90
APPENDIX:
APPENDIX No. 14.
MEMORANDUM on the Feasibility and Expediency of Establishing a Gold Standard in the Straits Settlements
and Federated Malay States. By J. BARR ROBERTSON,
The dificulties that have arisen in the silver money countries owing to the divergence between the par- chasing power of gold and that of silver owe their origin to the adoption of the gold standard in Germany in 1872. In order to introduce gold the German Govern. ment withdrew very large amounts of silver coins from circulation, and when they came to dispose of this silver, the French Mint, which was then open to both gold and ailver at the ratio of 1 to 154, offered the readiest market for it. When the French Government saw that the silver of Germany would to a great extent be tendered at the French Mint, and that gold would thus auto- matically leave France to a corresponding extent, they closed their Mint to the silver of private holders. The par of exchange between gold and silver which Franco had maintained at the ratio of 1 to 15 since 1796 was consequently lost. At this ratio the value of the stan dard ounce of silver was 60·84d., and the gradual fall in the gold value of silver, until it now stands at 82jd., would 30 years ago have been regarded as an impossi bility. It was a time of profound ignorance on monetary questions, and leading statesmen gave their assurance that silver, if left alone, would right itself.
In the 84 years from 1796 to 1878, in which latter year the coinage of five-frano pieces absolutely ceased, France coined £347,678,077 of gold and £220,478,070 of silver, all on the basis of one pound of gold being the equivalent of 15 pounds of silver. There was a seigniorage on the coining of both metals, but apart from this no silver was accepted at the French Mint except at that ratio. France maintained the par of exchange between the two metals almost single-handed for the 84 years mentioned above, and the closing of its Mint to silver was a disaster to the world. Henceforth there was no par of exchange between the two metals, and one country after another demonetized silver until the area over which it circulated was very much contracted, and its gold value has now fallen to 221d. per ounce, though, as will be shown further on, this fall is also due in a material degree to the scarcity of gold as compared with the increased demand for that metal,
The following figures are taken from the Report of the Director of the United States Mint for 1901, the latest available:-
COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.
From the preceding table it will be seen that the produo- tion of silver steadily increased, notwithstanding the closing of so many mints to the metal. In the meantime populations increased rapidly, and new fields for employ. ment of silver money were opened up by railways and other facilities for increased communication, while many of the more backward countries were brought within the influence of Western ideas and practice.
01
It has been the fuhion to attribute the fall in the gold price of silver to the excessive supplies of silver pressed upon the markets of the world, but this view is found to be quite untenable when the facts are thoroughly examined.
The following table presents some leading facts bear- ing on this question:-
TABLE II.
INDEX NUMBERS.
Col. II.
Col. III.
Mr. Sauerbeck's
45 Leading Com. Figures in Col. II.
EXCHANGE.
Col. V.
Singapore
Exchange on London.
Col. I.
Col. IV.
Mr. Sauerbeck's
Gold value of
Bar Silver
Indian Imports
YEAR.
modities.
in London.
converted into
and Exporta.*
Average of Year.
Average of Year.
Rupee prices
100 - 6084d. per
100
Gold prices
Silver prices.
in
Standard oz.
of 1867-77.
January and July.
Pence.
PUBLIC RECORD OFFICE
Reference :-
C.O. 882
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
7PUBLIC RECORD OFFICE, LONDON
1873 -
97'4
111
114
100
51
1874
96'8
102
108
105
51
1875 -
93:3
96
103
98
01
1876 -
86.7
95
110
95
51
TABLE I.
1877
00'2
94
104
08
01
The World's Production of Silver and Gold from 1873 to 1901, as given by the Director of the United States Mint. Converted at £ 1-85.
1878 -
80*4
87
101
94
51
1879 -
84'2
83
99
93
51
1880 -
85'9
88
102
98
45
000's omitted.
1881 -
85-0
85
100
93
44'50
Silver,
1882 -
84*9
84
99
89
43
YEAR.
Gold.
Fine,
Commercial value. Coining value 16 to 1.
1883
83-1
82
99
86
43
1884-
83.3
1885 -
79'9
Ozs. troy.
£.
£.
£
1886 -
74.0
1873
63,207
16,424
16,360
19,240
1874
55,300
14,135
14,300
18,150
1887 -
73-3
1875
02,202
15,616
16,100
19,500
1888 -
70'4
1870
67,753
15,664
17,520
20,740
1877
62,048
15,049
10,200
22,800
1889
70-2
1878 -
73,476
16,929
19,000
23,800
1879 -
74,280
16,077
19,200
21,800
1800
78'4
1850 -
74,701
17,127
10,340
21,300
1891 -
74-1
2 2 3 3 2 2 2 2
91
Bet
43
72
90
81
09
93
83
68
93
83
70
%
99
87
72
103
95
72
92
04
40
6 % % % % *
41'50
38.50
38.50
36
38
72
97
89
38-25
1881
78,800
17,955
20,400
20,600
1882
80,470
19,046
22,360
20,400
1892
65*4
68
104
94
34
1883
89,177
19,707
23,060
19,080
1884-
$1,597
18,163
21,100
20,340
1893 -
68'6
68
116
100
30:33
1885
01,652
19,513
23,700
21,680
1894
47.6
63
132
101
25
1880
03,276
18,554
24,120
21,200
1887
90,124
18,806
24,856
21,155
1895-
49'1
62
126
1888
108,837
20,457
28,141
105
25'50
22,039
1889 -
120.214
22,480
31,080
24,608
1800 -
50'5
01
121
103
1890
126,095
26,480
32,606
26.19
23,770
1807
45'3
62
139
101
23:50
1891
137,171
27,100
35,470
20,130
1892
153,152
26,681
39,003
29,330
1898 -
44'3
04
145
93
23
1803
165,473
25,824
42,789
31,499
1804 -
164,610
20,609
42,500
30,235
1699 -
45'1
68
151
97
23:33
1895
167,501
21,009
43,313
39,753
1900 -
40:4
75
169
1896
157,061
21,172
107
24
40,614
40,450
1897
100,421
19,251
41,483
47,215
1901 -
44.7
70
157
111+
23
1808
169,035
19,949
43,715
57,376
1899 -
168,337
20,201
43,530
61,345
1002 -
39'6
69
174
-
1000
173,591
21,625
44,888
1
50,919
1901 -
174,099
21,000
45,252
52,675
India."
* Figures furnished by Sir Henry Waterfield, G.0.1.x., as compiled from Index Numbers in "Prices and Wages in + For January only.
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