PUBLIC RECORD OFFICE
Reference :-
C.O. 882
9
PUBLIC RECORD OFFICE, LONDON ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
124
Mr. Lucas's letter of the 10th instant (No. 41128/06)* and its enclosures, respecting the proposed re-coinage of the Straits Settlements dollar.
In eply their Lordships direct me to acquaint you that they concur with the Secretary of State for the Colonies in his reluctance to recommend the alteration of the silver content of the dollar otherwise than by the reduction of fineness which was authorised by Order in Council so recently as the 22nd ultimo.
The Governor of the Colony now proposes that, besides the reduction of mille- simal fineness from 900 to 800 then authorised, there shall be a reduction of one- fourth in the weight of the coin, the resultant effect of these, two changes being to reduce the silver content by one-third. He supports this proposal by reference to the views of the Legislative Council and the Singapore Chamber of Commerce, and it appears that both these bodies are of opinion that the reduction of fineness will not by itself afford a sufficient margin of safety to the dollar.
Reluctant though my Lords would be to depart from the policy so recently adopted on the Governor's advice, they do not think that so strong an expression of representative local opinion should be lightly disregarded. Looking at the steady rise in the price of silver which has continued during the last four years, it would be rash to reject the possibility of a further rise which might neutralise of the effect of the reduction of fineness of the dollar in a comparatively short space time. If such a rise were to occur, and it were found necessary within the next two or three years to take further steps to adjust the silver content of the dollar, the Straits Government might not unreasonably complain of a course being adopted in opposition to their own views with the result of subjecting them to the wasteful necessity of a double re-coinage in so short a time.
An alternative means of meeting the situation created by a further considerable rise in silver might perhaps be found in leaving the silver dollars to their fate and providing for currency needs by the circulation of sovereigns and dollar notes. The rapid expansion of the Government note issue in the last few years affords some ground for the belief that such a course might succeed. But it is dangerous to assume, without the confirmation of local opinion, that a community which has been accustomed to silver coins of unlimited legal tender would readily adapt itself to the substitution of gold coins and notes in their place. My Lords would hesitate therefore to reject the Colonial Government's proposal, in reliance on that alterna- tive, until, at any rate, the Colonial Government has had the opportunity of stating its views upon it.
As regards the Governor's own proposal, I am to state that it appears to provide for a reduction of the dollar beyond what is reasonably necessary. If the weight be reduced by one-fourth, there should be no need to make any reduction in fineness. A dollar 900 fine and weighing 312 grains would not touch melting point at the value of 28. 4d. until silver reaches a price of about 44d. It can scarcely be doubted that, before that price could be reached, there would be an increase in the pro- duction of silver which could hardly fail to check the further advance in price. upon, it Consequently, if an amendment of the recent Order in Council be decided ought to be sufficient to repeal the provision for reduction of fineness and to sub- stitute a reduction by one-fourth of the standard weight. Incidentally the retention of the present fineness would facilitate re-coinage by the Royal Mint, where there is at present only one press capable of striking dollars 800 fine. I am to suggest that the Governor should be invited to state whether the possibility of objection to the acceptance of a dollar reduced in weight by one-fourth has been fully considered, and whether he and his advisers are satisfied that no serious difficulty need be apprehended in that respect.
I am to add that, when the particulars of the new dollar have been finally decided, my Lords will be ready to authorise the Royal Mint to undertake the work of re-coinage, with the assistance of the Birmingham Mint; also that the Deputy Master of the Mint reports, with reference to the enquiry in Sir J. Anderson's tele- gram of the 5th instant,f that a sufficient number of dies to re-mint 600,000 dollars can be prepared by the end of December if put in hand promptly.
I am,
&c.,
E. W. HAMILTON.
42224
125
No. 175.
COLONIAL OFFICE to CROWN AGENTS.
[Copy to Governor, No. 304, and to Treasury, 23rd November, 1906. L.F.]
Downing Street, 22nd November, 1906. GENTLEMEN,
I am directed by the Earl of Elgin to acknowledge the receipt of your letter of November 15th* with regard to the supply of currency notes for the Straits Settlements.
2. Lord Elgin approves your postponing the manufacture of $5 notes in favour of one dollar notes until you receive instructions to the contrary from the Governor, to whom a copy of letter will be sent by this week's mail.
your
43000
No. 176.
I am, &c.,
C. P. LUCAS.
THE SECRETARY OF STATE to THE GOVERNOR. (Sent 9.15 p.m., 22nd November, 1906.) TELEGRAM.
[Answered by No. 17^.]
Your telegrams of 5th November, 8th November.t I am very reluctant to take further steps and Lords Commissioners of the Treasury share my reluctance, but we are prepared to defer to strong local opinion if you and your advisers are satisfied that there will be no serious difficulty in native acceptance of dollar reduced in weight by one-fourth. Treasury point out that if weight reduced no need to coin dollar less than 900 fine since dollar then safe till silver reaches 44d. Retention of 900 fineness facilitates re-coinage Royal Mint, where only one press capable of striking 800 fine dollars. Royal Mint can prepare dies by end of December if put in hand promptly. Telegraph if you concur in course suggested.-ELGIN.
43217
No. 177.
THE GOVERNOR to THE SECRETARY OF STATE. (Received 9.34 a.m., 23rd November, 1906.) TELEGRAM.
[Answered by No. 179.]
In reply to your telegram of yesterday's date, Chinese Advisory Board, when consulted, recommended reduction of weight rather than of fineness of dollar, but were willing to leave matter to the Government. Suggestion of Treasury agrees with opinion of Chinese, and, in view of obvious advantage in facilitating re-coinage, I agree.
Presume that you will arrange with Treasury details as to half-dollar and silver subsidiary coin. Proclamation making sovereign and half-dollar legal tender to any amount issued to-day.—ANDERSON.
43330
No. 178.
>
28th November, 1906.
HOUSE OF COMMONS.
6 EDWARD SASSOON asked the Under-Secretary of State for the Colonies whether the silver dollar, the unlimited legal tender currency of the Straits, had
• No. 169.
† No. 166.
• No. 172.
↑ Nos. 166 and 168.
* No. 176.