44 
THE TROPICAL AGRICULTURIST, [July 1, 1898. 
CEYLON AND THE INDIAN cnRRENCY. 
TO THE EDITOR OF THE "ECONOMIST." 
Sli!,— On my return to Englaml nmy I be per- 
mitted to ofle'r a few renl^l^k^ on tlie letters tliat 
have ajipcircd on tiia Intliiin currency question, 
arisinL' I'roni xny lector from Ceylon of Marcli 1st? 
Lord Farrer iia« endeavoured (o juove that the 
Ceylon tea industry has not hecn adversely 
attected by the restricted currency Mr. Leake, 
who has been the guardian of planting interests 
in London for the last twenty-six years, ha.s t-ct 
him right in that matter; but both Mr. Leake 
and Lord Earrer appear to shirk the true gist of 
my letter, which is that we Ceylon and Indian 
producers are exjjected, without a currency, to 
compete with the barbarian with one. It can 
hardly be denied that we have a common right 
with 'all other .subjects of the Empire to a cur- 
rency that shall be a true measure of our coin- 
nioflities. We had this in silver jirevious to the 
closing of the Mints, and now that the Govern- 
ment has attained its object of forcing the rupee 
up to a level which will enable it to transfer 
from silver to gold, we expect it either to do this or 
to give US back our silver currency. Any middle 
course only continues the evil, as the rupee can 
only be maintained over the natural gold value 
of silver by keeping up a cuirency famine. Since 
my letter was written the Home Government has 
intimated its intention of developing a gold stan- 
dard, and with that promise definitely before ue 
we can now consider what this will mean to the 
producer. Erom Mr. Leake's letters of the 7th inst. 
it appeals tbat he regards thi.s as likely to 
continue the same bounty on the produce of 
silver-using countries as against ourselves. I do 
not, and in the contention I trust I shall liave 
the support of Lord Farrer and other economists. 
It is argued by the planters, in a memorial 
which they have addressed to the Colonial Ollicc, 
that commodities will not re-adjust them.selves 
to a gold currency in Ceylon, and the commo- 
dities specially instanced for the purpose of the 
argument are the coolie wage and the jirice of 
rice. It IS said that the coolie wage has 
remained constant at three days' labour 
to the rupee for the last thirty years, 
and that the price of rice i.i Ceylon has 
not risen commensurately with the fall in the 
gold value of silver, and from this it is inferred 
that if a gold ciirrency is substituted for a silver 
one, neither the labour wage nor the price of rice 
will fall when measured in gold. In other words, 
the planters claim that their principal commo- 
dities — cost of rice and labour wage — are ex- 
cluded from the operation of a great natural law. 
There must, of course, be a fallacy underlying 
such an argument, and the fallacy is this. It is 
quite true that the labour wage has remained 
the same for the past 30 years, but that wage 
represents to the Tamil family today at least 40 
percent more in volume than it did 30 years ago. 
The Ceylon planting industry then was coffee, 
which only gave three months' full employment 
to the coolie in the year. At the end of the 
crop a great part of the labour force was paid off', 
to return to distant homes in India ; the women 
that remained were worked half-time, and the 
children not at all. 
Tea gives full employment to the Tamil family 
all the year round, and the women and children— 
the least useful labourers in coffee— are those 
most in request in tea. The volume of wage 
earnable has increased fully 40 jjer cent, or quite 
the equivalent of the fall in the gold value of silver. 
In other ways tlie condition of tlie coolie hu leea 
.'ihieliorated by the opening of the tSouthern iDilian 
Railway, by which route he can be carrie<l fioni 
a Ce.ylon c.-tate to his home in '.id liourt^, where 
formerly he hud a weaiy tramp of ninny hundie<l 
miles on foot. In oilier wonls, the ienie«biire- 
nieiit of the lalw>ur wage in the mrrency lia« 
been rendered unnecessary (and therefoie haf' not 
been given visible elTect to) only because other 
compensating ciicumstance.'^ Iia\e moie tlmn made 
good the difference to the coolie. Hiniihirly in 
rite ; it will be contended that the actual |irice 
of rice in Ceylon (excluding famine cont«ideration») 
is only some IT) \ter cent higher than 20 yearn 
ago, while the fall in the g<d<l value of silver 
lias been 40 per cent. Here again it is overlooked 
that cheap freights and railways have enabled 
rice to be laid down in Ceylon at a price 25 
])er cent clieaper than could be done 2i) years 
ago, and that the price ftaid to the rice growt r 
in India is f illy 40 per cent higher than it wa« 
when the rupee was at par. Of the»e two com- 
nioditie.* — rice find the coolie wage — one has re- 
measured itself as far as it could in the currency, 
the other — coolie wage— ha.s re-.ailju.-te<l itself to 
the currency in other ways. Wiiy, then, is not 
l!:e same rc-adjiistnient to continue with a gold 
currency ? 
I will not trespass on yonr space by detailing 
the many advantageci to Ceylon that will result 
from a gold currency, for these will be fully 
dealt with by the Commission, but I would jKiint 
out that when these results liave been attiinod 
Ceylon will hwe little to fear in its com|)etition 
with silver-using countries, on which much stress 
is Laid in the planters' memorial. Our Chinese 
competitors will be unsupported by cheap capilnl 
as in Ceylon, and rice, the food of the Chinese 
coolie, must rise in price as the gold countries 
purchase it. Tl e quality of Chinese laljour must 
also deteriorate in proportion as it is ill-paid 
and ill-fed. 
I have ventured to suggest the transition from 
a silver to a gold currency at the rate of Is 
3il per rupee, not only because it appears a just 
rate, but also because it will fit in exactly with 
the token coins of England and India if repre- 
sented by a gold coin, the equivalent of 126 6d 
in England, and RlO in India. The present stock 
of rupees is not more than sufficient for token 
requirements, and it must be remembered that 
the burden of currency work in the East will 
always tall on the token coins, e.j., in monthly 
jiayments for labour ; the individual wage — after 
deducting food supplies — but seldom reaches RlO. 
This fact disjioses of the idea that the demand 
for gold for circulation in India will ever in any 
way comp.'ire with the like demand for it in 
England, where the labour wage is so much 
higher and food is not made part of the terms 
of payment. 
The proposal of the Government to with- 
draw rupees from circulation will simply cre- 
ate a tliHiculty for itself and send a thrill of 
horror throughout the East. What is wanted is 
to resupply the depleted currency of the 
last five years with gold, minted in India, and 
statisticians are not worth much if they cannot 
ascertain what this depletion amounts to, and 
what further addition to the cuirency is neces- 
sary to move the increased volume of produce 
stimulated by the fall in silver. — Yours truly, 
Haecourt Skrine. 
New University Club, 
St. Jaiwee's Street, May 9th, 1898. 
