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Tuesday, February 19, 2019

On A Sweet Note

By Alan Teh Leam Seng - February 4, 2018 @ 2:20pm

A group of King George VI banknotes used in Malaya.

“HAVE you checked the results for the largest bank note in Malaysian history? Bank Negara released the list of successful bidders just a few days ago. I’m so glad I’m among the successful ones,” shared my notaphilist friend cheerily when we bumped into each other in town recently.

His words jolt my memory. I’ve been so caught up with work lately that this important matter completely slipped my mind. In mid-December last year, Bank Negara Malaysia’s Governor Tan Sri Muhammad Ibrahim caused a buzz among collectors when he announced that the central bank would issue the largest known commemorative banknote in the world, measuring a whopping 370mm by 220mm!

At the event held at Bank Negara’s Museum and Art Gallery, the Yang di-Pertuan Agong Sultan Muhammad V launched the banknotes issued in conjunction with the 60th anniversary of the signing of the Federation of Malaya Independence Agreement. The design was based on the theme Raja Payung Kedaulatan Negara and the banknotes would have state-of-the-art security features.

I recall my friend and I chatted for a while about the current resurgence in interest regarding Malaysian bank notes, especially the ones issued prior to the Second World War. One clear indicator, according to my friend, is the record number of exhibitions and fairs organised throughout the country of late.

“Apart from imparting knowledge, especially to novice collectors, these events have successfully stirred interest among non-collectors as they may have some long forgotten paper money stashed away somewhere at home,” my friend added.

There’s definitely truth in his words as stories have emerged over the years about people making spectacular finds while clearing out their attic or storeroom. As much as I wanted to continue talking, the desire to return home to check the results soon set me on my way.

Banknotes issued by the pan-Malayan Currency Commission had all the state crests on the back.

EARLY NOTES

Back in the study, my roving eye catches sight of my small collection of banknote-related literature on a shelf nearby. While waiting for my trusty old computer to warm up, I take the opportunity to flip through the pages and look at the early banknotes that have captivated the imagination of collectors for over a century.

The earliest mention of paper money in relation to the Malay Peninsula dates back to the 15th century, during the rise of the Melaka Sultanate. The first ruler of Melaka, Parameswara, paid a state visit to the Ming Emperor, Yung Lo in 1412. Parameswara was said to have brought back 2,600 strings of copper cash and a very large sum of Chinese currency notes.

Researchers agree that although there’ve been no historical evidence that these paper currency were ever used in Malaya, it could still be possible that they were accepted by Chinese traders in Melaka as payment for their merchandise.

Two centuries later, the first banknotes in the world came into existence with the formation of the Bank of England in 1694. Unlike the Chinese Imperial-issued paper currency, the English banknotes had a more humble beginning. They owed their origin to goldsmiths’ receipts which were given in exchange for money deposited in their vaults for safe keeping. Over time, these receipts gained sufficient public confidence for them to be accepted as payment to third parties.

By the early 1700s, the circulated English banknotes became a widely accepted payment mode as the bearer was free to convert it on demand into bullion or coin. This same method of transaction was also adopted when the commercial banks in the Straits Settlements of Penang, Melaka and Singapore began issuing their own notes.

An early private banknote issued by the Chartered Bank in the 1890s.

The Straits Settlements government, through the-then newly formed Board of Commissioners of Currency, began authorising the issue of currency notes exactly 120 years ago, on Aug 31, 1898 after Ordinance VIII was passed by the legislature a year earlier. However, these notes which had the date 1 September, 1898 printed on them only reached public hands seven months later, on May 1, 1899. At that time, these official notes were freely convertible into Mexican silver dollars and various other silver coins that were recognised as legal tender within the three colonies.

I’m sure these banknotes, which were engraved and printed by Thomas de la Rue & Co. Ltd. of London, must have been popular with the merchants as well as members of the public as they could finally dispense with the hassle of bringing along the heavy and cumbersome silver coins, especially if they were in large quantities.

With the issue of the notes in denominations of $5, $10, $50 and $100, permission for private banks like the Chartered Bank (now known as Standard Chartered Bank) and Hong Kong and Shanghai Bank to issue their own notes were withdrawn.

This could have been one of the reasons that led to the depreciating value of the Straits dollar. The slide continued over the next eight years until a decision was made to peg it at two shillings four pence sterling in 1906.

The demise of Queen Victoria on Jan 22, 1901 and the immediate ascension of King Edward VII to the English throne was reason enough for the Board of Commissioners of Currency to order the issuance of new $5 and $10 notes.

The other reason behind this action was because both notes issued in 1898 were very similar in terms of size and design. Acting on public complaint, Thomas de la Rue printed a significantly smaller $5 note, measuring 120 x 76 mm as opposed to the initial 198 x 123 mm size while the $10 note remained largely unchanged. Both these notes were issued with the date 1 February 1901 imprinted on them.

Despite being the most common banknote value in circulation today, the one dollar note only came into existence much later, in 1906. Prior to this, the government-issued silver coin was the standard unit for this value.

A specimen note issued during the reign of King George VI.

THE ONE DOLLAR NOTE

The steep rise in the value of silver in 1904 forced the Board of Commissioners of Currency to call in the earlier issued coins and replace them with those that had lower silver content.

The fear of a shortage during this change over period led to the introduction of the first one-dollar note in our country. In order to prevent history from repeating itself, the exchange rate for the dollar bank notes were fixed against gold instead of the more volatile silver. With this, the British gold sovereign was for the first time declared legal tender and the Straits dollar was assigned an arbitrary value of two shillings and four pence sterling.

Interestingly, the dollar note which was initially produced as a stop gap measure proved to be so popular among the public that the Board of Commissioners of Currency decided to retain it in all future issues. Needless to say, the silver dollar coin became redundant soon after that.

By the end of 1906, the currency circulation in the Straits Settlements had risen to $21,866,142 while that of the private banks had fallen to just a little over a million Straits dollars.

This 1917 emergency currency was printed by the Federated Malay States Survey Office in Kuala Lumpur.

NOTING A MILESTONE

The next milestone in banknote history happened towards the end of the First World War. During those tumultuous times, the government had to issue several low value currency notes due to the shortage of subsidiary coins.

Known as the 1917 emergency currency, two different values were printed: ten cents and twenty-five cents. The initial printing of the former, made at the Singapore Government Printing Office, quickly proved insufficient and additional notes had to be ordered from England.

Although both banknotes looked the same, the one produced in Singapore had the signature of acting treasurer of the Straits Settlements at that time, H. Marriott while the one from England showed the signature of the treasurer, A. M. Poutney.

On the other hand, the twenty-five cent note was designed and printed at the Federated Malay States Survey Office in Kuala Lumpur. Owing to the simplicity of their designs, these emergency notes were extensively counterfeited.

Banknotes issued during the reign of King George V had the portrait of the monarch on them.

The illustration of a pair of one thousand dollar and ten thousand dollar notes in a catalogue soon catches my eye. Issued for the very first time during the reign of King George V, these high value denominations were made primarily for the convenience of inter-bank clearing transactions and not issued to the general public.

Like most values issued before them, both these high value bank notes were printed by Thomas de la Rue and had the words ‘THE GOVERNMENT OF THE STRAITS SETTLEMENTS/Promise to pay the bearer on demand’ boldly printed in front together with the date of issue, signature of the Currency Commissioners and the values appeared on the left in Chinese while the opposing side had the same written in Jawi.

The lack of notes issued during the brief reign of King Edward VIII proved only to be a temporary lull before the storm as an entirely new series of currency notes were produced soon after King George VI ascended the British throne in 1936.

This revamp happened when Sir Basil Blackett, Secretary of State for the Colonies, led a commission to consider the participation of the various Malay states, including Brunei, in the profits and liabilities of the Straits Settlements currency.

An example of the un-issued King George VI ten dollar banknote.

The resulting report, which recommended that the sole power of issuing currency should be entrusted to a pan-Malayan Currency Commission, was adopted by the governments of the Straits Settlements, Federated Malay States of Pahang, Perak, Selangor and Negri Sembilan and the states of Johor, Kedah, Perlis, Kelantan, Terengganu and Brunei.

Legislation was enacted in 1938 by the Straits Settlements Currency Ordinance No. 23 and subsequently ratified by the various states in 1939. A total of six low value notes comprising 1 cent, 5 cents, 10 cents, 20 cents, 25 cents, 50 cents were issued together with seven different dollar denominations: 1 dollar, 5 dollars, 10 dollars, 50 dollars, 100 dollars, 1000 dollars and 10,000 dollars.

These notes were printed in England and shipped to Malaya during the Second World War. While a large majority arrived safely, some shipments were not so lucky. It was believed that about 700,000 one dollar and 5,000,000 five dollar notes were seized by the Germans when one of their surface raiders captured the SS Automedon on Nov 11, 1940.

The Germans, upon realising that SS Automedon was too badly damaged to tow, set a time limit of three hours during which time the 31 British and 56 Chinese crewmen plus three passengers had to transfer their possessions and valuable cargo onto the German vessel. After that, SS Automedon was sunk by scuttling charges.

The public can place their orders for this banknote on Bank Negara’s website.

BRIGHT FUTURE

“Why is your computer idle?” my wife’s voice suddenly jolts me out of my reverie. Dropping my book as a result of the shock, I quickly turn towards her and apologise for daydreaming before proceeding to go online to check the results for the commemorative banknotes.

The Bank Negara website states that the large banknotes with RM600 face value are sold for RM1,700 a piece while the smaller RM60 ones retail at double the face value. Collectors can also opt for the special uncut 3-in-1 RM60 banknotes priced at RM500.

Although disappointed that my name isn’t among the successful bidders, I remain hopeful of getting one in the open market. I make a mental note to act fast as the prices for these unique currency pieces are sure to appreciate given their relatively small production number and growing public interest.

I also take the opportunity to check the central bank’s list of commemorative banknote to be issued for the rest of this year and the next. The impressive list bodes well for notaphilists as they’ll create a sustained momentum among collectors and further entice new members into the fold. The future for banknote-collecting certainly looks bright.

Sumber asal: https://www.nst.com.my

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