PUBLIC
RECORD
OFFICE
Reference :-
TLC.O. 882
7
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
PUBLIC RECORD OFFICE, LONDON
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MINUTES OF EVIDENCE:
1759. You admit that the fluctuations and the decline Mr. T. H. Whitehead. in the gold price of silver have been very inconvenient to Europeans, and to traders and merchants, and to all Jan. 1902. who have to make remittances to Europe?-Very much but the Europeans form a very small percentage of the aggregate population, not one per cent.
80,
1760. And to all who have dealings with Europe?- Very serious inconvenience and loss in many instances.
1761. Do you think that these disadvantages outweigh the benefits which you consider to be derived from the use of the silver standard in the Straits Settlements?— Do these disadvantages outweigh the benefits?
1762. Do the disadvantages arising from the existence of a silver standard outweigh the benefits? In other words, would you propose to make a change on the ground that it would be advantageous —No, decidedly no; I would have grave doubts about making any change unless that change is thorough an complete. The difficulties and the uncertainties which surround it are so great that you may fix a ratio to-day, and next week you may be 10 or 15 per cent out either way through unforeseen and unknown causes, and in the event of the ratio being fixed too low the Government would run the risk of all the silver being shipped away, no import duty would stop the export.
1763. But do you think there would be a risk of all the coins being shipped away if silver rose in value?— Not all the coins, but a very large proportion, and it might bring about-well, a financial cris, a monetary crisis, and dislocate if not stop trade, for business can. not be carried on without money.
1764. There is always the risk, if any country has got a standard that other people use, that the coins may be exported, and difficulties produced in that way. For instance, if a large percentage of our gold were exported from this country, we should be in great difficulties 7- Yes, but we take the precaution to prevent ita export. In the Straits you are dealing with an Asiatic race, and here you are dealing with white people.
1765. If a change were made in the Straits Settle- ments to a gold standard, I understand you to hold strongly that the change should be effective and thorough Otherwise disastrous results would follow, commerce would suffer seriously, and so would the credit of the Government.
1766. Do you think the cost of the change would be very great 7-It is quite impossible to estimate what the ooet would be. If the change is made, the Government presumably would make it for the benefit of the majority of the people, should bear the cost of making the change, and should redeem the present money, Mexican as well as British dollars, in circulation by virtue of the law which has been in force mince it was enacted. Although the effigy of the King is not on those Mexican dollars, yet at the same time the King's Government has legalised them, and for the Govern. ment to demonetise these dollars without redeeming them on a just basis would be equivalent to State robbery. Having had a long and intimate experience of the Chinese and the Malays, I entertain grave doubts as to whether riots would not ensue, and possibly large numbers of the natives would rise in revolt against a gross injustice, as would probably be created by de- monetising the present money and not redeeming it.
1767. Well, you hold that the Straits Government should redeem, se you express it, all the Mexican dol- lara circulating in the Straits Settlements 1-Yos.
1766. But do you nold that the Straits Government would be bound to redeem Mexican dollar brought from outside and offered to it 7-Certainly not, unleas those brought in were for the purpose of fulfilling and carrying out contracts already legally entered into.
1760. Brought in bond fide Bond file.
1770. You hold that if there was a change to a gold staucherd, all obligations and contracts entered into pre. vious to the time when the standard was obanged should continue to be payable in the old standard silver dollars Certainly.
1771. That is the same thing That is the same thing.
1772. As regards the justice of the question 1—Yes. 1773. That was not done in India, was it?——Well, yes, it was, as in India the coinage was not changed; the coinage remained rupess; the money remained rupees whether notes or silver-the money there re- mained the same, silver rupees. In my opinion, the
gold standard cannot be introduced and made a com- plete success in the Straits unless the present dollars circulating there are demonetised, and a new dollar, a new coin, whatever it may be called, substituted.
1774. Would you make the new dollar of the same weight and fineness as the present one-I think it would be expedient to do so.
1775. You tdrink that if a fixed artificial goki value is to be given to the new dollar, its quantity must be restricted? Its quantity must be restricted, otherwise It it will not be possible to give it a fixed gold value. took India some six years to restrict and limit the currency sufficiently before the Government could get gold tendered in exchange for rupees either in silver or
in notes.
1776. You think the name of the new coin should not be the dollar. Now, why do you hold that opinion? -Not the dollar? I do not say not the dollar.
1777. You say in your memorandum, "Whether the new coinage is given the name of the Straits dollar, or whatever other title, is not material; but it appears indispensable that the coin itself, as well as the name, should be different from any of the present dollars. That is, that it should not be called the Mexican dollar or the British dollar"-That it should not be called the Mexican dollar or the British dollar.
1778. It may be called a dollar -It may be called the Straits dollar.
1779. It may be called the Straits dollar 7-Yea.
1780. And when the Government called in the exist- ing dollars, and gave the new dollars for them, they would have at the same time to prohibit the import of Mexican dollars and British dollars? I think that would be absolutely necessary, otherwise the Gover- ment would have thrown upon their hands far more dollars than they had any right to redeem. Dollars en route to the Straits, and the further amount of dollars required to fulfil contracts already entered into for immediate and forward delivery, prior to the change in the standard, should be permitted.
1781. And in the future, after the establishment of a gold standard; the Government would have to possess the exclusive powers to coin the new dular --I think so; I think that is indispensable.
1782. And the new dollars woukl have to be, of course, unlimited legal tender 7-Yes, undoubtedly, un- limited legal tender, otherwise with an Asiatic race I am afraid there would be great difficulties, and the most serious riots would in every probability ensue.
1783. Do you think that a change on the part of the Straits Government from a silver standard to a gold standard would have much effect upon the price of silver-The French Government would immediately take action to establish a gold standard in Indo-China. The fact that this Committee is now sitting, and the proposal which has been made to place the Straits on a gold standard, may have already exercited mone than a due influence upon the silver market; the price may have been forced down unduly. It may be that there would be a further heavy fall, but it is very difficult, if not impossible, to predict what would take place.
1784. Yon point out that if the new dollar were given a value of 26, that would be equivalent to a price of 28d. per oz. 7-About 28d. per oz. standard silver.
1785. And would be an increase of 27 per cent. on the present value of the dollar --That is so, about 27 per cent.
1786. Do you think that a change of that nature would cause serious disturbanog in the relations exist- ing between debtors and creditors 7—Most assuredly, but I think commerce in course of time would adjust itself accommodate itself to such a change.
1787. But do you think there would be at first any serious difficulties?—The margin is so great that I do think serious difficulties would arise.
1788. It is quite a short time ago that the dolle was worth 2s. 7-Yes, quite a short time ago.
1789. And did the fall from 28. to ls. 7d. produce any very disastrous effect I-Certain people must have lost very considerably by it.
1790. I suppose the change from 1s. 7d. to 2s. would not be more serious than was the change from 28. by Is. 7d.; it is the same amount of change, only it is in the opposite direction 7----It might not be more serious,
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
Of course, the people have not yet realised their loss from 28. to 18. 7d. There is a great deal of money invested in local industries, house property, etc., still out there. The loss has not been actually realised because fluctuations take place, and because people hold on in the hope that there will be a recovery.
1701. But if the new dollar were given a fixed gold value of Is. 8d., the equivalent gold price of silver would be 234d. per os. Yes, thać is so.
1792. And that would be very little different from the present price?-Very little different.
1783. But if that were done, and silver were to rise again to, say, 25d. per oz, you would have all the difficulties of a fluctuating exchange-All the diffi culties, and no Customs machinery could possibly stop the outflow of the silver dollars if their gold value in the adjacent markets was 10 per cent higher than
in the Straits.
1794. Just as in India, if the price of silver were to rise to 50d., you would have all the difficulties of a fluctuating exchange over again 7—Most assuredly.
1795. And then you would have a higher rate of ex- change than you have at present?—Yes, a higher rate of exchange, but all the difficulties would have to be encountered.
1796. Do you think it possible that there might be any considerable rise in the gold price of silver?--I can imagine that India with prosperous years ahead-ons or two promperous years-might have to buy a very con- siderable amount of silver for coinage parposes. Then it is understood that the American Government has coined all the silver bullion they had in their vaults, and that they may have to enter the market and buy siver at no distant date for coinage purposes.
1797. And that might cause an increase in the de mand for silver 7-Yen,
1798. Which you think might very appreciably put up the price of silver 7-Which would certainly appreciably put up the value of silver.
1790. Do you think it is possible that the recent heavy fall in the value of silver may cause some reduction in the quantity of silver produced yearly 7-I think it is extremely probable.
1800. Therefore, at the present time, although the question is one upon which nobody would like to pro- nounce a decided opinion, there is no prospect of any serious further fall in the value of silver-immediately? -I do not see any. I think that the present position- the recent heavy decline has been caused in large measure by newspaper rumours and reports, rumours that Mexico was going on to a gold standard, and that the Straits Settlements intended to go on's gold standard. I think these rumours have been discounted to a great extent, but these rumours have certainly caused further want of confidence in silver, and brought about the heavy fall.
1801. Chans still uses the silver standard ?—That is so. 1802. And she has large gold obligations Enor mous-£120,000,000 sterling, roughly speaking.
1803. And the fall in the value of silver has been a serious matter for her?-Has added enormously to her obligations.
1804. If there was a further fall in the value of silver do you think the effect on China would be serious?-I think the effect already is so serious that she will not be able to pay the exorbitant indemnity that was exacted from her in 1901.
1805. And if she is not able to pay it at the present rate of silver, a fortiori, she will be unable to pay it if silver falls much lower?-Most assuredly. Her pro posal yesterday in Pekin was to collect their duties on exports and imports in gold.
1806. Would the collecting of those duties in gold have a serious effect upon trade?-It would paralyse it; it would stop the importa for a time, and some of them possibly permanently.
1807. Ja British trade a large percentage of that ex- port and import trade?-Yes, enormous; it is far more than the aggregate of all the other countries put to gether; I think it is upwards of 60 per cent.
1808. And you think on the general question that the fall in the gold price of silver has an injurious influence on trade between the East and the West -The fuc- tuations in exchange have been troublesome.
1809. I understand you would like to see faity of
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Mr. T. B. Whitehead.
value between the silver standard and the gold standard, if it were possible to attain it?-To arrive at an Inter- national agreement now will be very difficult, but fixity would confer enormous benefits on British com- 20 Jan 1903, merce, and would be a grand thing for the universe.
1810. And you think that a change in the Straits Settlements would provoke a change in French Indo- China -I am quite sure it would instantly,
1811. But may there not be a change in French Indo- China, even though the Straits may not make one?—I have reason to believe there will be no change unless the Straits go on a gold standard.
1812. You have?-Good reason; I have good reason to believe if the Straits continue on a silver basis that Indo-China will do the same.
1813. I understand that as you entertain great doubta about the expediency of changing from the silver to a gold standard in the Straits Settlements, you would not try the experiment ?-It bristles with great difficulties and grave dangers, not only to the trade, but may seriously affect the credit of the Government, besides the possibility of bringing about riots.
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1814. And you hold that the outcome of the experiment or the cost of making it cannot be estimated beforehand with accuracy 1-I do not think it can be estimated with
accuracy. any degree to approximate have not been able to arrive at any estimate. There is already a very large volume of silver in the vaults of the Government in the Straits, and whether they would have to sell any portion of that, and at what price, it is impossible to estimata.
1815. (Mr. Adamson.) Would you ascribe in great part the prosperity which is shown by the large increase in the imports and the exports of the Straits to the fall in the value of silver?— One of the main, and one of the contributing causes of the progress, development and prosperity has been an adequate supply of money at all times; and the absolute freedom of the two ports. The fall in silver to some extent may have benefited exports, inasmuch as the capital employed in tin mining is mainly, I think, silver.
1816. You are aware that as regards two of the main articles, tin and pepper, the gold value has enormously increased during the last few years?-The gold value.
1817. Yes P-Yes.
1818. So that the gold value would be represented naturally by a very great increase in the value, and to that extent it would explain that great increase?-- That would help, certainly, towards the increase.
1819. Then the great increase in the Federated States, of course, is due to the natural development of the country from a state of chaos to its present state?—Yes. the good Government which it has had and enjoys has largely assisted in the development.
1820. Would you think that the danger arising from the importation of spurious coin would be a great in the Straits Settlements as it is in the Netherlands Indies? No, not if the ratio was fixed at 2s. or 1s. 8d. 1821. Would you anticipate that trade generally would be interfered with in the Btraits if you had a token coin, but outside of that a free import of Mexican, British. and other dollars, under arrangements which precluded such dollars from entering into circulation 7-I do not see how it is possible to go on a gold basis and permit the free importation of Mexican and British dollars, as is done at present, or the unlimited issue of the new Straita dollar.
1822. No, I do not any as is done at present.
I must explain. If there was an arrangement by which those dollars could be brought to Singapore, or Penang, or Malacca, wherever the port was, and could there ba exchanged for token coin, but not allowed to go into circulation, would not that give the necessary facilities for trade?-I am afraid I do not quite understand how that would be possible.
1823. (Chairman.) May I try to explain?-Yes, cer- tainly.
1824. At present large amounts of Mexican dollara and British dollars are imported into the Straits Settle- ments, and are not kept there?--Yes.
1825. They are sent to other countries and are used in paying for various articles?—Yes.
1826. Well, it has been argued that if you have a gold standard these Mexican dollars and British dollars will not be available for the people who come from other places and want Mexican dollars to take
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