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and the consequent liability of our gold reserve being attacked from India, did not receive sufficient weight, and it was considered that the exchange differences with India could be settled through London.

5. Arrangements have now been made for the keeping of a joint account for the Colony and Federated Malay States in India, through the medium of which Government remittances will be made, and into which payments due on account of investments in India on account of light dues and on Indian Military Account will be made, so that the cost of Indian remittances will, so far as Government payments are concerned, be much reduced, if not entirely abolished.

SA. As regards London, if we had a sufficient reserve there, the process suggested by Mr. Anthonisz would be that if the Government here desired to remit to London the amount of the remittance would be paid to the Currency Commis- sioners here, and a corresponding amount at par of exchange transferred from the reserve in London.

The payment to the Commissioners here would, pro tanto, reduce the currency in circulation, and tend to raise exchange to a point when it would be profitable for the Currency Commissioners to buy telegraphic transfers on London, the proceeds of which would be paid to the reserve there, the profit, if any, being credited to Gold Standard Reserve Fund.

The difficulty in the way of introducing this arrangement at once is not only the fact that the Ordinance does not contemplate maintaining a reserve in London, but the fact that our whole coin reserve, amounting on 31st May last to seventeen million dollars, is in silver, which, in present conditions, is not a realizable asset. When our new coinage is completed, and the old dollar demonetized, we shall have seventeen millions of old dollars to dispose of, or, say, 14 million oz. of standard silver. To sell at a lower price than 25d. per oz. would sweep away the whole of our Gold Standard Reserve Fund, and there seems to be at present but little prospect of the price of silver rising at an early date beyond that point sufficiently to allow us to dispose of so large a quantity, as it is highly improbable that India will have to resume the purchase of silver for a long time to come.

6. As the Currency Commissioners already owe some £700,000 to loan funds, it appears useless to contemplate putting in force the arrangement suggested by the Treasurer unless we could count upon loan funds to finance the Currency Commis- sioners to the extent of a million sterling (including the £700,000 already advanced) for a more or less indefinite time depending on the silver market. The establishment of a gold reserve in London suflicient to enable us to adopt the Treasurer's proposals with perfect safety appears to be out of the question.

7. The circulation is by no means redundant at present, and the withdrawal of two million dollars would certainly drive exchange to a point at which the banks would require to apply to the Government for currency in exchange for telegraphic transfers on London, but in the present financial depression I should be reluctant to take any step which would reduce the loanable funds at the disposal of the banks, and beyond obtaining the necessary legislation to enable us to keep part of our coin gold reserve in London I do not propose to take any action in the matter of Government remittances unless exchange rises to such a point as will make it necessary for the banks to apply for currency in exchange for telegraphic transfers on London.

I have, &c..

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ARTHUR YOUNG,

Governor's Deputy.

197

of the first instant, entitled "The Straits Settlements (Coinage) Order, 1908"; and I am to request that you will lay the same before the Secretary of State for the Colonies.

I am, &c.,

Enclosure in No. 263.

AT THE COURT AT GOODWOOD HOUSE,

The 1st day of August, 1908. PRESENT,

A. W. FITZROY,

THE KING'S MOST EXCELLENT MAJESTY IN COUNCIL.

Whereas under the Straits Settlements Act, 1866, and other powers enabling him in that behalf, His Majesty has power to make laws for the peace, order, and good government of the Colony of the Straits Settlements (in this Order referred to as the Colony):

And whereas Straits Settlements dollars issued on or before the fourth day of March one thousand nine hundred and seven are of the weight and fineness specified in the Schedule to the Straits Settlements (Coinage) Order, 1903 (in this Order referred to as the Order of 1903), subject to the remedy therein specified, and Straits Settlements dollars issued after that date are of the weight and fineness specified in the First Schedule to the Straits Settlements (Coinage) Order, 1907 (in this Order referred to as the Order of 1907), subject to the remedy therein specified: And whereas Straits Settlements fifty cent pieces or half dollars issued on or before the said date are of the weight and fineness specified in the Third Schedule to the Straits Settlements Coinage Order, 1895 (in this Order referred to as the Order of 1895), subject to the remedy specified in Article three of that Order, and Straits Settlements fifty cent pieces or half dollars issued after the said date are of the weight and fineness specified in the Second Schedule to the Order of 1907 subject to the remedy therein specified:

And whereas Straits Settlements dollars and Straits Settlements fifty cent pieces or half dollars, whether issued before or after the said date, are, by virtue of the above-mentioned Orders and of the Straits Settlements (Coinage) Order, 1906 (in this Order referred to as the Order of 1906), legal tender in the Colony, and it is expedient that such dollars and fifty cent pieces or half dollars issued on or before the said date should no longer be legal tender in the Colony :

Now, therefore, His Majesty, by virtue of all powers vested in him in that behalf, is pleased, by and with the advice of his Privy Council, to order, and it is hereby ordered, as follows:-

1. The Straits Settlements dollars and Straits Settlements fifty cent pieces or half dollars issued on or before the fourth day of March, one thousand nine hundred and seven, shall as from the first day of January, one thousand nine hundred and nine, cease to be current or legal tender in the Colony.

2. This Order shall be read as one with the Order of 1895, the Order of 1903, the Order of 1906, and the Order of 1907, and may be cited as the Straits Settle- ments (Coinage) Order, 1908.

And the Lords Commissioners of His Majesty's Treasury and the Right Honour able the Earl of Crewe, K.G., one of His Majesty's principal Secretaries of State, are to give the requisite directions therein accordingly.

A. W. FITZROY,

SIR,

No. 263.

28606

No. 264.

ت

PRIVY COUNCIL OFFICE to COLONIAL OFFICE.

(Received 0 August, 1908.)

[Copies of the Order in Council were sent to the Governor. 14 August, 1908.

No. 195. L.F.]

Privy Council Office, London, S.W., 5 August, 1908. I AM to transmit to you the accompanying Order of His Majesty in Council

THE SECRETARY OF STATE to THE GOVERNOR. (Sent 11 August, 1908.)

TELEGRAM.

My telegram of 14 July,* Order in Council passed 1 August.-CREWE.

• No. 260.

PUBLIC RECORD OFFICE

Reference :-

LICO. 882

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PUBLIC RECORD OFFICE, LONDON

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