PUBLIC RECORD OFFICE
Reference :-
C.O. 882
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
Mr.
J. Frazer.
9 Dec. 1902
32
MINUTES OF EVIDENCE:
1177. I do not think it would stultify business ?—If you have not got these notes in circulation, would it not tend to stultify business?
1178. You will have the notes in circulation?-Yes, but the dollars are not a carryable commodity.
1179. You cannot carry them conveniently. That would be a trouble, but would it be a serious trouble?- should say a man can put $5,000 to $10,000 in notes in the safe, where he cannot do that with dollars them. selves, And not only that, but I think it would lead to burglaries; it would be a premium upon that sort of thing.
1180. But before notes were issued so largely in the Straits Settlements were burglaries very common?- No, because I consider the notes in circulation at the time were quite equal to the demand. It is only because of the increase of the trade in the Settlements that you require so many notes.
1181. But why is it that a burglar will take coin and will not take notes Notes are as good as coin to him. They are payable on demand tobearer-It is not in that way I put it, but a man can put notes in his safe, audit ay not be known, whereas possibly he cannot put $10,000 in his safe. You can understand a man carrying 810,000 and putting them in his safe; it is known; whereas he can put $10.000 in notes without anybody outside knowing anything about it,
1182. Do you consider that an insuperable difficulty? -I consider it a serious difficulty. I consider in this way that a man who was in the habit of holding $20,000, and he has got to do that in dollars, and not be able to do it in notes, it would certainly be a serious difficulty; it certainly woult,
1183. But it would only be a temporary difficulty?— I do not know.
1184. As soon as your gold standard is established? —Ân đườm as your gold standard is established, then ho can change.
1185. Then he can clango?--Quite so. I was wonder ing, sir, if you can inform me of the possible amount of dollars in circulation in the Straits Settlements,
1186. Well, a gentleman who gave evidence just now anid 100 lakhs, did he not ?-100 lakhs, sir?
1187. 100 Inklus of dollars he thought were in circula- tion 7-That is $10.000.000?
1188. A lakh is 100,000, and 10 lakhs would be $1,000,000 and 100 lakhs would be $10,000,000.
1188. (Mr. Adamson.) That was the amount roughly that was supposed to be in the hands of the bankers, apart from the sum they held as reserve against their note issue --And what about the Government reserve?
1190. That is apart a distinct thing?
(Chairman.) The 10,000,000 was what was in the banks' balances.
(Mr. Johnson.) Excuse me; I do not understand that the banks hold any special sum against notes.
(Mr. „Aikamson.) At any rate, the $10,000,000 was apart from the sun that the Government holds; $10.000.000, 1 understand, was the amount.
(Chairman.) Simply the banks' balances.
1191. (Mr. Adamson,) Yes; eash in dollars ?-That is to say, available dollars.
1192. (Chairman.) So that the total circulation of the colony would be very much more?-Do I under- stand this $10,000.000 is available dollars for the bank- ing issue!
1193. (Mr. Lamson,) They had it there; it was available, of course?—Yes, but they cannot circulate it.
1194. No, it is there to be dealt with?-No; they are obliged to keep that against the note issue--one- thinl.
1195. (Chairman.) It depends on the amount of their capital-the total note issue?—That is
to say, $10,000,000.
1196. In the bank balances?-And hell in the Government Treasury probably $8,500,000.
1197. You mean against the notes ?-Against their
own notes.
1198. (Mr. Johnson.) At present they hold about $8,000,000 7-That would make $18,000,000.
1199. (Chairman.) $18.000.000?—Then ran you in- form me what is the amount or these British dollar-
that have been minted in Bombay since they com menced in 1895?
1200. We have got that somewhere; it is something very large-I have got a memorandum; I do not know whether it is correct-$136,000,000.
1201. I saw figures of about that amount the other day-Then, if you have that since 1885, that is seven years, that is $20,000,000 a year, so that at the present time, according to this, there is one year's dollars in circulation in the Straits Settlements.
1202. There would be more than that, you see, be- cause there is $10,000,000 in the bank balances, and there is 8.000,000 in the Government 7-That is $18,000,000.
1203. That is $18,000,000. Then how much is in the hands of the people?—Yes. I do not think there are many dollars in the hands of the people for the reason I have tried to explain just now.
1204. What reason?-Keeping dollars in safes.
1205. Ah! but think of the common people, the coolic, who keeps his $5, $10, or $15 stowed away somewhere? This is not taking into consideration the Malay States at all.
1206. I am not sure about that.
1207. (Mr. Adamson.) No, it does not take in the Federated States?-No; the Straits Settlements.
1208. (Chairman.) The $8,000,000 is the balance against the notes. The notes circulate in the Federated States -The amount of dollars in circulation in the Federated States, independent of Singapore or Penang. or Malacca.
1209. You mean in the hands of the people?—In circulation.
1210. I am afraid there is no evidence on that point? In the banks.
1211. $10,000,000 is the banks' balance 7-Does this $10,000,000 apply to Singapore only?
1212. (Mr. Adamson.) Yes? Then what about Penang, Malacca, and the Federated States?
1213. (Chairman.) I am afraid I have not got de- finite evidence about that. Why do you want that information; how will it help you ?-The reason I ask is, because I have been taking into consideration the number of dollars that have been minted since 1895, the current dollar now, which is $20,000,000 a year.
1214. But they are not all in the Straits Settle- ments?—No, air; that is exactly what I wanted to find out. I find there is only $20,000,000 of these out of $136,000,000; acording to the statement between the Government and the banks in Singapore, there is only $20,000,000 out of $136,000,000. That is exactly one years' supply, about.
1215. Yes 7-Then, the reason I asked about that, is, of course, all these dollars may or may not some back to the Straits Settlemen..
1216. But if they are demonetised they will not come back. I think that you suggested that the British dollar should be demonetised in favour of a special Straits dollar-Yes, but in that case they will come back to be demonetised.
1217. Oh, you think that the Government should give a special dollar or every British dollar that was brought forward ?--Well, I do not know how far that goes; but I mean any of these dollars presented in the Straits Settlements.
1218. That would be, I should say, impossible, except at an enormous cost -But assuming that Hong Kong has got $30,000,000, and the Straits Settlements choose to go into this currency question, and Hong Kong ships down $30,000.000, rau the Straits Settle- ments réfuse them 7
1219. Why not?-How can they?
1220. Why should they not pass a law and say: "We will not allow any British dollars to be im- ported." Can you see in reason any difficulty?—I think the reason is you must give notice.
1221. Why? If you give notice would you not have all the British dollars in the world come to you? That is what I mean; you might get your $30,000,000 come from Hong Kong, when you had only got $20,000,000 in Singapore.
1222. I myself do not see any reason why they should
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
not prohibit their import; but we need not consider that question —Quite right, sir.
1223. There is that difficulty; the Straits Settlements have got to deal with it ?—That is it; they are liable to everybody who conceives he can make out of them. There are $30,000,000 in Hong Kong now at ls. 7d., and if the time is coming when you are going to make a fixed rate here they may say, "We will keep these dollars and send them down."
1224. They will, no doubt, and the only way of pre- venting that would be to refuse to let them in, as far as I can see 1-But you must give notice that you will not let them in.
1225. Why give notice --You cannot refuse a currency from established use.
1226. Why not?—It is not right and courteous,
1227. (Mr. Blain.) It is not the Straits Settlements that established the British dollar 7—It is established for the benefit of the Straits Settlements and Hong Kong.
1228. There is no particular obligation on the Straits Settlements to receive British dollars? Well, may I Ask a question: Is the Government, or are the banks in Singapore, in a position to refuse to change me $20, and give me a $20 note?
1229. The question is whether the Straits Settlements are requred to receive them into their country. If they passed a law saying they would not?--You cannot pass a law in 24 hours.
1230-31. (Chairman.) Can you not; I have seen a law passed in 15 minutes ?—Then, sir, one of the reasons that I would advocate a fixed standard is that some facilities might be given to people in England for investments in the East At the present time there is not the slightest encouragement for anyone to send money out for invest- ment. Take such large interests as the Tanjong Payar Dock Co. They are issuing their debentures at 6 per rent. for the reason that no one here will send out the money at this uncertain exchange and 6 per cent. In two months the rate may be 1s. 6d., and everything is last. The Straits Government, I believe, are likely to ask for a loan of something like £2,000,000 $20,000,000. There is no inducement whatever to people in England to send out their money there. They might send it out at 16. 7d., and get it returned at 1s. 4d. or ls. 2d., there- fore there is a want of stability in the currency to prevent English capital being sent to the Straits Settle- mente,
33
1232. The Government could get over that difficulty by raising a gold lown, could they not-Then the Government would only themselves suffer the same se other people are doing now. They could get a gold loan now here at 3 per cent. when the rate was la. 7à. ; but when you came to pay that the rate might be Is.
1233. And they would have so much more to pay in dollars 7-They would have 25 per cent. more to pay in dollars.
1234. And they receive their revenue in silver dollars in any case?-They receive their revenue in silver dollars, but then the loan for them instead of ebsting them 3 per cent, would probably cost them very much more when it had to be repaid.
1235. If they only had one-fourth more to pay it would not come to 10 per cent. 1-Why; it just depends upon what time it would be; I mean to say, it would cont them the difference of the depreciation of the dollar.
1236. (Mr. Blain.) Your exchange transactions in Singapore were between Singapore and European countries, I suppose 1—And India, China, Java, ́azıd Australia.
1237. But when you dealt, say, in exchange with Jara it was not with Chinese merchants that von were deal- ing, it was Europeans-Yes, sir. I may say that there is very little business done between Europeans in the exchange between Hong Kong and Singapore.
1238. Then you would not know from your experience how the Chinamen who import produce into the Straits Settlements from silver using countries, pay for it? They pay for it as far I know by bank bills, which is a very large business indeed between the banks in Singapore and Hong Kong, and it is just a question of Hong Kong exchange.
1239. I suppose there is a certain amount of trade between silver using countries which have not got the banking facilities that Hong Kong has, where bank bills awl bank drafts would not go 7-Such as 7
1240. Well, North Borneo ?-I think the trade with Borneo--
1241. Is very small?—Is not in it. 1242. Well, Siam-Well, Siam.
1243. There there are banks, of course -There are banks there, and if a China merchant receives goods from Siam, all he has got to do is to pay for those goods by a bank draft from the Singanore Bank on Bangkok Branch, or sends Singapore produce to Bangkok.
Mr. E. M. UNDERDOWN, K.C., called in; and Examined.
1244. (Chairman.) I believe you have experience of the East? Oh, yes.
1245. Have you resided there?—I resided in Penang nearly 40 years ago about 12 months, and in Madras. 1246. Were you many years in Madras ?—No; oh, no, only that time.
1247. Only 12 months both together?-Only 12 months both together. I went out about business in the Straits there.
1248. What is your business connection at present with the East ?—I am chairman of two companies curry- ing on business in sugar estates, one called the Penang Sugar Estates Company, the other the Straits Sugar Estates Company. The former was founded upon some large estates which were held for many years by the late Mr. Horsman, and are now really the property exclusively of Sir John Ramsden. The other company Sir John Ramsden is not the sole owner of, but has participation with some mercantile firms in Penang and Singapore.
1249. Then your connection with those two sugar companies constitutes your business connection with the Straits Settlements 7-Yes.
1250. No other business?—No other business.
1251. In addition I understand you have had con- siderable practical experience in questions of exchange with other countries-I have a very extensive and somewhat painful experience throughout the world.
1252. You have had experience of exchange with countries that have made use of a forced paper currency? -I have.
1253. As, for instance, Paraguay ?-Paraguay, the
68.19.
Mr.
J. Fraser.
Dec. 1902,
Mr. E. M.
All Finderdown,
Argentine, Borneo, China, and various other countries, which I have business connections with now. these countries that I have mentioned I am dealing with the question of exchange every day.
1254. And in these countries, or, rather, in the ex- change between those countries and gold standard countries you find large fluctuations?--I do, yei.
1255. Are they any hindrance to business, or are they of minor importance?-I consider they are very serious hindrances to business. Perhaps 1 am mistaking your question.
1256. I refer to the fluctuations in exchange-You do not mean, of course, the forced currency. I do not mien that.
1267. The fluctuations between the currencies of thes countries and the currencies of gold standard countries have been a source of hindrance to business in your ex- perience?-A serious hindrance and an enormous loss to this country, and, in my opinion, to the countries themselves.
1258. The tendency has been for the paper currency to fall in value relatively to gold-Certainly, both the paper currency and the silver currency.
1259. And in some cases the fall has been very large? Enormous. Very large indeed.
1260. Now, some witnesses havu said that the fall in exchange is a great gain to a country because it developes its production and its export; is that your experience ?Hardly, but one must allow that under certain circumstances if a man were to take over a quantity of gold and be able to buy currency at a very low rate, and pay wages and food and other matters which he wants in that country, and then he could sell
E
K.C.
}