2.1
In reply. I am to request you to point out to the Earl of Crowe that the miscon reptioni reterred to in the fourth paragraph of Sir J. Anderson's despatch of the 27th damary* arises through their Lordships having, in the fourth paragraph of the Treasury letter of 15th November last, inadvertently overlooked the special meaning by the Ordinance and used the expression "gold given to "gold standard reserve standard reserve fund in reference to the gold coin received by the Crown Agents for the Colonies agamst Government notes issued at Singapore
My Lords regret the ambiguity thus created, but if the words "gold received in in the paragraph in question. London" are read for "gold standard reserve fund' their argument will, they trust, become quite clear.
In Suggesting that general investment powers should be taken in respect of this futa, my Lords had regard to the conditions which may arise at a later stage, when, in the experiment is successful, the fund may attain very considerable dimensions and possibly encroach unduly upon the investment portion of the Note Guarantee Fund properly so called.
This point, however, can more conveniently be dealt with upon the clauses of The amending Ordinance defining the precise relations between the three component parts of the Note Guarantee Fund. atid my Lords would be glad to have an oppor tunity of considering this amending Ordinance in draft before it is enacted.
They agree with Sir John Anderson that for the present, at any rate, the moiety of the gold received in London which it has been decided not to retain in actual specie should be lent out at call or upon short loan.
Such an arrangement will be the more convenient in that when the tide sets in the other direction and telegraphie transfers have to be issued at Singapore against notes withdrawn, the Crown Agents will be able to meet such transfers in the first instance from these liquid balances and will only need to draw upon the actual The liquid balances will thus reserve of specie when such balances are exhausted.
act as a buffer to protect the specie reserve, which will be the more effective for general purposes if somewhat firinly held.
My Lords understand that, though Lord Crewe is advised that the lending out of the gold received by the Crown Agents at call or upon short loan is not technically permissible under the existing Ordinance, he has authorised them to proceed upon The lines suggested in the Treasury letter of the 15th Novembert in anticipation of They see no serious objection to this course, provided the necessary amendment that the amount retained in actual specie together with the dollar reserve at Singa- pore is not allowed to fall below the fixed proportion" under the existing Ordin-
Of this they assume there is no danger in present circumstances. They think it important, however, that the maintenance of a silver specie reserve at Singapore in legal tender dollars available for immediate issue to an amount of not less than one third of the total notes outstanding from time to time. as proposed in the Treasury letter of the 28th July last, should be made a matter of definite statutory obligation, and that in the meantime steps should be taken to secure that this requirement is, and continues to be, complied with.
ance
I am to add that my Lords have not thought it necessary to go into the proposals contained in Sir J. Anderson's despatches with regard to accounting adjustments between the investment portion of the Note Guarantee Fund and the Gold Standard Reserve, since they assume that the correspondence is not referred to them in regard to these points, but rather in view of its hearing upon the questions of principle involved in the new arrangements for regulating the exchanges.
I am, &c..
13328
No. 36.
G. H. MURRAY.
THE SECRETARY OF STATE to THE GOVERNOR. [Anstrered by Nos, 43 and 44.]
(Confidential.)
Downing Street, 18 May, 1910. SIR,
I HAVE the honour to acknowledge the receipt of your confidential despatches ̧of the 24th and 27th January last§ on the subject of gold held in London on account
the Government of the Strait- Settlements, and to transmit to you, for your con- deration, the accompanying copies of correspondence with the Lords Commis- -oners of the Treasury
2 The Crown Agents have been authorized, pending the receipt of further instructions, to proceed on the lines indicated in your despatches under acknow ledgment.
13328
GENTLEMEN.
No. 37.
COLONIAL OFFICE to CROWN AGENTS
[Answered by No. 35.]
I have, &c..
CREWE
Downing Street, 19 May. 1910. WITH reference to the letter from this Department of the 16th December last,†
I am directed by the Earl of Crewe to transmit to you a copy of the correspondence
Governor, Confidential, 24th January. 1910. Governor, Confidential, 27th January, 1910. To Treasury, 12th March, 1910. Treasury, 5th May, 1-10
noted in the margin on the subject of gold held in London on account of the Government of the Straits Settlements, and to inform you that, pending the receipt of further instruc- tions, his Lordship approves of your proceeding on the lines laid down in Sir J. Anderson's confidential despatches of the 24th and 27th January last.
15975
SIR,
No. 38.
I am, &c.,
H. BERTRAM COX.
CROWN AGENTS to COLONIAL OFFICE.
(Received 28 May, 1910.)
[Answered by No. 42.]
Whitehall Gardens, London, S.W., 27th May, 1910. I HAVE the honour to acknowledge the receipt of your letter of the 19th instant, No. 13328,§ on the subject of the gold held in London on account of the Government of the Straits Settlements, and to state that we are carrying out the arrangements indicated in Sir John Anderson's confidential despatches of the 24th and 27th of January last.
2. The result of the adjustments made in accordance with the terms of the despatch of the 27th of January is to show that £29,336 14s. 8d. belong to the Note Guarantee Fund (Gold Portion), half of which will be held in gold deposited at the Bank of England and half lent out at interest, while £243,810 19s. 9d. remains in the Gold Standard Reserve and should be invested in gold securities.
3. As, however, it is stated in your letter that these arrangements are to be carried out" pending the receipt of further instructions," it would seem undesirable to incur the expense of investing the £243,810 19s. 9d. until a final decision has been taken. We are, therefore, placing this sum on deposit at interest and we shall be glad to know as soon as possible whether we may proceed to invest it.
I have, &c.,
R. L. ANTROBUS.
• No. 33.
↑ No. 23.
* No. 10.
Nos. 32 and 33.
• Nos. 34 and 35.
↑ No. 31.
‡ Nos. 32-35.
§ No 37.
Nos. 32 and 33.
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