PUBLIC RECORD OFFICE
Reference :-
TC.O. 882
5 PUBLIC RECORD OFFIC
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
DON
Mr. W. Kenrick.
26 July 1398.
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COLONIAL CURRENCY COMMITTEE :
800. (Chairman.) Any contraction of this sort is not such that would have any effect upon prices, is it ? No, I think not.
801. (Sir R. Welby.) When the dollars into
go Canton, do they ever come back again, or do they get used up? Oh yes, they come back.
802. (Mr. Courtney.) Altogether? That is im- possible to say, but there is no great appreciable absorption.
803. But is there, as a matter of experience within the last 20 years y, a constant importation of Spanish dollars into Hong Kong and an exportation to China, do they flow through Hong Kong in the course of a year?-To some extent, but when sycee is scarce, that is, the silver in the form of the Chinese shoes, Mexican dollary and broken silver are made into Bycee.
801. Does that operate to cause on the balance throughout a year an inflow into Hong Kong from silver-producing countries, from Mexico or wherever it comes from ultimately, and an outflow into China? -Undoubtedly there is a consumptu going on.
805. And if that production stopped in any way in Mexico there would then ba real hindrance?
-There would be less coin certainly.
808. And the current demand for silver to go into China would be impeded?-A very slight difference would make the Chinese simply take bar silver.
B07. (Sir R. Welby.) I have heard that the dollars coming back from China into Hong Kong luse a certain amount of value by their being so much chopped, stamped ?--Chopped, that is so.
08. That is the case?—Yes.
809. (Chairman.) What happens to those dollars which are so stamped or clipped or deficient? They, in a great measure, find their way up to Foochoo and go into the large districts where the chop upon the dollar gives it an additional currency; it is looked upon as less likely to be spurious,
810. So the Chinese clipping, so to speak, is made up for by the additional currency that is got for it in China ?—Yes.
811. (Mr. Currie.) The chop means the stamp of a Arm 7-That is all.
812. It is rather the endorsement of a firm which he recognisen, and therefore takes it as good?— You.
813. What have been the fluctuations since the action of the Government of India in Chins ex- change?-The dollar has fallen from about 21. 8d. to the quotation yesterday of 2s. 6d, but I think it wont some four weeks ago, I am not sure, to what, the papers will show, but I think it went to 2d. under the present rate.
814. I think it went to 2. 4d. 7—2s. 4d., that would be about it.
815. Would it in your opinion be a great distur bance in trade, a sudden tull of 1ąd. ?—Undoubtedly. 816. And do you apprehend that no such fall is possible in the future ?—No such violent fall; it may go to a lower rate, but it will be a gradual one,
817. What would be the effect of the repeal of the Sherman Act, for instance ?—It would be a slump, I think, for a time.
818. And would that be no disturbing element in the China trade or the Hong Kong trade?—It would be a disturbing element until it was overcome; being expected it may not have quite the violent effect that is noticipated.
819. But I understand you to think that in spite of the action of the Government in India, and in spite of the anticipated action of the Americans, stil! silver is the best standard of value for these countries ?—It is the only one,
20. That remains to be seen, does it not ?—Well, you could not establish it in Chins, for instance, the country and the Government are not equal to it.
M21. (Chairman.) They could not do it? They cobi not do it.
822. (Mr. Currie.) Is it not the case that the Japanese are about to try and do it?-I understand not.
823. It has been so said?—Yes; I think it is not contemplated.
824. (Chairman.) Is China a great absorbent of silver; does a large quantity of silver go there that never returns?-Yes, in the past, of recent years, the balance of trade has caused China to give out bullion.
825. So that she is not a perpetual absorbent of siiver ?-Not perpetually.
828. (Mr. Currie.) To whom does she give bullion principally -India.
827. (Mr. Courtney.) How long has that been going on?-From the beginning of the China trade as regards India.
828. (Mr. Fairfield.) Has not China absorbed all our old Hong Kong dollars; they have disappeared? -The quantity was never great; it in not calculable; it is of no value.
829. (Chairman.) Have you any opinion about the expediency of coining a British dollar; that has been suggested by some witnesses ?-I can conceive the advantage of a dollar simply as a quantity of silver guaranteed by its stamp and its being issued by an English mint being an advantage in supplying both the Straits Settlements and Hong Kong, and very possibly in time a considerable portion of China with a dollar instead of having to weigh silver, if there was a dollar or a coin of recognised value in silver, but I cannot imagine that any advantage would be derived from giving that dollar a gold value.
830. I am not speaking of the gold value at present, but merely as to the question of supplying silver cur- rency 7-I believe it would be of advantage.
881, (Sir R. Welby.) But is it not a better thing for any State to get ita coin coined for it free rather than go to the expense of coining for itself, because, I think, if you look back at the short history of the Hong Kong mint, it failed owing to the heavy charge it was on the Hong Kong Treasury ?—Yes; combined with the fact that the Mexican dollar, which was a favourite dollar, could be obtained cheaper than we could produce a dollar.
832. That is exactly my argument ?-In the event of feeling satisfied that the Mexican dollar can be obtained at the value of silver, with a small seignorage for its coinage, there would be no necessity to contem- plate another dollar.
833. (Chairman.) Would it not be very much to the interest of the Mexican Government to get rid of as much of their silver as they can by coining the Mexican dollars, which they can pass off 7-It does not admit of argument, I think; if they want to part with silver, and could part with it in that way; it would be the best form.
834. (Mr. Currie.) Did not the Americans try the experiment that you spoke of, of coining a trade dollar 7-Yen.
835. Has it answered ?—I cannot say.
836. (Chairman.) They issued those trade dollars for the purpose of supplanting the Mexican dollar, and afterwards called them in ?-At one time these trade dollars were sent to some extent to China; there was a premium paid to get them back, and they wo returned to America; that is some years ago.
837. (Sir R. Welby.) Was there not this din- advantage in the trade dollar, that it was five to six grain lighter than the Mexican dollar ?—I do not remember.
838. (Mr. Curric.) The dollar that yon propose, I understand, would be a freely minted dollar, thint is
to say, that anybody bringing silver might have it made into these new dollars?—Yes.
839. But what advantage would that be to the person making the dollars?-The only advantage would be probably a signorage that would give a amall profit; I do not think it would be advisable to make the profit large.
MINUTES OF EVIDENCE.
840. And that dollar you would propose to make the legal tender of Hong Kong, and the Straits Settle- ments ?-And the Straits Settlements.
841. Wouki there not be a danger if you did that, that it being ■ legal tender in this country, and having what the French call force liberatoire, that they would all come there to an inconvenient extent ? They would always be simply the value of silver.
842. They would be legal tender; I having a debt to discharge in Hong Kong or the Straits Settlements could tender this ?-Yes. There would be no incon- venience through that.
843. Except that that Government would have staked its credit upon it; it would have made it legal money, and might not the effect have been what we believe the effect has been in Indin, that a much larger quantity will arrive than will be convenient for these countries ?--I think not. It would be the same with the Mexican dollar now; the Mexican dollar is Igal tender, why do not all Mexican dollars find their way to Hong Kong?
844. (Chairman.) Do you know where the Japanese get their silver that they coin into yens from princi- pally?-From the markets of the world.
845. All over 2-All over, wherever they can bny it cheapest.
846. It is chiefly from Mexico and the United States ?-A large quantity until recently went from San Francisco; probably now it will go again. It is nhort pasange and a cheap one,
847. (Mr. Courtney.) Who buy it ?-The Japanese buy it.
848. I mean the Japanese Government or the Japanere merchants?—The Government.
919. (Mr. Currie.) The Japanese have an agency in London for this purpose ?-Yes, or they may buy it through a foreign bank.
850. (Mr. Courtney.) But the actual purchaser is the Government?-The Goverment.
851. What regulates the amount they buy ?—I think their own caprice as much as anything.
852. It is not a case of free coinage?—No. $53. They coin just as much as they think judici- ous?—I presnine 80.
854. But do they make any gain out of it?— Doubtless; what gain they make I am not aware.,
855, (Mr. Currie.) It is mid to be one half per cent. I am not aware.
856. (Sir R. Welby.) But that one half per cent. has to go against the expense of the mint ?—I doubt whether they make anything by it really.
857. (Afr. Meade.) Is the yen in the Straits driving out the Mexican dollar ?-I do not think so.
858. (Chairman.) It goes pari pazzu with it
think BO.
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859. (Mr. Mende.) In Hong Kong, a few years ago, there was a strong objection made to legalising.the yon, because the community had not sufficient confi- dence in the integrity of the new management of the Japanese mint; do you think that objection still holde good?—I do not think it does. The experience that we have had has inspired confidence in the coin being maintained in its purity.
860. (Chairman.) Would not the making of the Japanese yen legal tender be to prevent Mexican dollars coming to Hong Kong to any great extent; would the Japanese yen take the place of the Mexican dollar --I think not.
561. It would not restrict the present supply of the Mexican dollar ?—I should not think so.
862, (Mr. Meade.) We have been told, I think, that the yen in wanted in Hong Kong not for the purposes of trade to China, but for local use in Hong Kong itself; do you endorse that ?—In order to have a stork of bullion-of coin.
863. Of coin, yes?-It may be so.
H04. And the Chinese do not take the yen s readily as the Mexican dollar?-They will not take it an readily, seeing that it is not a legal payment now; it is not legalised in Hong Kong.
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865. But I mean the Chinamen in China do not? -I am not aware.
Mr. W Keswick.
866. In the provinces specially with which Hong g6 July 1898. Kong deals ?-As traders I should think they would
stick to the Mexican dollar.
807. (Chairman.) Are the Chinese coining Buy dollars of their own ?—No.
868. Only small coinage; they have set up a mint I think ?—Yes, but I am not aware how it is working; it is not a matter of importance at present,
869. (Sir R. Welby.) Supposing that there were any proposal made to set the Hong Kong currency on a goid basis, I gather from you that you think bat that would be a very inconvenient thing, because Hong Kong's whole trade turns upon its being part of China? Yes.
870. Would there be any danger in case there wAS an attempt of that kind made to divert the advantages of the entrepôt from Hong Kong to some other place or some other port. I will take Macao for instance? -I do not think that Macao would rise on such a change. Naturally the Chinese trader would like to settle his money payinent as locally as possible, and that would be it we established a dollar on a gold basis in Hong Kong, not in Hong Kong.
871. Quite so, at the same time I rather gather from you that the larger part of this trade passes through Hong Kong, that no commercial transactions really take place in regard to those goods, but simply leave what I may call a toll behind them. If that is the case, does it signify very much whether Hong Kong currency was based upon gold or un silver?-- There is a large trade carried on in Hong Kong independently altogether of that trade with the more distant ports in the north.
872. But that is only the trade which belongs to a population of 200,000 people-their wants ?—No, we are almost within a stone's throw of the mainland of China, and there is an immense trade carried on with the mainland of China, and that trade contres in Hong Kong. The goods are landed in Hong Kong and are distributed from Hong Kong; they are not consumed to any great extent in Hong Kong.
873. I thought I gathered from you from what you were saying before, that the bulk of these goods passes through Hong Kong, and even in the case of trans-shipment it was merely changing from one ship to the other, leaving to Hong Kong not a se.tlement of ■ commercial transaction, but simply something in the nature of a toll or a profit given ?-The answer I gave there was in reply to an inquiry as to the trade at other places in China, and how far the trade in those other places affected Hong Kong. There is independently of that trade, elsewhere than iu Hong Koog, a portion of which simply passes in the manner you have mentioned through Hong Kong large trade in Hong Kong itself with the neighbouring province of Canton, and now there is also a trade with Cochin China with Haiphong and all the places to the south. The connexions of Hong Kong in a tradal sense are increasing every day almost.
874. But still that is mere distributing ?—That is distributing, certainly, but commercial transactions of great nagnitude also take place.
875. And what we come to really is that the real trading business of Hong Kong is only that part which relates to the consumption of a prosperous community of 200,000 or 300,000 inhabitants ?—You might put it so, but of course there is a vast trada which is outside and independent and still in some mensure connected with that trade.
876. (Chairman.) Is there a great `dial of small traffic, what we may call daily traffic, between Hong Kong and Canton ?-Oh! very great.
877. And at present they use the same coin, ie., Mexican dollars, in both places ?—Yes.
878. Then if you had a coin of a different value at Hong Kong from that which is used at Canton there would be some inconvenience to the people who were daily passing to and fro, would there not?-Thero
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