History of Sarawak Money
There is no more boring reading than Sarawak’s (or anybody else’s) monetary policy. I fell asleep a couple of times trying to fathom this essay on the subject. I have condensed this article down to a page and a half from about 12 pages. If you have an uncanny keen interest in the subject or need to fall asleep quickly, see the reference at the bottom of the page.
Sarawak’s monetary policy may be divided into three periods: From 1880 to 1930 Sarawak issued its own currency, but the predominant one in circulation was the Straits dollar. The Straits’ dollar included Singapore, Malacca, Penang and Dinding. Dinding were the islands off of Perak acquired by Britain in 1874.
The second ranges from 1930 to the Japanese occupation, where one pound sterling was equal to $8.57 Strait’s dollar. The Straits’ dollar was horded during the war. When you gave the bank one British pound, they gave you $8.57 Straits dollars.
The third was the afterlife of the Sarawak dollar. The British Military authority declared you could use Sarawak notes, coins of British North Borneo and coins of the Straits Settlements to buy things. However, Sarawak currency ceased circulating, replaced by the Malayan currency.
The first currency notes were 600 $5 dollar notes issued to the public in September 1880. They were convertible to the Mexican dollar, which was the standard coin of Sarawak.(how the Mexican peso arrived and became legal money in Sarawak is the subject of another article) The exchange rate was defined as one Sarawak dollar equals one Mexican peso.
In 1903, the government of the Straits settlements banned the importation of both Mexican and British currencies and stopped the export of Straits dollars. Straits dollars would have to be exchanged into another currency before you left Kuching.
In 1904, the Rajah announced both Mexican and British currencies would soon be useless. On November 30, 1904, the Rajah announced only the Straits’ dollar would be accepted to facilitate trade with Singapore. Sarawak currency was still accepted in Sarawak, where 1 pound sterling was equal to $8.57 Sarawak. This lasted until the outbreak of the war. When you came to Sarawak, you had to exchange your British pounds into Sarawak or Straits pounds.
In 1927, the Sarawak Government set up the Sarawak Currency Fund. This fund only did business with the London based Chartered Bank of India, Australia and China and the Singapore based Overseas Chinese Bank. You could use only these two banks to transfer money. Let’s say you wanted to purchase records from the U.K. You first had to deposit funds in the Singapore bank. They would transfer money to the U.K. branch, who would then transfer money to the merchant in the U.K. There were fees associated with each transfer.
The primary reason was the Sarawak’s government decision was to make both Sarawak government notes and Straits dollar coins the sole legal tender in Sarawak. The Sarawak government law of April 1, 1930 stated the importation of foreign currency notes was forbidden. You had to transfer your UK pounds to Sarawak money in Singapore or KL before you arrived in Sarawak.
In 1939, the government prohibited the importation of Straits Settlement dollar coins and declared them to be no longer be used. This became the forefront of the acceptance of the Malayan dollar.
In 1942, the Japanese occupied Sarawak and issued “Banana Money”. The Japanese government guaranteed the money and hinted the British government would also guarantee the funds. However, after the Japanese Surrender, the British government said they were worthless.
After the surrender, the British government declared British North Borneo coins, Sarawak notes and coins and Malayan notes and coins and Straits Settlements notes and coins were all accepted as legal tender.
On July 1, 1946, Raja Vyner Brooke ceded Sarawak to Britain as a crown colony, citing his lack of resources to rebuild Sarawak. Sarawak notes continued circulation, but the Malayan currency gained ground. No Sarawak notes were placed in circulation since the war, and the numbers decreased from 8 million to 961 thousand at the end of 1951. On July 1, 1952, the Malayan dollar became the sole currency in circulation.
History of the Currency
Sarawak 1880 establishment of the note issue.
Proclamation of 1904 made the Straits dollar and coins the legal tender for Sarawak
The proclamation of 1 January 1906 stated only the Strait’s dollar would be accepted by the government.
Currency Fund of 1927 established.
1 April 1930 Made Sarawak notes and Straits silver dollar coins sole legal currency.
Notification of 1939: Straits dollar coins stripped of their value and imports of the currency prohibited.
Japanese Occupation
1 June 1946 British Military Authority made Malayan currency notes and coins legal tender.
After the resumption of British rule in 1946, Sarawak notes were briefly issued.
Zou, Jingxing, and Garvin Kim. 2022. Analysing the Monetary System of Sarawak, 1927–1941. Studies in Applied Economics, SAE, No.225. Institute for Applied Economics, Global Health, and the Study of Business Enterprise, Johns Hopkins University. December 2022.
Tom McLaughlin for BorneoHistory.net