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The Straits dollar was the currency of the Straits Settlements from 1898 until 1939. At the same time, it was also used in the Federated Malay States, the Unfederated Malay States, Sarawak, Brunei, and British North Borneo.
Contents
History
In the early nineteenth century, the most common currency used in the East Indies was the Spanish dollar, including issues both from Spain and from the new world Spanish colonies, most significantly Mexico. Locally issued coinages included the Kelantan and Trengganu keping, and the Penang dollar.
In 1837, the Indian rupee was made the sole official currency in the Straits Settlements, as it was administered as part of India. However, Spanish dollars continued to circulate and 1845 saw the introduction of coinage for the Straits Settlements using a system of 100 cents = 1 dollar, with the dollar equal to the Spanish dollar or Mexican peso. In 1867, administration of the Straits Settlements was separated from India and the dollar was made the standard currency.
From 1898, the Straits dollar was issued by a new Board of Commissioners of Currency and private banks were prevented from issuing notes. Its value depreciated over the next eight years and was then pegged at two shillings four pence sterling in 1906.
The Straits dollar was replaced at par by the Malayan dollar in 1939.
To this day, Brunei and Singapore still use the successor to this unit, but Malaysia broke away in 1973.
Coins
The first coins issued for the Straits Settlements in 1845 were 1⁄4, 1⁄2 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".
In 1871, silver coins were issued in the name of the Straits Settlements for 5, 10 and 20 cents, followed by copper 1⁄4, 1⁄2 and 1 cent the next year and silver 50 cents in 1886. Silver dollars were first minted in 1903.
A 3-page special issue of the Straits Settlements Government Gazette published in Singapore on 24 August 1904, contained the following proclamation by then Governor, Sir John Anderson:
From 31 August 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 authorities 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.
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. 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 1⁄4 cent coins were issued in 1916. Dollars were last struck for circulation in 1926, with 50 cents production ending in 1921. The remaining coins continued in production until 1935.