PUBLIC RECORD OFFICE
Reference:
TIITTIC.O. 882
7 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
38
MINUTES OF EVIDENCE:
Dat Abdul has affected, or would affect, the immigration of Asiatics Rahman, into the Malay States and the Straits Settlements -I C.M.G. have some auch ides; I think sooner or later they will see that the dollar is not what it used to be, and they 16 Dec 1902. will find probably some other place to go to.
1371. But if they get a larger number of the dollars, would that not meet the difficulty?—Yes, but the in. crease in the number of dollars would not be propor- tionate to what they expect.
1372. Do you think the low rate of exchange inter- feres with the development of the resources of the Colony and of the neighbouring States?—So far not, but the time, I think, is not far distant when it will have that effect.
1373. Do you think the fall in the rate of exchange and the uncertainty as regards the future would affect the raising of capital for the making of railways and other public works in the Straits Settlements?—Yes, most certainly.
1374. You think so?—Yes, sir.
1375. If the Straits Settlements adopted a gold stan- dard, do you think the Johore State should do the same thing? Oh, yes, I should hope so, and I fully expect, as a Johore official, that Johore would be in- oluded.
1376. And I suppose it would be desirable that the States that are called the Federated Malay States should also adopt a gold standard in that case I think so.
1377. I understand that you have given some attention to considering the question of the best method of intro- ducing a gold standard I have, air; I sent in a paper the other day on the subject, and my suggestions there- in I offer to you for what they are worth.
1378. You propose that the Straits Government should provide a sufficient number of dollar and half-dollar notes 7-Yes, sir,
1379. And that the same Government should give notice that within three months, say, a gold standard, with silver and paper tokens in ciroulation, would be adopted ?—Yes.
1380. And you would propose that persons having silver dollars in the Straits Settlements and the ad- joining States should be called on to exchange those silver dollars for the Treasury notes 7-Yes.
1381. But I suppose it would be necessary to prevent the import of British and Mexican dollars from outside during that period?—Yes, I think I said that in some part of the paper.
1382. But, at any rate, whether you said it or not, that would be necessary 7-Yes, that would be neces
sary.
1383. That is part of your scheme ?—Yes.
1384. And at the end of that period of three months the Government should refuse to accept as legal tender any silver dollars which might still remain in the Colony - Yes, any silver dollars.
1385. After the Japse of the three months, any silver dollars 7-Any silver dollars except their own.
1386. Well, except those that were specially issed. ? -Yeg.
1387. Now, do you think that the people would be willing generebly to give up their silver dollars and take the notes under the conditions that you have men- tioned ?—I think they would, certainly.
1388. Do you think they would do that in the Jobore State-Yer; I think so, because so far as Johore is concerned, with regard to its currency, it is one with the Straits. I do not think the natives, if offered by the Johore Government a paper in exchange for silver do Hars, would refuse to take it.
1389. You think they would not refuse They would not refuse. I think that anything done by the Straits Government would be recognised as right. What would hold good in Singapore would hold good in Johore.
1390. Yes, but do you think that the people in Singa- pore would freely give up their silver dollars and take the notes 7-Yes, I think they would.
1391. I asked you the question because I am quite certain that the inhabitants of India would not do it ?-- Well, I have no experience of India, sir, but the Straite Government is so strong and so wealthy I do not think it would be challenged by a single person in the Straits.
1392. It comes to this, that the people in the Straits Settlements and the adjoining States have greater
confidence in paper than the people of India 1-- So far we have not had much experience of paper, but I think anything that is recognised by the Govemment, and they say to the natives, "We give you this as our guarantee; this piece of paper, which represents a dollar, is as good as a silver dollar," would be accepted by all of them.
1393. Then the dollars that were surrendered by the people in exchange for the notes you would have coined into a new dollar?—Yes.
1364. And that new dollar would be merely a token coin That is my scheme, sir.
1395. That is what you propose —Yes, sir.
1306. And then you think it would be necessary for the Straits Government to have a certain quantity of gold as a reserve to maintain; the value of its new dollar I think so, because I think it ought to be so.
1397. And you think that a beginning of that reserve might be made by taking the profit on the re-coinage of the dollars -Well, that would be a very small mat- ter, but still it would be a beginning.
1398. Do you think that Johore and the Federated States would be prepared to find a portion of the gold reserve I am not quite sure how they are placed, but I think some such understanding should be made as between those States and the Straits Government.
1309. Then you my that for a period, say, two years, the new coin should not be redeemable in gold, except at a reduction of, say, 1 per cent. Now, why do you put in that stipulation I think I have explained it elso there.
1400. Perhaps you would not mind explaining it again?—I make that stipulation, because I fear, as soon as the Straits are placed on a gold basis, natives would flock in even with the new dollar to get gold, and in order to give the Straits and the Federated Malay States sufficient time to accumulate gold in their Treasuries, and therefore there should not be a run on gold during those two years,
1401. But if they came in and exchanged their dollars for gold, how would they carry on their business from day to day, when they had no dollars —No; I do not think that they all would do it, but some of them might The Chinese, for instance, might want to take gold to China
1402. And during the same period, if a man presented ↳ sovereign or half a sovereign, you would give him silver coins, and a profit of, say, a half per cent.P-Yes, as an inducement. I have not, sir, got the percentage exactly; it is only a tentative suggestion; whether it should be one per cent, or half per cent. I am not quite
Lure.
1403. I quite understand that. And you think it might then be worth while for the Colonial Government to borrow a certain amount of gold to strengthen the reserve, to enable it to cash the dollars where necessary? -I think so, sir.
1404. But you would not make it obligatory on the Government to meet its obligations in gold; that is to say, the Government would not be bound to pay its servants, for instance, in gold ?—No.
1405. It might pay them in the new dollar or in gold, as it pleased —Yes.
1406. Then, I think, yo.. would prohibit the making of contracts to be discharged in gold coin -I think, as between parties out there, certainly not. I think it should be arranged that they should pay in dollars, otherwise it would be a drain on the Treasury.
1407. But even at the beginning you think the Colonial Treasury should give gold for dollars, if the gold was intended for remittance to a gold standard country-I think that would help trade, and other intercourse as between the Straits and gold countries.
1408. Is there anything else you would like to say on the subject No, air; except this, that indirectly I have heard that most of the Chinese merchants of the first rank there would be pleased to see the dollar put upon a gold basis,
•
1409. That is Chinese merchants who are now carry. ing on business in the Straits Settlements and in Johore-In the Straits Settlements, yes; especially those who have to do with British trade.
1410. (fr. Adamson.) Johore is purely an agricul tural country-Yes, it is, but we are trying to develop
COMMITTEE ON STRAITS SETTLEMENTS OURRENCY.
We do not know to what extent
our mining resources. those resources are.
1411. Has it been very prosperous of late years?— Yes, we have done fairly well.
1412. Have you any idea of what the advance in the wages of coolies has been in the last sight or nine years? -I think they have advanced about one-third; one third more.
1413. Not more during the last 10 years -During the last 10 years it might be a little more even When I say that I mean throughout, whether it is for agricul. tural labour, or mining labour, or domestic labour.
1414. Those coolies are mainly Chinese 7-They are Chinese, Tamils, or Indians and Javanese.
1415. Mainly Chinese ?-Mainly Chinese. 1416. They take away with them when they leave- and about two-thirds of the number that come in loave every year-they take away with them, do they not. money that they have accumulated during their stay? -Yes, as a rule.
39
1417. Then, what would they do with the notes that Dato Abdul you are going to give them 1-Oh ! they would exchange Rahman, them for dollars.
1418. Do you not think that a Chinese coolie who had a few dollars to exchange with a native money lender would be at very great disadvantage in making that exohange?-I think the disadvantage would be very small.
1419. That the Chitty would not get the better of him'↑ ---Not much.
1420. I understand you are not of the opinion that the fall in the value of silver has been of great advantage to your planting interests in Johore 7-It has been a dis- advantage.
1421. No, it has been a great advantage?—The fall? 1422. Are you of opinion that the fall in the value of silver has been of great advantage to the planters of Johore 1-No.
1423. It has not?—No, it has not.
SIXTH DAY.
Tuesday, 30th December 1902.
PRESENT:
Sir DAVID BARBOUR, K.C.S.I., K.C.x.o. (Chairman), presiding.
Mr. W. ADAMSON, C.M.G. Mr. G. W. JOHNSON.
Mr. W. BLAIN.
Mr. A. E. COLLINS, Secretary.
Mr. ROBERT CRAIG, called; and Examined. 1424. (Chairman.) You are a member of a firm which does business in Singapore 1-Yes.
1425. What is the name of the firm-Messrs. Edward Boustead and Co., of London, and Messrs. Boustead and Co., of Singapore and Penang.
1426. Have you resided in the East yourself ?--Yes, I have been there about 2 years.
1427. In Singapore ?-In Singapore nearly the whole time.
1428. Where else have you been besides Singapore - A short time in Penang only.
1429. Mainly in Singapore ?-You may say entirely in Singapore.
1430. What is the nature of the business your firm does 1-We are general merchants. We import Man- chester goods and other goods from this country, and export Straits produce to Europe and America; and then we do a coal business as well and look after shipping. 1431. So that you are familiar with the course of general trade in Singapore ?—Yes, I suppose I am to a certain extent.
1432. Now, the articles that you import from Europe, to whom do you chiefly sell them in Singapore; to what class of people ?-Nearly entirely to Chinese; the Chinese are the principal dealers there.
1-433. For local consumption, or for export, or for both 7-Well the great trade of the place, of course, is exporting from there.
1434. Of course it is indifferent to you whether the articles are sold locally or exported; I merely wanted to know as matter of fact whether the articles are sold for local consumption or for export ?-The great bulk of the imports into Singapore are exported from there.
1435. Quite so; and the Singapore produce that you buy, I understand, is mainly imported into Singapore from elsewhere 1-There is practically nothing grown ja Singapore; it is a very small island.
1436. The exports are mainly imported from else where ? You may say entirely imported from else where.
1437. From what places do they come chiefly 1-The Native States,
C.M.G.
16 Deo. 190%
Mr.
R. Craig,
1438. The Federated Malay States ?-The Federated Malay States; they produce all the tin, as probably you 30 Dec. 1902, know.
1439. And Johore ?-Well, Johore does not produce much tin; tapioca and pepper are produced in the Native States.
1440. And does much come from Java 7-Well, copra comes from Java and Balli.
1441. And does much come from Borneo ?-Sago comed over from Borneo, and pepper, gambier and sago flour come from Sarawak.
1442. Residing in the East and doing business there your attention has naturally been attracted to the question of the exchange between Singapore and countries with the gold standard ?—It is a question that is forced on you.
1443. Are you in favour of trying to establish a gold standard in Singapore 7-Yes, certainly; I have been so for many years.
1444. And I understand that you are prepared to suggest a plan by which you think the gold standard might be established 7-I do not think I ought to say that I suggest a plan. Mr. Adamson spoke to me some time ago, and said that as I was very strongly in favour of a gold standard, why could I not suggest a means of introducing it.
1445. In point of fact you do suggest a means ?— -Well, I do, but I am not a financial expert.
1446. But you suggest it in order that it may be taken into consideration. Your first proposal, I gather from your memorandum, is that a loan of £500,000 should be raised in gold to be used as a gold reserve against the note and silver dollar issue, and to form the basis of a gold currency or gold standard we will say?—Yes, I thought that night be one way of starting it.
1447. I am not throwing any doubt upon your pro- posal; I merely want to get it upon the evidence; that
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PUBLIC RECORD OFFICE
سياتتسائليسا
Reference :-
61
C.O. 882
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- | COPYRIGHT PHOTOGRAPH—NOT TO
7 PUBLIC RECORD OFFICE, LONDON
Air.
R. Craig.
30 Dec.
1902.
40
►
MINUTES OF EVIDENCE:
is all. And that £500,000_in_sovereigns, I 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 Straite dollar 7- Yes, I think that is necessary if you are going to establish a gold currency.
1449. And what weight and fineness would you make Jour Straite dollar !—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.
1452: 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 theans 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 are of much force ?—I do not think they are sufficient. 1455. You do not think them sufficient; that is all I want to get ?—No, I do not.
1456. 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 7-Yes, you must do that if you want to estab- lish a gold currency.
1457. 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, 1 understand you would demonetise the British and Mexican dollars and declare sovereigns and Straits dollars to be the only legal currency —Yes.
1-162. I also understood that you would fix the value of the new dollar at 28. ?—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.
1-164. And one advantage of having the dollar worth 25. would be that $10 would make exactly one sovereign 7
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 dollar.
1466. Which you think would be at 29. ?-Well, I at given to understand that it is almost fixed at that figure by the American authorities.
1407. You also compare the value of the new dollar with the Siamese currency, in which the tickal has been fixed at the rate of 17 to £1 sterling 1-Well, it was fixed at 17 to £1.
1-468-71. But if 17 tickals are a pound sterling and 810 are a pound sterling, you have 17 tickals equal to 810, and that is not a very good ratio, I should think 7-Well, what I was thinking of when 1 put that down was that the Sianiese 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 1-But they have hitherto ́d It with dollars, and 17 tickals to the pound is nearl the equivalent of the two-shilling 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 ?—Yes.
1474. The dollar at is. 11d, and a fraction. Corres ponding to the tickal at seventeen to the pound?— And a fraction of a penny.
1475. (Chairman.) Well, you see 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 rupes 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 gold 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 ?-If you left it in the hands of the banks they might flood the place with dollars.
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.
1480. At the rativ, of course, of a sovereign for $10 { -Yex.
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 would be a flow of gold into Singapore sufficient to maintain the currency 1-I think so. I believe there is a large balance of trade due to Singapore always.
1480. 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 ?—I mean an export from this country.
1401. Yes, there is an export from this country, but there is a large export from the Straits, too?—Not to the same extent.
1402. 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 ?—No; I think the returns are made out very loosely and very carelessly.
1494. 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 new dollar to be the only legal currency 7-Yes.
1405. At the same time, you are opposed to advancing the value of the dollar suddenly to us. 7—Yes, I am strongly appeal to that.
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
1406. 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 28. 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 ?— 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? -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 $12,000,000--- 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 1-Yes, but is the Government compelled to keep $5 in silver against a $5 note?
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 s. 7-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 ?-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. 7-Yes, and to prevent any dislostion 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 ?—I should think it would take some time. I do not know how long it took before the rupee rose in India to Is. 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 ?-Yes, I think it would take some time-the exchange today is 18. 74d. or 18. 71d.; it would take some time before it rose to 28.
1510. (Mr. Blain) And it is only by taking a con- siderable time to make the change that you could avoid unfair dealing with existing contracts?-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
6840.
41.
much prejudiced, and his customers correspondingly Mr. benefited ?--I do not see how the banker would be R. Craig. prejudiced.
30 Dec. 1902.
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 1-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 adopted, 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 1- 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 1-Yes, I do.
1516. Do you think they would have been more prosperous if they had had 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 1-There might be some little disloca- tion of trade 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 1897 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 Settlements - Yea. 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 terms almost, and it created a if you wanted to sell bills on London for ready delivery they would not give you better than probably is. 111d.; that was for ready delivery; and if you agreed to deliver them two months afterwards they would take them at 18. 91d., and they were able at that time to buy silver to lay down dollars there at about la. ed.
1519. (Mr. Johnson.) That was owing to the tem- porary scarcity of the silver currency in the Straits Settlements 1-Yes, certainly.
1520. Yes, but that scarcity was got over 1-That scarcity was got over by British dollars being brought
in.
1521. What would be substituted in dealing with the neighbouring places for the existing dollar The 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 China by the coolies. Every coolie that goes to China from the Straits Settlements takon a certain number with him. Theu there is a quantity
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