PUBLIC RECORD OFFICE
Reference :-
LPLC.O. 882
7PUBLIC RECORD OFFICE, LONDON
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MINUTES OF EVIDENCE:
Mr. Barr 188E. You wish to point out that the area over which Robertson. silver is now used as standard money is very much 27 Jan. 1903, contracted ?—Yes, it is very much contracted.
1839. You are also of opinion, I understand, that the fall in the value of silver as compared with gold is due in a material degree to the scarcity of gold as com- pared with the increased demand for it ?-Yea. From 1873 to 1892 the fall in the gold value of silver was undoubtedly due to the scarcity of gold.
1870. And since that time -In 1880 and 1891 the Indian import of silver, which was diffusing itself over the silver countries, was very much increased, and 1 attribute the closing of the Indian mints largely to the fact that the supply of silver was 50 per cent. greater in 1890-1-2 than it had been at any time during the previous 30 years.
1871. From the table you have put in, I see that the estimated production of silver increased from 63 millions and odd ounces in 1873 to 172 millions and odd in 1900 7-Yes.
1872. To not quite three times the amount ?—Yes, rather less than three times the amount.
1873. Whereas the production of gold increased from £19,000,000 odd in 1873 to £51,000,000 in 1900 1— Yes. At the same time I must call attention to the fact that in 1800-that is 17 years after the date of 1873- the production was only £23,790,000, when the United States, Germany, and other countries had passed to the gold standard, and had certainly absorbed £250,000,000 sterling of gold, these being countries which formerly used very little gold.
1874. Allowing for the falling off owing to special causes in 1900, the production of gold ems to have increased rather more than three times - Yes.
1875. But up to 1890 the production of gold had in creased really very little ?-Yes, with all the extension of gold coinage in new gold standard countries.
1876. You do not think then that up to 1800, or about that time, the fall in the value of silver was mainly due to the increased production 7-The fall in the value of silver was due entirely, up to 1890, to the scarcity of gold.
1877. But there was an increased production of silver-There may have been, but it did not appear up to 1889 in the case of India, which is a typical silver country. After that time the amount flowing to India did begin to increase in volume, but not before. I make a point somewhere in my memorandum that the fall in the gold value——
1878. I am coming to that. You have given here index numbers which may be taken to represent the average prices of a number of the chief commodities 7— Yes, of 45 commodities in London.
1879. In London, which is, I suppose, the greatest and the best market at which to take the prices ?— Yes, the leading market. And these articles are nearly all raw products and articles of production; they scarcely at all include manufactured articles.
1880. You show that if the gold value of bar silver be taken at 974 for 1873, it was 65'4 for 18027— Yes, it was.
1881. And, in the same way, that if the average price of the commodities be taken at 111 in 1873, it was 68 in 1892 1-Yes, that is correct. Or, rather, I would say, taking the average at 100 from 1867-77.
1882. I understand that. I merely wish to show the alteration. I understand that you take the average of a number of years as 1007-Yes, and 1873 at 111, happened to be a year when coal and a number of other things were exceptionally high; the others are more normal; that is to say, they are 100.
1883. So that the fall in the gold price of silver and the fall in the average gold price of commodities up to 1802 appears to have been about the same ?-Yes, practically the mme.
1884. But from 1892 to the present time, the result has been different 7-In commodities ?
1885. I mean that there has not since 1892 been the same equality of movement in the two sets of prices -No; they parted at that point.
1886. The gold value of bar silver fell from 65'4 in 1902 to 39'8 in 1902 7-Yes, that is correct.
1887. And the average price of commodities altered from 68 in 1892 to 69 in 1902 7-Yes. In the mean- time it went down to 61in 1896, and then went back to 69 for 1902.
1888. To what do you ascribe that difference of movement in the two sets of prices -Up to 1882, silver and commodities seem to have been very steady; the figures show that; they are compared for each year in the memorandum. After that time, silver was being placed on the markets of the world in excess of the quantity necessary to keep it on the level of the commodities. Formerly, apparently just by the natural course of events, it had been distributed over the world tolerably equally, so that commodities and it were steady together. Then more silver was imported into the silver countries, or rather, one would say, tnore silver was available in the world, and was pressed on the mints of the silver countries, so that it broke the level which had formerly subsisted between the gold value of silver and the gold value of commodities.
1889. In your Table II. you have given a column 3, which I understand represents the silver prices of com- modities just as the figures in column 2 represent the gold prices 1-Yes; that is correct.
1890. And according to that, the silver prices of commodities, being 114 in 1873, and 106 in 1874, were 97 in 1891, and 104 in 1892 7-Yes, that is correct.
1891. But between 1892 and 1902 the silver prices of commodities have risen from 104 to 1747-Yes; they have steadily risen up to that figure.
1892. Do you consider that that is evidence that there has been, in every reasonable sense of the term, a great depreciation of silver since 1892 7-Cert, inly; that is to say, silver in regard to its own former pur- chasing power, and without considering gold at all.
1893. That is to say, it takes much more silver in 1900 to purchase the saine quantity of the chief com- modities that are used in the world than it took in 18027-That is the point, yes.
1894. You do not think, I understand, that that is due to a greater scarcity of the cominolities ?—I do not think so.
1895. Then you give some figures in Table III., showing the decrease in the gold prices of commodities up to 1902, the increased silver prices of commodities, the increase in the purchasing power of gold, and the decrease in the purchasing power of silver?-Yes.
1806. These figures illustrate what you have already said --Yes. I would say here, though, that if you take the purchasing power of gold, it has increased by 45 per cent. Now, if you take the purchasing power of silver, it had fallen in 1902 to 57, but the index number of bar silver in London for the same year was 396. So the purchasing power of silver has not fallen to anything like the extent that the gold value of silver has fallen.
1897. No 7-The purchasing power of silver has fallen 43 per cent., and the purchasing power of gold has increased 45 per cer. The gap between the two is divided between those two conditions; it does not all belong to silver, and it does not all belong to gold.
1898. I understand you to say that from 1873 to 1892 the currency troubles were solely due to the inadequacy of the supply of gold ?—Certainly.
1899. But do you not think that that is the case with regard to what has happenel since 18927-Gold did increase up to 1896, but silver has decreased in pur chasing power all the time since 1892.
1900. You admit that gold has increased ?—The index number of 61 for 1896 shows the increased pur- chasing power of gold; the 50'5 for bar silver shows the fall in the gold price of silver; the two began to diverge in 1892.
1901. You point out that the gold value of the silver coin in use in the different countries of the world now varies very much from country to country-Yes. Formerly it was practically uniform.
1902. For example, in some of the French colonies
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
the value for the silver coins which circulate is at the rate of 60'8d. per oz. 1-Yes.
1903. In others, at the are of 13d. per uz.-the Indian rate 7-Yes.
1904. And that in others there is a varying gold value according to the value of silver ?-Yes-in Indo 'hina and other French Colonies in the Far East.
1905. And in the British colonies also we seem to have three rates of value for the current silver coius 1~~- Yes, we have.
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1906. The system of the West Indies ia peculiar 7- Yes.
1907. You state that the money of account is the dollar 7-Yes.
1908. Worth 48, 2d. 7-Yes.
1909. But there is no actual dollar?-There is no coin. That gives a halfpenny to the cent; it makes it simple to calculate into pence at 100 cents for 4s. 2d.
1910. And they use shillings, florins, and half-crowns -British subsidiary coinage —Yes.
1011. Which is full legal tender 7-Yes. 1912. So that, I imagine, if you went into a shop and wanted to buy an article, you would be told it was so many dollars --Yes.
1913. You would think in dollars, but you would pay in British coins 1-Yes. Of course there are bank notes there, but they are not legal tender.
1914. But they are commonly accepted 1-Oh, yes --of the Colonial Bank.
1015. In the Dutch colonies in the East, the silver money of the Netherlands circulates 7-Only the silver money of the Netherlands.
1916. At its face value ?—Yes; so that they may either import silver coin if it is deficient, or export it to the Netherlands if it is redundant.
1917. You think that the money which is current in the East must be to a great extent in the future, as it has been in the past, silver and copper -Yes, I think so. The nature of the people and their transactions make it necessary to have silver and copper.
1918. You think the increased production of gold in the future will tend to raise the gold value of silver? - think it will.
1919. Do you think it will have much effect ?- Well, I do not think it will have any great effect.
1920. Why I-Because I do not think there will be enough of it. For instance, I say in one part of my nemorandum that I do not think the gold index number of commodities will ever reach 100 again if we rely upon the supply of gold.
1921. That is so far as regards the effect on prices of the standard of value ?—Yes.
1022. You will admit that a famine as regards the chief articles of consumption might put the price of those articles up to almost anything -That is per- fectly true. My point is that the quantity is not likely to increase so much, that if commodities are tolerably steady, there would be any very great rise, although I think it is highly probable that they might reach up to a figure. I should be almost inclined to fix a limit of 80; it may be higher.
1922. Have you formed any opinion as to what the production of gold will amount to 7-I have not gone into that question so as to offer an opinion.
1923. Do you think there is anything in the argu- ment that after some time the production of gold will begin to fall off?—I think so. I have had a good deal to do with gold mines, and the history of gold mining is the history of the exhaustion of successive mines-of one mining district after another getting exhausted.
1924. Do you approve of the proposal of the Straits Government to reduce the reserve against notes from two-thirds to one-half ?—No; I think that on general grounds it would be a very unwise step.
1925. It would increase, to some extent, the silver on the market ?-To reduce it from two-thirds to one- half would bring down the present reserve of 8,000,000 dols. to 6,000,000 dols.; it would leave 2,000,000 dola. to be disposed of. That is adding to the
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Mr. Barr Robertson.
very difficulty which your Committee has met to try to get rid of.
1926-7. It adds to the exchange difficulty, but, on the 27 Jan. 1903. other hand, the Straits Government makes a profit out of it. It roughly makes 2,000,000 dols. out of it — Well, of course it does if you consider the Straits as a corporation continuing for ever and never having to pay its notes. But, after all, the notes are issued, and the withdrawal of 2,000,000 dollars would give the Government the use of that amount and nothing more. The notes issued would still be for 12,000,000 dols., and the reserve would be reduced from 8,000,000 to 6,000,000 dols. My objection is that they would be depreciating the silver currency if they sold 2,000,000 dols.
1928. Do you think a gold standard could be adopted in China 7-I lived in China for seven years in my early days, and I have given a good deal of attention to thai question. China is the last outpost where silver has already landed and is going to land, and the problem in China is how to get rid of he enormous quantity of surplus silver that will be necessary to bring the How can standard up to any reasonable gold level. China get rid of the surplus silver ?
1929. Surplus silver-in what way 7-For instance, say both the Straits and the Philippines adopt gold. It is perfectly true they will not use so very much less silver than before, but, at the same time, no one can tender silver there. They can in China. Suppose for a moment I am talking in a general way now-they have £200,000,000 sterling of silver at the present rate; that is, at the rate of 22d. we will say. It would not be worth the while of China to go on any gold standard except at some substantial advance on that price. Three shillings for the tael has been suggested. Of course, the question is, where is the surplus silver to be disposed of if that rate were adopted.
1930. When India changed to the gold standard there was no surplus silver ?—No, simply because India stopped at a moment when the rupee being at 1s. 2fd., it had only the rapees in circulation to deal with; it stopped at 18. 24d., and left silver to go to other countries. In the case of China, there are no other countries for silver to go to, and it can hardly begin to adopt a gold standard at 22d. for the ounce of silver; it would not be worth while to create a whole new system of coinage unless there was some certain steady basis for the currency.
1931. There might be a further fall in the near future? -That might be. Then comes in another question. I should judge that two-thirds or more of the whole cur- rency of China consists of sycee silver, not coins at all. It is quite clear that there must be entirely new coining on an enormous scale.
1932. China would have to begin by coining the whole of her silver into some new coin which the people could be got to accept ?—Yes.
1933. And that would be a big business in such a country and under such a system of government ?— Yes. Another point is that if you attempted to con- tract the currency by demonetizing this aycee silver, it would lead to native troubles, because there would be a considerable amount of sycee silver that could not be accepted for coinage. I think it is not practicable for China to adopt a gold standard unless at a very low gold value for silver, as to adopt a much higher level would leave a large amount of surplus silver to be disposed of.
1934. Do you think there will be any further material fall in the gold value of silver ?—I think not; I must say I do not think there will be.
1935. That opinion has been held at roany stages during the past 25 years 7—Yes.
1936. And it has proved to be wrong?-Yes, it has done so.
1937. So I suppose you do not speak with great confidence on that subject 7-Well, I think there is mechanical limit. No doubt there have been very great improvements in the production of both gold and silver-very great improvements, but at the same time, I can hardly believe that the enormous quantity being produced now can be produced for any length of time at that price. That is my view.