PUBLIC RECORD OFFICE
Reference :-
TELEC.O. 882
7
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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34. We have also examined a number of witnesses, most of whom have had a personal experience of the modes of conducting business in the Straits Settlements and the East generally.. These witnesses are not unani- mous, but the majority of them are in favour of the establishment of a gold standard. The Committee have tried to make their list of witnesses fairly representative of the different interests concerned, but from the nature of the case the witnesses we have examined have represented rather the classes who are in close connection with this and other European countries, than the natives of the Straits Settlements and the adjoining Malay States, or the Chinese who form so large a proportion of the population.
35. We see no reason, however, to think that the establishment of a gold standard could directly affect in an injurious manner the wage-earning classes in the Straits Settlements and the Federated Malay States, and we are disposed to think that such a change would, at any rate for a time, have the These classes constitute the majority of the persons opposite effect. interested in the matter who have not been fully represented before us.
36. So far as the European community are concerned there can be little doubt that whereas they were divided in opinion in 1897 and previously, they are now nearly unanimous in favour of a change to a gold standard. The Committee have received a representation to the effect that it is absolutely essential that the currency should be placed on a gold basis with as little delay as possible, signed by almost all the firms and public companies of the Straits Settlements represented in this country and on the Continent (bankers excepted). A petition has also been forwarded by the Governor signed not only by Europeans and those in receipt of salaries whose homes are in countries with gold standards such as India and Ceylon, but also by a number of wealthy and influential Chinese, the revenue farmers, ship- masters, bankers, merchants and landowners. The petitioners, without expressing any views as to the sterling value to be given to the dollar, express the opinion that it is extremely desirable that the legal currency of the Colony and of the Federated Malay States should have a fixed relative value to the British sterling sovereign. The petition represents that violent fluctuations in exchange are very detrimental to the general interest of the Colony, that even if the contention that a dollar of low value stimulates a portion of the trade of the Colony be granted, it must without doubt be admitted that there are numerous interests which have been prejudicially affected by the severe fall in silver which has recently taken place, and that it is the opinion of those of the petitioners, who desire a dollar of low value, that there must be some point at which the advantages derived from low exchange become distinct disadvantages, and that this point has been passed.
37. The Singapore and Penang Chambers of Commerce and the Municipality of Singapore favour a gold standard. In regard to the Federated Malay States opinion seems more divided. It is stated in the Governor's telegram of the 25th of December that the planters favour a gold standard and the Perak miners also. Other miners in the Federated Malay States prefer the existing silver standard of value. A petition, very numerously signed by all the principal Penang Asiatic traders, asks for a gold standard. A numerously signed petition in favour of a silver standard has been received by the Governor from Singapore, the signatures being almost exclusively Chinese.
38. It is a matter of course that the immense majority of the people concerned in this enquiry are unable to support any opinion on the com- plicated question of the best standard of value by reasons which would stand examination. The fact remains that the majority of those able to form an opinion appear to be in favour of a change to a gold standard, the chief exceptions being the banking community and the mining community. The latter, if we except those in receipt of money wages, have probably been the principal gainers from the continuous decline in the gold value of the dollür.
* Appendix 18 (6). See also despatches of 29th and 30th December, Appendix 18 (13), (14).
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39. There is no question that the Straits Settlements and the adjoining Malay States have prospered under a silver standard. Trade has grown largely. The values of the imports and exports and the growth of trade during the last twenty years are shown in the following figures :-
STRAITS SETTLEMENTS.
Imports.
Dollars.
1881
84,599,397
1891
135,886,217
1901
310,381,094
FEDERATED MALAY STATES.
Imports.
1882 1892 1901
*5,669,078
19,161,159
39,524,603
Exports.
Dollars.
77,925,962 125,805,772
266,553,270
Exports.
5,538,641
22,662,359
63,107,177
These valuations are in silver, but even if the imports and exports for these years be valued in gold the increase is very great. Prosperity is every- where apparent.
40. It is contended that there would have been the same or greater growth of trade and prosperity if a gold standard had been in existence for the last ten years. However that may be, we are of opinion that there must be a point at which the advantages said to be derived from a low or falling exchange cease, and distinct disadvantages are experienced. As the dollar has now fallen in value from 4s. 2d. to about Ís. 7d., the time has come at which those interests which have continuously suffered from the fall may fairly claim to be protected from further loss, unless it should appear that the disadvantages of adopting the necessary remedial measures would outweigh the benefits to be derived therefrom.
41. Fluctuation in exchange is undoubtedly a grave disadvantage to the community generally. It introduces an element of speculation which constantly interferes with legitimate business. The introduction of a gold standard will not do away with this evil, but will transfer it from the trade with gold countries, to the trade with silver countries. The trade with gold countries, however, is much larger than that with silver countries, as will be seen from the figures supplied by the Singapore Chamber of Commerce (Appendix 18 (12)). The disproportion in favour of trade with gold countries will be increased by the recent addition of Siam to the list of gokl countries, and the probable addition in the near future of the Philippines. The same course may be followed in other countries with which the Straits are in commercial relations, and which now employ the silver standard, but we see no prospect of any such change being made in China; and the places immediately adjoining that country, which depend largely for their prosperity on their trade with it, will consequently have a strong inducement
to maintain the same standard of value.
42. Although the aggregate of the trade with China and other silver- using countries is smaller in amount than that with gold countries, it has been represented to us that the number of transactions with the silver using
*Excluding Pahang, the value of whose imports and exports is very small.