Sept.'I, 1898.1 THE TROPICAL 
AGRICULTURIST. 
179 
THE INDIA CURRENCY COMMITTEE : 
MR. T. N. CHRISTIE S MEMORANDUM. 
Being much more interested in Ceylon than in 
India, I should premise my statement by explain- 
ing the relevancy of Ceylon evidence to the pre- 
sent enquiry. Although the Indian C4overnment 
in their recent Despatch (3rd March, 1898) claim 
for their Currency policy Imi)erial importance 
and Imperial aid, and so open the que>tion to the 
consideration of other than purely Indian views, 
there is not on the part of Ceylon any expecta- 
tion that its interests could in the very least be al- 
lowed to interfere with those of India. The at- 
titude of the Colony in this matter is, that its 1893 
Currency Commission (of which I Avas a member) 
cleared up issues and elicited facts which had 
not previously — nor have they subsequently — 
been investigated by any authoritative body, and 
that Ceylon afibrds a most valuable object lessen 
to those who desire to see what the effect of 
currency changes has been, and is likelj' to be, on 
the real prosperity of the people in a producing 
country, There is practically no dillerence between 
Ceylon and India in this particular ; the prosperity 
of the people in both countries depends on the 
remunerativeness of their agriculture, and the 
ability of each country to meet its home (English) 
charges for debt, &c., entirely hinges on a favour- 
able balance of trade being maintained. It is true, 
however, that in the matter of sterling payments, 
the position of the Government of India is not such 
an easy one as that of the Government of Ceylon, 
and that the anxieties of the former have not been 
shared by the latter owing to its relatively smaller 
gold obligations. 
In the investigation by the Committee of the 
probable effects of the proposed changes upon the 
internal trade of India, the issue of most far- 
reaching importance is whether on the whole a 
high or a low rate of exchange is beneficial, and 
the lindingas regards Ceylon, after most careful 
investigation, was : — 
" Oar opinion is that up to the present time a 
bnUioa silver currency, coupled with a falling rate of 
exchan<;e, has been for the benefit of the greatest 
number — in other words, the sum of the advantages 
has preponderated over the sum of the disadvantages, 
and, as far as we can see, the actiou of the 
Government of India is not advantageous to the 
general interests of Ceylon, provided — 
" (a) That the re-adjustment of all local salaries, 
waees, and prices to the altered value of the rupee 
could be deferred for an indefinitely long time ; 
" (b) That the future rise in the general revenue 
would be sufficient to keep pace with the increase in 
the obligations of the Government consequent on 
the altered value of silver, such rise being secured 
either by the revenue naturally rising pari passu with 
the increased demands on it, or by additional con- 
tributions fr*m the producing interests specially 
favoured by a bullion silver currency and low ex- 
change. 
" With reference to the possible re-adjustment of 
local wages and prices measured in silver, while ws 
find that there is in Ceylon a slight tendency towards 
increasing wages, and a more general tendency 
towards increasing prices (after taking duly into 
account local exceptions and certain prices which 
have decreased), auch increase bears no actual pro- 
portion to the progressive decline in the cold price of 
silver, and it can hardly be attributed thereto. 
" It is our opinion that the date of such a general 
adjustment of wages and prices is uncertain : that 
it will probably be remote, and that it may be post- 
poned for an indefinite period of time." 
This, be it remembered, was during a period when 
India, Coylon, the Straits, China, Japan, &c., were 
all sharing the fall, but when, as at present, the 
high rate of exchange "^isj^lan artificial one, and 
partial only to India, Ceylon and Mauritius, the 
crushing disadvantage to these countries where they 
now, or may hereafter, come in competition with 
silver-using countries, cannot be lightly thought of, 
and claims the most careful consideration. There 
is one rather convincing example of the benefit 
which a silver currency is to an industry competing 
against gold currency rivals, and that is the sugar 
production in Province Wellesley. It is the only 
one of England's sugar Colonies which is pros- 
perous and not on the verge of ruin — it is the only 
one with a bullion silver currency. 
I would most especially direct the attention of the 
Committee to the necessity of their examining the 
only attempt (so far as I know) of the Government 
of India to rebut the producer's belief that low ex- 
change benefits him. It is contained in the letter 
of the Government to the Darjeeling Planters' 
Association, dated 12th October 1S92, and on that 
document the Government of India evidently still 
rely, for it is referred to in their despatch of 
17th March last. The entirely erroneous premises 
on which the reasoning in that document is founded, 
were exposed by the Ceylon Currency Commission, 
(quotation). 
Even had the position of India's trade been as 
was (wrongly) assumed, the reasoning would still 
be unsound, for it takes no heed of' the benefit 
which accrues by a producer exporting more and 
spending the full amount of his increased income 
on imports. Further, the reasoning that any bene- 
fit derived by anyone from a mere currency change 
can only be at the expense of another member 
of the same community, would, if true, apply 
equally to the benefit which the Government of 
India expected to get by their currency manoeuvre. 
And still further, the argument that the gain is 
not permanent and is counterbalanced by a ten. 
dency to overproduction and consequent re-action 
would apply with equal force to a rise in market 
prices, and would condemn as illusory the benefits 
which the credulous producer has hitherto imagined 
he derived from many of the devices of mankind 
to cheapen production and land and sea transport. 
Additional profit of course means additional pro- 
duction, and that, in its turn, means lower 
prices, but it is the action of an all-round law 
and not one singular to exchange benefits. 
The value of Ceylon as an object lesson in this 
matter is that it presents, in a compact and reli- 
able form, an index of the results of high and 
low, natural and artificial, exchanges, undisturbed 
by war, famine or plague. Tlie prosperity of all 
classes in Ceylon steadily advanced with falling 
exchange, and with the artificial rise and scarcity 
of currency came a great check ; the margin of 
profit has most seriously eone down, in some 
cases disappeared, and the Bank rate has stood 
for months at 12 to 15 per cent. The price of 
tea, its staple product, has gone down, and veri- 
fied the prediction of the 1893 Currency Commission: 
"The effect of thia exchange premium in China's 
favour would therefore be manifested less by any 
remarkable increase in the export of China tea or 
displacement of Ceylon tea, than by a prolonged 
reduction in the price at tea to a figure which was 
so low as to prevent Chinese growers, even with a 
premium of say IJd or 2d per lb. in their favour, 
exporting with profit." 
Hart Ceylon been competing during the last few 
years on even currency terms with China and 
Japan, it would undoubtedly have displaced the 
teas of these rival countries to the extent of a 
good many millions of lb. in the American, Rus- 
sian and other markets, ond, as a consequence, 
the English market would have been relieved of 
the over supply which has depressed it. Up to 
the time when the artificial value of the rupeo 
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