Tin, Rubber and the Straits Dollar: the comparison with Geneva and Hong Kong

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Two currencies, two paths to stability

Geneva and Singapore reached monetary stability by different routes. Switzerland introduced the Swiss franc by the federal coinage law of 1850 and joined the Latin Monetary Union in 1865. It later transferred the monopoly of the note issue from 36 banks to a single central bank, the Swiss National Bank, which opened its counters on 20 June 1907 in Geneva among other cities.¹ The Straits Settlements carried out their monetary reform in the same decade. They achieved stability by tying their dollar to sterling and holding their reserves in London. Switzerland built a sovereign currency backed by a central bank, whereas the colony accepted a currency without monetary sovereignty.

The two systems reflected different political positions. Switzerland was an independent state that could choose its monetary regime and later defend the franc as a safe-haven currency. The Straits Settlements were a dependency of an imperial power whose currency they borrowed. After independence Singapore combined the two inheritances by keeping the full external backing of the currency board while building in the Monetary Authority an institution with the policy instruments that the colonial board had lacked. The Swiss franc and the Singapore dollar are both regarded today as stable currencies of small open economies, a result reached from opposite starting points.

Hong Kong offers the closer parallel. It abandoned silver in 1935 and tied its dollar to sterling, later returning to a currency board based on the United States dollar. Since 17 October 1983 the Hong Kong dollar has been linked to the US dollar at 7.80, since May 2005 within a convertibility band of 7.75 to 7.85, with banknotes still issued by three commercial banks under licence.² Hong Kong thus operates a classical currency board today, whereas Singapore manages its exchange rate against a trade-weighted basket. Part K returns to the competition between the two centres.

Commodities and the late arrival of trading in Geneva

The contrast in commodity history is sharper still. Swiss merchant houses such as Volkart, founded in Winterthur in 1851, and André, founded in Nyon in 1877, traded cotton, coffee and grain long before 1945. Yet Geneva became a centre of the world’s commodity trade only after the arrival of Cargill and its subsidiary Tradax in the 1950s.³ Geneva’s trading houses came to the city because of its banks, its neutrality and its tax regime, while the commodities themselves rarely passed through it.

Singapore’s commodity business grew the other way round. The tin and rubber came first, physically, through its harbour, smelter and godowns, and the banks, insurers and brokers followed the goods. The trading functions that Geneva acquired as an office centre Singapore acquired as a port. This difference still shapes the two centres. Geneva remains a centre of trading decisions, finance and contracts for goods that never touch Swiss soil. Singapore combines that role with a physical presence in refining, storage, bunkering and shipping, which Part G examines.

Notes

1. Ressos, Genève, place financière internationale, partie D, chapitre « Radicalisme, chemins de fer et banques par actions (1846-1914) », section « La question monétaire : du franc suisse à la Banque nationale », with its footnotes: loi fédérale sur la monnaie du 7 mai 1850; Union monétaire latine, convention du 23 décembre 1865; ouverture des guichets de la BNS le 20 juin 1907 à Bâle, Berne, Genève, Saint-Gall et Zurich; droit d’émission transféré des 36 banques qui le détenaient à la seule BNS. ↩
2. Wikipedia, “Hong Kong dollar” (accessed November 2026): Hong Kong “abandoned silver and introduced a crawling peg to sterling” in 1935; fixed peg of HK$16 = £1 from 1939; “On 17 October 1983, the Hong Kong dollar was officially pegged to the U.S. dollar at a rate of HK$7.80 = US$1”, described as a currency board arrangement; trading band of US$1 : HK$7.75–7.85 since May 2005; HSBC, Bank of China and Standard Chartered issue banknotes under licence. ↩
3. Ressos, Genève, place financière internationale, partie G, chapitre « Du comptoir au terminal : histoire du négoce à Genève », with its footnotes: Volkart founded in 1851 with offices in Winterthur and Bombay; André & Cie founded at Nyon in 1877; Cargill and Alcoa arrive around 1950, Cargill’s subsidiary Tradax becoming the centre of its international trade from Geneva. ↩
4. Figures as set out and sourced in the footnotes above, in particular John H. Drabble, “The Economic History of Malaysia”, EH.Net Encyclopedia, 31 July 2004; Wong Lin Ken, “Singapore: Its Growth as an Entrepot Port, 1819–1941”, Journal of Southeast Asian Studies, vol. 9, no. 1, 1978, footnote 28: “By 1920, Malaya was already producing 57.6% of the world output of rubber”, more than twice Indonesia’s estimated 25.4 per cent; Wikipedia, “Straits dollar” and “Rubber Trade Association of Penang” (accessed November 2026). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.