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C.O. 882

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

PUBLIC RECORD OFFICE, LONDORE

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gold reserve falls dangerously low and disappears, the situation should be dealt with as indicated in my confidential despatch of the 31st May.*

I

The total coin reserve at Singapore (both gold and silver) must be at least one-half of the total note issue—at present, of course, it is considerably more see no objection to your recommencing remittances to this country for investment, when you think it prudent to do so. But before remittances can be purchased by the issue of notes, it will be necessary to amend Ordinance 1 of 1906, which was so worded as to ensure the immediate or prospective supply of gold at Singapore in exchange for the notes issued. It will probably be best to amend the Ordinance by allowing the Commissioners to issue notes against telegraphic transfers on London at the market rate. The Commissioners will of course be careful not to sell notes against telegraphic transfers in such a way as to bring exchange unduly low. But, ex hypothesi, the full gold reserve, whatever may be the amount decided on, will always be available at the time remittances are made, and the danger is therefore small.

I see no necessity to place gold on current account at the Bank of England. The Crown Agents can always obtain gold in London, when necessary, on the security of investments. As to making gold legal tender, I can see no reason for dissipating the gold which the Government has got into its hands, and which in the holding of the Government constitutes a guarantee of the advanced value of the Straits Settlements dollar. As already stated, if the silver reserve falls too low, the surplus gold can be used for coining more dollars the profit being carried to the Gold Reserve Fund and if no more silver is required and a sufficient stock of gold is in the reserve at Singapore, surplus gold can be profitably invested by the Crown Agents.

I take this opportunity to transmit to you copy of a recent letter from the When it becomes desir- Chartered Bank, with a copy of the replyt returned to it. able to remit to this country for the purpose of investment or of purchasing silver for the coinage of dollars, it will no doubt be convenient to make some arrangement of the sort suggested by the bank. I understand that the India Office find this procedure convenient, in order to meet their gold requirements in London.

I am replying to your telegram by despatch, as I find it difficult to deal with a matter of this complexity by telegraph, and I may add that I should be in a better position to judge of any fresh proposals that you may wish to make on currency questions if they were accompanied with fuller explanations and arguments than the compass of a telegram allows.

I have, &c.,

27490

No. 138.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 11.20 a.m., 27th July, 1906.)

TELEGRAM.

[Answered by No. 139.]

ELGIN

Request permission to introduce Bill into Chamber empowering Currency Com- missioners issue gold against notes and to sell telegraphic transfers payable London in exchange for notes. Consider it necessary to maintain rate of exchange.- ANDERSON.

27490

No. 139.

THE SECRETARY OF STATE to THE GOVERNOR.

(Sent 3 p.m., 27th July, 1906.)

TELEGRAM.

[Answered by No. 140.]

In reply to your telegram of yesterday's date,§ if exchange goes down situation

• No. 128.

↑ Nos. 130 and 133.

* No. 134.

4 No. 138.

103

should be dealt with as in my Confidential despatch of 31st May.* See no need for legislation.-ELGIN.

27841

No. 140.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 9.20 a.m., 29th July, 1906.)

TELEGRAM.

[Answered by No. 141.]

In reply to your telegram of yesterday's date,† am advised that I cannot give gold for notes without legislation, and I propose to legislate at once.—ANDERSON.

27841

No. 141.

THE SECRETARY OF STATE to THE GOVERNOR. (Sent 2.35 p.m., 31st July, 1906.)

TELEGRAM.

[See No. 181.]

Referring to your telegram of 29th July,‡ no objection to legislation empower- ing Commissioners pay gold when specially requested, but no obligation to do so must be imposed on them.-ELGIN.

29743

No. 142.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 13th August, 1900.)

(Labuan.

No. 16.)

MY LORD,

[Answered by No. 145.]

Government House, Singapore, 19th July, 1908. I HAVE the honour to transmit herewith, for Your Lordship's consideration,

a copy of a letter from the Colonial Secretary, Labuan, on the subject of the currency of Labuan.

2. On the incorporation of Labuan with the Colony of the Straits Settlements, North Borneo currency should cease to be legal tender in Labuan, and I propose that the change should take effect from the 1st of January next.

Enclosure in No. 142,

I have, &c.,

JOHN ANDERSON.

The COLONIAL SECRETARY, Labuan, to the SECRETARY TO THE HIGH COMMISSIONER.

(Labuan. No. 348/1906.)

SIR,

Colonial Secretary's Office, Labuan, 3rd July, 1908.

I HAVE the honour to suggest that steps should be taken to make only Straits Settlements currency legal tender in Labuan.

2. The currency of Labuan is at present governed by His Majesty's Order in Council of the 11th July, 1905, and by Ordinance No. 1 of 1906, copies of each of which I enclose for reference.

8. It will be seen from these that the subsidiary coins of the British North Borneo Company are legal tender in Labuan. If there is any profit to be derived

+ No. 140.

• No. 128.

† No. 139.