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PUBLIC RECORD OFFICE

Reference :-

C.O. 882

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

7PUBLIC RECORD OFFICE, LONDON

.Mr.

19

MINUTES OF EVIDENCE:

1099. A gradual rise?—A natural rise from the value 4. W. Butt. of aver going up would not have the same effect as a

forced rise.

9 Dec. 1902

Mr.

J. Fraser.

1100. Now who is it that chiefly imports this large amount of dollars and exports them"; is it private mer- chants or is it the banks?—Imports and exports these dollars into Singapore?

1101. Imports them into Singapore and sends them unt again; is it chiefly done by the banks or by the merchants?—Oh, it is chiefly done by the merchants.

1102. I should rather have expected the banks to do that sort of business-Where would we send it to?

1103. Wherever they were wanted?—I will take the native States; the banks, in that case, do they send up to their branches in the native States?

1104. Yes?--And Bangkok takes a little.

1105. They export a little to Bangkok?—But I think the great bulk of the dollars going out are taken away by merchants.

1106. Taken away by merchants; and are the dollars imported largely by the banks 7-From home; they are from Bombay.

1107. From Bombay comes the British dollar?-The British dollar principally.

1108. I suppose in that case it in almost invariably the bankers who import the British dollar?—Yes.

1109. In fact, invariably?—Invariably, I should say. 1110. But the Mexican dollar, you think, is largely imported by merchants ?-Oh. no, no; the Mexican dollar comes over from San Francisco or London in the same way.

1111. It is the banks that import the dollars?—It is the banks that import the dollars.

1112. And pay them out over their counters ?—In some cases they have to ship a little to other places, but the majority is passed over the counter Singapore.

1113. To merchants?-To merchants.

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1114. Who in some cases export them to places where they are wanted ?—Yes, wherever they are wanted

1116. (Mr. Adamson.) Chinese merchants 7-Chinese merchants.

1116. (Chairman.) And the banks do not export very much from Singapore in the form of dollars ?-No. Some go up to the native States, of course.

1117. (Mr. Blain.) Could you say how the British

dollar now compares with the Mexican dollar in circula- tion in Singapore -Well, I should say that the greatest number by a long way were British dollars.

1118. J has a long way superseded the Mexican dollar —Oh, yes. A year ago or eighteen months ago it was a rare thing to see the Mexican dollar, but I believe there are more in circulation now. The Mexican dollar has been cheaper, and I daresay there are more than there were, but certainly the British dollar is far in excess.

1119. (Chairman.) Either dollar is taken quite freely by the people-Yes, both are legal tender.

1120. They make no distinction between them, do they?—No, not at all.

1121. (Mr. Johnson.) In parts of China they are said to still make a distinction between them, but that in not so in Singapore?—No, in Singapore they are both legal tender.

1122. In Singaporo itself they are, but in the sur rounding islands do they take the British dollar as freely as the Mexican dollar ?—Yes; it is only in North China that a distinction is made.

1123. (Chairman.) Are there many banking facilities in the Federated Malay States; are there banks there? -There are banks there.

1124. There are ?—The Chartered Bank has got two branches in the Malay Federated States.

1125. Are there any banks in Johore ?—No.

1126. There are banks in Siam ?-Oh, yes.

1127. In Borneo?—No, there are no banks; there are agents of banks; but that is nothing; there are no banking facilities.

1128. That is the same thing-agents ?—No banking business, only correspondents, you may say.

1129-31. There are banks in Java, I suppose —Oh, yes, banks in Java, several-both Dutch and English

(Mr. Adamson.) Then there is the east coast of the Malay Peninsula, Pahang, Tringanu, Kelantan, and Patani.

1132. (Chairman.) North of the Federated States ?— There are no banking facilities there.

1133. Where there are banks, then, the traders make use of bank, and get the ordinary banking facilities in the place. Where there are no banks the balance of trade has got to be met by silver 7-Haa got to be supplied by silver, yes.

Mr. JOHN FRABER, called; and Examined.

1134. (Chairman.) You have resided in the East, Mr. Fraser-Yes, sir, I have resided in the East; quite 30 years I have been resident in the East. Of course, it is more than that since I went to the East.

1135. And at what places have you resided in the East-I have been in Japan, Shanghai, and Singa- pore; chiefly in Singapore.

1136. How many years have you been in Singapore? -Thirty years.

1137. And what has your business been there?—I was connected with a banking concern first, and then afterwards started exchange broking.

1138. You were employed in a bank 2-1 went out to a bank.

1130. How many years were you an exchange broker? -Twenty-six years.

1140. And, being an exchange broker, you are neces- sarily familiar with the consequences that have rol- lowed the fall in the value of silver I have tried to.

1141. You, at any rate, have had experience of these consequences Certainly, sir.

1142. Do you think the fall in the value of silver, as compared with gold, has been, on the whole, a gain or a loss to the Straits Settlements?—I certainly think, since the fall from 28. to the present rate, ls. 7d., has been a severe loss to the Settlements.

1143. You think it has been a loss 7-I certainly think so, to the European residents particularly.

1144 And the fall from the uhl rate to 2s, what do you say as to that - Well, I have known the dol-

lar,

may say, from 5s. 3d., and it is impossible for me to say what the loss would be connected with any drop between that and, probably, 2s. beyond capital; but I think after exchange arrived at 2s., certainly, the loss is a very serious one. From my belief much capital was estimated at 28.

1145. But why is it that you can give an opinion as to the consequences of the drop from 28. to the present rate and cannot give any opinion as to the drop from the old rate down to 28. 7-Well, I should say the rise and progress of the place makes a very great difference. The rate has depreciated so as to give no encourage ment whatever for British money to go to Singapore for investment.

1146. But, of course, it was a discouragement to British capital when the exchange fell, say, from 4s. 6d. to 28. 1-Certainly.

1147. And a greater discouragement, I should say, that the fall from 2a. to 1s. 8d. ?—I doubt thuis, as it was in my opinion the discouragement took place from 2s. 6d. downwards.

1148. But do you think it is an advantage that it fell from 4s. or 4. od. to 28., or a disadvantage ?——That is a thing I could not give any opinion upon; I am re- ferring more to the drop from the time we have to take seriously into consideration from 28,

1149. Now in what way has the drop from 28. inju riously affected the Straits Settlements-1 should say it has affected the import trade of the place. It has profited the export trade of the place, such as the pro- ducers in tin and other products; of course, they have benefited very much by it. I do not say that the Euro-

COMMITTEE ON STRAITS BETTLEMENTS CURRENCY.

poan merchants have lost by it in the way of business; but I think, in my own opinion, the time has arrived when we ought to go on some basis, if it is possible to be done, somewhat after the lines of India.

1150. Now as reganis your own business, that of exchange broker, do you find a fluctuating exchange a good thing or a bad thing? Have you more business when exchange fluctuates or when it is steady ?--There is a great difficulty in answering that question, inss- much as, of course, we are paid commission. The cam- mission on a 4s, dollar and a 2s. dollar is a very dif- ferent thing, but though our dollar receipts are a great deal more, it does not mean the income is more unless you employ it in the East.

1151. I heard the other day-I do not know whether the report is well founded—that owing to the steadiness of the Indian exchange the rates of commission to the exchange brokers in Calcutta, at any rate, had been largely reduced ?—I believe so. I am still interested in that particular department, inasmuch as I have got a son-in-law in Singapore, and, although I am giving my evidence here, I am giving my evidence against nis interests; only I am doing so more in the general way in the interests of the Straits Settlements. I may 687 at once that I am not in any very selfish way interested in the exchange. With regard to my own investments I have investments there, but they are of such a nature, chiefly in land and property, that although the dollar depreciates, as a rule the land appreciates, so that I mean to say, in making any statement I am doing now, it is for no selfish purpose whatever.

1152. Are the bills in connection with which you are employed-many of them-drawn by the Chinese, or on Chinese firms?-None so far as I am concerned. I have nothing to do except with European firms.

1153. Who manages that business for the Chinese ? -I think there are some Europeans; but believe it

is done through Chinese brokers, or direct.

1154. Done direct, you think, chiefly -I do not know that there is much of it. I think the transactions, for instance, with the banks, are much more remittance by the Chinese to China than drawing.

1155. You are not familiar with that branch of the business?--I am not familiar at all with that branch of the business. It does not come within my view at all.

1156. If it were decided to establish a gold standard in the Straits Settlements, what rate of exchange do you think would be fair, looking to all the circum stances of the case?-Well, sir, I have been thinking about this question a great deal just recently, and the more I think of it the more intricate it seems, and the more difficult to get to a decision, but at the same time, I think we ought to have some certain solid basis to go on, whether it is 1s. 8d., Is. 10d., or whether it is 2., I do not know.

1157. But which of those three -Oh, I should think 2s., if it is at all possible or practicable, for many reasons; 2. makes it an easier calculation, and then, compared with India, you have got 14, 16 rupees and 10 dollars, and I think it would be a reasonable thing to expect. Of course, the problem comes to be how we are going to do it.

1168. Have you thought out any plan by which a gold standard could be introduced --Well, sir, I do not know exactly what you mean by a gold standard, unless there is a ratio.

1159. That is what I mean by a gold standard, tha the coins in circulation should preserve a fixed valu as compared with gold; that I call a gold standard?—— Do I understand you want to be in a position to exchange gold for silver at any time?

1160. What I understand by a gold standard is this: that the dollar circulating in the Straits Settlements should always be of the value of, we will say, 2. or 1. 10. or is. 8d., whatever ratio might be fixed upon. That is what I call a gold standard. If the dollar is always worth 2s., you have got a gold standard; if it is always worth la. 8d., you have got a gold standard; that is what I mean by a gold standard ?—I understand, sir. What do I understand your question is?

1161. Have you thought out any plan by which a gold standard could be introduced into the Straits Settlements?-Well, I have thought that the stopping

of the importation of dollars for a time from anywhere, except dollars, of course, which arrived in the Straits

31

Mr.

J. Fraser,

Settlements for transhipment to China. That would be the first idea that I have, and also in the meantime, or as soon as possible, to stop the mintage of dollars in Bombay, and as soon as possible demonetise Mexican 9 Dec. 19052. dollars in the place.

1162, Demonetise Mexican dollars?—Not only Mexican dollars, but demonetise the present British dollars?

1163. Yes-In place of them to substitute a Straits Settlements dollar.

1164. A special dollar?—A special Straits Settle- ment dollar, for the Straits and Confederated States only.

1165. A new dollar?-A new dollar; that is to say, you would demonetise all the other dollars that are in existence. Of course, I cannot say how that is to be done; I cannot even suggest it, unless you give a dollar for a dollar. As soon as you find out the amount of Coin in circulation in the Straits, to establish a Straits dollar and exchange; anyone wanting the new dollar can have it independent of the rate of exchange, and after you have estimated your currency generally, keep the place as short of dollars as you can, without stultifying trade, raise the value of your dollar until you arrive at a position in which you are justified in simply saying: "We will make a standard,” say 25.

116. Another witness. Mr. Heim, sketched a plan very much the same as yours. I do not know whether you have seen his plan or not?—I have not. I know Mr. Heim, but have not seen him or been in communi- cation with him for five years. I live in Scotland six months, and I live in the country in England six months, and I think Mr. Adamson will tell you I am very seldom in contact with city people.

1167. Well, is that the only plan that has occurred to you? The difficulty in thinking over this matter is taking the plan as a plan. I have not been able to get at the bottom of how to do with the bank notes in circulation.

1168. But would there be any difficulty at all as re- gards the bank-notes in circulation t

What is your difficulty 7-Well, the difficulty is I do not understand how you are going to dispose of them; how you are going to meet them.

1169. Meet them in the new dollar Meet them in the new dollar, yes; but then in the meantime I have got, say, $100 of bank notes, and I keep this in view of the possibility of dollars being demonetised, and I hold these notes until such time as you have declared a gold standard.

1170. Well? Well, that is the trouble that I can- not get over.

1171. But suppose that the gold standard was de clared at the ratio of 1s. 7.. you would not gain any thing by holding these notes, us far as I can see -- Exactly so; but I was going on the presumption of the basis of 28. when I am talking in this way. The ques tion of holding until the currency was fixed as standard. Of course, so long as you fix it at the standard of the current rate of the day, it does not matter.

A

1172. But supposing that no more notes were issued beyond those that are in circulation at present —That is one of the questions that I have thought over.

1173. There would be no great difficulty, would there? Is it possible for the Government, or anyone else, to stop the circulation of notes. Under the char-

ter of the banks they are allowed to circulate noter up to a certain amount, holding a reserve of one-third or one-half in coxin against such circulation, and that allow ance has been made, as I understand, for a certain number of years. I do not know whether it is in the power of the Government, or anybody else, to say:

Now you must stop issuing notes."

1174. It might be possible for the Government to come to an agrement, an amicable agreement, with the banks that they should not issue more notes than at present ?—That is the point.

1175. Then there would be no difficulty as far as I can see, because you would have no more notes to cash than you are bound to cash at present 7-Then the Government notes come in in that way.

1176. The Government could check the issue of its notes also, and say it will not issue any more It would depend on the demand of the place. Such action might stultify business.