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PUBLIC RECORD OFFICE

Reference :-

LICO. 882

7PUBLIC RECORD OFFICE, LONDON

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

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APPENDIX:

effect, will most assuredly still further unsettlo and throw into confusion the existing conditions of British trade all over the world with the remaining silver money countries.

CHANTRET INCHBALD.

36, Nicholas Lane, London, E.C.,

26th January, 1903.

To the Chairman of

The Straits Currency Commission.

P.S. Since writing the above my attention has been called to the enclosed letter*, appearing in the latest issue of the "Statist," under the heading, "Mexico and the Fall in Silver."

Whilst this letter does not perhaps advance us any further towards a solution of the silver problem, it at least goes to show that there are thinking brains in Mexico and the United States which are at the present moment endeavouring to discover some practical scheme under which all the nations having an interest in silver may combine together to produce a more or less stablo equilibrium. Whether or no any such workable solu tion can be found, the future alone can show, but the mere fact that so great a desideratum is at the present moment engaging the attention of business men seems to me to be yet another reason why it may be unwise to decide as hurriedly as some of the Straits merchants would seem to wish on any isolated experiment, unless, indeed, the arguments in favour of such experiment very largely outweigh those brought forward against it.

• Not printed.

COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.

103

APPENDIX No. 16.

REPORT of the Committee appointed in the Colony to consider the subject of the Currency of the Straits Settlements in 1893.

The Committee appointed by His Excellency Sir CECIL CLEMENTI SMITH on the 27th July last to consider the subject of the Currency of the Straits Settlements, havu mut ten times, and have taken the evidence of 23 witnesses.

2. We have not had before us any specific proposals on the part of the Government, and we have not been asked to advise on the desirability or otherwise of any particular step which may be in contemplation. We hare conceived, therefore, our duty to be to receive and record the statements and views of representative men of all classes—merchants, bankers, planters, and others -and to endeavour to place them before the Govern- ment with such remarks and recommendations as it may be possible to make upon a subject which presents so much difficulty and so much occasion for variance of opinion.

3. Excluding the majority of the Chinese traders, especially those connected with planting enterprises, who conceive that their interests are best served by a silver currency and low exchange, the witnesses whom we have examined, and who are fair representatives of the thinking men of the Colony of all classes, are mostly in accord in declaring that the fall in exchange has been disadvantageous to these Settlements. All the effects remarked on in paragraphs 21-28 of the Report of Lord Herschell's Committee are in operation in the Straits Settlements.

4. It is not necessary to add much to what has been asid in the last of the paragraphs just referred to, but we must not leave without special remark the check to the investment of British capital in the Straits Settle- ments by reason of the fall in exchange. That is perhaps the greatest injury that the Colony suffers. It is not only that money is not available for new enter- prisas, but that capital invested here a few years ago has suffered great shrinkage While European capitalists who have interests in the Colony find that their investments have shrunk, and hesitate to invest more in a place where this is possible, their European employés in the Colony find that the purchasing value of their salaries has diminished. Clerks, engineers, wharfingers 81! European subordinates and in a less degree the whole of the Eurasian community-whose habits of life necessitate the use of articles procured from gold countries find that their incomes have shrunk, though they have to recognise that it is difficult to apply for consideration to employers, who are themselves prejudicially affected by the same causes.

5. The public revenue, reflecting as it does in a measure the prosperity or adversity of the people, has fallen off since 1890 by about 17 per cent., and there can be no immediate prospect of recovery. At the same time, the charges upon the Colony in respect of pay- ments which have to be met in gold have necessarily in- creased, and may increase yet further. The claims of public servants (see paragraphs 17 and 18 of the Report of Lonl Herschell's Committee) may have to bo con- sidered, and an additional charge on the revenue may thus be involved. The Colony may at any time have to contemplate the imposition of new taxation in order that the ordinary expenses of the Government may be

met

6. The prejudicial effect upon commerce, especially on the import trade, of incessant variations in exchange has been testified to by many of those whom we have examined, and may further be illustrated in some degree by the following statistics relating to the last eight years during which sterling exchange experienced great fluctuations between 3. 101d. and 2s. Ofd., with a downward tendency continued during the present JOAT !--

6849.

Trade with silver-using countries.

(Excluding Inter-Settlement trade and the Malay Peninsula.)

1891

1892

Imports. Exports, Total.

1885–9 (Mean) -

1890

8

8 52,219 29,990 €3,354 36,377 €2,233 39,346 68,271 39,997

8

82,218 99,731 101,579

108,268

Trade with gold-using countries* :—

1885-9 (Mean) -

44,342 58,048 102,388 47,553 61,130 108,083 41,465 58,970 36,107 €4,558

100,435 100,683

1890

1891

1892

* 8 000 omitted.

These figures appear to show that, while the trade with silver-using countries which is not exposed to any serious fluctuations of exchange has shown a steady normal increase, that with gold-using countries has fallen off even as measured in dollars. The falling off in gold value will be seen to be considerable, the average exchange for these periods having been :--

1885-9

1890

1891

1892

·

·

3/3+ 3/6k

·

3/3 2/101

7. The above figures show the trade done with gold countries as more than 48 per cent. of the total. But if India and Burma had been included among gold countries (as since the recent action of the Indian Government they apparently should be in future) the figures for 1892 would have been :-

Silver countries.

Imports Exports

$46,432

32,304

Total

$78,826

Gold countries.

$57,946

72,159

$130,106

that is to say, other things being equal, the proportion of the total trade of the Colony which is carried on with gold countries would appear to be now more than 62 per cent.

It is noteworthy that the China export trade, the only portion of the trade of the Colony at all likely to be injuriously affected by the introduction of a gold standard, is smaller than that carried on with British India and Netherlands India respectively.

8. The situation which we have to consider has been partly created by the policy adopted by the Government of India in June last. We have to accept that policy as an accomplished fact, and it would be idle now to consider whether any other policy might have been, or is still, possible by international agreement. For the purpose of our inquiry, we must regard the step taken by India as one that is unalterable.

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