CO882-(8-9) — Page 128

PUBLIC

RECORD OFFICE

Reference:

TTIC.O. 882

سائلسنين

6

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- | COPYRIGHT PHOTOGRAPH-NOT TO

PUBLIC RECORD OFFICE, LONDONÍ

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5. I telegraphed to you in cypher on the 19th instant suggesting that your Government should not give any pledge that it would ultimately give new dollars in exchange for all the Mexican and British dollars in the Colony and in the Federated Malay States. On the eve of the arrival of the first consignment of the new dollars I thought it well to suggest caution in this respect, as it seems likely that representations may be made pressing for such a pledge, and it is important that the Government should keep its hands free. I gather from paragraph 9 of your confidential despatch of the 6th of Junet that you share my views in this respect, but I am anxious that the point should not be lost sight of.

6. It seems clear that there is at present in the Colony a supply of British and Mexican dollars in excess of the needs of the community, and that this excess is at least in part due to speculation. It is anticipated in paragraph 58 of the Currency Committee's report that when the importation of British and Mexican dollars and the exportation of the new dollars are prohibited, a quantity of British and Mexican dollars will flow out of the Colony to meet trade requirements. This process, which is necessary before any contraction of the circulation can be brought about, will be facilitated by the absence of any definite undertaking to give new dollars for all the old dollars now in circulation-otherwise they may be held back to obtain an advantage from their exchange.

7. It will, of course, be most satisfactory if the Government is able to offer exchange for all the old dollars left in the Colony and the Federated Malay States when demonetization takes place, but you will be fully justified in protecting the interests of the community against speculators as far as possible by declining to give a pledge to that effect.

37744*

No. 39.

I have, &c.,

J. CHAMBERLAIN.

THE HONG KONG AND SHANGHAI BANKING CORPORATION to COLONIAL OFFICE. (Received 13th October, 1903.)

DEAR SIR,

[Copy to Governor, October 20, 1903.

[Answered by No. 41.]

No. 350. L.F.]

31, Lombard Street, London, E.Ç., 13th October, 1903.

I BEG to enclose copy of a letter received by last mail from our Hong Kong Manager referring to a suggested exchange by the Straits Government of British dollars in Singapore for our bar silver at Bombay.

The advantage of such an exchange would be that we would receive the equiva- lent of our silver at once, where we want it, in Singapore, for shipment to Hong Kong; and the Straits Government would receive the silver at once in Bombay, for coinage into the new Straits dollars, instead of shipping the coins from Singapore for re-coinage, and thus saving time and cost of shipment-the operation suggested would, therefore, appear to commend itself as a mutually convenient and advan- tageous one.

You will notice our Manager appears to be under the impression that the Straits Government will do nothing without instructions from the Colonial Office, and I would ask you if instructions could now be sent by wire authorising the Straits Government to make what arrangement they, in their discretion, may think proper in the matter.

It is doubtful if the £70,000 referred to in the enclosed letter has not been already coined into British dollars and possibly shipped, but it may still be available if there was any delay in minting, but even if so, there is other silver en route.

Yours, &c.,

M. V. TOWNSEND,

PS- Sir Ewen Cameron is away in Scotland on a short holiday.

A. E. Collins, Esq.

• No. 36.

↑ No. 24.

Manager.

‡ [Od. 15561.

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Enclosure in No. 39.

LETTER FROM HONG KONG.

With reference to exchanging British silver in Bombay with the Straits Govern- ment for British or Mexican dollars, which was referred to in my market letter yesterday, I give you my telegram to Singapore and their reply:—

To Singapore." We have wired Bombay send British silver to mint, £70,000 due to-morrow (12th September).-Here ends the foregoing telegram. With reference to the foregoing, can you arrange Straits Government ship to Hong Kong British or Mexican dollars estimated out-turn which allows for seigniorage of 1 per cent. converting British silver into new Straits dollar on their account. With reference to the foregoing Straits Government will make a saving of conversion (or redemption) shipping charges, seigniorage 1 per cent. With reference to the foregoing, on what terms will they exchange. Our opinion is 1 per cent. in our favour would be fair. If you can arrange we shall advise Bombay deposit in name of Straits Govern- ment. Do the best you can in the matter.'

Singapore's reply was.-"With reference to your telegram of 10th, Straits Government will make no arrangement of this nature, but if you think it advisable they have no objection Hong Kong and Shanghai Banking Com- pany, London, try to arrange Colonial Office. Our opinion is there will be great delay coinage of British dollars Bombay Mint."

I did not consider it worth while wiring you on the subject, but in case we have more silver afloat for conversion into British dollars when this reaches you or as the Mint may not have started coining the £70,000 deposited to-day, it might be advisable to see the Colonial Office and try to arrange the matter.

From our point of view it would be advantageous to the Straits Government, saving them freight on shipping dollars to and from Bombay, as I presume the P.&O. would carry on Straits dollars free of freight same as they do the British.

37744

No. 40.

THE SECRETARY OF STATE to THE GOVERNOR (Sent 12.20 p.m., 14th October, 1903.)

TELEGRAM.

Hong Kong and Shanghai Banking Corporation ask that Government of Straits Settlements may be authorised to supply British or Mexican dollars Singapore for shipment Hong Kong in exchange for silver Bombay. See no objection, always provided that dollars supplied will be shipped at once out of the Colony. Matter left to your

discretion.-LYTTELTON.

37744

No. 41.

COLONIAL OFFICE to THE HONG KONG AND SHANGHAI BANKING CORPORATION.

SIR,

[Copy to Governor, October 20, 1903. No. 350. L.F.]

Downing Street, 14th October, 1903. In reply to your letter of the 13th instant, I am directed by Mr. Secretary Lyttelton to inform you that the Officer Administering the Government of the Straits Settlements has been informed by telegram that the Secretary of State sees no objection to the Colonial Government, at its discretion, supplying British or Mexican dollars at Singapore for shipment to Hong Kong in exchange for silver at Bombay, provided that the dollars so supplied are at once shipped out of the Colony.

81104

• No. 39.

I am,

&c., H. BERTRAM COX

D