PUBLIC RECORD OFFICE
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Reference :-
C.O. 882
7 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- | COPYRIGHT PHOTOGRAPH-NOT TO
Mr.
G. 17. Butt,
9 Dec. 1902
26
MINUTES OF EVIDENCE :
922. You say that gobl is too lear in the sense that a gold coin sufficient to meet most of their transactions would be too small to be convenient —Yes; it would not get down to the coolie class.
923. For instance, if the largest payment a mạn had to make or receive is a dollar which is now worth Is. E a gold coin representing 1s. 8d. would be so small as to be practically unusable 7-Yes; practically that is what I mean.
924. And you think that the present system of cur- roney in the Straits Settlements is very convenient ?- 1 do.
925. In what way is it specially convenient?-Be cause it pays for all the produce that comes into the place in a Poin of its actual value in silver, and at the same time it is legal tender in the Straits.
926. Anil that coin is also current in the countries ad- joining the Straits, or in most of them It is taken anywhere as silver.
927. It is taken as silver; it is practically a current coin in the East ?--It is a current coin paretically all over the East.
928. Do you think that any evils have arisen from the fall in the value of silver relatively to gold?—A certain advantage has been received, I should say, hy the stimulated production.
929. I was asking if you thought there were any evils to begin with? -Any evil? Any rise or fall in exchange, any serious fluctuation, is an evil.
930. Yes; but do you think the evils have been greater or less than the advantages-Well, I should be inclined to think the advantages have been more thau the evils.
931. You think that the low exchange has stimulated production?—Ys, I think it has.
932. And, therefore, stimulated the exports?—Yes; *ertain things would not have been exported at all.
933. Quite so; it has stimulated the exports, and I suppose you would admit that the imports, speaking set off generally, pay for the exports; the one is against the other?-You mean to say they are equal.
934. Well, the transactions between any country and any other country have got to balance in some way; that is the sum total of the transactions?--With trea- sure and everything included ?
935. With treasure and everything; they have got to balance somehow 7-Yes.
936. So that if exports have been stimulated there must have been something on the other side to balance that?--I think the import of silver.
93. You think that is what balanced it?-Yes, it might.
938. Do you think it was balanced by the import of goods to any extent?-To a great extent, certainly,
939. You think so?—Yes; I think the import of dollars being as low as 20.000.000, of course the dif ference between them must have been goods.
940. A rise in exchange you think would have the opposite effect; it would check production and reduce exports 1-It would certainly check production, espe- rially in the planting.
941. And exports?—And exports, naturally.
942. And checking production and exports, I sup pose it would check imports, too?-Well, it would Baturally check the wealth of the country.
943. If the two balance, if the imports balance the exports, a fall in export must check the import ?—Yes.
944. A rise in exchange would have the opposite effect to a fall?--It would have that effect, yes.
945. I do not know whether you have ever con- sidered that a fall in exchange from the point of view of the silver country is a rise in exchange from the point of view of the gold country?-Well," naturally.
946. And then the difficulty that has occurred to me and many others in this: How is it that fall in ex- change, an alteration in exchange, looked at from the point of view of the silver country increases the inter- national trade, whereas the same alteration, looke
at from the point of view of the gold country, decreases ernational trade?--I do not exactly follow.
י
947. You do not follow the argument ?-No; I do not follow it cametry.
948. A fall in silver exchange is a rise in the gold exchange, is it not?—Yes.
949. A fall in silver exchange stimulates the exports. and imports between the gold and silver countries?
--Yes.
Come to the gold 950. Now we are done with that. country; we have got a rise in exchange from the rise in the value of gold --A rise in the value of gold 1
951. From the rise in the value of gold you get the opposite effect, a rise in the exchange as regards the gold country-Yes.
952. That ought to check the volume of international trade. It is the same thing. a rise in gold is the same as a fall in silver. I do not know whether you can see the argument - see the argument that a rise
in the gold country is a fall in the silver one.
953. Yes; but a fall in exchange stimulates the in- ternational trade?—A fall in exchange stimulates.
954. Looking at it from the silver point of view?—— Looking at it from the silver point of view, yes.
955. And from the gold point of view that is a rise; arise would have the opposite effect?--In the gold country.
956. Yes, but the trade is the same; the exports and imports of the silver country are the imports and exports of the gold country?—Yes; but the cheaper you lower the value of your coin you are dealing with, It would be in a gold the cheaper you produce. country exactly the same thing. Of course, you talk of the fall in silver being equal to the rise in gold. In England, for instance, a gold country, the dearer the sovereign, the more expensive it is to produce.
967. Therefore, production would be checked and exports would be checked according to the theory?—
Yes.
958-60. But by your argument, looking at the matter from the point of view of the silver country, the exports from the gold country ought to have increased to pay for the increased exports from the silver country? The exports from the gold country would increase, as the silver country being more flourish- ing would take more imports, but the difference would be made up chiefly by a larger exportation of silver,
961. I do not say it is my argument: it is an argu- ment that has been used, and I would like to get your answer. I want you to have full time to think it over, because I do not think it is fair to put a question of thai sort and export a final answer on the spot. Your opinion is, that on the whole, a fall in exchange has been a benefit to the East 7-Yes.
962. Do you think there would be a further benefit if the exchange went on falling?-I think the trade would adjust itself to it.
963. That is hardly the question. The question is would there be a further benefit if the exchange went on falling I do not believe in a falling exchange It encourages. We are about being exactly a benefit.
to lose sight of the fact that it has done a great deal of gool; it has stimulated production.
964. But I thought you said that, on the whole, the advantages had been greater than the evils of the fall of exchange -I think they have, but I do not know that it is altogether by the fall; they might go down to an infinitesimal sum, and I do not suppose it would do so very much harm as people try to make out. I do not think it is an advantage to have a continually falling exchange beyond a@ertain point.
965. I only want to get your opinion on that ques- tion; do not know whether yout are prepared to fix the limit at which the advantages from the fall in exchange would begin to be less than the evils- is it 1 8.. 1s. 6d., 1. 4., 18. for a dollar-Well, I could hardly say that. I believe to whatever it went it would be bad to a great many people, but any way, there would be some compensation for it.
966. Would you be quite satisfied if the exchange was to remain at its present rate permanently, oi would you like to see a further fall?-I would rathe. see it permanent-
967. You would rather see it permanent 1-I think any fluctuations are injurious.
968. Would you like to see oxchange rise; in the natural course of events, by the of silver?-Ver-
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
gradually, if it did at all. I do not think it would affect trade very much.
969. Would you like to see it rise?--Personally, I would.
970. I ask the question with reference to the interests of the East, as a whole, putting aside the personal in- terest ?—I think the more stationary it is the better.
971. There is a large amount of dollars imported into the Straits every year I believe?—Yes.
972. And sent out again ?—Yes; they find their way .out..
973. If a gold standard were established in the Straits Settlements, do you think those dollars woull continue to be imported-I think so.
974. For the sake of export ?-For the sake of deal- ing with the produce and the labour especially of the Native States and of the outlying countries near.
975. I am assuming that the Native States adoptest a gold standard, too -I think that, then a great deal of labour would be financed for in silver dollars.
976. You think that the Mexican dollar, we will say, would continue to circulate 7-I think so.
977. In the Straits Settlements and in the Federated States If it were allowed to, I mean.
978. I am assuming that it was allowed to; you think that it would continue to circulate as well as the coins that were on a gold basis?—Yes.
979. They would circulate side by side --Well, of course, the one, I presume, would be legal tender and the other would not.
980. The one would be legal tender and the other would not —There would be a certain use for silver dollars, and they would fill a gap that the token com would not do.
981. And there would be a certain rate of exchange between the two classes of coins, a fuctuating rate of exchange between them 7-They would be a commodity in fact.
882. Do you think that would be a great evil?—No, I think if you did that you might have a gold basis for the Straits Settlements without any trouble.
983. You do not think it would be a great evil to have the two currencies 7-Oh, no.
984. No man would use either currency unless it suited him best?-He would only use the silver cur- rency for what it was actually required.
985. When it suited him ?-When it suited him. 986. When it did not suit him he would use the other currency He could not pay his debts in it for instance; it would be a matter of agreement.
987. I gather from the paper you put in, that you are opposed to the attempt to establish a gold standard in the Straits Settlements 1-Well, I am not exactly opposed to a gold standard; the difficulty is to know upon what that gold standard would" be based.
988. We will assume for the moment that it is prac- ticable to introduce it; if it were practicable to intro duce a gold standard, would you be opposed to it 7- I think it would be a very good thing it there were sufficient silver currency allowed in the place to take the place of the amount imported now and lost.
989. Of course, the silver currency under a gold standard would be a token currency; do you refer to the sufficiency of the token currency I refer to that for the currency as a gold currency.
990. Even on a gold standard, you think if there was a sufficient amount of the silver currency the result might be satisfactory 1-Not that silver currency- the present silver.
991. That is to say, if the import of silver dollars and raw silver was left unchecked 1-Yes.
992. You would not object to a gold standard —–—
No.
993. Do you think, that having a gold standard at Singapore would lead to trade being diverted to other countries It, of course, depends upon the way in which that gold standard is maintained. If you have the silver dollars available in the way they are now in Singapore, they would fill the place with these outlying countries, you would be practically dealing with them on a silver basis, although you would have your gold currency yourself.
R849.
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Mr.
994. So that, in that case, you do not think there would be a danger of trade being diverted to other G. W. But countries - do not think so; no, if there was sufficient silver in the place to finance it.
0 Dec. 190%
995. Now, do you think there would be any serious danger of false coinage in silver if there was a token currency in circulation -I think it would be a great temptation as we have seen in Java.
996. Well, what has happened in Java in that respect ?—At one time there were a great many forged coins in circulation, and they were coming from all part. In the Java Bauk it was as much as they could do to detect them.
997. Were they in good silver?—In almost the same silver.
998. Where did they come from 1-They were pre- sumed, I think, to be Mexican dollars melted down, because they were supposed to be the same weight and fineness as the Mexican dollar.
999. Where were they melted down; where was the false coin made-It was never known. 1000. It was never found out-No..
1001. Dil that amount to anything very serious?
· There were a great many about at one time in the Straits, so much so, that we lind to work upon them with very great suspicion.
1002. Upon the Dutch guilder Upon the Dutch guilder, yes, the 24 guilder piece. When guilders were offered we had to be very careful how they were passed.
1003. Did you get any of the false coins in the Hong Kong and Shanghai Bank -Very few; I refused a lot.
1004. You refused a number 7-Yes
1005. On suspicion, or merely because you weru certain 7-Because we knew; we could tell they were forgeries.
1006. You could tell they were forgeries 7-A good man; a good export could. We were very lucky; there were very few bad that went down.
1007. Has that false coinage ceased now?—I have not heard of it for the last two or three years.
1008. Of course, you know there is that risk in this country —But to a much smaller extent.
1009. Why to a smaller extent 7-Because any ship- ment of half-crowns, shillings, or sixpences into this country would be looked upon with great suspicion, whereas it is a common thing to have a shipment of 200,000 or 300,000 guilders go to Java.
1010. But that danger is one which exists more or less in all countries that have got an over-valued silver currency 7-Oh, it does undoubtedly.
1011. Have the fluctuations in exchange been pro- ductive of much inconvenience in business in Singa- pore 1 take it that all fluctuations are injurious, any serious fluctuations whether it is up or down.
1012. I suppose, the merchant there tries to secure his exchange beforehand ?-Oh, yea
1013. Does he generally succeed ?—Yes.
1014. But, I suppose, to secure his exchange before- hand he has got to pay something?--There is very little difference. The forward rates are based upon a matter of interest.
1015. He does not pay much more?-He does not pay much more.
1016. Is there much token currency in circulation in Singapore at present I do not know what the amount is; there is a considerable amount, yes.
1017. You can see it in common use You can see it in common use.
1018. Is there much of that token currency circa- lating in countries outside the Straits; I refer to subsidiary coins issued by the Straits Settlements 7- I think you will find them in the Native States.
1019. In the Native States -I think you woul but I do not think you would in Borneo or AFLU place like that.
1020. Do notes circulate freely in Singapore --- Government notes?
1021. Well, Government notes and the Bank notes, too --Yes.
1022. They do 7-Yes.
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