CO885-(7-8)-2 — Page 19

PUBLIC RECORD OFFICE!

Reference :-

C.O. 882

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

7PUBLIC RECORD OFFICE, LONDON

Mr. J.

Burkinsho

25 Nov. 1912,

Mr. G. Pertile.

16

MINUTES OF EVIDENCE

have. That is a difficulty we referred to before; they would have to calculate the ratio of value that 1, 87. is to some coin in the country where those persons wished to return to, and it would be a matter of exchange calcula. tions, just as it is between Singapore and London now. I take it the largest trade is with England. We could do away with these speculations and trouble of calcula- ting the exchange with the home country, and we should

put it, so far as adjoining countries are concerned, on the shoulders of the traders.

547. And do you not think that that would be a greater inconvenience to the traders than the present arrangement?--I do not, because I am assuming that the greater bulk of the trade is with the home country— with England. I say the disadvantage is less in dealing with the surrounding countries.

Mr. G. PERTILE, called in ; and Examined.

548, (Chairman). You have resided in Singapore } Yes, sir.

549. For how many years? -About 20.

550 What year did you first go there?-1882; the end

of 1882.

$51. Have you resided in any other part of the East? -No, not for any long time.

552. You have been engaged in business in Singapore 1 -Yes, sir.

553. What has been the nature of your business --Both import and export.

551. From what countries did you chiefly import 1 -From England, from Germany, from Italy, "from America, and from Austria.

555. And to what countries did you export-To the same places about. I have been importing also from India, especially from Ceylon.

556. Now as to the articles that you exported to these countries, where did you purchase them -In Singapore. 557. Who brought them to Singapore? The Chinese

merchants.

558. From what places did they bring them?-Mostly from the Dutch Islands. Our special articles are gutta- porclu and prattan, which are mostly coming from Borneo.

539. From Borneo and from Java?-Yes, from Borneo and from Java, but especially from Borneo.

560. You have given some attention to the currency question as affecting the Straits Settlements 1-I have tried to.

561. I gather from your paper that you are in favour of establishing a gold standard there! Yes, a gold stan dard or something equivalent to the gold standard.

562. Well, something equivalent to a gold standard would be a gold standard, I suppose ?--Yes.

503. What are the advantages of establishing a gold standard there—Well, stability of exchange before all.

564. Between the Straits Settlements and the Gold countries?-Between the Straits Settlements and the Gold countries especially; I think it would be neces- sary in fact because the uncertainty of this low ex- change in driving the business more to the Dutch Islands.

565. Have the Dutch Islamis got a gold standard or a silver standarıl! They have got a kind of a gold

standard.

580. A kind of a gold standard! Yes, they have got a kind of a rupee, which is, however, kept high by the banks in a special way.

567. The guilder, is it not -The guilder is kept as high, so that the exchange instead of being 230 rupees for $100 it is only about 110 or 115 now.

368. Yes, nul as a result of that is you think that there arises a tendency for trade to be direct between the Dutch Islands, and the gold staulard countries --Instead of coming to Singapore. There are many places where there is not even telegraphic communication; it is a long way off to Bornen especially, and it is quite natural the Chinaman there--the natives there, who used to buy their import goods in Singapore and who used to send their "goods to Singapore, find it very risky now; for a month or two they do not know how the exchange will go on; they find it more Convenient to buy their goals in Macassar, or in Batavia which they know they pay the same guilders for they are using in their own place. If they send an order to their Chinese friends in Singapore to buy 50 cases of something, they do not know at what exchange they will be able to get it. That is an advantage; so it is in the interest, in my opinion, of the trade of Singapore and the trade of the Colony that there should be a stability of exchange so as to give these people in the Dutch Islands

the same advantage to trade to Singapore instead of encouraging the extension of the trade in Macassar, Batavia, and Sumatra.

569. That argument would not apply to such a country as Siam where the standard is silver, would it -Well, stability of exchange would certainly not hamper the

trade.

370. But if you had a gold standard in the Straits Settlements all these difficulties about exchange would arise between Siam and the Straits Settlements - Singapore is not selling its own goods and Siam cannot got them from another silver country. Then it would be the same thing for Siam and it would be better for us.

571. A Siamese merchant might buy something from the Straits Settlements; he would not be troubled by the rate of exchange at present; you might be troubled with it between the Straits Settlements and England, but he would not be troubled at present with the rate of exchange between Siam and the Straits Settlements }- He would not be troubled.

572. No-But I do not think it would be more troublesome for us, because we would sell in doliars, we would not sell in picula.

573. There was a witness said that even in the Dutch falands the people generally used the Mexican dollar, although the guilder was the legal coin; is that the case? There is only one place that I know where Mexican dollars are used, and that is Deli in Sumatra.

574. Is that a Dutch possession-That is a Dutch possession. In Deli in Sumatra, 1 do not know why, they use the dollar also, but they use guilders besides. But in Borneo-I have not seen any dollars sent to Borneo I do not think it is the case. I had a branch in Kota several years ago, which I had to give up because we were required to have a Dutch nianager. Dutch people are allowed to go inside the country, but a foreigner would not be allowed. We started a branch in Kota Baharn, Samarinda. I know we always used to buy guilders in Singapore because there was no other currency there but guilders. In Borneo and Java there are no dollars.

575. Can you always bay guilders in Singapore ---Of course; there is a big trade in Singapore, because all those Chinamen having their steamers running to the Dutch Islands require always to pay with guilders.

370. And do these Chinese merchants thoroughly understand the guilder!--They understand it very well. They know the guilder and the rupee or anything. A Chinaman would never object to see another coin, but I hear the Chinemen very often complain: our Chinamen say "I cannot give you » firm offer for prattan ; 1 cannot make you a firmu offer: I cannot write to my friends to buy for such and such a price “I know nothing about the exchange; the guiller is always getting clearer." And I find it very hampering to trade to Borneo : the Singa- pore fluctuation I find very hampering to the trade with Borneo.

577. (Mr. Johnson.) Dutch Borneu --Dutch Borneo. 678. (Chairman.) Borneo is not altogether Dutch 1- Of course, there is Sarawak und Labuan.

579. What is the standard: they have got the Mexican dollar-In Labuan and Sarawak they have got the Mexican dollar, but I have never been trading with Labuan and Sarawak direct.

580. Do you think there would be any disadvantage in introducing a gold standard in the Straits Settlements! -I certainly think there would be no disadvantage for anybody, except it would be a loss to anybody having dollar debts in Singapore for a gold country. But 1 do not suppose that there is anybody, I do not think that there are people owing dollars in Singapore, because all the accounts with the outside are kept in guld currency. Our accounts with the banks in London or Paria, or wherever it is, are always in gold; and besides, even if

COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.

there were somebody losing something, I think it is for the Government to protect the value of the currency in the place-it is in the interest of the Government to encourage bringing money to the country and not to take care of the interest of the people taking money away from the colony using the money of the colony.

581. You have got a plan here for introducing the gold standard into the Straits Settlements -Well it is to follow the Indian.

582. It is not quite, I think, the Indian procedure, but your first proposal is this, to withdraw for a short period all doflar coins legally current in the colony. They would be received at certain places and currency notes given in exchange 1-Yea. This is the same thing that has been proposed by the Committee on Straits Currency and the Sub-Committee of the Chamber of Commerce when they proposed the gold dollar-23.

583. I suppose these Government Currency notes would not be convertible into dollars immediately ?—I think that we can do without silver in Singapore, the confidence of the natives in the Government is so great.

584. You say your object is to get in all the dollars- the silver dollars 7-Yes, the silver dollars.

585-86. And you would give paper in exchange for them 1-In exchange for thein.

587. But that paper would not, for the time being, be convertible into silver again -Not be convertible into silver again.

588. For the time being?-For the time being. 1 think we could do with an exclusive paper currency for months without any difficulty. In some places in the interior of Borneo, for instance, if you would go with a bank note they would say, “ I do not know what that is." They want to see the ringing silver, but I do not think in the Straite Settlements or in the Malay States or the Malay Peninsula any native would object to give his prattans or his gutta-percha or whatever it is against paper.

580. They would not object, you think?-They would not object.

590. Then you would send the dollars and have them coined into rupees--that is Indian rupees-That is what I think should be done.

501. And you would give two rupees for every dollar note Two rupees for every dollar note leaving a profit of thirty-one rupees to the Government on 100 dollars- fifteen per cent.

592. And then the two rupees would be made legal tender for one dollar?-Made legal tender for one dollar. 593. And two rupees would be worth 28. 8d.; that is the value of two rupees -Two rupees is about 28. 8d.

594. And the dollar at present is worth about la. 7d. That is a considerable rise--thirteenpence -It is a considerable drop from 48, 6., and the daily disturbance of trade that we have now, and I do not think it would affect in any way--.

595. But might not that sudden change press rather hardly upon some people I have been studying the question and getting also technical advice because I know the merchant is not always the best judge on a matter like that, but I have been trying to get the best technical advice 1 could, and I do not see that there is any disturbance. Of course, it will disturb. For instance, if to-day it will be published that the dollar is worth 2. 8d. we would not be able to pay in Singapore 180 for tin as it was paid yesterday.

596-97. Not the same price?-Not the satne price But it would not drop altogether to the purity of London prices. It would probably go a little higher in London, and a little lower in Singapore, and the differ. ence would be shared between London and Singapore.

598. Now, that is all very well in theory, but will you tell me why the price of tin should rise in gold when you made that change in Singapore 1-Because in Singapore probably the Chinaman, the holder of tin, would not be prepared to sell at such a drop, and for a few days they would keep back the tin and not sell it at ali.

599. In the hope of getting more-In the hope of getting more and it would certainly not drop entirely.

600. But do you not think that if the Chinaman, the holder of tin, could get more by holding back his tin when that change was made, he could equally get more to-day by holding back his tin, and as everybody wants to get as high a price as he can lie certainly would hold it back. I imagine the man out there who has got tin,

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Mr.

wants to get the highest possible price for it. If he finds he can get a higher price by holding back to day he will G. Partile. hold back; how would his position be improved by making this change in Singapore. Why would he be 25 Nov. 1902, more likely to get a highe: price by holding back after you made this change than he would be by holding back at the present moment --To-day tin is $80.

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601. For how much ?-For a picul. To-morrow the Government will issue a notification that the dollar will be changed into rupees, and it will rise. Then, of course, $80 corresponds to to-day's price in London-£120; in, London they are not prepared to-day to pay more than £120. Then it will stop for a moment; "the Chinaman will say, "I got 880 yesterday, I must get $80 to day." The man in London will say, "I got it in London at £180 yesterday, why not get it at £120 to-day." Then it will stop a little, and then they will have to meet, but in London, they will probably have to pay a little higher in order to induce the Chinaman to sell. But at the same time it will be no loss--no actual loss.

Of course, the Chinaman instead of having to-day 100 tons of tin in his store, would have the equivalent in dollars. He would make a profit on those dollars, but if he has got the tin to-morrow, if he takes even a lower price has got a lower price in dollars, he has got a more valuable dollar for which he can get from China more of his food stuff.

602. But suppose a Chinaman had 100 piculs of tin and he owed $8,000. He would say, "I will sell it at $80 apicul, that is $8,000, and that will pay my debt.' But you introduce this change and he finds he can only sell for $6,000; in that case he is worse off, is he not, by $2,000 7-Well, if he owes $8,000.

603. I am assuming that case, of course 1-If he owes $8,000 of course he his making a loss, but as a rule careful merchants are covered. The Chinaman will not have more tin in his store than he has al- ready actually sold beforehand or made contracts for with a buyer. That buyer has not bought in advance from the Chinaman or contracted to buy the tin, without securing his exchange at the bank, so that I think the actual loss would be very limited. The Chinaman should have made a contract with the European to deliver him his tin, if he is a careful miner; the European merchant who has bought his tin, should have sold it in London, and made also his arrangements with the bank the bank having bought the drafts of the European, should have sold drafts to quare it, so that I do not think that there should be a very great dis- turbance.

004. Assuming now that the rise from 18. 7d. to 28, 8d. is a very slight disturbance, would it not follow that the fall from 28. to 1. d. must have been quite a small disturbance, also 7-It would cause an impoverishment, a general impoverishment of all the places. If the Bovereign would be worth do-day in London all of a sudden or even slowly-slowly going down to 10., all the wealth of London would be reduced to one half.

605. But the sovereign could not go down to 10 because 10. is half a sovereign-I say to the equivalent. Gold is the standard, but I say that the comparison is not altogether out of place. We had in Singapore-say there was a capital of $50,000,000 or $100,000,000 worth so many pounds. If the dollar has gone down on account of the depreciation of silver it is all the colony that is suffering, the general wealth of the colony is suffering, and if it goes down even more nobody will be able to go there. If it would go down to sixpence it would ruin the people who are there and nobody would go there again.

606. Certain witnesses have given evidence here, that the fall in the value of silver so far from being an injury. to the Straits Settlements was an enormous advantage and that the Colony has prospered exceedingly owing to the fall in the value of silver?—Well, I am quite against that. I think it is not the case, absolutely not. It looks 80 at a certain moment because they say if silver would be higher then the prices of the products of the place would be lower; but I think that is regulated by the demand and the supply and by the coat of production. Of course if silver goes down to-day-as a rule in Singapore who gets the advantage of it? The Chinaman at first, because the competing Europeans always give him the advantage as it is.

407. I suppose if the fall in the value of the dollar from say 4 to 24. was a great gain to Singapore a fall to la, dd. ought to be a further gain 1-According to that argument it should be the best that it should go down to one penny.

608. And you do not agree with that --Not at all

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