RUBBER DEALERS (AMENDMENT) BILL

5.39 p.m.

Order for Third Reading read.

Mr Speaker: Notice has been given by the Minister for Finance that he desires to introduce a new clause in the Bill as appears in the, Order Paper Supplement. The Bill accordingly stands recommitted to a Committee of the whole Assembly in respect of the new clause.

Committee stage, what day?

Dr Goh Keng Swee: Now, Sir.

Bill considered in Committee.

[Mr SPEAKER in the Chair]

5.40 p.m. New clause - `Amendment Section 2 of the Rubber Dealers ofSection 2. Ordinance, is hereby amended by inserting immediately before the definition of "rubber plant" appearing therein the following new definition:- ""purchase" means purchase of specific rubber pursuant to any contract or agreement pro-viding for completion by delivery of such rubber but does not include purchase of unascertained rubber by description by means of a forward contract;".'. -[Dr Goh Keng Swee].

Brought up, and read the First time.

Dr Goh Keng Swee: Mr Speaker, I move, "That the clause be read a Second time."

This clause is substantially the same clause which was negatived by the Committee of the whole Assembly on 15th January, 1962, and it is the only single clause of the Rubber Dealers (Amendment) Bill. Hon. Members will recall that this Bill seeks to amend section 2 of the Rubber Dealers Ordinance by providing a definition of the word "purchase", for the purpose of removing uncertainty prevailing in the rubber market as to the validity of rubber contracts. This uncertainty arose from the decision of the Court of Appeal in the case of Mizrahie versus Stanton Nelson Company Ltd., details of which were given in the speech of the Second Reading of the Bill. The Government considers it necessary to restore this clause in view of a recent Federation of Malaya appeal allowed by the Judicial Committee of the Privy Council on the ground that the currency was not licensed under the Rubber Dealers Ordinance to purchase rubber. Singapore's economy is largely founded on the rubber trade. Today she is the world's largest rubber market. Forward dealings are carried out in all major commodity markets of the world. It is absurd in the world's largest rubber market that there should be a legal ambiguity whether or not forward contracts are enforceable in law. Yet this is the effect of the Rubber Dealers Ordinance as it stands, and the effect is clearly not the intention. The proposed definition makes it clear that only purchases of specific rubber completed by delivery need be covered by a licence and that all contracts in purchase of unascertained rubber by description do not require a licence on the part of the purchaser. Thus it would ensure that legitimate hedging operations could be carried out without fear that such contracts would be declared void and the gambling - reckless speculation - would be curbed as the contract becomes enforceable in law. I understand corresponding amending legislation is being considered in the Federation of Malaya.

Sir, I beg to move.

The Chairman: The Question is, "That the clause be read a Second time." We debate now on the principle of the clause.

Mr David Marshall: Mr Speaker, Sir, the Minister has told you that this clause is necessary in order to protect legitimate hedging operations. Sir, what is a hedging operation? A genuine dealer in rubber undertakes to deliver, let us say, a hundred tons of rubber to a consignee in Germany. The delivery is in June. Then he goes round purchasing that physical rubber and projects himself against a fall by making some purchases now, some purchases in May and the final purchases in time for delivery in Germany. These are the genuine dealers in rubber. These are the backbone of the rubber trade. These are the people who, irrespective of whether the amendment is passed or not, must take out licences.

Sir, the obnoxious part of this Bill is that it seeks not to protect hedging as is alleged, but to protect pure gamblers - those who have not the slightest intention or interest in receiving or supplying physical rubber. The Minister himself in the debate on the 15th of January spoke of paper rubber dealings. He wants to legalise paper rubber dealings without the requirement of a licence. It is not the question of hedging purchases or hedging sales. Those people who make deliveries must take out licences under the Rubber Dealers Ordinance. It is not they whom he seeks to protect. What is sought, in the words of the Minister for Finance, is to legalise dealings in paper rubber. Mr Speaker, Sir, these are gambling deals. I say to you the approach of this House should be that we deplore gambling. We recognise that stock exchange gambling is one of the diseases which seem inherent in a free economy and we will interfere insofar as is necessary to minimise the vicious effects of such gambling upon the small man. In this case, a ruling of the Court of Appeal has indicated that in order to gamble in rubber, the person who makes those purchases should take out a licence. It is no more serious than that, Sir. All you have to do is to take out a licence. The Minister must admit that there is not the slightest impediment to anybody taking out a licence. His character is not investigated. He is not asked his political affiliations. There is no enquiry as to what publications he has been associated with. You put down $600 a year; you put down a deposit of $1,000; you take out your licence to deal in rubber; you go ahead and gamble to your heart's content.

Sir, it is alleged that this amendment is vital to the economy of Singapore. But, Mr Speaker, have those people who deal in a manner that is material to the economy of Singapore in matters of rubber not got $600 a year for a licence or a $1,000 refundable deposit? That is all. What I say is that anyone whom it is sought to inveigle into buying or selling paper rubber should be sufficiently conscious of the gravity of his action and that this mild impediment of a $600 licence plus a deposit would be at least some deterrent. It is no more than that. I ask this House to consider what is wrong with this very minimal protection that is now available.

Mr Speaker, you are not unconscious that there is in times of boom or depression a large flux in prices of commodities like tin and rubber in this island when hopes of golden fortunes are held out to small men if they would come in and gamble on the stock exchange. It is to this silent voice of temptation to large-scale and ruinous gambling that I urge we leave the existing protection which says that if you, Mr Clerk, who earns only $400 a month, are going to lend yourself to this plan to make vast fortunes or incur great losses, at least you must first of all put down $600 for a licence. In Monte Carlo you need no licence. In Singapore we do not ban large-scale gambling. We only ban gambling for the small man. The Chee Fah and the Fantan participants are criminals. The gentlemen of the rubber exchange who gamble in vast sums are essential for our economy. But all we ask is that they pay $600 a month for a licence. Paper rubber gambling is not essential and is no part of the healthy development of our economy. The anxiety indicated by this Government behind this move is a recognition by the rubber brokers that the small man in Singapore and in Malaya who has a little money and who is beginning to understand a little about investing can be tempted to participate in a gamble to buy and sell future paper rubber - to indulge in paper transactions in which he can make money, it is true, and he can also lose sums beyond his capacity to meet.

The need for a licence that exists today checks these small investors from entering too freely and too rashly on the road to ruin. I ask, Sir, why in the name of sanity, if not of decency, do we have to encourage the little man with little money to lend himself - and his family - to being a victim of rubber brokers and paper rubber gambling?

Sir, what is our interest? Is it the protection of the people of Singapore, or is it the protection of the capitalists and the greater glory of the rubber brokers? What is this P.A.P. Government - a gambling society? Or has the Minister so much imbibed of the heavy wine of capitalist hospitality that he has no more feeling for the little man and the little man's needs?

Mr Speaker, it is stated in the Explanatory Note to this Bill that we will be losing $39,000 a year in licence fees. That means $39,000 from persons who should be taking out licences today to gamble in paper rubber. But these are definitely persons who do not engage in the honest sale or honest purchase of physical rubber because, if they did, they would still have to obtain licences. There are therefore these gamblers who even now take out licences. But if you divide $39,000 by 600, Mr Speaker, you will find fortunately that the number today of those who gamble in paper rubber is not great, not great enough to meet the insatiate greed of the capitalist friends of this capitalist Government. I do plead for a rational answer. What is the objection to the existing system whereby those who want to indulge in this roulette in the golden El Dorado should be required to pay $600 entrance fee a year?

Mr Rajah: Mr Speaker, Sir, listening to the Member for Anson speaking on this particular section, it seems to me that if the point to his objection is one of a permit to gamble, then he has missed the boat. He should have taken objection when the amendment to the Civil Law Ordinance was moved and that was the time when the objection should have been taken. As far as I can remember, the Member for Anson was present in the House on that occasion when the amendment was moved to the Civil Law Ordinance which at that time forbade gambling contracts to be entered into. But subsequent to that amendment, gambling contracts which have been declared illegal or unenforceable under the Civil Law Ordinance now can be enforced in a court of law. If that is the correct position and if it was the Civil Law Ordinance that dealt with the gambling aspect of any particular contract, why then is the Member for Anson raising that particular problem which should have been discussed on that particular amendment in respect of the Rubber Dealers Ordinance, which does not deal with the gambling side of a rubber transaction?

Mr Speaker, Sir, so far as I am concerned, this clause which seeks to define the word "purchase" has become necessary as a result of the amendment to the Civil Law Ordinance. We on this side of the House voted for the amendment to the Civil Law Ordinance and we would have voted with the Government on this. I will now inform the Minister for Finance why we voted against it. On that occasion, when a number of questions were being asked by Members of the Opposition with regard to the operation of this clause, they were treated cavalierly; no proper answers were given. It was for that reason that we did not vote with the Government on that occasion. I mention this because, having voted with the Government on the Civil Law Ordinance, we could not object to this amendment in principle.

6.00 p.m.

But we voted against the Government on that occasion to show our displeasure at the manner in which the Government was treating the Opposition when it was raising what we thought were legitimate queries on how this particular section would operate. Now if the Government is prepared to give all the proper explanations on this particular section in a manner which it did not think fit to give on the last occasion, we will certainly vote for the Bill on this occasion.

Dr Goh Keng Swee: Mr Speaker, Sir, one would have thought that the subject of a rubber market is a serious one. It is not a subject which one can embark on with wild fanciful oratory. Yet we have been treated by the Member for Anson to another prima donna exhibition.

Sir, I have explained to Members that Singapore is the world's largest rubber market. It has achieved its unique position not by the gambling propensities of rubber brokers. A rubber market of such eminence takes many decades to build up, and to dismiss all dealings in paper rubber as sheer gambling, roulette gambling, is fantastic nonsense which I do not think any sane man with knowledge of affairs would waste time to rebut. But to give the Member for Anson his fair chance, I am unable to swallow the logic of his submission. First he says, "It is all right if they pay $600 a year." That is the admission charge to the "casino", as he calls the rubber market. But he wants to protect the class of small men who he thinks go in the rubber market for an occasional flutter. Then he castigates the group of people who would be contributing some $39,000 a year to Government revenue by taking up licences for dealings in paper rubber. I cannot reconcile his two objections and I will not try to swallow his arguments.

I only want to say something about the purposes for which the Rubber Dealers Ordinance was introduced in this country and in the Federation. The Bill goes back to 1910, soon after the development of the rubber industry. In its original form, it was just for the purposes of administration. But after the First World War, in 1921, the Federation of Malaya and Singapore considered it necessary to restrict the production of rubber in order to raise its price. This was the first scheme. Then after the great depression in 1930, an international restriction scheme was established between the Governments of the Federation and Singapore, the then Netherlands East Indies, Thailand, Ceylon and other major rubber producing countries. Therefore, this Rubber Dealers Ordinance provides in the Federation and in Singapore for various administrative measures which are necessary to operate a restriction scheme to provide for the inspection of licensed places, the proper and accurate accounting of purchases, dealers' stocks, and so on. We had no connection whatsoever with the operation of the rubber market as such. If it is the intention of the Member for Anson that stock exchange hedging operations are legitimate provided a fee is paid, then may I suggest that he has missed the point? He himself has admitted that under the existing Ordinance anyone can get a licence by paying a $1,000 deposit and a $600 annual fee. That is no way to ensure that those who operate the rubber market are men of some financial worth. To ensure that the market consists of businessmen of repute, the Stock Exchange itself will have to make rules regulating the conduct of its members. This is what is being done by the rubber trade associations and the Singapore Chamber of Commerce. They are there to ensure that a certain standard of integrity is maintained in the rubber industry without which it would not have been possible for Singapore to achieve the distinction of being the world's largest rubber market.

As I have explained at some length, one handicap which the rubber business suffers from today is the ambiguity of the law in regard to the enforceability of contracts and it is this ambiguity which the Bill before the House seeks to remove.

Mr David Marshall: Mr Speaker, can I speak again?

The Chairman: Yes, we are in Committee. The Member can speak as many times as he wishes.

Mr David Marshall: I am much obliged, Mr Speaker. The Minister speaks of an ambiguity in the law that it is necessary for the welfare of our economy to clarify. Mr Speaker, he has not told you that the ambiguity is nothing more serious than should you have a licence or need you have a licence? That is all the ambiguity which he considers so vital to remove for the enforcement of contracts. But a much easier way and a healthier way for the people is that the ambiguity should be resolved by saying that all purchases whether in paper rubber or in physical rubber require a licence, and let them pay their $600 a month. What is the difficulty of the ambiguity that exists today? The people who are paying $39,000 a year are people who have resolved it by making sure and taking out licences.

Mr Speaker, the Member for Farrer Park has made a speech that does him least credit of all the speeches I have ever heard from him. It was based on inaccuracies to justify a change of stand - awkward and embarrassing! I would not wish to turn the knife in the wound. He is sufficiently sensitive to know what he is doing. But I must draw attention to two major inaccuracies. His whole thesis is, "I do not like you as I am on the Opposition side. We voted against you because you were rude to the Opposition in the questions that were asked about this Bill." Mr Speaker, earlier, I expressed appreciation of your foresight in making available to Members the unrevised transcript of the proceedings of 15th January, 1962, which dealt with this Bill and nowhere were there any questions at all. There were speeches by the Parliamentary Secretary, followed by me, the Minister for Finance and the Parliamentary Secretary. That was all in Committee. I spoke and nobody even cared to reply; and a division was called. Though I am in complete accord with the Member for Farrer Park that the arrogance of the Government side is of such a character that it will sometimes provoke the Opposition to deal out of fashion with their proposals, I do not think we should accept that in fact the S.P.A. negated a provision which they considered essential for the welfare of this country because they considered the Government was rude about mythical questions which did not exist in respect o rude answers that for a change had not materialised.

The other inaccuracy is: the Member is wrong in thinking that I was in the Chamber at the time the Civil Law Ordinance was passed. But that is not material as I trust I can point out to him. My interest is this. I have sought, I thought in my speech on the Second Reading, to point out that we must recognise that in a free economy a certain amount of gambling of a large-scale character by big financiers is inevitable. It was not gambling contracts in rubber as a whole that I sought to make illegal. My desire is the protection not of the large financier but of the small man. The Civil Law Ordinance made these gambling contracts legal. That is so. I feel, Sir, much as I dislike that provision. I am not sufficiently satisfied that to make those contracts illegal would not, in fact, in some measure prejudice the rubber trade which we have. What I sought and what I seek in resisting this present proposal is to leave the mild impediment that exists today in requiring the small man to take a very big hurdle in that $600 licence. That is the simple logic. The Minister says I castigate those who pay that revenue to the State. Not at all. They are gamblers and those who pay that $600 are gamblers too. The transaction is legitimate. I know it is legitimate. I do not like it, Mr Speaker. I am not, however, adequately satisfied that one can safely eliminate all that gambling, but I am satisfied that it is essential one should protect the small man from gambling and that the existing law which requires him to take a $600 licence before he can indulge in paper rubber transactions is some impediment, some protection, thought not complete.

Mr Speaker, I am not so naive that I can believe speeches in this House in the context of today have any material effect in changing minds. I am somewhat reminded of a biblical passage, "And the Lord hardened the heart of Pharaoh." It is so true these days. But I do ask the S.P.A., who valiantly supported a reasonable resistance to the removal of a mild protection of the small man from indulging in paper gambling, to reconsider their stand.

6.15 p.m.

You will remember, Mr Speaker, I was almost prophetic when I rose on the motion to commit this Bill for a Third Reading earlier this afternoon and suggested that obviously the Government had behind the scenes so manoeuvred that it was now satisfied that it could obtain a majority. I did not know then what we know now of the arrangement for voting which has transpired in the speech of the Member for Farrer Park. But I would urge that the reason and the justice of the position should prevail against any political consideration, association and undertaking.

Mr Rajah: I fully realise, Mr Speaker, that on that last occasion when there was an equality of votes and, therefore, the provision was negatived, the Member for Anson was the only speaker. So far as the Members of the Front Bench of the Opposition were concerned, they did not partake in that opposition. Then when the Member for Anson was getting such a rough time from the Government Benches, and he was not given proper replies to what we thought were legitimate questions, we decided to vote against the Government because, although it was the Member for Anson who was at the wrong end of the stick, we thought that the questions raised by him were legitimate questions to which reasonable answers should have been given. But as they were not provided and as from the Assembly point of view satisfactory answers were not given, we voted against the Bill.

The only question I raised on this matter was this. The Member for Anson made his speech on this clause which he should have made on the amendment to the Civil Law Ordinance. The main part of his speech on this particular section of this clause was that it had something to do with gambling. Now, if it was gambling that the Member for Anson was against, then he should have opposed it on the amendment to the Civil Law Ordinance. It was the Civil Law Ordinance that opened the gates to gambling. Having willingly opened the gates to gambling, then the Member for Anson says, "By all means, let us open the gates to gambling. But if the poor man wants to gamble as a result of my having opened the gates, I will charge him $600 a year."

Dr Goh Keng Swee: Sir, the Member in his question asks, "Why not let these chaps pay $600 per year?" Sir, I have explained the origins of the Rubber Dealers Ordinance and its connections with the physical control over rubber movements that are necessary to enforce the two rubber restriction schemes - one in 1921 and the other one in the 1930's. There the Ordinance was never intended to apply to rubber brokers and those who dealt in paper rubber. It was only after this case before the Court of Appeal that rubber brokers thought they should attempt to regularise the position by taking out these licences. That is the position. It is absurd to fall back on an unintended levy on the rubber market in a state which the Member for Anson thinks would be healthy.

Sir, all produce markets have some sections on paper commodities. There is not a single commodity market in which the vast majority of such sections are not covered by the physical product. That is so in rubber, copper, tin, or any other commodity. And before we start fiddling around and imposing restrictions on the commodity exchange, particularly on one in which Singapore is the world's largest, i would say we have a duty to make a proper and thorough examination of the system of produce marketing. I suggest that the Member for Anson has made no such study. He is blatantly trying to appeal to people's emotions on a very technical matter. I say this is completely wrong for any Member of the House to do

Question put. "That the clause be read a Second time."

Mr David Marshall: Division, Sir.

The Committee divided: Ayes, 29; Noes, 15; Abstentions, Nil; Absent, 7. Ayes. Noes. Buang bin Fung Yin Ching, Omar Junid Miss Byrne, K. M. Lee Siew Choh Chan Chee Seng Leong Keng Seng Chan Choy Siong Lin You Eng Madam Lingam S. V. Ayes.(contd.) Noes.(contd.) Chor Yeok Eng Low Por Tuck Goh Chew Chua Marshall, David Goh Keng Swee Ng Teng Kian Hoe Puay Choo Ong Chang Sam Mdm Ong Eng Guan Kandasamy, G Sheng Nam Chin Koh, C. H. Tan Cheng Tong Lee Khoon Choy Tee Kim Leng Lee Teck Him Teo Hock Guan Lim Cheng Lock Wong Soon Fong Lim Yew Hock Mammen, John. Abstentions. Mohamed Ali bin Nil Alwi Mohd. Ariff bin Suradi Absent. M. Ismail Rahim Abdul Hamid bin Ong Pang Boon Haji Jumat Rajah, A. P. Ahmad bin Ibrahim Rajaratnam, S. Ahmad Jabri Bin Ramaswamy, S. Mohammad Akib Sahorah binte Bani, S. T. Ahmat, Madam Chan Sun Wing Seow Peck Leng, Lee Kuan Yew Mrs Yong Nyuk Lin Tan Kia Gan Thio Chan Bee Toh Chin Chye Wee Toon Boon Yaacob bin Mohamed

Clause accordingly read a Second time and added to the Bill.

Bill reported, with an amendment; read a Third time and passed.