CO882-(8-9) — Page 201

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PUBLIC RECORD OFFICE

Reference:--

C.O. 882

9 PUBLIC RECORD OFFICE, LONDON!

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC

COPYRIGHT PHOTOGRAPH-NOT TO

6.

166

These facts have to be taken into consideration in considering our probable future requirements in regard to metallic circulation. It is, moreover, to be borne in mind that it is the avowed intention of the Dutch Government to make the guilder the only legal tender in Sumatra as soon as they have obtained a sufficient supply of that coin, and the demonetization of the Straits dollar there will probably be It is difficult to estimate what amount of Straits dollars accomplished during 1908 is in circulation there, but I think a fairly safe estimate would be somewhere between five and six millions, probably nearer the latter than the former figure, which would reduce the metallic dollar circulation of the Colony, Federated Malay States, &c., to fifteen millions.

7. Even assuming, therefore, that the tendency of the metallic circulation to decrease does not proceed further--an assumption which, in view of the steadily growing popularity of the note issue, a popularity which has been increased by the obvious convenience of the one-dollar note as compared with the dollar, I consider improbable our total requirement of silver dollars for the purpose of active circula- tion should not exceed fifteen millions, and that for some time to come the necessary expansion of our circulation will be effected by the issue of notes against gold.

I

8. We have already remitted $12.255.000 for the purpose of being recoined, and with the reduction in the weight of the dollar these should produce $16,340,000. propose, when this recoinage approaches completion, to remit a further sum of $2,250.000, to be coined into the new half-dollars, which should yield a sum of $3,000,000 of that denomination, bringing the total of our new standard silver coin up to $19,340,000. This amount will be sufficient for the purpose of metallic círculation and silver reserve for many years to come, and as soon as it has been received from the Mint, I propose that the old dollar should be demonetized, as otherwise the hesitation to receive the new dollars which is found in the more out- lying districts will be perpetuated. A period of, say, six months would be allowed for the exchange of new dollars for old.

9. The old dollars as they are exchanged will be sold, the equivalent of their face value in gold being handed to the Currency Commissioners and the difference debited to the Gold Standard Fund, as proposed in paragraph 7 of your despatch*

under reference.

10. From what has already been stated, Your Lordship will have learned that our note circulation forms already by far the largest part of our total circulation- some twenty-seven millions in notes as against twenty-one millions in dollars, or, if Bank notes are included in the one case and subsidiary coin in the other, twenty- nine millions in notes and twenty-seven in coin standard and subsidiary. Exclud- ing the coin circulating in Sumatra which will shortly be returned, the proportion of notes to coin will be still greater, and as the tendency is towards an increased use of notes, the maintenance of exchange by the expansion or contraction of the currency will be effected through the Currency Commissioners, as under the law they only buy or sell telegraphic transfers at a rate which will cover the charges for shipping gold, &c., there will be no occasion to draw on the Gold Standard Fund for the purpose of maintaining exchange. The cost in any case will be comparatively small, and it may be as well to leave the existing arrangements untouched.

I have, &c.,

No. 224.

JOHN ANDERSON.

39735

167

No. 225.

CROWN AGENTS to COLONIAL OFFICE.

(Received 12th November, 1907.)

SIR,

Whitehall Gardens, London, S.W., 11th November, 1907. IN continuation of our letter of the 26th August, I have the honour to enclose, for the information of the Secretary of State, copies of further corres- pondence which we have had with the Government of the Straits Settlements on the subject of the sale locally of uncurrent silver coin.

I have, &c.,

GENTLEMEN,

Enclosure 1 in No. 225.

E. E. BLAKE.

COLONIAL SECRETARY, Straits Settlements, to CROWN AGENTS.

Colonial Secretary's Office, Singapore, 30th September, 1907.

I AM directed to acknowledge receipt of your letter, 320A Straits, of the 23rd ultimo, regarding the sale by this Government of $2,000,000 to the Hong Kong and Shanghai Banking Corporation.

not

In reply I am to point out that as the sale took place on the 17th July here, this Government was selling on the quotation of the 16th in London, viz., 31 on the quotation 313, which was not received here until the 18th and 19th.

2. In concluding this bargain the Government acted on the information which you yourselves supplied us with, that assaying and melting involved a charge of

d. per oz., not 092 as mentioned in Messrs. Pixley and Abell's letter of the 15th August copy of which is forwarded with your letter under reply.

3. Taking therefore the price of the day on which the sale took place the figures would work out as follows:-

Price per oz. 31% Less-

Freight insurance, &c. Refining fee

Crown Agents' charges

31.187

*192 *092

*02

*304

30'883

4. The price actually obtained was 30'875, and, considering that this Govern- ment was acting upon the rate notified by you for refining charges, viz., 4d. per oz.,

it was natural to conclude that in making this bargain the Government was obtain- ing a very good price.

5.

am to point out that the question of interest does not come into the account as the price would not in any case have been paid until delivery.

I have, &c.,

ARTHUR YOUNG,

Colonial Secretary, Straits Settlements.

37810

COLONIAL OFFICE to CROWN AGENTS.

[Answered by No. 227.]

GENTLEMEN,

Downing Street, 4 November, 1907. I AM directed by the Earl of Elgin to invite your observations on the enclosed copy of a despatcht from the Governor of the Straits Settlements with regard to the investments on account of the Depreciation Fund of the Commissioners of Currency.

I am, &c.,

C. P. LUCAS.

• No. 196.

+ No. 222.

SIR,

Enclosure 2 in No. 225.

CROWN AGENTS to COLONIAL SECRETARY, Straits Settlements.

Whitehall Gardens, S.W., 8th November, 1907.

I HAVE the honour to acknowledge the receipt of your letter of the 30th September, CA. 5912/1907, regarding the sale by the Colonial Government of $2,000,000 to the Hong Kong and Shanghai Banking Corporation.

• No. 221.