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PUBLIC RECORD OFFICE

C.O.

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Mr.

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MINUTES OF EVIDENCE:

689. (Chairman.) On the other hand you have to R. Campbell. take into account the special remittances, to Europe ?---

2 Dec. 1902.

Yes.

690. Of various sorts in the Straits Settlements - I have no doubt you will have other witnesses before you who can more fully explain.

(M.. Adamson.) I think these tables are very reliable.

(Chairman.) I do not suppose there is any record of the exports across the land frontier.

Mr. Adamson.) There is very little of that; very little export across the land frontier.

691. (Chairman.) Not for Malacca 2-(Mr. Adamson.) Well, it is not material.

692. (Chairman.) You think, that if the Straits Settlements had a gold standard, a merchant, say a Chinaman, who has brought produce from a silver- using country, might find it inconvenient to be paid in the new dollars-I think so; to the extent beyond what he wanted to use them for in buying produce locally,

603. He would not take them away with him?—I do not think he would.

694. No; that is quite certain, and if he took any dollars away with him, he would purchase Mexican dollars -In some way or another.

(Mr. Adamson.) There is one thing I might mention, the large amount which is taken by the coolies to China out of their wages. You see, we have an import of 180,000 Chinese coolies every year; 140,000 or so go back; nearly all these men take something with them. (Chairman,) Do you mention those dollars as affecting the balance of trade?

605-8. (Mr. Adamson.) No, as regards the dollars 7-- Those dollars will not be recorded in the Returns,

699. (Chairman.) You think, that & sudden en. hancement, an artificial enhancement, of the dollar would disturb the status as between debtor and creditor I think so.

700. I suppose, if there was a great fall in silver, there would be a disturbance, though, perhaps, not an equally obvious disturbance Oh, yes, undoubtedly, but it would be, probably, gradual and slow.

701. And, at any rate, it would not be a disturbance to which anybody would be likely to very strongly object 7-No; they could not object to a disturbance of that kind in the same way, as they might object to a disturbance caused by an arbitrary act of the Government.

702. I gather that you are, on the whole, opposed to any attempt to introduce a gold standard into Singa pore--I am,

703. That is your opinion ?—Yes.

704. And, holding that opinion, I do not know whether, supposing it were decided to introduce a gold standard, you are prepared to make any suggestions as to how it should be done? That is a question I have not thought about.

705. (Mr. Blain.) Your objection to a gold standarl in the Straits Settlements would not be put on the same ground that it has been put by some witnesses before us, namely, that it is an advantage to the Straits Settlements to have a depreciating currency? -No.

706. You do not share that view?--No; I do not put it on that ground.

707. It is simply on the ground of the necessary rela tion of the Straits Settlements with countries that must be on a silver basis?--Chiefly,

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708. Seeing that the great bulk of the trade of the Straits Settlements, both import and export trade, ia with countries a gold basis, why should

relations with the countries on

silver basis be the more important for this purpose? -Well, because it is the silver-using countries that take money away from the Straits. For instance, I mention in my memorandum that the Straits export every year to other silver-using countries-I mean on balance—including the protected States, $11,000,000 odd every year. Now I my that it would be a very serious thing to ask the takers of these dollars to take them in the appreciated Straits dollar; that is to say, they would get a smaller number of the Straits Settle ments dollar than they do of the Mexican dollar which

they get now, and these dollars, when they do tak them away, would be probably of no use to them in their own territories,

709. I suppose the essence of the thing is that the Straits Settlements are closer to the silver-using coun- tries than they are, generally speaking, to the gold- using countries? Yes, they are surrounded by silver- using countries, especially China. They are in closer touchi,

710. The trade relations are closer, more personal, than they are in the case of trade with European coun tries-Certainly. The Straits Settlements trade with Europe chiefly depends on their relations with the sur- sounding silver-using countries, It is the latter who are their real customers, so to speak.

711. The trade statistics, whatever their value may be in detail, I suppose that, generally speaking, they give a correct view of the relative trade with different places. It would seem that the trade with silver-using countries is altogether out of proportion with the rest of the trale, especially now Siam has gone over to the gold standard -

712. (Mr. Johnson.) Sir David asked you whether it would not be possible that the Mexican dollar should still be imported for the purpose of re-export, but would it be practicable to have Mexican dollars imported for us outside, and yet prohibited from circulation inside the Colony ?--I do not see how you could.

713. Would it not be very inconvenient, and would it not almost destroy the possibility of keeping up the value of the Straits dollar if the Mexican dollar were also in circulation in the Colony, even if it were not declared legal tender-I think so, and, as I say, you would probably have two quotations, two market prices; one for payment in what you call legal tender, and the other for payment in Mexicans.

714. I understood you to say in wour memoran- dum that the gold standard could only be effectively maintained if the balance of trade or when the balanco of trade was in favour of the Colony ?--Yes,

715. And that, so far as the statistics show, the balance of trade was always against the Colony ?--Yes; as I say, I cannot understand these statistics, and I would not rely on them in any way.

716. But equally it is impossible for the balance of trade always to be in favour of the Colony, is it not? -Yes; there is no country will always give away more than it gets, any more than it will be able to receive more than it gives away.

717. But that being so?-There is a possible explana- tion in regard to that--that a surplus trade balance may he invested; that is to say, suppose Singapore had a favourable balance with England, instead of taking it back in goods or in specie, it might buy securities.

718. Yes, quite so; but do I understand you to mean that only in such a case as you have just mentioned would it be possible for a gold standard to be main- tained, because you said a gold standard could only be maintained if the balance of trade is in favour of the Colony-Yes, if the balance of trade is in favour of the Colony-

719. But, ordinarily speaking, is not the balance of trade sometimes in favour and sometimes against? -What I

mean is that if the balance of ex-

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port of goods from a country is in favour of the Colony, then there is a surplus to be returned, which the Colony might demand in treasure, in specie. On the other hand, if the balance of trade against the Colony, it has got to pay that somehow, and might in certain circumstances have to export cur- rency, the same as gold passes between here and the United States, and so on. If it came to a point where the Straits had to export currency in settlement of trade balances or in settlement of its indebtedness, it could not do that without serious lows, because that currency would only pass outside its own boundaries at its intrinsic value, not at the appreciated value put upon it inside.

720. Is it not the case that it goes up and down; one year it is in favour and the other year it is not in favour? That is so; yes.

721. And if so, the gold would be maintained one year and not maintained another year. In other words, it would not be maintained For that very reason you would require to have a reserve to meet a bad year.

722. Yes; quite so?—The same as India has now. 723. (Mr. Adamson.) Is there not, as regards that, an

COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.

object-lesson just now in China?-As regards the pay- ment of the indemnity.

724. Where the balance of trade is against it so much. Supposing, for instance, China had had a dollar which had a fictitious value, what would have happened when it had got to pay off this money? That is an object- lesson?They could not have paid it.

725. (Chairman.) There are one or two questions I have to ask you. First, with regard to the Mexican dollar and the new special dollar, both circulating in the Straits Settlements at the same time: If the Govern- ment accepted only the special dollar-the new dollar- and public bodies only accepted it, that would give that dollar a certain advantage-Yes.

726. And it would circulate to a certain extent ?- I daresay it would always circulate to a certain extent.

727. But there might conceivably be the Mexican dollar circulating among people engaged in business?..... There might be, and you might find a condition such as is found in a country with an inconvertible paper currency, where one price is quoted for payment in gold and another for payment in paper.

728. Quite so. Then, as regards your argument that if the balance of trade turns against a country which

the has an artificially-appreciated currency, gold standard cannot be maintained. If two countries trade together that have got the same standard, and if the balance of trade, we will call it by that name, turns against one of these countries up to gold point, it exports gold-It exports gold.

729. If it has a gold standard, yes; and vice versa it imports it You.

750. But if the country has an artificial currency, and

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the balance of trade turns against it, it cannot export its currency except at a great loss?--Certainly not.

731. And it will not do it until the exchange largely falls ?-No.

732. The exchange must fall down below, we will say, the silver value of the dollar before it exports it. For instance, take the case of India: Exchange, we will say, is 18. 4d. now?—Yes.

733. If the exchange fell to Is. 2d. it would not ex- port its silver --No; it would not export its silver until the exchange went to about 8-8); it could not.

734, That is to say, if the balance of trade did turn against a country that had artificially-appreciated cur- rency, its exchange would fall until at last it became profitable to export its currency at its bullion value?— Quite so.

735. (Mr. Blain.) It has been represented to us that one object of making this change in the Straits Settle- ments would be to encourage the investment of Euro- pean capital in the Straits ?--Yes.

736. Could you may, from your experience of India, whether fixing the sterling exchange of the rupes has had the effect of encouraging capital investments in India -I have not seen much evidence of that; but you must remember, in dealing with that question, that before the report of the Indian Currency Commission was issued the exchange had risen to 1s. 4d. It is a different thing from raising the exchange from 1s, 7d. to, say, 2, the dollar.

737. It was only a short time before ?-Within the year.

738. But there is no evidence up till now of any great change? As far as I have seen, I have not observed any.

Mr. J. HEIM, called; and Examinet

739. (Chairman.) Have you resided in the Straits Settlements ?-I have resided there for over 20 years. 740. During what period —Between 1878 and 1898. 741. Have you resided in any other portion of the East-No; only in Penang and Singapore.

742. Were you engaged in business there I wu,

743. What was your business 7-A merchants' 'musi-

ness.

744. Imports and exports Imports and exports; the usual thing out there, import and export, and shipping.

745. As regards the produce that you bought; did you buy in Singapore?-In Singapore and Penang.

746. It was not produced there -No, we bought it from the dealers, from the Chinese.

747. It was imported by Chinese merchants and trailers By Chinese merchants.

748. You bought it from them and exported it? And exported it.

749. Mostly to Europe and other countries in the West-Chiefly to Europe and America.

750. As regards the imports from Europe and America, you did not buy in Singapore -Oh, no, we bought them in the place where they came from.

751. And sold them again in Singapore and Penang? -Sold them again to the natives; to the dealers.

752. These dealers exported them?-Who exported them, or used them in the country,

753. Now as to the men who imported produce into Singapore and soht it there. What did they generally take away with them or send out of the country in ex- change for what they had imported-Well, they generally pay for the imports by draft on London, and they draw on London for their produce, which they ship to London.

754. I am thinking of the China merchants-The China merchants; of, they only pay in the currency of the country, in Mexican dollars.

755. A Chinaman might have imported £3,000 worth of pepper, say into Singapore, and sold it for the sur- rency of the country 7-Yes.

756. As a rule, what did he do with the currency; did he actually send it out of the country, or did he

buy something else with it, and send that something else out of the country He would use it; he would spend part for his own expenses, or invest his savings in landed property, or anything of that kind.

757. Have you had your attention directel to the question of introducing a gold standard into the Straits Settlements 1—Oh, yes.

758. Do you think it would be desirable to do sol -Not immediately. I mean to say, I would not think it desirable that the currency should suddenly be changed from silver to gold.

750. My question had no reference to a sudden change; do you think it desirable that there should be a change in the course of time?—Yes.

760. What are your grounds for making that change, or wishing to make it -Because the present currency of the country is losing value, from day to day almost; it has been for the last 10 or 15 years.

761. Losing value with reference to gold 7-With re- ference to gold.

762. Is it losing value with reference to commodi- ties I think so, to a certain extent.

763. In other words, are the prices of commodities rising-Oh, yes, they must be.

764. As a matter of fact, are they rising?—They are rising.

766. Have wages risen at all-I should think so. 766. Well, as a matter of fact, is it within your knowledge that they have risen -They have risen,

yes.

767. They have 7-Yes.

768. How would you propose to introduce a gold article standard ?—I have sent to the Secretary an which embodies my ideas very fully on the matter, and I would refer you to that.

760. Your first step is, I think, to get a special dollar for the Straits Settlements?--Yes.

770. Of the same weight and fineness sa the present one-As the present one, yes.

771. And gradually to get that into circulation — Well, gradually or suddenly.

772. Well, get it into circulation -Get it into oir- culation, yea

Mr.

R. Campbell.

2 Dec. 1902

Mr.

J. Heim.