PUBLIC RECORD OFFICE
Reference :-
C.O. 882
7PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
Mr. B'.
G. Gulland.
13 Nov. 1902.
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MINUTES OF EVIDENCE:
29. I suppose you would admit that the basis of all trade in the long run is the exchange of commodities against commodities ?—It is supply and demand.
30. I mean to say, that although you nominally buy thing for dollars-Really you pay the gold price. 31. You pay for it really in produce sooner or later; you export something which pays for it-Well, you know in Singapore there is a great deal done in ex- change operations.
32. 1 grant you the exchange operations; but what is the basis of all trade 7-We have got to pay for what we get somehow or other.
33. Somehow or other by produce-By produce.
34. In the long run?-In the long run.
35. You have to use gold and silver as mediums of exchange, but sooner or later you have to send out tin or something else to pay for what you buy and im- Port-We have to give value for what we receive.
36. You think that the fall in the price of silver and in the exchange does stimulate production ?—I think so.
37. Do you think that stimulus is permanent - No. I am doubtful about that, because it may go too far.
38. If you increase production prices will, of course, fall but besides that, I suppose that when the ex- change falls and the price of silver falls, various charges that are paid in silver tend to go up, such as wages and other charges 2-Well, I should have thought so; but I see at the end of the 1897 report by the Chamber of Commerce, they give a table to show that wages have not rison.
39. Have wages not risen at all in the Straits Set- tlements 7-European wages have risen very much.
40. Do you think native wages have risen ?--I believe that the Indian coolie in the Straits now finds that he cannot buy the number of rupees with the dollar that he used to get, and therefore ho is dissatisfied; but, of course, with the Chinaman, the Mexican dollar is still good for remittance to China, and his eyes have not been opened to the same extent.
41. And does the Chinaman get no higher wages than he did when his dollar was very much more valu- able? I think you will find in 1897 they may he did
42. I am not asking about 1807. I want to know about 1901 or 1902 7They say no; but I am doubtful about that.
not.
43. Because if he gets no more Mexican dollars now than he did before the fall in silver began, his wages, measured in gold, are only about one-third of what they usel to be not much more than one-third 7-I think you will get gentlemen here who will tell you that, although the wages may not be higher, everything else is much higher. Rice is much dearer, and everything else is dearer.
44. Well, if everything is dearer and wages are no higher, the China workman is not so well off?—He is not so well off, certainly; but he is found to some extent, and as long as he can get his opium and his rice and so many dollars to remit, he is much the same as he was before.
45. The articles produced in the Straits Settlements
are mostly special articles, are they not 7-Yes.
46. That are not usually produced in other places? --No; if they are produced elsewhere they are produced in gold countries
47. Now, if you had a gold standard, all the fuc tuations in exchange between the Straite Settlements and gold countries would be very largely diminished ?
Yos, certainly.
48. But the fluctuations in exchange between the Straits Settlements and silver countries would be largely increased P--Certainly, but it would move our base, as it were, to the scene of operations.
49. Where does the capital that is employed in the Straits Settlements mostly come from t-The capital.
50. Yes 7-Well, of course, the Chinese have a lot of capital.
51. They have --They have, undoubtedly.
52. It is in silver?—Undoubtedly a lot of silver capital; but as I state in my mamo., whenever there
is any work of utility, or anything of that sort to be undertaken, it is European capital.
*53. European capital F-Yes, but that is very difficult to get now.
54. What do the Chinese employ their capital in ?— They invest it very largely, first of all, in house pro- perty. They will put it in anything almost that they can manage directly themselves, but they do not like to trust it, seemingly, to companies or investments of that sort.
55. You say in your memorandum that concerns that some years ago could borrow money at 4 per cent. now find it difficult to obtain the necessary funds in any quantity at 6 per cent. ?—Yes.
56. What sort of concerns do you mean -There is the Tanjong Pagar Dock Company, for one.
57. The dock company. Does it borrow its money in gold or in silver 7-In silver.
58. It borrows it in Singapore It borrows in Singapore.
59. And it is difficult to get it there 3-In fact, when I say it borrows it in Singapore, it borrows it nomi- nally in Singapore, but the bulk of it comes from London.
60. But it is on a silver basis?—It has a silver basis. 61. You say the same difficulty is experienced by the Singapore Municipality, whose loans, being of un- doubted security, would be readily taken on favour able terms but for the fear of silver falling further Yes.
62. The Municipality borrows in Singapore ?—It borrows in Singapore.
63. In silver 7-In silver.
64. And the capital comes from this country, I sup- pose, mostly-I think Mr. Johnson will tell you that we have to help the municipality. The Federated States took up a large amount.
65. (Mr. Johnson.) I think that was so?-People do not care to send money out of a gold country into a silver country at present.
66. (Chairman.) Take this case: If silver falls, ac- cording to your evidence, production is stimulated?— Yes.
67. Will not, therefore, a man who sends his money into the Straits Settlements be likely to say: "It is quite true that there may be a depreciation of the standard, but if there is, I get a larger profit from my business"—Yes; but then the price is going down in London all the time. You see, thin last month, as silver has fallen, we have had a large drop in the price of tin.
68. You have had a fall in the price of tin ?—Yes.
69. I gather from your evidence that you would be in favour of establishing a gold standard in the Straits Settlements 7-Yes, certainly.
70. How would you propose to do it? Well, sir, that is what we want this Committee to tell us how to do,
71. Are you prepared to give evidence on the subject? -Oh, certainly.
72. Then let us hear what you think the best plan? -Well, I have stated in my memo. I think there are three courses open to us. I think it is too late to hark back to the rupes; the yen there are objections to. Of course, if we go and take either the rupes or the yen as our standard, when money got tight in either India or Japan we should suffer in Singapore. I believo interest sometimes gote up to 10 per cent. in Japan. Then we might take it for granted it would do the same in Singapore.
73. Do you think it would -Well, so I am told. Our yens would probably be slipped off to Japan, and we would be left without currency.
74. Even if the rate of discount went up to 10 per cent. in Japan, that rate would not be likely to last long-But still long enough to trouble us.
75. A man sensing his yens from the Straits to Japan would have to bear the cost of freight and insurance, would he not 7-Yes.
76. And the interest while his money was going there -All which would come to, perhaps, 1 per cent.
77. And when the pressure was over the money would
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
have to come back again?-Well, all that puts us to a disadvantage.
78. He would lose on the bringing of it back?—Yes. 79. Therefore he would have to get the higher rate of interest for a considerable time to balance his total less? You would think so, but they are always shuffling it about, these banka.
80. No doubt they are always moving money about. Now, if you had some other coin than the yen, might it not be possible that they would take your gold all the same, and send it to Japan, and turn it into yens there? Well, it is quite possible, if the Japanese Government wanted gold, that it might buy it in Singa- pore if they could get it.
Did 81. Just so; if they were much in want of it. you ever suffer when Japan had a silver standard and you had a silver standard? Did you suffer much if the rate of discount went up in Japan -I do not think we did, but we had the Mexicans to fall back upon; we had two sources of supply.
82. When there was a very high rate of discount in India, and India had a silver standard, and you had a silver standard, did you suffer ?—No, because we had a different coinage.
83. No; but your silver might have been exported and turned into rupees?—I cannot say we did.
84. I merely asked with regard to your argument that if you had the same coin as the Japanese, you might suffer very much in case there was a higher rate of interest in Japan-I mention that objection as the only one I know against the yen from a business point
of view.
85. Do you think it is a very strong objection ?—I am not inclined to attach much importance to it myself; but, still, it is an objection.
86. What is the value of the yen -I think it is 2s. 0.0.
87. (Mr. Blain.) 2s. Ofd. 1—2s. Old.. is it?
88. (Chairman.) You do not see your way to intro- ducing the rupee?-I think it would be too sudden a jump for us to go from 18. 8d. to 2s. 8d.
89. What would you think of going from 18. 8d. to 1. 4d. I think we would rather not.
90. You would not do that f—Well, of course, it would be virtually the same thing if we went on to the rupoe at 1s. 4d.; it would still be the same ratio, would it not P
91. How the same ratio? Your dollar, if you take the rupee at 18. 44., would be worth 18. 4d. 7-18. 4d.
92. That would not suit you ?—I think not 93. Would it be possible to say a rupee is worth 161., and that instead of paying one dollar everybody in future must pay a rupee and a half. That would bring you to 28. for the dollar?-I do not see why we should not assist a gold currency of our own by using the rupee as an equivalent.
94. I mean to say wherever there is a dollar to be paid there should be a rupee and a-half paid ?—If our dollar was 26., what would be the rupee equivalent? 95. One and a-half rupees 7--One and a-half rupees; I should certainly think it would be a very good thing
to make the rupee the legal tender at that rate.
96. At that rate P-At that rate, and I believe it would introduce the rupes into the Far East
97. I do not know if the Government of India are anxious to introduce the rupee into the Far East ?-That is another thing; I always thought that if, years ago, we had had the rupee it would have become the com of the Far East.
98. It would be a little awkward, would it not, with Fur large native population, to say that in place of a Hullar there was to be one-und-a-half rupees paid?—I do not think so.
99. Would it not be a much simpler matter if you were to say that in place of the old dollar there was to be a new dollar special to the Straits Settlements; there would in that case be no apparent change, and no need to calculate? Oh, much better, certainly,
100. Then you think the rupee is a possible coin in the future for the Straits Bettlements; and you do not like the yen, nor do you much like the rupee; you prefer to have your own coin?-We would prefer to
have our own.
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Mr I
101. Your own currency, and you would like to have your sovereign as your standard coin with the 28. dollar? G. Gulland. -Yes.
102. And I observe that you seem to be in favour of 13 Nov. 1902. notes for one dollar?-Yes.
103. There are no such notes at present in the Straits Settlements, I believe?
104. (Mr. Adamson.) No?-What is the lowest? 104*. Five ?-Five.
105. (Chairman.) But you would go down to one dol- lar-I think I should. That is for you, gentlemen, here to decide.
106. Yes; but we want to know the opinions of prae- tical men, of men who are familiar with business in the Straits Settlements. We can only deal with the eri- dence we get?—Yes.
107. Then the objection, at least one objection, to the one dollar note is that if there was a panic the poorer
or less educated people who would chiefly use them might get frightened and present them for payment That is an objection I have not thought of,
108. Do you think it is a sound objection ?—I have seen the banks run on there, but that is years and years ago.
109. 1 was thinking of a Government note?—I do not think there would be any fear of a run on the Govern-
ment.
110-111. I was thinking of a Government note? I merely suggested a one dollar note, as I thought its use might facilitate the introduction of a gold standard, and I wanted to know whether you thought there was much force in the objection I have stated ?--I do not think there in.
112. If there was great danger of anything of that sort, could it not be met,by keeping, in the case of the one dollar note, an unusually large reserve?-I think it. would.
113. For instance, if you kept the reserve equal to the full amount of the one dollar notes out, there could not possibly be any risk then, because you could pay a dollar in coin for every note dollar-Yes; but if you put it that way I do not know that there is much object in having a one dollar note.
200
114. I may mention that I think that if a gold standard was to be introduced, for certain reasons, it would be desirable to have a one dollar note--I am not proposing to issue a one dollar note, I am merely trying to got your view whether, if there was dollar note, there would be great risk, in case of a pania, of a run on the Government reserves P-I do not think so. 115. And if there was that risk, it could be met by keeping a specially large reserve against one dollar uotes P-Oh, certainly.
116. Do you think that the rate of 2s. for the dollar would be generally accepted by people in the Straits Settlements-That seems to be what they fancy. We have gone along very comfortably for the last four years
117. That is about 4d, higher than the present rate ?→→→ That is about 4d. higher than the present,
Ou 28.
118. And if you introduced a gold dollar at Is. 8d., would there not be a risk that the value of silver might rise ?--I think a very great risk.
119. In that case your gold standard would disappear ? -Would disappear. I think we certainly would have to put it considerably above the market value.
120. So that if you were going to introduce a gol standard with a currency of silver dollars, you would have to put the rate of exchange something higher than the present rate?-Certainly, yes.
121. Has there been any change of opinion in the Straits Settlements as regards the introduction of a gold standard? Are more people in favour of it, or opposed to it P-I think this last drop has caused a great change of feeling.
122. A large drop always has that effect for time, has it not Yes.
123. You do not think the yen would be very popular in the Straits Settlements P-Well, we have had the yon before, and it went all right.
124. But you were on a silver basis then ?-We were
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