PUBLIC RECORD OFFICE
Reference :-
PLEC.O. 882
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PUBLIC RECORD OFFICE, LONDONÍ
Lally withoUT PERMISSION OF THE COPYRIGHT PHOTOGRAPH----NOT TO BE REPRODUCED PHOTOGRAPHIC-
SIR,
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Enclosure in No. 28.
The SECRETARY OF THE CHAMBER OF COMMERCE, Singapore, to the COLONIAL
SECRETARY, Straits Settlements.
Chamber of Commerce, Singapore, 16th July, 1903.
I AM instructed by the Committee of the Chamber to enclose copy of a letter, dated the 27th ultimo, addressed to the Chamber of Commerce by the Advisory Sub-Committee appointed to watch the progress of the Currency Scheme.
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2. With regard to paragraph 10 of that letter, I am directed to enquire if the Government will afford a definite interpretation of the expression "first supply in Section 58 of the Currency Committee's Report.
3. It will be observed that the Advisory Sub-Committee lay special stress upon the necessity of measures being taken immediately to prohibit the importation of the Mexican dollar, as they feel that if this action is deferred, the operation of the scheme will be delayed. In this connection I am desired to bring to the notice of the Government that the Mexican coin still continues to flow into the Colony. The Chinese are collecting them at a premium in China and the Philippines with the The Committee, moreover, under- intention of shipping such coin to the Straits. stand that the United States Government will have about eight millions of Conant dollars available for circulation in Manila about the middle of August, and this movement may have the effect of releasing the Mexican currency there, and leaving a large amount available for shipment here. The Committee attach importance to that contingency, which they believe was not hitherto contemplated in its effect upon the Currency Scheme.
4 With reference to paragraph 15 of the Advisory Committee's letter, reading :-
"They think, however, that when the time has been reached at which Government desire to finally fix the ratio, that ratio should approximate to the rate of Exchange then ruling."
my Committee would prefer to state the recommendation in the following words
"They think, however, that the Government should delay fixing the ratio until the ruling rate approximates to the ratio the Government have in view."
I have, &c.,
DEAR SIR,
ALEX. J. GUNN,
Secretary.
Singapore, 27th June, 1903. WE, the Advisory Sub-Committee, appointed on 4th June by the Committee of the Chamber to watch the progress of the scheme for reform of the currency of the Colony, by invitation met His Excellency the Governor, the Colonial Secretary and the Colonial Treasurer at the Legislative Council Chamber on 2nd June, 1909, for the purpose of discussing the proposals of Government for obtaining fixity of exchange between the dollar and the sovereign.
2. At that meeting we understood from the Governor-as had also been gathered from His Excellency's speech at the meeting of Legislative Council on 29th May that Government intended adopting and acting on the report and recommendations of the Straits Currency Committee, of which Sir David Barbour was chairman.
3. We also gathered, very distinctly, that Government is not prepared to depart from any of the details recommended in that scheme, but that the principles indicated in Sections 57 to 61 would dictate the policy intended to be pursued.
4. This being the decision of Government the door is closed to our making any recommendations as we should have wished to have done in the direction of suggesting alterations in the details of the currency scheme.
5. We gathered that all that Government is prepared to receive from us are suggestions for bringing into operation and working the London Committee's recommendations in their entirety, and that if such suggestions be, in the view of Government, likely to facilitate the conversion, these would receive due considera- tion.
-0. · It is, therefore, within these last-mentioned limits that we are compelled
to frame our suggestions.
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7. At our interview with the Governor on 2nd June, we received an assurance from His Excellency that the currency conversion will be introduced by Govern- ment in a broad and liberal spirit, and iu the best interests of the community generally. We feel that it is by the adoption of this policy that ultimate success can best be attained.
8. Your Advisory Committee deem it desirable that the Chamber of Commerce should at this stage direct the attention of Government to certain dangers that may arise during the period of transition, and suggest certain safeguards that, in their opinion, it would be prudent to provide with the object of ensuring the successful establishment of the new system.
9. The Advisory Committee desire to lay much stress on their view that prior to the period of demonetization the most liberal provision in respect of the supply of new coinage should be made towards meeting the requirements of the Colony and the Federated Malay States, so as to avoid what otherwise is likely to produce at and following the period of demonetization-intense monetary stringency, the effect of which upon our trade would be exceedingly dangerous.
10. The Advisory Committee are of opinion that the Chamber should ask for a definite expression of the interpretation placed by Government on the words "first supply" in Section 58 of the Currency's Committee's Report.
11. The Advisory Committee suggest that demonetization shall not take place until the currency of the Colony and that of the Federated Malay States is so largely composed of the new Straits dollar that loss to the last holders of the old coin will be avoided, otherwise great hardship and public inconvenience will ensue. This view is in keeping with the spirit of Section 59 of the Currency Committee's Report.
12. The knowledge of the terms of the Currency Scheme has already led to large shipments of Mexican dollars to this port. These shipments seem likely to continue, and the Advisory Committee would strongly recommend the Chamber to urge that Government should immediately prohibit the importation of Mexican dollars.
The Advisory Committee feel that if this action is postponed the operation of the scheme will be delayed and a heavier burden thrown upon Government, for it must be manifest that the greater the number of dollars now allowed to be imported the greater will be the quantity of coin to be re-minted by Government.
13. Having reference to the recommendation in Section 60 of the Currency Committee's Report that the coinage of dollars should cease until the exchange value of the dollar had reached the ratio decided upon by Government as the future value of the Straits dollar, your Advisory Committee would recommend that the Chamber strongly urge upon Government that in carrying out this procedure the greatest possible care should be taken to avoid bringing about stringency so sudden as to dislocate the financing of the trade of the Colony.
14. In the opinion of your Advisory Committee, Government will undoubtedly require to maintain a readily available reserve of Straits dollars to meet the require- ments of trade, and the contingency of extraordinary monetary stringency
It must not be overlooked that Government is about to assume, to itself alone, the duty of financing the trade of the Colony and Federated Malay States-a responsibility that has hitherto rested with the local banks—and in this connection it seems appropriate to sound a warning as to the abnormal demand for money prior to Chinese New Year, and at other times when trade is active.
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15. It is, in the view of the Advisory Committee, premature to give any definite expression of opinion regarding the future ratio of the Straits dollar in relation to the sovereign. They think, however, that when the time has been reached at which Government desire to finally fix the ratio, that ratio should approximate to the rate of exchange then ruling.
In advocating this policy the Advisory Committee have in view the paramount necessity, in their opinion, of slow and gradual evolution in the transition stages of the scheme, so as to avoid as far as possible any marked difference between the ruling rate of exchange and the rate finally fixed by Government.
16. The Advisory Committee desire to lay special stress upon the principle indicated in Section 61 of the report :-
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"The Government should be prepared not only to give in exchange for a sovereign such number of dollars as are hereafter declared equivalent to a sovereign, but also to give sovereigns in exchange for dollars at the same
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