COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
77
PUBLIC RECORD OFFICE
التسلسليا
Reference :-
C.O. 882
7 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
76
APPENDIX:
that, while a mark on a particular class of manufactured goods indicated the quality, the stamp upon depre ciated coin available as legal tender was nothing less than a fraud enforceable at law.
The inconveniences of establishing a new set of coins must not be lost sight of, but it might be promised that neither sterling nor gold contracts necessarily involve a gold coinage, nor the fixing of the legal tender of any denomination of coin.
As to the general mercantile position.—It has been sug- gested to me, and I agree, that the main question to bo settled by a banker or merchant before doing business with foreign countries or the Colonies is: "How shall I be paid for the goods or stocks. I am exporting?" And, in the opposite case: "How many pounds sterling shall I have to pay for the goods or stocks I am buying abroad?" For no mercantile transactions are possible with foreign countries unless we first consider the rate of exchange on the country with which we are dealing.
But if we consider the conditions under which a merchant would operate from England with coun- tries where there are likely to be large fluc-
tuations in the rate of exchange, such an element of uncertainty is introduced into the business, that for his own protection the merchant has to assume a larger percentage of profit than would otherwise be the case consequently the silver-wing country is penalised by and to the extent of this extra profit which the merchant has assumed for his own profection; and it further seems to me that it is this particular point which is operating so adversely on the Straits Settle- men's, especially on the agricultural portion of the community, at the present time and by the present con- ditions.
Still, the position generally taken up by the ex- porters must not escape attention; they calculate upon this basis: They pay for native labour, food, materials, and other requirements obtained in the colony with s currency standing at a low rate. They sell their pro- dure for gold; hence the establishment of a gold stan- dard or other enhancement of currency would involve an apparent loss of profit-that is to say, from this point of view it would appear that their profit is the difference between the gain they realise in local pay- inents and the losses they sustain in remitting the pro- ceeds of their business to the mother country or abroad. If they sell abroad for gold they secure a large pro- portion of such profit. On the other hand, the im- porter who buys abroad for gold has to sell his goods locally, and be paid for them in the local currency; and he is subject to the fluctuations above mentioned, more especially as he must, as a rule, sell on credit; and to cover this risk he must increase his selling prices.
These are, of course, general observations, and may be almost classed as truisms.
The Committee wish to know the views of witnemes as to the effect of the Indian measure under which the price of the rupee has been fixed. All that can be said in this connection is that the direct result has been that through all the fluctuations of exchange in the Straits Settlements the rates on Bombay and Calcutta have stood steadily in the neighbourhood of 1s. 4d., whilst in the Straits the dollar has come down materially, I think the lowest point touched was is. 6id.
which were shipped at a time when the dollar was worth about Is. 94d. Now, if that money had to be brought home here to-day the company would only get about 18. 6jd. to 18. 7d, for every one of those dollars; but in this case that company, dealing with itself, did not assume any profit whatever in the original transaction.
But supposing a merchant had consigned goods for sale in Penang at a similar rate, besides loss of interest and of incidental charges and expenditure, he would have lost, through no fault of his own, through no fault whatever in his market, but merely through the opera. tion in exchange, about 10 per cent., unless he had assumed an extra profit to protect himself.
True it is that merchants and bankers make up day by day for these fluctuations, it being the business of The bankers particularly to take advantage, as far as they can, of the fluctuations, either for their own pro- tection or for their direct profit; and while upon this it is not out of place to remark that a bank, established in England, starting in business in a foreign country. where it has to locate the bulk of its capital, may, and does, find that capital reduced very considerably by the conversion of that capital into currency which sub- sequently falls in value
We now come to the main point to be considered. Shall a gold standard be introduced; shall coins be circulated of a fixed value, intrinsic or artificial, or shall some zystam analogous to the English one be adopted? That is to say, a limitation_of the amount of debt dischargeable in currency. In England wa know no debt can be discharged in silver above 40s. Or shall what has taken place in India be adopted ↑ That is to say, fixing by law the rate at which a creditor shall receive his debt, a rate at which the State shall receive its taxes. Such regulations are useless when the country is brought into touch with others, a naturally such obligations can only be conterminous with the territory.
PRICES of Staple food, namely, Rice, for similar Period.
$
1892
NUMBER of Dollars required to Purchase an English Sovereign for the same Period.
$ c.
July 1889
August 1889
130 per Coyan
6.80
13
1890
11
6
1890
1891
96
19
-
97
1891
6.30
116
1892
11
"
71
7
1893
110
1893
가
31
"
8
1804
1891
"1
114
9.00
1895
105
1895
11
11
+
9.40
1896
134
1896
11
"}
9.30
1897
#
1897
186
7
11.20
1898
"D
1898
F
10.80
1899
1899
++
10.30
1900
1900
16
0.20
1901
M
1901
10.27
1907
1902
"
13
11.40
•
"
146-192 per Coyan
144-185
11
151-190
144-188
146-185
"}
n
JJ
VALUE of Dollar for exchange purposes for the years 1889 to 1902, taken at the end of July in each year, being the period for closing the Penang Sugar Estates Company's crop accounts.
1 d.
4. d.
July 1889
-
3 1
July 1897
1890
19
3 74
1898
11
1 91# 111
1891
J
3 34
1899
1 11
1892
"
2 101
1900
2 4
It
31
1893 (Indian Mint closed to silver) 2 61
1901
13
1 111
1994
"
2 11
1908
11
19
1896
13
2 14
Present value
1 011
1896
"
2 1/
The Committee will doubtless hear many expressions of views by the commercial community, more or loss coloured in respect to their individual interests. must, however, be clear that an increasing general difi- culty remains to be dealt with, viz., instability, which threatens the commercial prosperity of the colony.
The conclusion which is forced upon those interested is that some steps must speedily be taken to avoid greater confusion; already the introduction of English or foreign capital for the purpose of developing im- portant industries of commerce of the Straits offers grave difficulties.
PRIME Cost to the Estates of Indian Coolies in the
yeare
1889 820 por man.
1891 = $17.75
**
1902- $36,09 **
AVERAGE Wages earned by Indian Coolies in the
1889
•
1902
-
I lay before the Committee a statement of the ex- changes which have ruled during the last 13 years, în which the Penang Sugar Estates Company, Limited, haa been dealing with its sales, exports, and imports. Natur- ally, the great difficulty of & Company which is providing for the greater bulk of its outlays in gold, and which has, as a rule, to recover its capital and interest through 1891 the sale of its produce for silver and other currency, subject to great fluctuations, is a very serious one. Take, for instance, the sale of the crop of a particular year. The seller may find himself from 10 per cent. to perhaps 20 per cent. worse off in the payments made against deliveries over, say, 12 months than he would have been had the prices of the contract been paid down or the rate of exchange fixed. The salaries of European employés and "agents have to be paid in sterling in order to procure efficient men. (The discon- tent of the Indian Government officials has found ex- pression, and has produced its natural result upon others.)
Again, in the early part of this year ■ Sugar Estates Company bought certain stores, implements, tools, etc.,
-
14 to 16 cents per day. 20 cents per day.
Jours-
Indentured labourers
Free labourers -
Indentured labourers
Free labourers -
21 to 22
17 to 18 renta per day.
"
Indentured labourers (Government are stipula-
ting for 28 cents per day). Free labourers -
-
35 to 45 cents per day.
The real comparison should be between the rates paid for free labourers at the different dates, because at the earlier dates the coolie had to repay cost of passage, &c., now he is at no expense whatever, the importer paying all charges
L
6849,
No comments yet.
Private notes are available after approval.