2 
On broad lines it may be said that Tea is produced in silver currency and paid for 
in gold currency. In other words, a certain very large percentage of the price obtained for 
the article has to be converted into rupees, in which the producing expenses are paid. 
The higher the gold value of the rupee, the fewer rupees will the seller of Indian and 
Ceylon produce get for his sterling price, for when the rupee is worth is4d the pound sterling 
exchanges for only 15 rupees, while it exchanges for 20 when the rupee is worth only is. 
The Industries are now of such vast magnitude that a rise of id. in the exchange 
means a difference of more than ;^40o,ooo sterling to the producers. 
The artificial value recently given to the rupee by the closing of the mints by the 
Government of India, handicaps the growers of India and Ceylon in their competition with 
their rivals in other Tea producing countries whose currency is ruled by natural laws. 
Referring to the Diagram — The line showing the gold value of the rupee calls for 
little remark. The rupee fell steadily from 1886 to 1888. There was a very slight 
recovery in 1889, and a rapid rise in 1890, which was due to the passing of the Sherman 
Act by the United States Congress in that year. A heavy fall took place in 1891, and 
continued until 1895, when the rupee went as low as is ifd for the average of the year. 
Then, at last, the closing of the mints began to tell, and the gold value of the rupee rose 
gradually to is 2^d in i8g6, and is 3^d in 1897. 
The real interest of the chart lies in the red line showing the silver equivalent of 
the London average price of the Tea, and from this it will be seen how great an injury has 
been inflicted on these industries by the closing of the Indian mints. 
For a few years previous to 1896 the producer had been able to combat the almost 
persistent fall in the London average price of Indian and Ceylon Tea by the decline in the 
value of the rupee, and notwithstanding a fall of nearly 20% in the London market price, he 
received an increased number of rupees for his produce. 
Since 1895. the planter has not only had to face still lower markets, but has received 
a less number of rupees, for his local expenditure, in proportion to the rise in exchange 
which has taken place ; and although the fall in the London price was only about 6%, the 
fall in the remitting power amounted to a figure approaching 20%. 
What is true of Tea is, of course, true of all Indian produce. Everything that has 
to be raised in India and Ceylon and sold abroad is injuriously affected in precisely the 
same way as Tea. China is not handicapped in this way, for the Chinese Government has 
not yet either adopted the gold standard, or employed methods for giving a fictitious 
value to the dollar. Silver in China, therefore, is regulated by natural laws, and hence we 
find industry is rapidly prospering in places, where the benefits of European administration 
are experienced. 
Practically, India at the present time, when the rupee is but a little under is 4d of 
our money, gets only about 15 rupees for the sovereign for which she sells a commodity. 
Whereas a piece of silver, if current in China, of exactly the same weight and fineness as the 
Indian rupee, would be worth only lojd. Consequently the sovereign obtained, let us say, 
for China Tea exchanges for 221 silver pieces exactly equivalent to the rupee in weight and 
fineness. The difference between 15 and 22y is about 50%. In other words, the gold which 
the Chinese trader obtains in Europe by the sale of his goods, returns in silver coin about 
50% in excess of what it does in India and Ceylon. 
Hitherto, fortunately for Indian traders, the Chinese have not been able to avail 
themselves of the advantage they have over their Indian competitors. But the whole 
of Europe is now scrambling not only for railway, banking, and other Concessions, 
but for territorial possessions and for trading privileges. Is it not possible that, before 
long, European skill and capital will be applied to the creation in China of the industries 
which have made such strides of late in India ? 
