. 592. Therefore you would have a divergence between it and the dollar, the dollar being based always on the price at which the Chinaman would
for silver?
take
593. (Mr. Currie.) That is to say, that if the Government of India succeed in establishing the ratio the divergence would be exactly the same as against sterling ?--Yea.
694 (Mr. Fairfield.) What arrangement would you contemplate about the repayment of your dollar notes under the proposed change?-Well, I should propose this, that the banks should be instructed by the Government to call them all in.
595, (Chairman.) And then you would issue new notes on the new basis ?—Yes.
696. Can you give an ides of the amount of notes that are out in banks in Singapore ?-Singapore and Penang together, 1 should think about 8,000,000 dollars at the present time, but I am speaking rather vaguely,
697. Not a very large amount?-There are only two banks there, our own and the Hong Kong and Shanghai, that issue notes, and we are hampered by ou charter as regards the amount we are allowed to issue.
598. I see it gives it here at about 2,700,000 dollars in Singapore of these two banks, and 2,000,000 dollars in Penang, roughly ?—That must have been an unusual amount.
599. That was in December 1891 ?—The amount varies a good deal according to the time of the year; before the Chins new year the circulation very much extends.
600. This would be taken just at, practically, the highest time?--Yes.
601. (Lord Farrer.) In the place you have been speaking of, how would you provide for any increase in the currency afterwards if it were required ?-The balance of trade between India and the Straits would automatically regulate the supply and demand. If the banks found that it paid them to bring rupees from India they would do so.
60%. So that the provision which is made to ensure increase of circulation in India would provide increase of coins for Singapore if it were wanted; that is what you would contemplate?-Yee.
608. That, in fact, by taking gold to the Indian mints you could get the double rupee for Singapore? -Yes.
604. (Sir R. Welby.) You would practically ex- change the present amount of dollars circulating for rupees, and after that trust to the remainder being done in the course of trade ?-Well, India is such
an
enormous country, and there is such a large quantity of coin in circulation there as compared with the Straits Settlements, that I think there is co danger on that point.
605. (Mr. Currie.) I do not understand that you would go in for the double rupee more than the single rupee, would you ?--That is a Inere convenience of trade, the same as if you wanted a florin here instead of a shilling; there is no principle involved in that at all.
606. (Chairman.) The idea was, that if it were a double rupee in India, and a dollar in the Straits, that it would, owing to the habits of the Straits, be loss unpalatable than if you were to attempt to make the rupee the currency ?-That may or may not be, but I should very much question the great benefit arising from making the two rupees into one. After all it would not be the dollar they have been accustomed to, but if they wanted a double rupes that could be sasily ovined.
607. (Mr. Currie.) On the other band, if the object is, as I think you say, to secure a market for this money, the Government of India might not be willing
MINUTES OF EVIDENCE.
to accept the double rupee which they were not used to ?—It would require to be legal tender in India.
(08. That might not suit the Government of India —It is a mere mechanical operation ; I do not think there is any principle involved.
609. (Chairman,) I suppose it would not be probable, if you did no more than exchange the pre- sent currency in the Straits for these double rupees, that any considerable number would return to India? —Well, they would need to be legal tender for this reason, that if the banks at any time required to send rupees back to India as the course of trade might compel them to do, they would naturally expect that the coin which they were sending back to India was legal tender,
610. But I am supposing it to be legal tender there : although some might go from time to time it would not be likely that in relation to the currency of India the percentage would ever be anything but very trifling P―Oli, a mere bagatelle.
611. (Lord Farrer.) Supposing that this plan were not adoptel, and that they were determined to retain the dollar as the ordinary currency at Singapore, and not to go to the Indian mints at all, have you any suggestion to make as to the mode in which the dollar in Singapore could be put upon a gold footing ?—Only if John Bult came into bi-metallism, so that if we brought those dollars home we could exchange so many of them for a sovereign. Anything else to my mind is quite futile. The merchants had some vague idea upon this point, but I think if you at all put them to close quarters you would find their bubbles would be pricked.
612. (Mr. Currie.). It is evident that a trade dollar of that sort would come into circulation only in any particular community where it was a legal tender?— Quite so.
013. (Mr. Courtney.) Why is that; it might come to England ?-If it does it simply has to go to the bullion broker to be sold as silver.
814. As the coin-of the particular country it would there pass from hand to hand generally, but those who tike it and pass it on would take it at the value in the country where it was in circulation If it were legal tender, but Mr. Currie mid it was not a legal tender.
615. (Mr. Currie.) I said, would not this domble rupee conie back to the country where it was minted auil not circulate generally in the East ?—That is another point altogether.
610. I am assuming it to be a monopoly dollar, by which I mean a dollar with a gold value ?—I ses no process at all by which you could work that out practically unless England allowed them to come back here and be exchanged for gold.
617. (Chairman.) Supposing you
had a new British dollar, and you limited the amount of it in coinage, then you might give it, might you not, an artificial value ?--Well, I am not discussing the dollar, but I think we would then be going beyond even what we are attempting in Indin.
618. But take the five frane piece, for example, the five franc pieces here would fetch more than their value in silver, would they not ?—Because we know they can be exchanged into gold.
619. (Mr. Courtney.) In France ?——-Yon. 620. Might not that faw prevail all over Europe if there were no coinages outside France, so that the five franc piece all over Europe might be of such a value?--I have my opinion upon that point, but it is a large economic question which I would rather not discuss DOW.
621. You would have a dollar in Singapore which would pass throughout the East, that dollar being given an artificial value ?—No, excuse me, I did not kay that. What Mr. Currie meant was this, how could that dollar be prevented from rising and falling with the price of silver unless you could exchange it at sapte point for gold.
622. (Mr. Currie,) What I mean to state in this, that I do not think it is feasible that a small community like Singapore should have a trade dollar, or whatever
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you call it, a gold dollar, a monopoly dollar, a re- stricted dollar, and that that should circulate through- out the East, because I think the effect would be that it would come back to Singapore. The reason why five franc pieces would circulate all over Europe is that they would go back to France, and the fact of the matter is, that they have gone back to France. The five franc pieces of the Latin Union have gone back to France ?—That, after all, comes back to the question that unless you have exchangeability for gold at some point or other the silver coins are on a silver basis.
623. (Lord Farrer.) Would that exchange for gold be sufficient if it were to take place only in the Straits Settlements themselves ?-Well, I cannot conceive any such law being passed.
624. (Chairman.) But the five frane piece itself is not, strictly speaking, exchangeable for gold in France ?—No, but it is practically.
625. It is receivable at its gold value, but where could you get gold for it ?—I believe if you go to the Bank of France they will give it you in small quanti- ties. In France, if I take four five franc pieces into
a shop where they know me, they will give me s Napoleon back.
626. (Mr. Courtney.) Let me ask you to exercisa your imagination upon this suggestion: Supposing India adopts, as she has adopted, a system of coining a limited number of rupees, issuing them in exchange for gold at a fixed ratio, so as to give the rupee au artificial value, and that system prevails, as it might prevail, throughout British India. We have got so far. Now, suppose all the countries in the East outside British India were absolutely unsettled, but they became peopled by communities having no political connexion with British India, and yet, fir reasons of commerce, all these new commuuition adopted the British Indian currency, would it not be possible for the rupee so issued to become the sole circulation throughout the East ?--If you gave it a sufficient time I do not see why it should not.
627. Is not that parallel to the suggestion I made, that throughout Europe you might have the five franc piace exalusively circulating, simply because the outside communities were content to receive and ciroulate the coins which are issued from Paris ?-That is theo- retical question that I cannot well give an answer to.
628. (Mr. Currie.) But is not the differenco rather this, that a country like France might do it, but a country like the Straits Settlements, with a population of 200,000, could not do it ?—I must say that I do not see any possible precses except that of linking the Straits Settlements and Hong Kong to India.
629. (Mr. Courtney.). How is that to be done? 630. (Chairman.) Yon mean if a change is to be made which will tend in the direction, at all eventa, of freeing all these countries from the fluctuations of the silver market ?-Yea. There is one thing I should like to say on that subject, which, perlimps, would be of interest to the Committee. Recently there has been a very distinct lessening of the import of Mexican dollars into England. I do not know whether it will continue, but it may be a very serious question for those colonies that are using dollars. In Singapore they have the yen also, although in Hong Kong they have not. We have lately telegraphed to our Hong Kong manager, who is one of the members of the Council there, urging him to have the yen made a legal tender. I have a strong impression that the Japanese are guing to follow India as regards cessation of coin- age of silver, and so it may come that those colonies may be deficient in a circulating medium
031. Why have the Mexican dollars becoine lam of late P-It may be because they find that the mines are likely to give out to a great extent.
082. Is your impression that Mexico has been coining fewer dollars ?—I should say there is some reason why there is a scarcity of Mexican dollars, and the East wants the Mexican dollar. I have heard a rumour that they may put an increased export duty
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Mr. J. H. Guyther
19 July 1693.