PUBLIC RECORD OFFICE
Reference :-
TC.O. 882
7 PUBLIC RECORD OFFICE, LONDON
|ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
MINUTES OF EVIDENCE:
22
Mr.
J. Herm.
773. As quickly and conveniently as Yes.
you
can -
774. And, then demonetise the Mexican dollar and
2 Dec. 1902. the British dollar Yes, the Mexican dollar is de
monetised, I understand, so it is only a question of the British dollar now.
775. I think the Mexican dollar is still current in the Straits? -
(Mr. Adamsn.) Oh, yes, it is legal tender.
776. (Mr. Johnson.) You are thinking of the Japanese yen -Oh, it is the yen; I beg your pardon. 777. (Chairman.) And then, you would not coin any more of those special dollars, unless the person who wished to have them, was prepared to pay 2s. for each dollar-Whatever the value the Government says.
778. Looking to the present price of silver, what do you think would be a reasonable value to fix for the new dollar, supposing the change was to be made? The decision is much more difficult than at that time, be- cause the value is now so very low.
779. It is now about 18. 74. i-Yes.
780. Well, what do you think 7-I should think the final value upwards could not be fixed at once, or, at least, not definitely fixed; it might be fixed tempora rily with a reserve, that it might be raised when that limit is reachel.
781. That is very much the course that was followe in India - Yes; because it was a very small difference then, between the value and the limit which was taken, but I do not think it would be desirable to fix the present value of the Mexican dollar, say at about 1-8th, which is about 21. higher than it is now, or 1-9th, which is 3d higher. I do not think it would satisfy the Straits merchants, or anybody, because it will still be such a very low value,
782. The Indian exchange fell as low as 1s. Old. before it rose to 18. 41. I thought it was about 18. 10., or 1s. 9., that was about the loss at the time; I admit that you must know better.
783. The rupe was at one time, nominally, 2s., and it fell down below 1s. 41., and after the mints were closed it fell as low as 18. 04. for the rupee; and after- wards it rose to 1s. 41. Yes, you are right; I am getting mixed up. I meant the rupee was 10d., not
18. 10.
784. That is a rise of quite 30 per cent 7-Yes, but the proportion between the rupee and the dollar would now he still enormous, if the dollar was to be brought to that basİN.
785. I do not suggest any value for the dollar. I merely ask you, are you prepared to give an opinion as to what you think should be the value of the new dollar, if it is decided to introduce a gold standard? Well, I think the ultimate value ought not to be under 28.
780. You think it ought not to be under 2s. ?—No. 787. You would fix 2s. as your temporary value, would you -Yvs.
788. And leave it an open question whether it should be raised higher leave it an open question whether you should raise it further.
789. Is it not rather a serious change to raise the value artificially, from 15. 7d. to more than 2. Yes, but it would not-at least. I think that it would not be quite so sudden a jump as intended; it woul go up gradually.
790. There has been an objection to the introduction of a gold standard, which is this: That the Chinese merchants bring produce from silver-using countries to Singapore, and sell it there for Mexican dollars? - Yus
791. Mexican dollars are the currency that circulates in the countries from which they brought their pro- dure, so that if you give then. the new overvalued dollar they will get a smaller number of them, and they will not be able to take them away to their own untries, or to the countries from which they have brought the produce? I do not think there is very much forre in it, because the countries, fron which the produce chiefly comes to Singapore, are, so to say, dependencies of Singapore, more or less, that the money which is paki for the produce in these places very often flows back to Singapore.
792. It down now, being Mexican dollar; bat in the
new case, being an artificial dollar?—It would so much more certainly flow back, because the dollar would be. of higher value in Singapore than somewhere else.
793. But do you think people would take these arti- ficial dollar in these other countries-Oh, I am certain they would; they would soon find out it is not an arti ficial value, but it is for them a real value.
794. (3r. Adamson.) How would you propose to keep- up the value of the dollar at 2. when its intrinsic value might be 1s. 7d. ?-Well, as I say, the value of 2s, would be reached gradually through the appreciation of the dollar through scarcity; to a certain extent you may call it scarcity.
795. Scarcity; you would create a scarcity? Well, I would not create a scarcity of money; I would create There is, of course, the a scarcity of silver dollars. help of notes and other things.
796. You would limit the currency in order to raise the price? I would not increase the supply for some time.
You must know that 797. Yes; that is something. about $20,000,000 ure imported every year into the Straits Yes; but how much of it is exported?
798. That is a point that I am going to ask you?-- Yes.
799. How much is exported?-Well, I have not got the statistics before me, but I know that at certain times every dollar that is available, which the banks can spare, is exported, for the simple reason that it pays the banks to export it.
800. The banks export it?—The banks export it as a matter of business,
801. For the banks?—Yes; business for the banks only.
802. Then you do not think a very large portion of what is imported is used for the purposes of trade by the natives themselves?—No, I do not think so.
803. Are you aware that $6,000,000 went up to the Federated States, to pay for wages and other expenses there? Oh, yes; but how much of it came back?
804. Well, but I am going to ask you this: Do you suppose that with such a large movement of specie every year the trade would not be interfered with if you limited the amount of free silver that was coming to it? It might be to a certain extent; for a time it might do harm; but then the Government, having the coinage in their own hands. could always meet an emergency.
805. You propose to keep up the price of the dollar by making a scarcity?—Not exactly a scarcity.
906. A scarcity to the point at which you get your 2. dollar-Yes.
807. I am asking you whether you do not think, look- ing to the general conditions of trade in the Straits, that would not greatly interfere with the course of trade? I do not think so, because the dollar is not the only means of trade in the Straits. You have got the notes and all the other things; I mean cheques and drafts.
808. But are not notes equivalent to dollars? They are equivalent to dollars, but the notes might be issued against other securities than dollars.
809. And you are of the opinion that to put an arti- finial exchange of 2x. would not be disadvantageous, on
the whole?—Not on the whole; there might, of course, be temporary disadvantages.
810. (Mr. Blain.) You think tint the Chinaman who brings produce into the Straits Settlements would just as readily take the new artificial dollar as he would take the Mexican dollar?—I am sure he would, especially if he had no other choice.
811. Although in his own country, or at any rate, where his produce has got to be paid for it could not command its artificial value except by being sent back to the Straits Settlements?—I do not know that it could not command its artificial value.
812. We will take this case: Suppose a case of trade between India and the Straits Settelments; would any- body in the Straits Settlements take payment in rupees as the equivalent of 1s, 4d, now?-Certainly,
813. Is that commonly done at present in the Straits Settlements?--Well, it not commonly done, because rupees are not so common; but if anybody comes to the Straits Settlements with rupees, he can buy as much- produce with them as if he had dollars.
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY,
814. At the rate of 1s. 4. ?—At the rate of la. 4d., or very near that figure.
816,, Relying on always being able to get that value for them in India ?—I suppose if he went into the jungle and bought a fow parcels of gutta from a native, and offered to pay for them with the rupee, he would pro- bably get into trouble; but the rupee commands its value just as much as the dollar.
816. That is amongst people accustomed to rupees?... – Amongst traders.
817. You think it would be just as easy among people by whom this produce is brought into the Straits Settle
Of course, at the beginning, ments at present?--Yes.
at the outset, people would want to be enlightened about it; but that would very soon he got over.
was
818. I did not clearly understand what your objec- tion would be to fixing the dollar, supposing there a new dollar, at a rate below 28 ultimately; why should not. 1s. 8d. be a fair price to fix it at Þ—Ŭli, because it is not only the dollar, it is all the property in the Straits Settlements, which thereby would be per manently reduced to that value.
819. Not permanently reduced ?—Of course, more or less permanently. If you have a house, if you have property which is worth a certain amount of dol lars; a short time ago the dollar was 2s., and now you fix it at la. 9. or 1k. 8d., or whatever it is; the differ. ence is loss to that man,
820. Take the case of a property like a house, its value will come to the surface ultimately, whatever your nominal currency might be.
821. (Chairman.) The value in the lower dollar will rise; whereas it was formerly worth $1,000. it might now be worth 81,200?—It might be; but is it so; it would not immediately rise,
822. (Mr. Blain.) But you said permanently these values would be reduced?—Well. I think permanently. Of course, it might rise, but it might rise also if the dollar is remaining at 2s,, because property generally rises in places which are going ahead.
823. On the other hand, I suppose you would admit there would be an injustice, or there might be an in- justice, done in the case of people who had bargains since the dollar fell below 2s.. if you changed the value of the dollar back up to 2«. ?--I do not see that anybody would lose by it.
624. (Chairman.) If a man borrowed $1,000 when the dollar was 1. 7d., and you raise the dollar to 2s., would he not lose when he had to pay back that $1,000 --- Not unless he has changed them into gold,
825. But suppose he had depended on produce to make the repayment. He got $1,000 and used it in his business, borrowed it, and he had to pay it back some day; he produced something--we will say sugar—and he sold that: well, if the dollar was raised to 28. le would get a lower price, and he would have to give more sugar in order to pay his debt?—I admit that, but that is one of the chances of trade. On the other hand, if a man sends out £1,000 when the exchange is 1, 9., and the exchange falls next day to 18. 7d., he is in just the same position; it is one of the chances of trade. You cannot avoid it. In my opinion, it is better to have such an injustice happening once than happening continually.
826. You cannot reform the currency without causing somebody some loss; the question is which is the smaller loss. Of course, a man engaged in trade must take those chances.
827. (Mr. Blain.) The general maxim, I think, is that the interference of a Government in these matters ought to be as little as you can make it. Supposing the value of the dollar at present in 18. 6d., and you want to fix it, and prevent it being affected by fluctuations in silver, the proper way to do it would be to fix it at 18. 6. But why did India fix it so much higher It is the same thing; the Government of India does it.
828. But, then, Government does necessarily inter- fere with the operation of contracts?—I do not see how it could he helped; otherwise, you would have some- body interfering, and the Government is the right party.
829. Well, it is one thing to prevent further change. and another thing to interfere to create further change? -Yes, but is the condition that has been reached the right one that should be maintained? Who is to judge that?
23
830. (Chairman.) What was the old value of the dollar? The old value of the dollar was 4s. 2d.
(Mr. Adamson.) When I first went out it was 55, (Chairman.) When would that be; about the tim of the Indian Mutiny?
831. (Mr. Adamson.) 1854 14. is the par value of the American dollar.
832. No; the American dollar is $4.90-92 cents per pound sterling.
833. (Chairman.) What was the Mexican dollar in 1870-The same as the American dollar; I mean the gold value.
(Mr. Adamson.) Well, I think, about 1870, it woull be worth about 4a. 3d., as far as I remember.
834. (Chairman.) Your argument, apparently, is that the dollar having been about 4s. 2d. or 4s. 3d., and having fallen to Is. 7d., you think that the fair average value to all concernel, as accurately as you can get it, would be 28., or something more -Something better, yes.
835. (Mr. Johnson.) I presume, one reason why you would make the artificial value much higher than the present value is, that it is just possible that silver may, of its own accord, rise?-May of its own acconi go up again.
836. The statistics of trade published in the Straits Blue-Book show that the imports during the last five years have largely exceeded the exports-I believe that is so.
837. Do you imagine that these statistics are accurate ? -Not exactly accurate; of course, they are very dit- cult to keep.
838. Do you imagine that they are even approxi mately accurate, that the imports have exceeded the exports by 13 or 14 per cent. continually —I should not have thought so. I think it is not correct, because these figures are arrived at on wrong condi- tions. For instance, all the imports of the produce which is shipped from Singapore, and which comes from the small places surrounding it, are taken as imports. These small places around the place ought really to be included in the Colony; I mean to say, they are part of it for the purpose of business.
839. (Chairman.) But do they belong to the Straits Settlements They do not belong to it; I mean they are all, more or less, dollar trading countries; coun- tries trading in dollars.
840. No, the question is this; I do not think you quite understand it: the Straits Settlements import and export --Yox.
841. And we find that its importa every year aru $40,000,000 more than its exports ? Yes.
842. How does it pay for that 840,000,000 every year 1-It cannot be right, because the country would be impoverished if it had to senil out more money than it got in.
843. We want to know whether you can explain that? -It is the wrong way the statistics are drawn up. The fact is, out there especially, the natives are getting richer and richer, and they could not get richer if the money was leaving the country.
844. Besides exports and importa, there are certain payments which the Government of the Straits Settle- iments have to make in England —Yes.
845. And there are certain profits which the mer- chants and the officials residing there remit home -- Yes.
846. And there is all the money that the Chinese coolies remit ?—Yes.
847. Which would be practically equivalent to add- ing to the importa?—Yes."
848. But that would make the divergence on the balance of trade still greater?—Yes.
849. Then you think that the figures cannot be per- fectly accurate? Cannot be right; it must be the other way round.
850. (Mr. Adamsun.) I understand Mr. Heim to propose that this change should be very gradual; is that so 7-Yes.
851. (Chairman) The principle of your scheme is this: First of all, get a special dollar current in the Straits Settlements ?—Yes.
Mr.
J. Heim.
Dec. 1902.