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COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.

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PUBLIC RECORD OFFICE

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Reference :-

C.O. 882

7PUBLIC RECORD OFFICE, LONDON

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

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APPENDIX:

On the contrary, the adoption of such a scheme would, in our opinion, be certain to aggravate them and prove detrimental to the general interests of the Colony,

9. India possesses a coinage of her own, manufactured in the Country. The Straits Settlements not only have not that advantage, but her own currency, over which she has no control, comes from foreign States.

10. India is, moreover, a country of immense sise, containing population numbering over two hundred and seventy millions, with vast internal resources and an inland trade of great extent; whereas the Straits Settlements are but a small Crown Colony, with a popu lation of about half a million, depending chiefly both for the supply of their food and labour upon the countries whose standard currency is identical with ours,

11. The forced circulation of coins of nominal value would naturally handicap all lood industries, impede their development, and reise unnecessarily the price of every class of labour, because the new coins would be. come the medium of all business bargains, and restrict the sphere of all commercial transactions. This would tend to alienate a portion of our trade.

12. It is alleged by some that fixity of exchange would induce the inflow of European capital into this country. That might be so, if the fixity were the result of matoes) osuses; but if such fixity is based only on legislation, the contrary would happen, as such fixity would afford means for the withdrawal of all the money of timid capitalists from this Colony.

13. It cannot be denied that the present low rate of exchange is assisting materially to promote the quick

and speedy development of the internal resources, not only of this Colony, but also of the Protected Native States. In connection with this, it may be mentioned that a large number of the local enterprises in both places are being carried on by means of Chinese capital and labour.

14. All the Chinese who have made their fortunOS either here or in the Protected Native States, become with their families permanent residents of the Colony. The Chinese capitalists are the only capitalists who re- main as permanent settlers in the Colony. All capi- talists save the Chinese seek to depart sa soon possible.

16. ▲ British trade dollar, following the price of silver, of the same weight and fineness as the Mexican, would find favour with the people høre, provided it could be laid down as cheaply as either the Japanese Yen or the Mexican dollar.

16. Some of the claims of the officials of the Colony, owing to the depreciation of silver, have our sympathy, and may be met by the ordinary means of compensation.

17. We, therefore, maintain that, if the present our- rency is allowed its free course, or if a British dollar following the fortunes of silver be supplied, there is reason to believe that matters will readjust themselves on the ordinary rules of supply and demand, and that better times will reappear.

T. JIAX KI.

8. LIANG SEAR. TAN KRONG Bark.

Council Chamber, 22nd September, 1893.

APPENDIX No. 17.

REPORT of Sub-Committee appointed by the Committee of the Singapore Chamber of Commerce "to enquire into the local Currency with the view of calling attention of Government to the question of converting the Straits Currency to a Gold Standard."

Singapore, 6th November, 1897.

1. The committee of the Chamber having, at their meeting on 25th August, unanimously expressed an opinion in favour of the desirability of axity of ex- change, we the undersigned, were appointed a sub-com- mittee, and have considered the question, with the view of bringing before the Chamber such evidence and argu- ments as may appear to bear thereon, and of suggesting some scheme which may be laid before Government, by which fixit yof exchange may be attained.

2. The immediate occasion for the appointment of a sub-committee was the very sudden fall in the value of silver during the months of July and August, the appre- hension that a further fall was by no means improbable, and that the metal might become too low in price, and too unstable, to serve any longer as the standard of value for the currency of these Bettlements.

In this connection we may refer to some of the effects of the continuous fall in sterling exchange.

(a) It has brought about a corresponding advance in the dollar price of almost all imports, more particularly of those from gold standard countries. The cost of living has thus been greatly increased, and all classes have been more or less affected. Those who have felt it most, and they form a very important section of the community, are the employees-Euro- pean, Eurasian, and Asiatic. The former have, of course, suffered more severely, their wants being more numerous, and supplied largely from gold standard countries.

(b) The necessity of an increase of remuneration was recognised by Government in 1894, since when their officers have received exchange compensation; the municipality have also granted compensation since that year, to some of their staff; and all the banks, and some mercantile firms and the dook com-

panies, have followed suit. In September last, officers and engineers of many local steamers secured by "strike" a considerable advance in wages; an increase in lawyers' fees has been approved by Government; and professional men generally are raising their charges. But, for the great majority of em ployees, no compensation, in any shape or form, seams warranted by the present posi- tion of business affairs in this colony and fixity of exchange, on some distinctly higher basis than the present, has become, with them, an urgent necessity.

(c) From Appendix H it would appear that the wages of Chinese immigrants have not risen in any appreciable degree during the past seven years. This coincides with what has come to be regarded as one of the most important features in our import trade with gold standard countries, namely, that the income of natives generally is not elastio, and has not kept pace with the rise in prices caused by the depreciation of the dollar.

3. Fixity of exchange has of late years grown in favour with the community. In 1803, when the Currency Commission reported on the question, many business men held that a falling dollar was in the interests of the producer and exporter; but figures given in Ap pendices D., E. and F. show that such has not been the osse. Importers and consumers generally have always been in favour of fixity.

4. In considering the subject of fixity of exchange it has been our endeavour to do so mainly in the light of local business experience, and with this in view, we have investigated the latest published trade figures for this colony, and now record the conclusions we are led

to.

5. The years 1890 to 1896 have been selected for ex- amination as the period-

(a) Showing the most marked decline in the price

of silver.

(b) Including the repeal of the Sherman Act în America in 1893, and the closing of the Indian Mints, on 26th June, 1893; and (0) Affording the latest and most reliable statistics, 6. It is believed to be a prevailing ides amonget some Chinese merchants in the Straits, that the effect of the fall in the gold value of the dollar has been to enhance local prices of produce sold by them, and that they therefore, as sellers, have benedited by the de oline; but if the course of prices from 1890 to 1896 (Appendix D*) in studied, it will be seen that, on the whole, producers have not only not benefited, but are actually in a worse position, with a dollar below 25. than they were when the value of that coin was above

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7. Those who have followed the course of the Singapore produce marketa during the period referred to cannot but admit that prices are, really, only temporarily affected by any fluctuations in exchange, ie, that a sudden drop or a rapid rise, marely causes a temporary rise or fall in the value of any article of produce, and that, eventually, prises do séadjust themselves accord- ing to the usual laws of supply and demand. On the other hand it has to be admitted that the effect of the decline in exchange-more rapid, as a rule, than the corresponding fall in the gold value of produce iu Europe and elsewhere--has, undoubtedly, been to enor- mously stimulate production, and this has naturally been a source of profit to the colony, and to the Penin- sula, although the individual producer may have suf- fered. The sub-committee have therefore to take this into consideration in their recommendations, and, in suggesting fixity, the sim should be to give the dollar such gold value as ruled when the trade of the colony was in the most flourishing condition as regards volume of exports.

8. Appendix F gives some details regarding the movements of various articles of produce during the years under review, and the total exports of those ar ticles in each year, from 1890 to 1896. From those figures it will be seen that the year 1886 generally shows the largest exports, and the average value of the dollar for that year was as nearly as possible 26. 21d.

9. From the trade statistics pablished by Government, and from the Singapore and Penang Exchange market reports, the figures given in the various appendices have been taken, and the following remarks are based theroon :--

10. Imports (specie excluded) have increased as fol- lows:-

Total 1800 $141,436,000)

1896 186,198,000

an increase of $44,781,000

of this only

tne remainder

Appendix A.

$ 12,624,000 was from gold standard countries (Appendix B.*)

32,564,000 being from silver stan- dard countries (Ap- pendix C.*)

slight difference being caused by the omission of the $ 45,188,000 - 34 per cent. (the Inter-Settlements trade figures.)

* The appendices to this Report are not reprinted, but ace pp. 124––143.