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PUBLIC RECORD OFFICE

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5. We could therefore have obtained at least d. or .196d. per ounce better terms than were obtained, and if the sales had been made here gradually we could have hoped to have secured as much as 31 d. net, or d. (.321d.) per ounce better, while the cheaper freight charges to Calcutta would have given better figures still.

6. Leaving the saving in the freight, however, out of the question, the above figures show that on the transaction we should probably have done better by £1,370 or perhaps as much as £2,250 if the business had been placed in our hands.

7. The proceeds of the sale would, moreover, have been paid here by the Government of India, thus saving the loss of interest incurred during the trans- mission of the bill for £216,958 through the post, representing at Bank rate a further sum of about £740.

8. The whole transaction appears to confirm the view which we have often expressed that London may be relied upon almost always to afford the best market for carrying through any business of any extensive nature..

The Honourable

The Colonial Secretary,

&c.,

&c.,

&c., Straits Settlements.

Enclosure 3 in No. 221.

(Confidential.)

GENTLEMEN,

Messrs. PIXLEY AND ABELL to CROWN AGENTS.

165

As there are indications of the Indian Government being in the market for some time to come, there is every prospect of being able to obtain the lower rate for further dollars which the Government may wish to realise, but we would lay stress on the great importance of keeping these sales quiet, as it is clearly an advantage to the banks who have large interests in silver to know when there are important quantities of dollars on the market, and an equal disadvantage to the seller, who may find his market prejudiced thereby.

37810

I have, &c.,

E. E. BLAKE.

(No. 408.) MY LORD,

27, Old Broad Street, E.C., 15th August, 1907, We beg to acknowledge the receipt of your letter of the 13th instant enclosing oopy of a letter dated 18th July, 1907, received from the Government of the Straits Settlements.

There would appear to be some misunderstanding on the part of the Straits Government as to the terms quoted by London for refining the Straits dollars.

In our letter of the 6th June we quoted you a price not to exceed d. per ounce for refining Straits dollars .900 fine, or d. per ounce for dollars 800 fine. In our letter of the 25th June we repeated the above maximum rate of fad. for .800 fine coin, and further quoted d. per ounce to cover all expenses of shipping home. This latter charge of d. was subsequently modified by excluding packing expenses, and we agreed should not exceed 11s. 6d. per cent. for freight and insurance, or, as the Straits Government put it, .178d. per ounce.

It would appear that the id. quoted for shipping expenses has been added to the figure of .178 and .014, and the cost of sending the dollars home should therefore read d. per ounce instead of ¡¡d.

As a matter of fact we were in a position to do very much better than the d. per ounce for refining the Straite dollar, as the Indian Government were willing to take them off our hands at d. under the price of silver, and this was equivalent to a refining charge of '089 per ounce gross, or underd. per ounce, and this is the price at which we have refined the $1,000,000 shipped by the Straits Government to

Calcutta.

If these dollars had been sent home to England the charges would have been 089d., say, 092d. per ounce standard for refining and 1921. for freight, insurance, &c.

On the 10th July we could have obtained 31d. per ounce standard, less 284d, ie, 30.0d. per ounce standard, and on the 17th July, 81 d., less .284d., i.e., 31.09d. By shipping to Calcutta the freight, &c., would have been reduced, and the price would have been proportionately better.

We, however, pointed out that it was impolitic to sell large quantities of silver at that time, as the market had an improving tendency, and if the $2,000,000 had been sold gradually we could probably have obtained the same average price as we obtained for the $1,000,000, viz., 31.518d. per ounce standard.

We cannot rely on always getting dollars refined as low as 089d., this rate being only obtainable when there are coinage or special orders in the market, and we quoted id. as being the maximum rate.

No. 222.

We are, &c..

PIXLEY AND ABELL.

THE GOVERNOR to THE SECRETARY OF STATE. (Received October 26, 1907.)

[Answered by No. 285.]

Government House, Singapore, 2 October, 1907. My attention has been called to the fact that the whole of the Depreciation Fund of the Currency Commissioners is invested in Consols.

2. I have no doubt that this was arranged at a time when it was believed that Consols were less liable to fluctuations than other gilt-edged securities. Recent experience has, I submit, shown that this belief is not well founded, and unless your Lordship sees anv objection I would recommend that the Crown Agents be given the same discretion in regard to the investment of the Depreciation Fund as is allowed them in regard to the other investments of the Currency Commissioners.

I have, &c.,

38670

No. 223.

JOHN ANDERSON.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 2nd November, 1907.)

(Confidential.)

MY LORD,

Government House, Singapore, 10th October, 1907. WITH reference to your confidential despatch of 18th of January last,* I have the honour to acquaint you that I have given full consideration to the various questions affecting the currency of this Colony discussed in that despatch.

2. I would remark in the first place that there is a steady tendency here towards a diminution of the metallic circulation, and an equally steady tendency towards an increase in the note circulation.

3. In round figures the total number of Straits silver dollars coined amounted to thirty-four millions; of these there were in the vaults of the Currency Commis- sioners on 31st December, 1905, $10,821,255, and on the 31st of December, 1908, $11,991,304.

4. During 1907 three millions have already been withdrawn from circulation and sold for melting purposes, yet on 31st August there were in the vaults or being recoined $9,769,279, so that the active metallic circulation had decreased by two millions between the 31st of December, 1905, and the 31st of August, 1907. During the same period over a million dollars in subsidiary coin have been withdrawn from circulation and sold for their bullion value, so that the actual reduction of the metallic circulation during the period of a year and eight months in question has been four million dollars.

5. The note circulation, on the other hand, was, on 81st December, 1905, $17,353,710, on 31st December, 1906, $22,222,560, and on 81st August last $26,974,556, an increase of, roughly, nine and a half million dollars during the twenty months in question. During the same period the note circulation of the two banks of issue increased from $1,194,255 to $1,049,488.

• No. 196.