PUBLIC RECORD OFFICE
Reference :-
C.O. 882
7 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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APPENDIX:
It will be seen from the last of these statements that:-
(a) The needs of the colony in currency for its own use is only 24 per cent of the importa
(b) That in addition to the actual wants for local circulation, some $20,000,000 must be annually imported.
(c) That if a fixity of exchange is adopted the native trader must buy yearly a very large amount of dollars to carry on the trade of the colony with.
(d) That these dollars will vary in cost according to the fluctuations in silver.
(c) That therefore no fixity of exchange has been secured for the trade of the colony, but rather that the responsibiliy in connection with exchange has been transferred from the European merchant to the native trader.
() If, as it has been suggested, the Government decided to convert when exchange was 18. 6d., what would be the position of the Chinese wage-earner should the value of silver rise, and the intrinsic value of the discarded dollar be increased to 1. 10. The result would be simply disastrous; the Chinaman who had $100 to remit would find on application to the bank that the bank would give him only $80. All the Chinese wearing apparel,
that
foodstuffs, etc., etc.
are imported from China would be increased in price by 20 per cent. In other words the great bulk of the population would be put in the same difficulties that a mere fraction of the population are now in. Of course the "mere fraction" is the important European community; this community can however be pro- tected, and every day adds to the employees who are being made independent of the decline in silver.
Fiscal Responsibilities.-It would appear that, as the Chinese pay 90 per cent. of the cost of administrating the Government of this colony that their prosperity should be of the first importance to the Government; and that a currency under which the trade of the colony has prospered so marvellously, and which from a purely personal point of view keeps 38 per cent. of our popula- tion in touch with their own country, should not be lightly tampered with. A constant flow of Chinese immigration is the life blood of the colony, and the more the Straits Settlements resemble China in the way of currency the easier it will be to tempt them to come to the colony.
The Position
of the Government. If prosperity means the indulgence in luxuries, then we may look for a great increase in the revenue from licences. This increase will far more than make good the additional expenditure to be incurred through the decline in exchange.
No. 11.
Governor Sir F. A. SWETTENHAM to Mr. CHAMBERLAIN.
Government House, Singapore,
December 11, 1902.
Sir. I hate the honour to forward copy of a letter from the Municipality of Singapore on the Currency question.
I have, etc. A. SWETTENHAM.
Enclosure in No. 11.
The President. Municipal Commissioners, Singapore, to the Colonial Secretary, 8.8.
Municipal Offico, Singapore,
6th December, 1902. Sir.--I have the honour to inform you that the follow- ing resolution was passed at the meeting of the Com missioners held on the 5th instant, and to request that you will be good enough to submit the same to the Right Honourable the Secretary of State for the Colonies:-
That this Board is of opinion that every en- deavour should be made to secure fixity of exchange, and that Govament be requested to submit to the Right Honourable the Secretary of Stato the view
of the Municipal Commissioners of Singapore on the urgent need now existing for establishing a stable currency in this colony,"
The Municipality are very large importers of goods from gold-using country, and the fluctuations of the dollar make it impossible for them to work to the esti mates in their budgets. The revenue is usually fully appropriated, and to make provision for excesses in votes caused by a fall in exchange, savings have to be effected under other votes, and the services provided for under them have to be inefficiently performed.
The Municipality are contemplating the construction of very extensive works, viz., a new impounding reser- voir, which will probably cost about £250,000, and the introduction of a scheme for the collection and disposal of night soil. It will be impossible to raise the loan required locally in silver, and the Commissioners natu- rally hesitate to agree to the raising of a gold loan which, owing to the unstable nature of the currency obtaining in this colony, will burden them with liabilities which cannot be ascertained and be provided for before- hand.
I have, etc.,
J. O. ANTHONIAZ, President, Municipal Commissioner.
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
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No. 12.
Governor Sir F. A. SwETTENHAM to Mr. CRAMBERLAIN.
Government House, Singapore,
17th December, 1902.
Sir, I have the honour to forward herewith, for submission to the Committee on Currency now sitting, a letter with enclosures just received from the Chamber of Commerce, Singapore.
Sir,
I have, &c.,
F. A. SWETTENILAM.
Enclosure in No. 12.
Singapore Chamber of Commerce to Colonial Secretary.
Chamber of Commerce, Singapore,
December 17, 1902.
1. Having reference to the question of Fixity of ex- change for the Straits Settlements, and to your letters Nos. Misc. 9344/02 and 9781/'02 of 31st October and 18th November respectively, I now, by direction of the Committee of this Chamber, comply with the request contained in these letters by handing you the following (17) soventeen schedules of Statistics brought up to 31st. December, 1901. These, for the sake of reference, are numberd 1 to 17, and are described on a list thereof, appended to this letter.
2. The foregoing represent extensions, brought up to 31st December, 1901, of the Trade Statistics put fur- ward in 1897, when the question of Fixity of exchange was the subject of consideration and representation to Government by this Chamber.
3. I further beg to hand you the following additional tables of Statistics, which it is thought may be of interest and service to Government in considering this question, viz. —
No. 18. Coinage of British dollars to 31st March,
1902, at Bombay and Calcutta minta. No. 18. Straits Settlements imports and exports of silver coin and merchandise from 1890 to 1901.
4. All statistica given cover to by by this letter have been as carefully checked as the system prevalent in the colony for recording imports and exports permits.
5. Your letter of 31st October, 1902, asked that the Chamber would revise up to date paragraphs 10 to 15 Inclusive, also paragraphs 58 to the end, of the report of 6th November, 1897, of a Sub-Committee of the Chamber dealing with this subject.
6. The figures and information desired in continua tion of those furnished under the head of Imparts in paragraphs 10 to 30 of the above quoted report, will be found in the enclosures hereto, numbered 1 to 3.
7. Between 1896 and November, 1897 (when a sub- committee of this Chamber reported on this subject) exchange on London had, by depreciation of the value of silver, fallen about 15 per cent., the rate when that report was issued having been about 1s. 11d. The rate to-day may be said to be, roundly, 1s. 7d., showing a further decline of about 15 per cent, or a total decline since 1896 of about 30 per cent.
8. I am directed to particularly draw the attention of Government to the figures as to exports shown by Schedules 4 to 6. From these it will be seen that for the year 1897 the trade figures (Inter-Settlements ex- cluded) were as follows, vis. :-
1897
$160,851,000
Over the years following 1897 the value of this export trade, represented in dollars, steadily and largely in- creased, as the following figures will show :-
1898
1899
1900
1901
$184,970,000
$215,888,000
$239,622,000
$245,069,000
It has by some people been contended that this increased dollar volume of the trade is due to the declining value of our local currency.
The increases, however, shown by the figures just above quoted occurred under what was practically a period of Fixity of exchange, as is shown by the follow- ing, which were the average rates on London, for these years, viz. :-
1897.
1898.
1890.
1900.
1091.
i. d.
1 118
8. d.
1 11
a. d.
I 1118
8. d.
2 1
1. d.
9. Appendix F, accompanying this letter, is a mem- orandum on the course of the produce (export) markets of Singapore during the years 1897 to 1901 inclusive, and from this it would seem reasonable to conclude that the increased dollar value in our export trade of the five years should not be placed to the credit of a declining dollar.
10. Even if it be admitted that a dollar of low value has stimulated and increased the export trade of this colony, it must also be accepted that on the course of decline a point must be reached, after which further decline must, in a general or over all way, result in injury. If this be not admitted, then he who advocates that increased general prosperity must follow any decline of the dollar, would hold that a dollar fallen to 6d. (if that be possible) would be of benefit to the trade of the Colony and the Peninsula Under no circumstances could such a view or contention be upheld; it requires no argument or figures to demon- strate that a turning point must exist at which benefit becomes transformed into injury. The committee of this Chamber considers that this point has been passed, and is strongly of opinion that the mere fact_in itself of the dollar having declined in value to Is. 7d. is one that makes it imperative upon Government, in the interests of the Colony as a whole, now to decide upon some means of bringing about and to establish fixity. Further, it is the opinion of the Committee of this Chamber that a dollar for which Government at present accepts no responsibility, discredited until it is worth only la. 7d., and no legitimate cause in sight or in prospect to prevent silver from still further seriously depreciating, are, in themselves, circumstances which not only make fixity a necessity, but which now relegate the question more to the judgment of plain commun sense than leave it dependent on such pros and cons as may be adduced from trade returna and statistics.
11. The kingdom of Siam has now placed its currency upon a fixed value in relation to gold. Hitherto, when the question of Fixity has been mooted for this Colony, ths who have advocated that the currency of the Straits Settlements should continue to follow the rout of silver have, as one of their reasons, urged that Fixity would be prejudicial to the Colony's trade with Siami, that country being on a silver basis; Siam having now gone upon gold basis, this, as an argument agains. Fixity, has become one strongly in fa tour of a gold bass for the Straits Settlemen