CO882-(6-8) — Page 109

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

7 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

Mr.

'G. W. Butt.

Dec. 1902.

28

MINUTES OF EVIDENCE:

1023. Do you find them in the hands say, of coolies? Well, no, hardly coolies. You see the lowest I think is five dollars. If we had one dollars they would be taken by coolies; but five dollars is rather too big.

1024. I do not know whether you have ever been in India or not -No; I have never been in India.

1025. 1 ask whether you think coolies and people of that class would take small notes, because in India they certainly would not I think they would.

1026. (Mr. Adamson.) Going back as to what you said as to the probability of there being two curren- cles, when you have established your gold currency, do you think there would be a practical difficulty arise, a difficulty which would result from a man not knowing what his legal payment was to be -1 take it you would only have one legal payment, the legal tender in the Straits currency, and the British and Mexican dollar would be simply a matter of conveni- ence for trade to use when required; that an ordinary debt would be paid in Straits currency.

1027. Quite su, but supposing, for instance, up in the Native States an arrangement were made with the coolies on the one side, it was supposed the coolie was to be paid in the Mexican dollar Yes.

1028. And when you came into Court with any dispute that night arise, then are you not dealing with the legal dollar; would there not be a difficulty I take it that you would agree to pay him so funny silver dollars a month; so many Mexican or British dollars.

1029. Might there not be a difficulty with domestic servanta large bodies of coolies are difficult?—Yes.

1030. Domestic servants and stablemen and gardeners and people of that kind?—1 take it that the ordinary custom in the place would go on. If they had been in the habit of being paid in silver, they are paid once a month, that in itself would be sufficient evidence to know that their wages would be paid in silver.

1031. You see no practical difficulty?—I don't think there would be any trouble there.

1032. As to Java; has there been of late any im- portant export of guilders from Java back to Holland - That I do not know.

1033. I ask the question because it might have some bearing on the question of spurious guilders in this way that there might be a larger amount attempted to be put in circulation than the Dutch authorities thought neces- You Bary. I think there has been an export -Yes. mean to say a great many of the 21⁄2 guilder pieces are still forgeries in the place, only they cannot be detected.

1034. I mean that the Dutch who regulate their currency would have a larger supply than they wanted -Not made by themselves?

1035. Yes. Then can you tell us what might be the amount of dollars held by the banks on an average roughly in Singapore, spart from the reserves they have to keep against their note issue 7—Well, you mean to say the total altogether]

1036. Yes How much I think the banks hold in the Straits?

1037. How much you think the banks hold?—Uf course, it would be very rough.

I should say it 1038. Very rough—Very rough. would be probably 100 lakhis, and, of course, then there is the note issue, and the Government reserve too is in the place

1039 In addition 7~~In addition.

1040. That gives some sort of idea what might be the amount 7—Of course, I have got no figures to go upon.

1041. What might be the amount that would have to be exchanged for the new dollars, if the new dollar was made legal tender ----Yes.

1042. (Chairman.) When you say 100 lakhs, you mean 100 lakhs of dollars?—Yes, $10,000,000.

1043. And I suppose 1 lakh is $100,000 7-The lakh in $100,000.

1044. The same as the Indian lakh ?—Yes.

1046. (3r. Blain.) I suppose there is no question that the trade of the Straits Settlements is considerably greater with gold standard countries than with silver standard countries 7-You mean, the exports to gold countries is more.

1046. Both export and import-the total trade – The total trade with gold countries, I presume it is

•

1047. And it tends to become increasingly so as other Alver countries go on to a gold basis, like Biam ?—Yes, 1 believe that would be the case.

1048. If we look at the question merely from the point of view of the statistics of the import and the export trade, I suppose no one would have any doubt that it is better that a country should be on a common basis with the countries with which it has the largest trade?— Well, I am not quite certain about that. It may be if you can by a cheaper currency produce a thing cheaper, and you may gain an advantage over your neighbouring countries that adopt a gold basis.

1049. Yes, that is the argument of the benefit of a de- preciated currency, but if we look at it merely from the point of view of convenience of trade, apart from any economic gain you may derive, it would certainly seem most convenient to be on a common basis with the countries with which you trade most largely 7-It will be a great convenience, of course, to have a fixed ratio butween the countries or on the same basis.

1050. That is a fixed ratio in so far as variations depend on the metal basis of your currency ?—Yes.

1051. But in spite of that fact many people hold that the advantage in the case of the Straits Settlements is rather with remaining on the silver basis, and even people who do not hold your view about the benefit of a depreciated currency, take that view because they say that it is more convenient for trade transactions. Do you share that view ?--What, to have a gold basis?

1052. No, to have a silver basis, even although the trade with silver countries is less in volume than the trade with gold countries. We have been told at this Com- mittee, that it is more convenient that the Straits should be on the same basis with its silver neighbour, rather than on the same basis with the more distant gold countries with whom it does the greater trade?—Yes; I should say so. The silver countries are the places where they buy their produce, the gold countries practically are the places to which they send their produce. The Straits send a lot to England; I do not know that we send a lot to a gold country, but they have got to pay for it in silver.

1053. England pays for it in silver?-No; the Straits pay for it in silver, and they get gold for it here.

1054. What I wanted to know, and I suppose your ex- perience as a banker would enable you to say, is whether the reason for this opinion that I have been stating s not the difference in the manner of trade between the Straits Settlements and gold countries on the one hand, and between the Straits Settlements and silver countries on the other. 1 take this case, A merchant in the Straits Settlements is exporting produce to this country; how does he get paid for that ?-The merchant in Singapore gets paid in silver dollars.

1055. Yes, but does he draw a bill?—He draws a bill.

1056. Which he negotiates for silver dollars in Singa- pore 7-Yes

1057. On the other hand, supposing a merchant in Singapore imports produce from one of the neighbour- ing silver countries?—Yes.

1058. How does he pay for it?—He pays, for instance, take Siam; he can pay in British dollars, or in Siam ticals he can pay in Siam. Hitherto they have taken the British dollar at the rate of 60 cents.

1059. But does he export the British dollar, or is it done by means of a bill -No, he would buy a bank draft.

1060. He would buy a bank draft in that case ?—Yes.

1061. But 1 suppose there are a good many silver countries where those banking facilities do not obtain with which the Straits Settlements trade, are there?— Well, I suppose if you went down to Macassar and even Borneo you would not find many banking facilities.

1062. That is rather what I want to know, how the bulk of the trade is done; the great bulk of the import trade into the Straits Settlements from the silver stan- dard countries. Are the trade differences settled through banks, as a rule, or by bills of exchange, or by actual dealing in specie –Well, they are done through the banks.

1063. Very often in those cases -Even in Borneo. Take Borneo where there is practically no bank, only agents, there the majority of it is financed in Singapore on the silver dollars, and in the case where silver dollars are wanted they are shipped to Borneo to pay for the goods.

COMMITTEE ON STRAITS SETTLEMENTS CURRENCY

1004. Are they shipped by the man who has imported the goods, or shipped by the bank --Oh, they are shipped, as a rule, by the man I think.

1065. Who has imported the goods?--Yes, 1056. It is a direct trade between commodities and silver -Oh, yes.

1067. Then that would not entirely serve to explain why the identity of standard is more important with bilver countries than with gold countries, because they have to a large extent the same facilities for trade transactions, banking facilities and bills-Yes; they want the silver, of course, to pay for it. In a place like Borneo it is a question whether they would take a token Singapore dollar.

1068. No, but if the transaction is settled through banker, I presume the Singapore merchant pays in the currency of Singapore, and the Borneo merchant receives the equivalent in the currency of Borneo, so it would not necessarily be the same at all?—No, but who is going to pay that the banker could not pay it; he would not send his Singapore currency over there; he could not ship it.

1059. Then there is an absence of the same banking facilities that you have with gold countries?—Yes,

1070. (Mr. Johnson.) Could not a large part of this import and export of silver dollars that goes on in the Straits every year, if not the whole of it, be met by banking facilities, by drafts and bills of exchange, as it is now between the Straits Settlements and gold countries? --I take it there is a balance of trade which you would have to pay for.

1071. But the imports of dollars into the Straits Settlements amount to nearly $20,000,000 a year?-Yes.

1072. And the exports to $20,000,000; 1 am giving enough figures-Well, the export must. You see Singa pore is a peculiar place; you cannot take the imports and exports, because it produces nothing and it receives nothing really; it is simply a centre.

1073. Yes, I know; but with regard to these dollars, I still cannot understand why it is that such an enor- mous number of dollars are actually imported and ex- ported. I do not understand why a large part of that trade, even with the neighbouring islands, could not be done by bills of exchange, and so on, as is done with gold countries?-Well, I take it that it is not export exactly; it would go to the Native States, for instance.

1074. Yes, but even excluding the Native States, there are $500,000 sent to Siam every year-1 do not know about every year; the particular year I have before me and $500,000 come back from Siam. Why should not a great part of that be done by bills of exchange? Why should such a large quantity of dollars go backwards and forwards in one year?-Well, I suppose at one time of the year they find their way there, and at another they come away. You find a lot of shipping of bullion b tween any two countries,

1076. (Chairman.) Yes, there are large imports and exports of gold in this country, are there not, and yet banking facilities are very highly developed here- Yes.

1076. (Mr. Johnson.) Do zuu know whether an appre ciable quantity of this $20,000.000 brought into the country is taken out in the pockets of Chinese? Probably a great deal of it finds its way up to the Native States to pay for labour, which is Indian and Chinese, and these dollars undoubtedly are hoarded by then, and taken away by them to China. They find their way up, of course, to Hong Kong: the coolies go to Hong Kong; they each take a certain number of these dollars away with them.

1077. (Chairman.) Are the dollars ever melted down for the sake of the silver, in order to make ornaments?— I believe so; it is not perceptible, but I should say with the Indian coolies it is very likely.

1078. (Mr. Johnson-) Bupposing we had the new dollar on the gold standard, you would still want Mexi- can dollars, partly for this trade outside the Colony, but partly, I think you said, to pay coolies. Why should coolies continue to be paid in Mexican dollars instea of in the new coin?-Well, if they were paid in the new coin of the place. I take it they would buy the silver dollar directly they wanted to go away.

1079. That is when they wanted to go away ?—They do not go to the bank and buy a bank draft. They want to take something-they prefer ulver-home to their

country.

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Mr.

1080. Yes, when they are going home; but then the coolies remain in the Colony for some time, and G. w. Bull. if they had to buy things in the Colony while they atay there, and only had Mexican dollars, then the 9 Dec. 1902 tradesmen for ordinary food, and so on, and clothing, would have to have two prices, one for the coolies and one for the other people, one in Mexican dollars and one in the new Straits coin 7-Yes.

1081. Would it not be more convenient to pay thesu coolies and everybody else in the new Straits coin aud let the coolie when he was going away change whatever coins he had saved for Mexican dollars, of which he would get a larger number?-That, of course, might be done. The result would be the same. The same num- ber of dollars would go out of the place.

1082. Yes, the same number of dollars would go out of the place, but I asked the question because I did not think it was fair not to pay the coolie in the coin of the country? You would pay so much. The chances are the coolie would go round and buy Mexican dollars with it as soon as possible, or with what he could save.

1083. With what he could save, quite so. But 1 mean to say you would be paying him a varying rate of wages if you continued to pay him in Mexican dollars, whereas, if you paid him in the proper coin of the coun- try, he would know where he was with regard to buying food, and so forth 7-Yes. Well, he would be just where he is now if he were continued to be paid in silver.

1084. No, not where he is now, would he?-He has to buy produce.

1085. The price of goods has not varied with the fall in silver?-Not very much, except those coming from a gold country.

1086. Yes, but the coolie does not buy very much of these-Very little.

1087. So that he knows now that so many dollars wages would produce so many of the necessaries of life. If the country had the new coin, provisions would arrive at a fixed price in the now coin, and you would not be treating the coolie fairly, it seems to me, if you paid him in an outside coin which did not belong to the country P...-- I do not know. There is no reason why you should not pay in the local currency. But there is no doubt that he would get hold of the Mexican and British dollar to take away with him in the same way as he does now.

1088. (Chairman.) A good deal of the produce that is brought to Singapore from other Eastern countries is imported by Chiness merchants, I believe?—Yes, a great deal by Chinese.

1089. Do they use the banks as freely as Euro- pean merchanta do ?—Well, no, I do not think so. You do not see Chinamen giving cheques and that kind of thing the way the European does.

1090. But as regards drawing bills and buying drafia1 Oh, yes, they buy a lot of drafts and draw bits.

1091. But they do not use cheques quite so freely 1— Not so freely. Of course, there are some Chinese mer- chants who do,

1092. Is that because it does not suit their business, or because they are not so much inclined to use cheques ? -Well, I do not know the reason of it.

1003. Do Chinese merchants of any importance gene- rally keep a current account ?—The large merchants do. 1094. Now if a gold standard were established in the Straits, what would you recommend as the permanent rate to be fixed between the dollar and the sovereign 1— Well, if it were possible to make any rate, the rate of 2s. is the most convenient, being 10 to the £1.

1005. The most convenient, but what do you think would be the best 7-Well, it depends. If you mean to raise the price of the dollar to the basin, I think 2. would be too high.

1096. Too high 7-I think that if you stopped the im portation of dollars which, I presume, is the only way to do it to raise it to 28.-it would check trade. We should come to a deadlock. It might be done to 1. 8d. To raise it ld. I do not suppose it would die. locate trade very much.

1097. Did the fall from 2. to 1x, 8d. or 1s, 7d. die- locate trade very much -No, I do not think so.

1098. Well, if that is the case, would a rise to Pa. dislocate it very much 1-A natural rise would not have the same effect.