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PUBLIC RECORD OFFICE

Reference

LILICO. 882

Amend-

Inent of

Section 9

of the

principal Ordinance.

Amend-

ment of

Section 10

3.

90

Sub-section (2) of Section 9 of the principal Ordinance is hereby repealed and the following sub-section is inserted in place thereof :--

(2) Whenever the Governor satisfies a Secretary of State that the Deprecia- tion Fund is not less than ten per cent. of the investment portion of the Note Guarantee Fund and that any depreciation of market value below the cost price of the securities forming the investment part of the Guarantee Fund has been made good and that it is unnecessary for the present to increase the Depreciation Fund he may order the annual payment to the Depreciation Fund of the said net balance to be discontinued and the said net balance to be paid to the General Revenue of the Colony. If at any time thereafter the Governor is of opinion that it is necessary to increase the Depreciation Fund the Governor may order that the whole of or any part of the said net balance shall be again paid into the Depreciation Fund.

4. Sub-section (3) of Section 10 of the principal Ordinance is amended by omitting the word "forthwith" in line 5 and the words " by order of the Governor in line 6 and by inserting after the words "the Revenue of the Colony" in line 7 the words "at such times as the Governor may with the sanction of the Secretary of Ordinance State direct."

of the principal

Passed this 16th day of February, 1906.

A. H. LEMON,

Acting Clerk of Councils.

Enclosure 2 in No. 122,

REPORT On Ordinance No. V of 1906 being an Ordinance further to amend "The Currency Note Ordinance 1899."

This Ordinance was introduced after some correspondence between the Govern- ment and the Secretary of State, in which the main principles of the proposed legis lation were settled. The objects of the Ordinance are as follows:-

(i) To enable the payment into the Depreciation Fund existing under the provisions of the Currency Note Ordinance, of the whole of the net income from the investment portion of the Note Guarantee Fund, instead of as at present, one per cent. of the cost price of the securities. (ii) To permit the suspension, for such time as the Governor may with the sanction of the Secretary of State think fit, of the payment from the general revenue of any deficiency existing between the market value in dollars of the Currency Note investments and their cost price. The first object is effected by the second section of the Ordinance, which repeals two sub-sections of Section 8 of the principal Ordinance, and substitutes for them a provision enabling the net income from the investment portion of the Note Guarantee Fund to be paid into the Depreciation Fund, instead of one per cent. of the cost price of the securities as provided for in the repealed sub-sections.

2.

3. The third section makes alterations to Section 9 of the principal Ordin- ance, which have been rendered necessary by the preceding section. It gives the Governor power, subject to the sanction of the Secretary of State, to discontinue the annual payment to the Depreciation Fund when the fund is not less than ten per cent. of the investment portion of the Note Guarantee Fund, and the deprecia- tion of the market value below the cost price of the securities forming the invest- ment portion, has been made good.

4. The last section amends Section 10 (3) of the principal Ordinance, so as to effect the second of the two objects mentioned above.

5. I am of opinion that this Ordinance may properly receive the Royal Assent.

Attorney-General's Chambers,

Singapore, 1st March, 1906.

J. R. INNES,

Acting Attorney-General.

12415

91

No. 123.

TREASURY to COLONIAL OFFICE.

(Received 9th April, 1906.)

[Answered by No. 124.]

*

Treasury Chambers, 7th April, 1906. SIR,

I HAVE laid before the Lords Commissioners of His Majesty's Treasury Mr. Lucas's letter of the 21st ultimo (6008/1906), and its enclosures, respecting the steps proposed to be taken by the Government of the Straits Settlements, in case of necessity, to prevent the exchange value of the Straits dollar from falling unduly below the rate of 2s. 4d.

In reply their Lordships direct me to acquaint you, for the information of the Secretary of State for the Colonies, that they concur in the terms of the first five paragraphs of the draft despatch, empowering the Straits Government, when the exchange falls to 28. 34d., to give out gold in exchange for its notes, if necessary, to the full extent of the gold reserve.

While they hope that the measure thus authorised would suffice to counteract any falling away of the exchange which is likely to be experienced, my Lords agree that it is desirable to consider what further steps could usefully be taken to the same end in case that measure proved insufficient. Before, however, expressing concurrence in the proposal in paragraphs 6 to 8 of the draft despatch, namely, that the Straits Government should be authorised to sell telegraphic transfers on the Crown Agents at the market rate to an unlimited amount, my Lords will be glad to receive more detailed information as to the procedure contemplated. They will be glad, therefore, if they can be informed of the use to which the Government of the Colony is intended to apply any money received by sale of the telegraphic transfers, and what steps are proposed to be taken to liquidate the indebtedness incurred to the Crown Agents without further depressing the exchange.

12415

SIR,

No. 124.

I am,

&c.,

E. W. HAMILTON.

COLONIAL OFFICE to TREASURY.

[Answered by No. 126.]

Downing Street, 20th April, 1906. I AM directed by the Earl of Elgin to acknowledge the receipt of your letter of the 7th instant, and to request you to inform the Lords Commissioners of the Treasury that it is intended that the Currency Commissioners shall hold as part of the Gold Reserve Fund the dollars or notes realised by the sale of telegraphic transfers on London until gold is again tendered at Singapore. The gold, when received, will be utilised in paying off the sums borrowed in London to meet the telegraphic transfers previously sold. The charges for interest on the accommoda tion temporarily obtained will be debited to the Gold Reserve Fund and will be met in the first instance by an advance from general revenue and subsequently recovered from the Gold Reserve Fund.

In the last resort it might be necessary to raise a loan in London in support of the Gold Reserve Fund (the debt charges on which would be met from general revenue), but in view of the rapidly advancing prosperity of the Malay Peninsula and the certainty of an increased demand for currency, which can only be obtained in exchange for gold, Lord Elgin considers there is no necessity to anticipate such a contingency arising.

&c.,

I am,

H. BERTRAM COX.

• No. 120.

† No. 123.

N 1

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PUBLIC RECORD OFFICE, LONDON

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