39039
115
No. 150.
!
38484
No. 156.
I am,
&o.,
H. BERTRAM COX.
THE SECRETARY OF STATE to THE GOVERNOR.
(Sent 5,15 p.m., 19th October, 1906.)
TELEGRAM.
[Copy to Treasury, 22nd October, 1906. L.F.]
Your telegram of 18th October,* I agree. It is desirable as far as possible to insist on dollars being melted down before exportation in order to avoid any obliga- tion in respect to them, in future. Otherwise they will be returned to Colony here- after when silver falls again.-ELGIN.
38597
No. 157.
THE SECRETARY OF STATE to THE GOVERNOR. (Sent 4.5 p.m., 19th October, 1906.) TELEGRAM.
Order in Council will be submitted to His Majesty on 22nd instant, providing : (1) For making British sovereign legal tender concurrently with Straits
Settlements dollar, which will continue standard coin;
38597
(2) For reducing millesimal fineness Straits Settlements dollar from 900 to 800. New dollar will only differ in fineness from present dollar, which will not be demonetized;
(3) For making fifty-cent pieces unlimited legal tender. Each provision will operate from date which you will fix by Proclamation.-ELGIN.
No. 158.
THE SECRETARY OF STATE to THE GOVERNOR. [Answered by No. 182.]
(Confidential.)
SIR,
Downing Street, 19th October, 1906. WITH reference to my telegram of to-day's date,† on the subject of the cur- rency, I have the honour to transmit to you the draft of the Order in Councilt which the Lords Commissioners of the Treasury propose to submit to His Majesty on the 22nd instant.
I trust to address you shortly on the whole question, explaining the action which has been taken, and the reasons for which I have on some points departed from your recommendations.
I have, &c.,
ELGIN.
THE GOVERNOR to THE SECRETARY OF STATE.
(Received 10.13 a.m., 23rd October, 1906.)
TELEGRAM.
[Answered by No. 165.]
Viceroy India informs me that Governor-General India cannot undertake, owing pressure of work, remint dollars- Can work be undertaken at home? Require about 25 million dollars reminted; can send $10,000,000 immediately.-
ANDERSON.
38597
SIR,
No. 160.
THE SECRETARY OF STATE to THE GOVERNOR. (Confidential.)
1
Downing Street, 26th October, 1908. I HAVE the honour to acknowledge the receipt of your Confidential despatch of the 13th of September,* with regard to the currency of the Straits Settlements.
2. But for the continued rise in the value of silver, I should have preferred to adhere to the policy of not declaring gold legal tender. My view would still have been that the existing currency was sufficient for all requirements, and that it was desirable to accumulate and retain in the hands of the Government a gold fund sufficient to guarantee the dollar from falling appreciably below the fixed value of 28. 4d.
3. In view, however, of the continued rise in the price of silver I found it necessary to take immediate action to cope with an unforeseen situation. The matter had already formed the subject of discussion between this Department and the Treasury when your telegram of the 14th instantt was received, pointing out that the intrinsic value of the Straits Settlements dollar had risen to 27.52d., and I was advised that, if the dollar was to be retained at 2s. 4d., it was necessary that an Ordinance should at once be passed in the Colony empowering the Commissioners of Currency to pay notes in gold or silver at their absolute option, that a notification should simultaneously be issued to the effect that gold would be accepted in payment of all Government dues, and that His Majesty should be moved to pass an Order in Council at the earliest possible date, empowering you to declare gold legal tender, and authorizing the reduction of the fineness of the Straits Settlements dollar to 800. I concurred in these views, and telegraphed to you accordingly on the 10th instant.
4. In deciding on this action I did not lose sight of the alternative explained in the letters from the Treasury of which a copy is enclosed. But it appeared to me that to withdraw the notification under which notes have been issued in exchange for gold, and to allow the currency to float on to a silver basis again would have involved the gravest disadvantages. It would have meant throwing away all the results of the efforts made during the last three years to place the currency on & gold basis, and re-introducing all the evils resulting from fluctuating exchange which the Currency Committee's scheme was intended to terminate. Apart from the confusion and dislocation of trade and industry which would thus be caused, I cannot doubt, from the correspondence which passed when the dollar was fixed at 28. 4d., that a higher rate for the dollar such as 2s. 6d. or 28. 8d. (which might have been fixed hereafter) would have been gravely detrimental to the interests of the Peninsula. But there were other considerations of a very serious character. you point out, the liabilities of the Government in respect of its note issue, the reserve against which is, for the greater part, in gold or gold securities, might with a further considerable rise in silver have involved a loss which the Government is not in a position to face, whilst the obligation (for it is practically an obligation) to continue the conversion of salaries based on sterling into dollars at the rate of For all these reasons it 29. 4d. would have entailed further and very heavy loss. appeared to me necessary to adhere to the rate of 2s. 4d.
As
• No. 153. ↑ No. 157.
For Order in Council as passed, see Enclosure in No. 161.
• No. 146.
81104
↑ No. 147.
‡ No. 148.
No. 154.
TA
PUBLIC RECORD OFFICE
Reference :-
PILLICO. 882
6
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO