Tuesday, January 29, 2013

Straits Settlement Story


The establishment of the Straits Settlements followed the Anglo-Dutch Treaty of 1824 between the United Kingdom and the Netherlands, by which the Malay archipelago was divided into a British zone in the north and a Dutch zone in the south. This resulted the exchange of the British settlement of Bencoolen (on Sumatra) for the Dutch colony of Malacca and undisputed control of Singapore. Its capital was moved from Penang to Singapore in 1832.

Straits Settlements situated on the Malay Peninsula of Asia, was formed in 1826 by combining the territories of Singapore, Penang and Malacca. The colony was administered by the East India Company until its abolition in 1858. Straits Settlements was a part of British India from 1858 to 1867 at which time it became a Crown Colony.

The Straits Settlements currency gradually became acceptable legal tender in the neighboring Federated as well as the Unfederated Malay States. The Straits Settlements were dissolved in 1946, while the coinage continued to circulate until demonetized at the end of 1952.

Straits Settlements Coins History

Straits Settlements

The first coins issued for the Straits Settlements in 1845 were ¼, ½ and 1 cent denominations in copper. They were issued by the East India Company and did not bear any indication of where they were to be used. A second issue of the same denominations was produced in 1862 by the government of British India. These bore the inscription "India - Straits".

10 cent

In 1871, silver coins were issued in the name of the Straits Settlements for 5, 10 and 20 cents, followed by copper ¼, ½ and 1 cent the next year and silver 50 cents in 1886. Silver dollars were first minted in 1903.

50 cents

A 3 page special issue of the Straits Settlements Government Gazette published in Singapore on 24 Aug. 1904, contained the following proclamation by then Governor, Sir John Anderson. From 31 Aug. 1904, British, Mexican and Hong Kong Dollars would cease to be legal tender and would be replaced by the newly introduced Straits Settlements Dollar.

The purpose of this action was to create a separate exchange value for the new Straits Dollar as compared with the other silver dollars that were circulating in the region, notably the British trade dollar. The idea was that when the exchange value had diverged significantly from that of the other silver dollars, then the autorities would peg it to sterling at that value, hence putting the Straits Settlements unto the gold exchange standard. This pegging occurred when the Straits Dollar reached the value of two shillings and four pence (2s 4d) against sterling.

silver coin

Within a few years, the value of silver rose rapidly such as to make the silver value of the Straits dollar higher than its gold exchange value. In order to prevent these dollars from being melted down, a new smaller dollar was issued in 1907 with a reduced silver content. A parallel story occurred in the Philippines at the same time. The last ¼ cent coins were issued in 1916. Dollars were last struck for circulation in 1920, with 50 cents production ending in 1921. The remaining coins continued in production until 1935.

Straits Settlements Banknotes History

Queen Victoria (1837 - 1901)
The Government of Straits Settlements, was first authorised to issue currency notes by Ordinance VIII of 1897, which came into operation on 31 August 1898. These notes, although dated 1 September 1898, were not issued to the public until 1 May 1899. Both the Chartered Bank and Hong Kong and Shanghai Bank continued to issue banknotes, which circulated side by side with the official currency. All notes were freely exchangeable with the Mexican dollar or the various other silver coins that were legal tender in the Colony.

Queen Victoria

King Edward VII (1901 - 1910)
King Edward ascended the throne in January 1901. In the previous issue the 5-dollar note had been of almost the same size and design as the 10-dollar. To make recognition more simple it was reduced in size. The series dated 1 February 1901 were printed by Thomas de la Rue & Co. Ltd. of London. In 1903, a dollar-sized coin in silver was minted specially for the Straits Settlements, and this became the standard unit of value. All other silver dollars at that time circulation were demonetized by 1904. A step rise in the price of silver, however, soon forced the government to call int the first issue of this Straits dollar and to replace it with a coin of lower silver content.

1 dollar

5 dollar

King George V (1910 - 1936)
During this reign the range of currency notes was extended up to one thousand dollars for the convenience of inter-bank clearing transactions. In 1915, it was decided to make a complete change in the design of the 50, 100 and 1000 dollar notes. These denominations were first issued to the public in February 1920, October 1919 and May 1917 respectively. They were printed by Thomas de la Rue. A 10,000 note was first issued in October 1922. This was not available to the public, but was used exclusively in inter-bank transfers.

The most expensive Straits Settlements banknote is the $1000 1911 Specimen banknote sold for US$308,619 at Spink Auction on 5 July 2008, you can read about it here; Straits Settlements most expensive banknote.

Source: wikipedia, Krause Publication.