52 



IV. G. Langxi'orthy Taylor 



India had 

 an unfavorable 

 balance of 

 payments in 

 its trade with 

 England, and 

 naturally pre- 

 ferred to pay 

 in goods; 



in fact, it 

 could hardly 

 do otherwise. 



•India Coun- 

 cil bills repre- 

 sent roughly 

 the tribute of 

 India, 



which by off- 

 setting- the 

 debts of Eng- 

 land, which 

 would cause 

 the export of 

 silver, lower 

 its value in 

 England. 



their habit of hoarding. The gold standard has not been intro- 

 duced into India because the banking system is undeveloped. 

 The people stick to their ancient customs. They obtain all the 

 silver they can to bury, or to make into bracelets, earrings, and 

 other jewelry, to be worn by their wives. The amount that is 

 absorbed in that way is very large. Hence, it is evident that 

 whatever that possession does export must be in the shape of 

 goods, and that it must send a large amount in order to pay the 

 tribute to England. It is also plain that bimetallism could not 

 change that state of affairs. It is determined, on the one hand, 

 by India being a vassal state, and on the other, by this unquench- 

 able thirst for the precious metals, but principally for silver. 

 Both determinants, especially the latter, are corollaries of an 

 arrested civilization. 



§ 15. A word remains to be said about the significance of India 

 Council bills, in connection with the proposition to introduce 

 bimetallism into England, the central market for precious metals. 

 The English colony of India is ruled by a board situated in 

 London through the governor-general in India. The finances 

 of the colony are managed from London by it. Naturally, the 

 India Council has very large payments to make in England for 

 causes already mentioned, viz., supplies and the pensions of 

 retired and returned civil service servants. In order to raise this 

 money, its funds being situated in India, it is obliged to sell 

 bills of exchange upon the branch of the Indian treasury located 

 there. The produce of these bills will represent, in part, then, 

 the tribute that India pays to England, that is, the surplus of 

 imports into England in the trade with that colony. 



But the sale of the bills has a restrictive effect on the trade in 

 silver. The people of India cherishing the preference noted 

 above for the precious metals before English commodities, and 

 especially for silver rather than gold, the cheapness of exchange 

 thus freely offered by the India Council not only puts a premium 

 on importation into England from India, but also erects a dam, 

 as it were, to prevent the outflow of silver thither. For if ex- 

 change in this form were not available for the English importers, 

 they would be obliged to pay their debts in silver, and the Indian 



166 



