330 



INDIA. 



by borrowing in England, and asked the British 

 Government to introduce an act into Parliament 

 authorizing the Secretary of State to borrow up to 

 the maximum of 20.000^000 for the purpose of es- 

 tablishing a gold standard in India. After the 

 passage i'if the statute the Secretary of State should 

 at once I.OITOW 5,000,000 and ship it to India. 

 Holding this reserve of sovereigns, the Indian Gov- 

 ernment would withdraw from circulation and melt 

 down in crores of coined rupees the first year and 

 another 10 crores the second year. Before the 

 currency is contracted to this extent it is anticipated 

 that exchange will be steady at 16d. for the ru- 

 pee, and that gold sovereigns will flow into India 

 to form the medium of international exchanges in 

 Bombay and Calcutta, while the silver rupee will 

 remain as before the only coin used in domestic 

 transactions. Si r. lames Westland believed that the 

 sale of Kx 0.000,000 worth of silver for two suc- 

 ;ve years would have no permanent effect on 

 the silver market, but did not explain how he ex- 

 pected to get that sum for 10 crores of rupees, equal 

 to a third of the world's supply, when suddenly 

 thrown upon the market in competition with the 

 product of the mines, except that he thought that 

 the Indian population would absorb that amount of 

 rupees, which was approximately equal to the an- 

 nual importation of silver bars, as it was formerly 

 thecustom to use coin in making articles of silver, 

 until the stoppage of the coinage gave an artificial 

 value to the rupee. In the letter of the Govern- 

 ment of India of March 3, setting forth this plan for 

 securing the early establishment of a gold standard 

 and a stable exchange, it was represented that this 

 was a matter of imperial concern, in which India 

 could fairly claim that the whole burden should not 

 be thrust upon her and that the British Government 

 should contribute, not only in material assistance, 

 but by creating the greater confidence which would 

 result from its publicly assuming a share of the lia- 

 bility. Financial experts in England did not be- 

 lieve that the whole twenty millions sterling would 

 suffice for the establishment of a gold standard in 

 India. Some thought that eighty or a hundred 

 millions would not be enough. But the prospect of 

 giving up even five millions created alarm in Lom- 

 bard Street, and drew protests from some who had 

 been foremost in urging the Indian Government to 

 reject international bimetallism and adopt the 

 English standard. The opposition of English finan- 

 ciers was so pronounced and general that Lord 

 George Hamilton was unwilling to accede to the 

 propo>al- of Sir James \Vestland until the subject 

 wa^ inquired into by a commission of experts. 



This imissjon had for its chairman Sir Henry II.' 



Fowler. I, on! (Jcorge Hamilton's predecessor in the 

 India Office, who was responsible for the closing of 

 tin- mints. The other members were Lord Bal four 

 of Borleigh. Sir Francis Mowatt, Sir David Bar- 

 bonr. Sir Charles Crosthwaite, F. C. Le Marchant, 

 K"i>ert Campbell, Sir John Muir, Everard Ilambro 

 W. II. Holland, and Sir Alfred Dent. 



The bankers of London, not less than the tea and 

 coHVe planters of India and Ceylon, the manufac- 

 turers of Bombay, and representatives of every sec- 

 tion of Indian native society, distrusted theco'mpo- 

 sition of this oommittafr-HMmtaining six Indian 

 officials and ex-officials, but no member of the 

 classes engaged in commerce and production in 

 India and still more distrusted the object and scope 

 of the inquiry. A memorial of leading London 

 bankers declared that no inquiry would be satis- 

 factory that did not include an examination of the 

 entire monetary policy of tin- Indian Government 

 initiated in 181)3. and a report as to the possibility 

 or advisability of maintaining it. When chambers 

 ol commerce and planters' associations objected to 



the scheme, which they believed would subject 

 their industries even more than before to the 

 ruinous competition of China and other silver-using 

 countries, they were told that the adoption of a 

 gold standard for India must be taken as the 

 definite and permanent policy of the Government 

 of India. Opponents of the gold standard asserted 

 that the money stringency in India was the direct 

 consequence of tampering with the currency, and 

 that the late famine was no food famine but a money 

 famine and a large proportion of its victims were 

 the victims of the Indian Government, Since the 

 closing of the mints fluctuations in exchange, which 

 that measure was intended to lessen, had been as 

 violent as before, and often more unexpected. 

 While Indian producers of all classes desired to re- 

 turn to the silver basis and free coinage, English 

 manufacturers and merchants, except cotton manu- 

 facturers of Manchester and others who were in 

 favor of international bimetallism, were interested 

 in raising or keeping up the sterling equivalent of 

 the rupee and introducing the gold standard in In- 

 dia, and bankers and bullion merchants on the other 

 hand were fearful that the attempt, for which they 

 foresaw only failure, would cause a disastrous gold 

 crisis, and grave disturbance of trade in England. 

 Lord George Hamilton, a bimetallist of long stand- 

 ing, in vouching for the plan of establishing a gold 

 standard in India without a gold currency, con- 

 sidered that to open the mints of India to the free 

 coinage of silver without some international ar- 

 rangement would be an act of lunacy, and that cir- 

 cumstances did not exist for entering into an inter- 

 national arrangement, because no such arrangement 

 would be effective without the inclusion of France, 

 and France would only accept a ratio of 15| to 1, 

 which was impracticable when the market rate was 

 35 to 1. 



When the currency commission began to take evi- 

 dence the theories of establishing a gold coinage on 

 a gold basis without gold currency were unsettled 

 by testimony from India. Facts that came to light 

 regarding the extent of the illicit coining of full- 

 weight rupees both in the native states and in 

 British India, with machines brought from Vienna 

 capable of turning out a lakh every week, presented 

 a new phase of the question. These counterfeits, 

 which the masters of the mints are unable to detect, 

 are believed by Indians to have been the means of 

 saving their trade from strangulation since the 

 mints were closed. 



The Army. The European army in India in 

 1898 had an established strength of 3.62(> officers 

 and 70,673 noncommissioned officers and privates, 

 made up of 11 cavalry and 56 infantry general olli- 

 cers, 33 general officers unemployed, 914 officers in 

 the staff corps, 5 officers and 10 men on the invalid 

 and veteran establishment, 491 officers and 12.!lH> 

 men of the Royal Artillery, 261 officers and 5,409 

 men of the cavalry, 347 officers and 158 men of the 

 Royal Engineers, and 1,508 officers and 52,180 men 

 of the infantry. The native army of British India 

 had an established strength of 1.578 Kuropcan offi- 

 cers, 3,209 native officers, and 135,853 noncommis- 

 sioned officers and privates, comprising ''>} Furopeau 

 and 54 native artillery officers and 2.001 men, :!'>s 

 European and 619 native cavalry officers and 21. '.I'M 

 privates, 65 European and 488 native officers of 

 sappers and miners and 3,142 privates, and 1.122 

 European and 2,048 native infantry officers and 

 108.755 privates. Of the total effective force of 

 214,924 men of all ranks 55,872 were in Bengal. <>7,- 

 171 in the Punjab, 47,318 in Bombay, and 1 l..'>r,:! in 

 Madras. 



The European volunteers in India numbered 29,- 

 466 on March 31, 1897. The imperial service troops, 

 maintained by native princes and trained under 



