41
Mr.
R. Craig.
30 Dec. 1902.
PUBLIC RECORD OFFICE
Reference :-
TLC.O. 882
7 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
Mr.
R. Craig. 30 Dec.
1902.
40
•
MINUTES OF EVIDENCE;
is all. And that £500,000 in sovereigns, 1 suppose, would be sent to Singapore 1-Sent to Singapore, yes.
1448. Then your next step would be, or a simul. taneous step would be, to coin a special Straits dollar ?— Yes, I think that is necessary if you are going to establish a gold currency.
1449. And what weight and fineness would you make your Straits dollar 7-I would make it equal to the present British dollar.
1450. And I understand that you would also propose to issue one dollar Government notes 7-Yes, I think that would be an advantage; that was proposed some
years ago.
1451. By whom 7-By the Government, and I do not know for what reason it was abandoned.
1462: Well, I have seen one argument against it at any rate, which was this, that in a place like the Straits Settlements where dollar notes would get very dirty, it would be unpleasant, and that they would be the means of spreading infectious diseases which would be dangerous?—Yes, I have seen that too.
1453. Do you think there is much force in this objection --I do not think so. If I remember right the Scotch bank notes many years ago were just about as dirty as you would want to see them.
1454. And so are the Irish, but I merely want to know your opinion; do you think those two arguments arc of much force ?—I do not think they are sufficient. 1455. You do not think them sufficient; that is all I want to get 7-No, I do not.
1450. Then you would prohibit the importation of dollars into the Straits Settlements, that is you would prohibit the import of British dollars and Mexican dollars —Yes, you must do that if you want to estali lish a gold currency.
1-157. I quite agree with you: I merely want to get your evidence; and the British dollars which the Straits Government now hold, I suppose as a reserve against the notes, what is their amount -I believe I am speaking only from hearsay they hold about $12,000,000 against a bank note issue of about $12,000,000.
1458. You would coin those?-Re-coin them into the Straits Settlements dollars.
1450. Re-coin them into the new Straits dollars; and would you recoin any Mexican dollars that the Govern- ment may hold, if it does hold any ?—I think so; yes. 1460. They are both on the same footing ?-They are both on the same footing.
1461. Then, as soon as the Government considered that a sufficient number of Straits dollars had been coined, I understand you would demonetise the British and Mexican dollars and declare sovereigns and Straits dollars to be the only legal currency ?—Yes.
1462. I also understood that you would fix the value of the new dollar at 2s. -Yes.
1-163. And that you would propose that the advanec to 28. should be made gradually through the contrac- tion of the currency -You would require to advance the exchange very gradually, otherwise you would have great trouble in the bazaars; I am sure of that.
1464. And one advantage of having the dollar worth 2s, would be that 810 would make exactly one sovereign ? -That is one advantage I think.
1-165. And 28. would be almost equivalent to the Japanese yen 7-Yes, and also to the new Philippine dullar.
1466. Which you think would be at 29. 7–Well, I am given to understand that it is almost fixed at that figure by the American authorities.
new
1467. You also compare the value of the dollar with the Siamese currency, in which the tickal has been fixed at the rate of 17 to £1 sterling –Well, it was fixed at 17 to £1.
1468-71. But if 17 tickals are. a pound sterling and 810 are a pound sterling, you have 17 tickals equal to $10, and that is not a very good ratio, I should think ?—Well, what I was thinking of when I put that down was that the Siamese Government are reckoning a dollar at about two shillings.
1472. The Siamese Government do not deal with the dollar, the only deal with the tickal ?-But they have hitherto d It with dollars, and 17 tickals to the pound is near! the equivalent of the twoshilling dollar; it is within a fraction.
1473. Mr. Blain.) That is at the fixed rate which has prevailed in Siam of $3 to five tickals 1—Yes.
1474. The dollar at la. 11d, and a fraction. Corres- ponding to the tickal at seventeen to the pound 7-- And a fraction of a penny.
1475. (Chairman.) Well, you sen the dollar would be worth 1'7 tickals; it would be 17 to 10. You also point out that the new dollar would be equal to a rupee and a half, which you think would be an advantage-Well, it is easy to calculate.
1476-79. It has that advantage obviously. And one of your arguments in favour of a two-shilling dollar is that it would probably prevent any disturbance of the currency from a rise in the value of silver —If you fixed it at two shillings.
1480. If you fixed it at two shillings -I think the probability is that silver will go lower rather than go higher.
1481. And you also think that by adopting the two shilling dollar the Government would make a con siderable profit on the coinage of the new dollars, and that profit it could use to meet the cost of the goid reserve 7-Yes, I think it would.
1482. I understand that you would not inferfere with the present system under which the banks are allowed to issue notes ?—I do not very well see how you can. The banks, I believe, have a charter by which they are authorised to issue notes.
1483. The coinage of the new dollar you would leave entirely in the hands of the Government 3-If you left it in the hands of the banks they might flood the place with dollars.
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1484. I quite understand; I quite agree with you; you propose to leave it in the hands of the Government: it is the only plan, obviously ?—Yes.
1485. And the Government would only issue them in exchange for gold or Government notes ?—That is my suggestion.
1486. At the ratio, of course, of a sovereign for $107 -Yey.
1487. Then I understand that you would make it compulsory on the Government to pay their notes either in gold or in silver, but you would leave it optional to the Government to pay in gold or silver, as they thought proper ?—I think it would be necessary to give them that option at first until it was seen how the change worked.
1488. And you think that after a time there wonki be a flow of gold into Singapore sufficient to maintain the currency ?--I think so. I believe there is a large balance of trade due to Singapore always.
1469. Why do you believe there is a balance of trade in favour of Singapore --Well, there is a large export of silver in dollars always going out to the East.
1400. But there is also a large import of silver 3—I mean an export from this country.
1491. Yes, there is an export from this country, but there is a large export from the Straits, too ?—Not to the same extent.
1462. You are no doubt aware that, according to the returns of imports and exports, the balance of trade would seem to be against the Straits 7-Yes, I have been told so.
1493. But do you accept that 7-No; 1 think the returns are made out very loosely and very carelessly:
149-1. Now, there is one difficulty in your scheme, to which I would like to call your attention: When you had coined a sufficient number of new dollars you would demonetize the Mexican dollar and the British dollar, and declare the now dollar to be the only legal currency?—Yes.
:
1-405. At the same time, you are opposed to :ulvancing the value of the dollar suddenly to s. 7-Yes, I am strongly opposed to that.
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
1409. But if you declared the new dollar to be the only legal currency, and simultaneously made use of your £500,000 in gold which you had in reserve to cash it, the value would rise immediately to a. 1— Yes; but if you stop the importation of dollars, I take it your exchange will rise slowly, and I should wait for some time until the exchange had reached about the figure of 28. before making any change.
1497. That is to say, you would not immediately on demonetizing the Mexican dollar and the British dollar use your gold reserve to cash the new dollar 1- No, I think I should not.
1498. Because, if you did that of course its value would rise to 28. at once; but you would not do that 1 -No.
1499. You would wait until it had risen of itself. But suppose it did rise of itself in the course of 24 hours, which might happen. For instance, if you only coined a small number of the new dollars and then suddenly demonetized the British dollar and the Mexican dollar, the exchange might very likely rise at once to 28.; if you coined a large number of the new dollars that would not be so likely to happen?-Well, if the Government reserve of dollars-about 812,000,000— were coined, that would go a good way.
1500. I do not think they would go very far, because those $12,000,000 would have to be kept in the Government Treasury as a backing for the notes ? -No, they could put them out and get fresh dollars.
1501. And get some of the new dollars; that is, they would have to coin more than 12,000,000 of the new dollars. If they only coined 12,000,000 of the new dollars that would be barely sufficient to provide a backing for the notes 7-Yes, but is the Government compelled to keep $5 in silver against a $5 nole?
1502. That depends on the law for the time being. Of course, I merely wish to point out to you that if the number of the new dollars coined is limited when you demonetize the Mexican dollar the exchange might rise suddenly to 28. 1-Yes.
1503. But I also wish to point out to you that if you coined a large number of dollars that would not be so likely to happen. I wish to know whether you have any remarks to make on what I say 7-Before the Government demonetizes the British and Mexican dollars there ought to be a sufficient number of new dollars coined.
1504. You consider that at starting, a sufficient number of dollars should be coined to prevent the exchange rising suddenly to 28. 1-Yea, and to prevent any disloation of trade
1505-6. (Mr. Blain) Then you contemplate that it might be a considerable time before you would be able to make your gold standard effective 7-I should think it would take some time. I do not know how long it took before the rupee rose in India to 18. 4d., but I should say it was probably a couple of years.
1507. (Chairman) More than that, but I wish to point out to you the difference between the Indian case and the Singapore case. In the Indian case the rupee currency existed and there was a much larger number of rupees in existence than was required for the circula- tion; a great many rupees were hoarded ?—Yes.
1508. Therefore when the Government stopped coining silver there was at least enough rupees to carry on the business of the country at the old rate of exchange; but in Singapore your proposal is to coin a new dollar, and the number of your new dollars would be absolutely limited by the Government, and therefore if you do not coin a good many there may be too few to keep the exchange at the old par 7-Yes, I quite understand. 1509. You see the difference 1-Yes, I think it would take some time-the exchange to-day is 18. 7 d. or 18. 74d.; it would take some time before it rose to 2s.
1810. (Mr. Blain) And it only by taking a con- siderable time to make the change that you could avoid unfair dealing with existing contracts 7-Yes, I think so.
1511. A banker, for instance, who has a deposit of the money of his customers in the existing dollars would be expected to pay out in the new dollars, and if their value rose suddenly the banker would be very
6849.
much prejudiced, and his customers correspondingly benefited -I do not see how the banker would be prejudiced.
1512. Do you think that the trade and prosperity of the Straits has been injured in recent years by having had a silver standard 7-No, the Straits generally have been very prosperous, but I do not think that is to be attributed to silver or to the decline of silver, as some people say.
1513. But being on a silver standard has not injured her prosperity so far 3-I do not think so. No; it has injured individuals, of course, but the country itself has been prosperous-both the Native States and the Straits Settlements.
1514. As far as one can judge by the figures-which everybody says are unreliable-it would appear that within the last few years the Straits have distinctly prospered, while both Japan and India have not so decidedly prospered. I believe you can give explanations both in the case of Japan and India why things have not improved very greatly since the gold standard was lopted, but still it does appear to be a fact that they have to explain why these results have not been obtained. In the Straits they have got no need to explain anything. Under existing conditions they seem to be doing well enough to satisfy anybody 7-- One large interest in the Native States is tin mining, and tin during 1898-in the beginning of 1898-was £65 a ton; it has since gone up to £140, and the pro- duction has increased I should think about 10,000 tons. 1515. (Chairman., Do you think the Straits Settle- ments would have been so prosperous if they had had a gold standard for the last ten years as they have been?-Yes, I do.
1516. Do you think they would have been more prosperous if they had Kad a gold standard ?—I would not say that, but I think the Straits would have prospered, no matter what their currency was.
1517. (Mr. Johnson.) I understand you would demonetize ultimately the Mexican and the British dollar. Do you think that any inconvenience would arise with the petty traders if that were done, because a great many dollars are exported and imported into the Colony for dealing with the neighbouring islands, and so on ?-There might be some little disloca- tion of rade at first, but the traders would very soon get used to the new dollar, and find means of working it. When the Japanese adopted a gold standard, in 1807 I think it was, the currency of the Straits at that time was practically yen; I should think about 75 per cent. of the silver dollars current were yen.
1518. (Chairman.) In the Straits Bettlements 1- Yes. When the Japanese Government decided to adopt gold the banks gathered in all the yen, and there was a regular scarcity of money. You could not good deal of friction with the banks. At that time borrow money on any terma almost, and it created a if you wanted to sell bills on London for ready delivery they would not give you better than probably la. 111d.; that was for ready delivery; and if you agreed to deliver them two months afterwards they would take them at ls. 9fd., and they were able at that time to buy silver to lay down dollara there at about 1. ed.
1519. (Mr. Johnson.) That was owing to the tem- porary scarcity of the silver currency in the Straits Settlements 7-Yes, certainly.
1520. Yes, but that scarcity was got over 1-That scarcity was got over by British dollars being brought in.
the neighbouring places for the existing dollar? The 1521. What would be substituted in dealing with Straits dollar, which does not circulate anywhere else, could not be sent out of the Colony very con- veniently I expect it will be taken out by traders in the small quantities that they require; I do not think in any great number. A great deal of the trade done in Singapore is more barter than buying and selling.
1522. Well, $20,000,000 somehow get exported from the Colony every year--in dollars I mean?-A good many are taken to Chins by the coolies. Every coolie that goes to Chins from the Straits Settlements takes a certain number with him. Then there is a quantity
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