Straits dollar

History

In the early nineteenth century, the Spanish dollar was the most common currency in the East Indies, including issues from Spain and its New World colonies, particularly from Mexico and Peru via the Philippines. Local coinages such as the Kelantan and Trengganu keping and the Penang dollar also circulated. The Straits Settlements were formed in 1826 under the East India Company, which attempted to impose the Indian rupee as the sole official currency, but Mexican dollars remained dominant in trade, and private banks issued their own notes redeemable in silver dollars.

In 1844, a copper coinage was authorized for the Straits Settlements based on 100 cents = 1 dollar, equal to the Spanish dollar or its successors like the Philippine peso or Mexican peso, and declared current on 1 June 1847. Administration passed to the British colonial office in 1867, and the Indian rupee lost legal tender status. A shortage of Spanish silver dollars led the British to issue trade dollars in 1895. The Board of Commissioners of Currency for the Straits Settlements was created in 1897, and from 1899 it issued currency notes, while private banks were prohibited from issuing new notes.

In 1903, the board issued the Straits dollar at par with the British trade dollar and demonetized other silver dollars. In 1906, the Straits dollar was pegged to two shillings four pence sterling, then on a gold standard. When sterling left the gold standard in 1931, the Straits dollar moved to a sterling-exchange standard. It was replaced at par by the Malayan dollar in 1939.

Brunei and Singapore later acknowledged the successor currency unit, though Malaysia rescinded in 1973; a Currency Interchangeability Agreement between Brunei and Singapore made their banknotes and coins legal tender in each other's country.

Coins

The first coins for the Straits Settlements, issued in 1845 by the East India Company, were copper 1/4, 1/2 and 1 cent denominations, struck at the Calcutta Mint and later at the Madras Mint, with dies engraved by William Wyon. They bore no indication of their intended use. After administration transferred to the Crown in 1858, a second issue of the same denominations was struck in 1862 at the Indian Government Mint, Calcutta, inscribed 'India – Straits'. Silver dollars were first minted in 1903. This pegging occurred at two shillings four pence. A rise in silver prices made the silver value of the dollar exceed its gold exchange value, so a smaller dollar with reduced silver content was issued in 1907. The last 1/4 cent coins were issued in 1916. Dollar production for circulation ended in 1926, 50 cents in 1921, and remaining coins continued until 1935.

Banknotes

The Board of Commissioners of Currency introduced 5 and 10 dollar notes in 1898, followed by 50 and 100 dollars in 1901 and 1 dollar in 1906. Emergency issues of 10 and 25 cents were made between 1917 and 1920. A 1000 dollar note was issued in 1930, but during the rest of the 1930s only 1, 5 and 10 dollar notes were issued. The Government of Straits Settlements was authorized to issue currency notes by Ordinance VIII of 1897, which came into operation on 31 August 1898; notes dated 1 September 1898 were issued to the public on 1 May 1899.

The Chartered Bank and Hong Kong and Shanghai Bank continued to issue banknotes that circulated alongside official currency, all freely exchangeable with the Mexican dollar or other legal tender silver coins. The 5-dollar note was reduced in size in the series dated 1 February 1901, printed by Thomas de la Rue & Co. Ltd. In 1903, a silver dollar coin became the standard unit, and other silver dollars were demonetized by 1904. A rise in silver prices forced the government to replace the first issue with a coin of lower silver content.

During the transition, the one-dollar note was introduced, fixed against gold instead of silver; the British gold sovereign was declared legal tender, and the Straits dollar was given an arbitrary value of two shillings four pence. The one-dollar note proved popular and was retained, largely replacing the silver coin. One-dollar notes dated 1 September 1906 were printed by Thomas de la Rue & Co. Ltd., as were five-dollar and ten-dollar notes dated 8 June 1909.