Family Money: Currency Crises

By Leslie Wright

Several developing nations have seen their economies ravaged by currency crises after freeing up capital flows in the past two decades.

In 1981 it was Chile’s turn, with Mexico next in 1995, the Asian “tigers” in 1997 and Brazil in 1999. The latest to join this club have been Turkey and Argentina.

With an open capital account and a fixed exchange rate, Thailand saw foreign capital pour into its stock market and banking system in the first half of the 1990s.

But good fortune can vanish when investors see vulnerability in the economy, exports lose their competitiveness and the current account deficit soars - in Thailand’s case to more than 8% of gross domestic product in 1996.

Thailand ultimately decided to accept the International Monetary Fund’s financial assistance, which included requirements to tighten monetary and fiscal policy. The measures were later criticised for being the wrong recipe and worsening the impact of the recession.

The victims are obvious. But who are the villains?

In comparing the countries, the symptoms of the crises were similar but the underlying causes differed, according to one Cambridge University economist.

After 1970 there was a massive surge of capital inflows to several developing economies, which had opened up their capital accounts.

Early in that decade, bonds, equities and non-bank assets of the G-7 major developed countries and the European Union nations totalled $64 trillion - almost six times the US gross domestic product at the end of March 1995.

The huge pool of capital, coupled with new derivative products, led to a massive flow of funds freely crossing national boundaries to seek maximum returns. The developing countries opened up their capital accounts at a time of large and highly volatile short-term capital inflows.

Institutional investors used developing countries as markets of last resort and, with fewer opportunities in developed nations, developing countries experienced a massive surge of capital inflows to their financial markets.

Net private inflows into Chile during the 1980s, for example, equalled the country’s exports.

In the case of Malaysia during that period, the inflows accounted for 25% of gross domestic product.

According to the Thailand Development Research Institute, foreign capital inflows to Thailand increased to 14% of gross domestic product in 1995 from about 8% in 1990.

The inflows allowed developing nations to finance their investment with external borrowings at lower interest rates than from the domestic market.

But the greater the reliance on foreign capital, the greater the risk to the countries concerned if there was a sudden shock.

In the face of the large inflows, how would the finance ministers react to a sudden shock? What kind of interest rate policy could they impose to counter it? What kind of fiscal policy and what kind of foreign-exchange mechanism?

These capital inflows took three different routes toward a crisis.

One is the Mexican pattern, in which the capital inflows transform into consumption booms and asset-price bubbles.

In contrast, ‘’tradeable’’ economic activities themselves do not need much financing. For example, imports of consumption products rose by 86% per year in Chile and by 57% per year in Mexico during the boom period in the 1980s.

Second is the Korean pattern, caused by the chaebols - giant conglomerates that dominate the economy - acquiring too much foreign-currency debt and then being hit by falling profits of their information technology-related manufacturing in the 1990s.

The Korean pattern was not caused by consumption booms and asset price bubbles as in the first example. Korean corporations’ investment was stable at around 30% of gross domestic product, while their foreign-currency debts surged to $82 billion, double Chile’s foreign debt.

The third pattern is the Brazilian one, under which the financial crisis stemmed from the government’s rescue of the banking system, leading to the devaluation of the currency in early 1999.

In essence, Brazil’s attempt to prevent a Mexican-style crisis created another type of crisis. Its tight monetary policy adversely affected the banking system and the rising national debt created by the government’s policies had weakened the economic fundamentals.

As Brazil had some degree of capital controls before the crisis, the amount of capital inflows was not substantially high; but the short-term inflows accounted for as much as 60% of the total capital available.

Thailand and Malaysia were in between the first and second routes to a crisis.

They did not experience Mexico’s high level of capital inflows and asset-price bubble, and their exchange rates were not affected to the same extent as Brazil’s.

Private savings in Thailand and Malaysia were generally high, compared with the corresponding savings rates for Latin America.

However, between 1993 and 1995, the increasing rate of short-term foreign inflows in Thailand was higher than in the build-up to Chile’s crisis.

Despite the differences in the crises, the IMF came up with the same policies for Thailand as in Latin America.

Capital controls were one solution to cope with high volatility in the face of liberalisation. But supervision of the banking system needed to be improved so that banks avoided too many off-balance-sheet activities of which shareholders were unaware.

Developing countries also needed to establish better monitoring of liabilities of the corporate sector and improve financial institutions’ capacity to price and assess risk efficiently.

In the three years after massive speculative attacks against the fixed exchange system forced the float of the Thai Baht, currency speculation has continued in ebbs and flows.

The Bank of Thailand has chosen a two-pronged approach to ward off speculators, using limited intervention in the market to smooth rate fluctuations and imposing capital restrictions to squeeze non-commercial trades.

The chairman of SCB Research Centre, Dr Olarn Chaipravat, has said that the small size and inefficiencies of the Thai market made stability management by regulators crucial to guard against speculation. Thailand continues to have weaknesses in its currency management, he said.

Floating currency rates are commonly used by developed economies, where large numbers of players, 24-hour trading and rapid information flows helped raise efficiency in the market and limited the influence of any one party in manipulating rates.

Yet Asian currencies, such as the Thai Baht, Indonesian Rupiah and Philippine Peso, featured much smaller markets and a limited number of traders, making prices easier to manipulate and increasing the opportunity of speculation and wide fluctuations.

Thai traders and economists were trained on Western market models which differ significantly in nature from the smaller Asian markets.

“Is the daily rate for the baht, supposedly representing market prices, actually a fair representation?” Dr Olarn asked.

Thailand’s currency markets lack genuine competition, Dr Olarn said, with only a handful of major players dominating daily trade and current rates failing to genuinely reflect Thailand’s economic fundamentals.

He said developing the market would require additional players to help prevent any one party from manipulating rates. Open and transparent information flows would also help raise market efficiency.

Dr Olarn said the Bank of Thailand, while making strides toward greater transparency over recent years, should provide additional information on transaction volume by Thai and foreign banks, both for the local and offshore currency markets. More information would also benefit the public as a whole, by giving greater guidance on future trends.

Currency rates had stabilised in late 2000, following tighter enforcement by the central bank on existing currency regulations.

M.R. Chatumongol Sonakul, the central bank’s governor, has been quoted as saying that signals sent by regulators to clamp down on currency speculation had achieved a certain measure of success.

But one concern for the central bank was in Thailand’s trade competitiveness compared with major partners.

M.R. Chatumongol said the Central Bank was studying the appropriate equilibrium level for the baht, to serve as a better guide in setting broad economic policy.

Thailand’s trading ties, with allies and competitors, had changed significantly in the past few years, he said. Protecting the country’s future economic interests made it crucial to find the most appropriate price levels to match the country’s competitiveness.

Of major concern is the amount of public debt, which has grown rapidly from 15% of GDP in 1997 to 64% of GDP in 2000, and currently stands at 4.7 trillion baht, according to recent reports.

The government set aside 3.6% of its 1997 fiscal year budget and 8.2% of its 2000 fiscal year budget to service these public debts.

A bigger amount will have to be sliced off the national budget in the future if the debt restructuring process cannot proceed as planned.

Non-performing loans still account for some 36% of GDP, and it is hoped that 40% of these NPLs will eventually be recovered. It is rather pathetic to think that 60% will not.

The biggest headache for the government is a 1.2 billion baht debt incurred by the Financial Institution Development Fund. Restructuring this would only be sweeping the mess under the carpet.

The Chuan government floated bonds to cover some of the indebtedness, and more bonds to cover the dividends that became due with insufficient funds to cover them.

Certain state enterprises such as the Bangkok Mass Transit Authority have been operating at a loss for a long time, and it is almost impossible for them to service their debts without drastic changes in the way they operate.

But while public debts keep accumulating, the government still has to borrow tens of millions of baht a year to allow the economy to function effectively.

Now that a new government is in power, there is some concern that currency speculation will rear its ugly head again. Steps have been taken to limit this, and the substantial cash reserves that have been built up over the past three years since the crisis will help to cushion the shock if it comes.

Nonetheless, a negative trade balance for the first time in a long time earlier in the year served as a warning that the economy is not returning to the robust pre-crisis levels that were widely expected. And increasing NPL figures - especially those of restructured loans that are now non-performing again - are not a good sign for the domestic economy either.

The government has been trying to persuade banks to increase lending; but the banks are keeping a tight rein on lending, which means that small and medium sized firms are having a hard time financing expansion at a time when their productivity is needed to stimulate both exports and the domestic economy.

It would seem from this that the government’s pronouncements on the baht’s strength smack more of hopeful propaganda than a true reflection of its position in the international market. As a result, it would be less surprising if its exchange rate to the dollar continued sliding down towards the much-predicted 47 than rising towards the hoped-for 40.

Leslie Wright is managing director of Westminster Portfolio Services (Thailand) Ltd., a firm of independent financial advisors providing advice to expatriate residents of the Eastern Seaboard on personal financial planning and international investments. If you have any comments or queries on this article, or about other topics concerning investment matters, contact Leslie directly by fax on (038) 232522 or e-mail [email protected] Further details and back articles can be accessed on his firm’s website on www.westminsterthailand.com

by Mirin MacCarthy

All of those “Do’s and Don’ts”

Every country has its own customs of social etiquette and good manners, and Thailand is no exception. If a foreigner actually lives here on a long term basis, these customs usually present themselves in everyday situations, one or two at a time, so the learning process is fairly easy. Trial and error. Thai friends will often help the newcomer to settle into some of the more elaborate intricacies of ceremonies, such as weddings, funerals, festivals and other major events. The visitor is often on his or her own when stumbling through the other myriad of do’s and don’ts in most every other form of social contact.

There really is no way to cover all of the little idiosyncrasies of life in the Kingdom. What works well in sophisticated Bangkok and cosmopolitan Pattaya may not be so appropriate in towns or villages in other regions. We are all human, creatures of habit and social engineering of some kind or another, and tend to operate on ‘automatic pilot’, thinking we are doing the right thing, until we get it wrong or give offence in some way.

There are lots of little books printed in various languages which give a few basic rules on how to conduct oneself with decorum while living here. I will agree that they can lead the reader in the general direction. But much in the same way a world Atlas will probably not guide you through the new and complicated expressway system in Bangkok in the same way the latest city street guide can, these little publications are only the basic introduction of what can be some rather complicated social interaction. Time, patience and experience will ultimately provide the best instruction. Even then, much of the settling in period will be flown on a wing and a prayer. Except in absolutely critical situations, most of the gaffs, misunderstandings and wrong turns will usually turn out fine in the end.

A lot of visitors ask me about the advice they always here on arrival about not touching the Thais’ heads. What about hairdressers and barbers? Are they foreign workers like one often meets in Saudi and other Middle Eastern countries? And how does one point with one’s foot? Is that such a common practice in other countries? The head is simple to explain. It is sacred. Best leave it untouched. The foot is a little harder to explain. I have never actually seen anyone in any other country point with their feet. Of all the things on the human body, I would have thought that would be the last one used for pointing. Chinese tell us not to point with our fingers, but with our chins. I point with an umbrella; that way I please everyone.

Crawling past one’s superiors so that the head is lower is going to be a little harder for our visitors from abroad. Use some common sense here and it will most likely serve you well. When invited to the Royal Palace, Thai associates will tutor those unfamiliar with court etiquette. Crawling on the floor at a company board meeting will probably not be required. Massive corporate desk jockeys aren’t always in the best of physical condition. More than one Thai secretary has slipped a disc assisting her boss back to an upright position. In general circumstances, one only needs to ‘imply’ the gesture of a lower head by scrunching ones neck and shoulders, and then lowering the eyes for a moment.

Any graphic breach of etiquette will mostly likely be more noticeable in tiny hamlets and upcountry villages. The simplistic lifestyle here may be ruled by folklore and superstition, so there is a lot of little things people to do acquire good luck and to avoid bad luck. Try not to walk under a clothesline when women’s underwear is being hung. Like the ladder in the West, walk around the clothesline. If older people are relaxing and chatting on the floor, do sit down with them rather than in a chair. As always we must mind our heads.

No one is expected to do everything right the first time. Thai friends will be happy to coach visitors as these little things come up. I remember my first visit to Iran. My hosts were full of mischief, and I seemed to get everything back to front. The more I got it wrong, the more they laughed. Hospitality in any culture makes room for tolerance. Relax. Enjoy.

by Lesley Warner

by Marion

Over countless centuries in the UK and Europe, black dogs have been given a very sinister meaning. These black dogs are generally described as being as big as a calf and have saucer sized eyes that glow yellow or red. They are seen as a bringer of evil and an omen of death. In many regions, the black dog is called Black Shuck and is thought to be the oldest phantom in Britain, the legend being that he came to the UK with the Viking invaders and their legends of Odin’s black hounds and Thor’s own dog, Shukr.

Beware the Black Dogs

The phantom black dog of Dartmoor, the death-hound of Arthur Conan Doyle’s ‘The Hound of the Baskervilles’, was one of these vigorous archetypal beasts, and the author was said to have taken his inspiration from the local folklore.

But Dartmoor is but one of the regions where these black dog folk tales exist. Such packs of spectral hounds - with or without hunters - have been seen all over Europe, and are generally known as the Gabriel Hounds or Gabble Retchets in Britain, and as the Wild Hunt in Germany and Woden’s Hunt in Scandinavia.

Modern researchers such as Angela Hurren in the UK have followed the Black Dog’s histories. “The black dogs go under many names depending on which county you are in; here are some of the more common ones. In the north of England in counties such as Yorkshire and Lancashire you will hear names such as Guytrash, Shriker or Barguest, in East Anglia and Norfolk you will hear Black Shuck, Skeff or Moddey Dhoo and in the south of England you will hear names like Yeth or Wish Hounds. The origin of the word Guytrash is unknown but Shuck can be traced back to the Old English Scucca, meaning demon, while Barguest may come from the German ‘Bargeist’ meaning ‘spirit of the (funeral) bier’. The demon association is sometimes emphasised by the title ‘Devil Dog’.”

Even in modern times, the stories continue. A typical reference appears in the Reverend Worthington-Smith’s book on the folklore of Dunstable, published in 1910, where he writes, “Another belief is that there are ghostly black dogs, the size of large retrievers, about the fields at night, that these dogs are generally near gates and stiles, and are of such a forbidding aspect that no one dare venture to pass them, and that it means death to shout at them. In some places the spectral dog is named Shuck and is said to be headless.”

Black Shuck and his canine friends have certainly earned their reputations as harbingers of doom and destruction. In the 1890s a teenage boy rescued from the North Sea told how he had been forced to swim further and further from the shore by a huge dog that chased him through the waters, its teeth gnashing at his neck and shoulders. At Alveston, Charles Walton, a ploughboy, met a phantom black dog on his way home on nine successive evenings. On the final occasion a headless lady in a silk gown rushed past him, and the following day he heard of his sister’s death. Somerset has a black dog which appeared in 1960 to two people - both of whom died soon after. East Anglia, Essex and Buckinghamshire all have examples of phantom dogs which disappeared in dramatic flashes, in one case burning to death a farmer, his horse and wagon.

However, one of the most famous pieces of folklore comes from Suffolk, dating back to 1577, and there is still physical evidence to back up this tale. At Bungay in Suffolk, the dog tore through the congregation of St Mary’s Church during a service. The dog killed two and left another injured, shrivelled “like a drawn purse”. Shortly after, news came that Black Shuck had struck just a few miles away at Blythburgh where he had again attacked the church congregation. A man and boy were killed there and others left scorched and hysterical as the church spire crashed through the roof.

The reports of the day stated that as the dog flew from the church he is said to have left deep scorch marks on the door. The legend continued for centuries even though there were no signs of the marks on the original door. Then, in 1933, the door was cleaned and burn marks became obvious. They remain there today for the disbelievers amongst you.

If you take the time to look into the Black Dog mysteries, you will find that there are literally hundreds of sightings recorded throughout British history, and just to show how much importance Black Shuck has had, just south of the Surrey border near Haslemere is a place called Black Dog copse, and a lane that runs between the old Crawley High Street and West Green is Black Dog Lane, and near Horsted Keynes there is a place marked on old maps known as Black Dog. Those are but a few.

by C. Schloemer

Good points: affectionate, beautiful, excellent with children, hunting ability, successful show dog

Take heed: lively, not good as a guard; it loves everybody!

The Irish Setter is a first-class gun dog which combines its work with its role of family pet and companion. It is a happy house dog, utterly content in the family home. This breed has a great need for affection, which it will return to its owners a hundred fold. The Irish Setter is kind and reliable with children so owners with little ones need not worry. The breed is, however, of a lively nature and should not be confined in close quarters — a warning to those who would like an Irish Setter but do not have the time or the room to allow this dog plenty of room and exercise. This breed will become anxious and highly strung when confined and will most likely become a nuisance without sufficient freedom and exercise. If owners live in the country, they will find the Irish Setter to establish a good relationship with horses.

For owners with space to keep the Irish Setter, this breed can do well as gundog. Those who are aiming at the ring will find this beautiful animal a delight to show. Its magnificent color and showy coat is beautiful to behold. This breed carries itself with elegance that is hard to match.

Size: The Americans look for a tall dog; 63.5-68.5 cm high. But in Britain no height is specified.

Exercise: An exuberant breed, the Irish Setter needs lots of exercise, either working, hunting, or running free in open spaces. If owners cannot provide this is, it is wiser to choose another breed

Grooming: That luxurious coat will need regular brushing to keep it looking glossy. Keep the ears clean.

Origin and history: The Irish Setter has evolved from the crossing of Irish Water Spaniels, Springer Spaniels, the Spanish Pointer and English and Gordon Setters. The name Irish Setter was settled upon by the Ulster Irish Setter Club in 1876. Synonymous with the breed is the name of Edward Laverack, who prior to his death in 1877 spent almost a lifetime improving this breed.

by Anchalee Kaewmanee

Both signs of this combination are ruled by Mars, and if you are familiar with mythology, you will remember that Mars is the God of War. An individual born with a Sun sign in Aries and a Moon sign in Scorpio makes for a very aggressive personality. Whether in love, business, or just plain living, this person may not think it’s fun if it’s not a fight.

An extremist in thought and spirit, this man or woman will never do anything half way. When they succeed, it’s total triumph, and when they are defeated, it is total tragedy.

One thing is certain; the people born into this sign never lack thrills and excitement. Blessed with great powers of concentration, they are ambitious, and their thirst for competition helps them get ahead in the world. But at the same time, their extreme independence and defiant nature can often prove their downfall. These people need to get their emotions under control.

It is difficult for this group of people to accept compromise, or hold back belligerence. They can be driven through the whole spectrum of sensual, emotional, and spiritual experience, and still never learn to have patience and tolerance for people who may stand in their way. They need to learn that occasionally it pays to listen to advice. It is next to impossible to go through life always having things one’s own way. However, the Aries/Scorpio has tremendous willpower, and strong creative impulses. If this combination ever learns to channel all that passion and acquire the skills of compromise, this combo will go far indeed. If not, they often fall into depression, and seek consolation in excessive eating, or drug and alcohol abuse. It is an unhappy fact that many people in this group can be destructive if they cannot harness their intellect and passion into both fulfilling relationships and rewarding work. Sometimes that destruction is wreaked on others, sometimes it is turned inwardly.

This sign has the potential for greatness. All that enthusiasm and pioneering spirit will benefit from training early in life. This sign is hard to control right from the start. These individuals should receive professional training at a young age, thereby channelling that aggressive nature into something productive. That sharp intellect and superb powers of concentration can produce innovative scientists, social activists, and scholars. Not content to rely on superficial impressions, these people probe beneath the surface of things.

All natives of Moon in Scorpio have a self-rejuvenating ability. No matter how much trouble they get into, or how many times that freedom loving and courageous spirit may land them into trouble, they bounce back, fresh and ready to tackle new challenges. This vitality needs to be nurtured.

Sex, and plenty of it, is important to both the Aries and the Scorpio. Both signs are sensual and passionate. Deep protective instincts may attract weak or passive partners, so this combination of Sun and Moon will most likely choose a lover who is sensitive and non-aggressive. This could prove a fine union if our Aries/Scorpio is not too overbearing and possessive. They mean well, but all that smothering sometimes overpowers a partner.

by John D. Blyth, P.O. Box 97, Pattaya City 20260

For a country with a modest-sized rail system, Thailand has an ability to produce a notable number of ‘puzzles’ in its locomotive history. Not many of the answers are in the records of the State Railway - for example, what happened to the small British locomotive sent through an agent in Scotland to (presumably) another agent in Bangkok, about 1920? This little engine had been built to the unusual track gauge of 20 inches. It has not been heard of since. The locomotive seen in my drawing and photograph this week is an example where many thought they knew the answer but all seem to have been wrong.

Kyosan Kogyo official diagram of the 75 cm gauge 10-tonne locomotive of which three are ‘mysteries’.

A little over ten years ago, a gang of workmen were knocking down a building in Bangkok’s New Road, at a point where the buildings are backed by the Chao Phraya River, and were no doubt ready to put up something nastier. Reaching the waste ground on the riverbank they saw a small shed, and - being good, enquiring Thais - they just had to have a look inside. They did, and found a small locomotive; it did not look in good health, and whatever it stood on was going to let it drop on to one side quite soon; whatever paint it had was almost gone, and it didn’t seem worth much. News travels fast, and soon someone else was interested.

This was none other than Prof. Sanpsiri Viryasiri, a well-known Bangkok figure and TV station owner, just in the process of setting up a small transport museum in a building in a corner of Chatuchak Park, which ought to have been half of the National Railway Museum, never opened, decree of some forgotten politician. Already he had one smal1 steam locomotive as an exhibit, now he might get another. Assuming the locomotive to be their property, which I would not like to argue, the demolishers agreed that the Prof. should have it on loan for an indefinite period, and it was duly transferred to the Chatuchak Park site, given a free coat of paint, and an examination by a qualified steam locomotive engineer. He came up with the news that it had never been used: the boiler and its tubes were all clean and no waste was to be seen; wear on all bearings, wheel tyres, etc., was similarly ‘NIL’. Yet, in the year of grace 1990 or so, this locomotive bore a cast plate to tell that it had been built in Japan by the Kyosan Kogyo Company in 1959, with their number 10089 (which in their way means that it is a 10 tonne locomotive - first two figures -and the 89th of that size, last two).

Some wise person wrote to the Kyosan Kogyo people and received a polite reply that it was one of three for ‘some sugar line in Thailand’ - the others were said to have had serial numbers 10088 and 10090, making ours the ‘middle’ one of three - so making three puzzles, not one! The company regretted that they had no further information in their records.

Inside the Chatuchak Park museum, Bangkok; the ‘mystery’ engine is on the left, the front raised in an attempt to install an electric motor to make the wheels rotate; on the right, State Railway No. 33, formerly on the Sung Noen ‘firewood railway’. (Photographed on 26th March 1994)

Visiting Prof Sanpsiri’s museum one day I asked him to whom he though the locomotive properly belonged. Quickly he returned his answer, ‘To the Srimaharacba Timber Company at Si Racha’. Privately I was sure he was mistaken; I still think so but cannot prove it. This company, which went out of the timber business in about 1972, was originally British, under the Borneo Company, and its early locomotives reflected this by being just as British; soon some German influence was to be seen, and the last four locomotives bought, in the mid-1950s, all came from the Henschel Company in Kassel. By this time they could almost certainly see the end of the trees, and would know they had to do something else, or go out of business. They did the former, and did not need locomotives for it either. Another point was that in all their years, which had included the astonishing purchase of a ‘Shay’ geared locomotive from the U.S.A. Lima Company in 1914, they had never dealt with the Japanese locomotive industry.

Again, if for Srimaharacha, where were the other two? Had they actually arrived in Thailand, and maybe gone to ‘some sugar line’ as claimed? By this time the number of sugarcane growers was small and getting smaller who actually still had a railway operational on their land; there may still be two in the north, but as long ago as 1959, there could have been one more. Virtually all of their locomotives are accounted for.

I then wrote to an old colleague in the U.K. for help; this was Russell Wear, chairman of the Industrial Locomotive Society. Help was forthcoming in the form of an English-speaking Japanese, Ichiro Kondo, who at once took the question to heart. It took a little time, but the firm only repeated the old song ‘a Thai sugar line’, but Ichiro was lucky enough to be able to trace the agent, in Osaka, who had dealt with the transaction. Ichiro then asked me for some photographs of the locomotive, and I was able to supply, including one of the mystery locomotive standing in the museum alongside another Kyosan Kogyo locomotive, this time an 8- tonne example supplied to the State Railways firewood line at Sung Noen ten years earlier. The agent’s man was very interested indeed, and we all thought we were there.

We were not. That file, dealing with those three locomotives, was missing from the cupboard, and it was the only one that was missing! Why? Where? How? Where do we go from here? Where are the other two locomotives?

by Apichart Panyadee

Sheffield Plate properly describes a process of fusing silver and copper that was accidentally discovered by Thomas Boulsover in 1742. It was applied to the manufacture of domestic articles from the 1750’s to the 1850’s, and no article may be legally sold as Sheffield Plate unless it is made both by the precise process and within the period.

Early Sheffield Plate cup of the type which Mathew Boulton was famous; dated 1800

Not all Sheffield Plate was made in Sheffield, however. Large quantities were made in other manufacturing towns in England, and the process was copied abroad. Russia, Poland, and France all produced fused silver items, though their quality and style were generally sufficiently inferior to make them easily recognisable. To date there is not evidence that there was any large scale production in Ireland or North America.

Thomas Boulsover enjoyed some success with his discovery, but unfortunately, not enough. By 1769 he had given up making fused plate, but Joseph Hancock, now known as the ‘father’ of Sheffield Plate, had taken up the process of manufacture of domestic items. Matthew Boulton established his Birmingham factory in 1762, and with his partner, John Fotherfill, produced high quality work. Boulton was among the first platers to adopt the sterling silver thread process, invented by Roberts and Cadman, by which a silver wire was soldered to edges to hide the raw copper that would otherwise show through. Boulton stamped such pieces with the words: SILVER BORDERS and his marks: the double or single rayed sun.

The Process

The first form of Sheffield Plate was arrived at by binding, with a brass wire, an ingot of silver to an ingot of copper which was hardened with about 25 percent brass alloy. The bound ingots were then heated in a furnace until they fused. When cool, they were rolled into thin sheets. This was referred to as single plating. After 1770 however, double plating came in. The method was similar, but now the copper ingot was sandwiched between two ingots of silver. Accordingly, the resulting sheets showed silver on both sides and could be used for making articles such as sauce boats and entree dishes that required silver to show on the inside as well as the outside. Where a surface was unlikely to be seen but nonetheless required a finish, it was tinned. Original tinning is steely grey in colour and if it is in good condition, it counts as a plus point when considering the value of the item.

Plated wine cooler circa 1800

Fused plate articles were made in much the same way as their solid counterparts. This created a problem, and the solution to which presents us with a guide to authenticity. The hammering and annealing required to raise a seamless vessel contributed to the edges of the work fraying. Makers masked this defect by cutting the sheet of an angle, allowing the upper or outer edge to be drawn over and under to keep the edge tidy, and conceal the raw copper. This was called ‘lapping’. Therefore, it is only on the very earliest examples of Sheffield Plate that a raw copper edge can be seen. This problem also existed on items produced by seaming and die-stamping. The application of a hollow silver wire or thread, (after 1785) proved an effective alternative. Wire was applied until the mid-1820’s, the technique having run concurrently with applied decorative borders - first the bead, then the gadroon and finally, the foliate and shell motifs - since the 1790’s. These borders were made of stamped silver filled with lead.

A major innovation in 1768 was the production of plated wire, which enabled the construction of delicate wirework baskets and other decorative containers. The refined effect of wirework was a natural partner to the elegant designs of the Adam period. Work of this period was enhanced by piercing, bright-cut engraving, and the application of either stamped out or applied reeded wire, or bead borders.

by Richard Brunch

I’ve been looking at the Beta 2 of the next version of Windows NT in all its guises, business desktop, home, and server versions. The Professional (business) and Personal (home) editions are called Windows XP, but the server’s remains “Whistler.” All three are a marked improvement on their predecessors and are far more than just another version of Windows 2000. Regrettably one of the new features is a pain in the posterior, known as Windows Product Activation and is probably going to the most irksome thing to many users. In essence, after installing Windows XP Professional, Windows XP Personal, or Whistler Server on a system, you will need to activate it, even though it runs without restrictions from the first time that it boots up. However very soon a “balloon” message appears telling you that you have only 13 days left to “activate” your system. If you click where the message tells you to click, so long as you have an Internet connection you will receive a message thanking you for activating. A code is produced based upon the Product key and various details pertaining to your PC hardware. If you are unable to register by Internet then you have to telephone Microsoft. Whilst Microsoft inevitably has a desire to stop piracy, there are many scenarios where it will inconvenience legitimate customers. As an example, say you decide that your system has become ‘bogged down’ and you decide to do a total reinstall, but since activating the product you have upgraded your system, say a faster processor and some additional RAM, maybe a new hard disk, and the installer thinks it is a new system and the software pirated, so you have to telephone Microsoft and explain, giving them pertinent details and hopefully they will reactivate your software. A potential problem with the Activation could be that the process appears to be just HTTPS, so if a firewall was installed the activation may be thwarted, once again necessitating a call to Microsoft. On the plus side, Activation is not required for Open, Select or Enterprise licenses.

Send your questions or comments to the Pattaya Mail at 370/7-8 Pattaya Second Road, Pattaya City, 20260 or Fax to 038 427 596 or E-mail to [email protected]. The views and comments expressed within this column are not necessarily those of the writer or Pattaya Mail Publishing.

Richard Bunch is managing director of Action Computer Technologies Co., Ltd. providing professional services which include custom database and application development, website design, promotion and hosting, computer and peripheral sales service and repairs, pro audio solutions, networks (LAN & WAN) and IT consulting. For further information, please e-mail [email protected] or telephone/fax 038 716 816 or see our website www.act.co.th

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