PUBLIC RECORD OFFICE
882
ALLY WITH
PUBLIC RESON
74
No risk is involved, while the half-measure does involve a certain amount of risk, and is open to the objection that it prolongs the inconvenience of having no real standard currency in circulation and available for international payments. With our enormous tin industry and our rapidly expanding rubber industry, this inconvenience may prove serious as a temporary stringency can easily be created with so limited a total circulation as fifty million dollars.
6. I regret that my attention has not been called to the despatch of the 27th of March, 1903, but I am fully aware that a remittance to England for investment involves an increase of the circulation. My reason for ordering the remittance in question was that I felt it necessary to test the persistent statements made to me by bankers and prominent merchants that exchange was being forced up artificially by speculative operations on the part of the Dutch Bank here, which, it was alleged on good authority, had at that time sold forward to the extent of two millions sterling. My own belief was that the speculation in exchange was small, but that the Manager of the Dutch Bank, seeing that the market for tin was steadily rising and that the circulation here was restricted, had, by offering slightly better terms than the other banks, secured practically the whole available business.
The only way of satisfying myself on the point was to order a substantial remit- tance on behalf of the Currency Commissioners, and that I accordingly did. The result was to satisfy me that I was right, as though the market remained stationary for a short time after the remittances, it has since continued to advance steadily. So long as the present exceptionally high price of tin continues, and money from England continues to be remitted here for investment in rubber planting, the rise is bound to continue, and, though the rise in the price of silver has generally checked the export trade from the East for the moment, our exchange has not fallen though it has for the moment ceased to rise.
If I had been aware of the despatch of the 27th of March, 1903,* I should not have ordered the remittances without previous reference to you, but I am convinced that it has had a good effect by slacking the rate at which exchange was rising and preventing the dislocation of trade which a sharp rise always occasions.
7. The opinion of Mr. Adamson that there has been no contraction which can be felt by the business community is interesting. I do not understand, however, how the community is to feel it. That there has been a considerable contraction is obvious, and the only way in which it makes itself felt and manifest is by the steady rise in exchange. If Mr. Adamson means that that rise has not been felt by the business community, I can only say that the experience of his firm is exceptional, and that I am informed by everyone that, with the exception of tin and rubber, there has been a general slackening of the export trade. So long as the price of tin and rubber and the increase of investment in the latter is maintained exchange must continue to rise, and when it has reached parity I do not appre- hend any difficulty in maintaining it.
8. With regard to subsidiary silver, there is, I am informed, still a con- siderable influx from China, but I have relieved the market to some extent by taking three hundred thousand dollars of it from the banks and placing it with the Cur- rency Commissioners, who have issued notes against it. When the works con- templated by the municipality, the Tanjong Pagar Dock Board and the Govern ment Harbour Works have been commenced, the whole amount will probably soon find its way into circulation again. There is, therefore, no need for precipitancy as regards the issue of the Order in Council extending the legal tender of subsidiary
coin.
9. As regards the payment of compensation to the Tanjong Pagar Dock Company, we must take our chance. I am satisfied that there is no probability of any real fall in exchange unless further large remittances are made on behalf of the Currency Commissioners and that, if effective, would in the end cause far more serious lose to the community by deferring the time when the present unsettled conditions will be determined, than any increased amount which, owing to the appreciation of the dollar, we may have to pay to the Company.
I have, &c.,
JOHN ANDERSON.
1222
75
No. 98.
THE GOVERNOR to THE SECRETARY OF STATE,
(Paraphrase.)
(Received 4.10 p.m., 10th January, 1906.)
TELEGRAM.
[Copy to Treasury, 12th January, 1906. L.F.]
[Answered by No. 100.]
Rate of exchange rising rapidly. It is to-day 2s. 41d Banks press for notes. Expect stringency.-ANDERSON.
1313
No. 99.
THE GOVERNOR to THE SECRETARY OF STATE. (Received 3.7 p.m., 11th January, 1906.)
TELEGRAM.
(Paraphrase.)
[Copy to Treasury, 12th January, 1906. L.F.] [Answered by No. 100.]
Just returned from Borneo. Your Confidential despatch of December 15th.* The telegramt sent yesterday states position of exchange. Rate has risen to-day to 28. 44d. The Chinese new year begins on January 25th. Demand for currency is always active at that period and a panic is feared if nothing can be done to relieve stringency.
For the reasons stated in paragraph 9 of my confidential despatch of December 20th‡ I would again urge course suggested in telegram of January 3rd.§. I would propose to give notes here in exchange for gold at fixed rate and to invite tenders for issue of notes against deposit of gold in London after amending the Ordinance as you suggest in the confidential despatch* referred to.-ANDERSON.
1313
No. 100.
THE SECRETARY OF STATE to THE GOVERNOR. (Sent 6.20 p.m., 12th January, 1906.)
TELEGRAM.
(Paraphrase.)
[Copy to Treasury, 19th January, 1906. L.F.]
[Answered by No. 102.]
Referring to your telegrams of January 10th and 11th,|| I have not yet received your despatch of December 20th. Please report fully by telegraph as to what are, in your opinion, the reasons for the recent sharp rises in Singapore exchange. Are you sure that they are chiedy or largely due to shortness of currency! Are other special causes at work! Telegraph also gist of representations made by the mer- cantile community. Any fixed rate for issuing notes against gold in Singapore could only be the same as the rate ruling at the time when the notification was made. Report your views as to possibility of a half-crown dollar. When will suggested amendments to Ordinance be made 1—ELGI.
• 8887; not printed.
"RAPHICË
NOT TO
LONDON
• No. 94.
↑ No. 98.
No. 101.
f No. 95.
Nos. 96 and 99.
B1104
OF THE F
No comments yet.
Private notes are available after approval.