March i. 1898,] THE TROPICAL AGRICULTURIST, 
613 
is now an excellent opportunity to male another 
calculaton to show what saving Government would 
have effected if they had accepted the terms pro- 
posed. There is no rule, however, by which appe- 
tites are controlled, and it is difficult to under- 
stand why the meeting of the home expenditure 
at Is lid exchange, is not indefinitely more 
advantageous to the Government than a rate 
which varies between Is 21 and Is 4d. The irrita- 
bility of the digestion which rejects the solid feed- 
ing obtainable for 13d in favour of an unhealthy 
and irregular repast at 16d might have been ex- 
pected to be relieved when the Parisian treat at 23d 
was displayed. The Government of India have for- 
gotten that one of the objects they had in view 
when the mints were closed, was to force interna- 
tional bimetalism. 
NEW STANDARD AIDS. 
In not accepting the Paris and American banquet 
the Government shewed good taste, as it certainly 
would not have looked well to display a leaning 
towards extravagance, while funds were so low in 
India. The Goverenment have, however, explained 
their reluctance to have anything to do with the 
tempting advances made by America and France, 
and no true friend of India will, for a moment, 
believe that this decision was other than a wise 
one. The explanation given is, of course, not quite 
logical, but the experience of the past four and-a- 
half years is enough to show how disastrous the 
result of meddling with the standard of value, even to 
a minor extent. The consideration which has been 
given to this proposal and the arguments which 
have been adduced to show that it was better 
for India to hold aloof from its adoption, will, I 
trust, influence the Government to give back to the 
country the prosperity it enjoyed prior to 1893, 
That a great advance has been made in respect of 
our Indian currency, in the direction it was con- 
templated by the authors of the policy of 1893, is 
no doubt true, for rupees in circulation at trade cen- 
tres have been reduced much below requirements, 
and India is now ripe either for a future experiment 
in making wealth exist by legislative enactment or 
for retracing the steps which have led to so much or 
inconvenience and loss. The belief is gaining ground 
that the Government are not prepared to rectify 
the blunder of 1893, until they attempt to inaugurate 
a system for making the rupee currency convertible, 
and some colour is given to the report by the 
statement of the Finance Minister that public and 
official opinion in England has been prepared for 
the possible necessity of a measure which may involve 
the actual diversion for Indian puposes of a certain 
amount of gold from the general available stock. 
The Finance Minister, however, was unable to give 
a final reply, as to the precise measures to be un- 
dertaken, as’ the matter was under consideration, and 
it was impossible at the present time to make any 
definite announcement. From this, it may be re- 
ferred that India may yet be involved in another 
experiment, which even though there be sufficient 
gold at its back to carry it to a successful issue, 
must, in the meantime, cause further disturbance 
to trade. It is but a few months ago that the 
Bank of Engand rate was raised to four per cent on 
the mere apprehension that gold might be withdrawn 
from the Bank of Japan, and there can be no doubt 
that the tendency is towards a higher rate of interest 
in England. The annual cost of a conversion fund 
in gold, sufficient to meet all possible demands on 
it, must be very heavy, and would in itself be a 
considerable tax on the Indian rate-payer, apart 
altogether from the enormous gold indebtedness 
which has already been incurred, and which, so long 
as the present currency policy lasts, cannot but in- 
crease. The late Finance Minister estimated that to 
establish an effective gold currency £77,000,000 would 
be required, and I think, he afterwards stated that for 
a conversion fund £15,000,000 or l-5th of the rupee 
coinage in active circulation would.be wanted. The 
estimate of £77,000,000 for the gold currency was 
based on the belief that there were in 1892, 115 
crores of rupees in active circulation; the mints 
accounts show that in all 355 crores have been coined. 
There is no doubt whatever that the great danger 
to the convertibility of the rupee lies in the 
certainty of the hoarded or dormant rupees coming 
in for exchange. Another factor, which must not 
be lost sight of, is the rupees which have 
been, and may be, coined by the people them- 
selves unknown to the Government and to 
the_ impossibility of preventing coinage in the 
native and neighbouring hill states. The demand 
for gold for India’s purposes would most assuredly 
cause a further fall in silver bullion, and the manu- 
facture of spurious rupees would become thereby 
all the more profitable, although the profits on this 
nefarious trade are now enormous. It must be re- 
membered that so long as the rupees contain the re- 
quired fineness of silver, the Indian public does not 
regard the coiner as one who inflicts loss on them. 
Very few will inform against him, he is an enemy to 
the state but not to society. So long as that is the 
case he is safe from interference; and when money 
is stringent and rupees are denied by the Government, 
the coiner’s trade is probably looked upon, by his 
neighbours, as a very necessary one. 
THE DANGER OF TRYING GOLD. 
The assertion that the machinery for the con- 
vertibility of the rupee would be automatic, I do 
not for one moment believe. The Indians’ love for 
gold is well-known, and they would, knowing the poor 
success that has attended the Government’s efforts to 
maintain the gold value of the rupee in the past, 
not miss the opportunity of at once exchanging their 
silver while it was possible to do so at an advantageous 
rate. The ratio fixed at the outset of the new policy by 
Government would be regarded by the people as the 
maximum value of silver rupees as compared with gold. 
Rightly so ; it would be quixotic to espect any change 
in favour of rupees. To defer making the exchange 
for gold would endanger, not benefit, the position of 
holders of rupees. To leave out of the calculation, 
when determining the amount of the gold conversion 
fund required, the hoarded and spurious rupees, would 
undoubtedly involve tne failure of the system as soon 
as it came into force. The experience of the past 
should convince the Government that in a scheme 
of the sort, it is absolutely essential in the first place, to 
establish confidence in their power to carry out what 
they under take to do. This confidence could only be 
established by having a stock of gold of sufficient mag- 
nitude to meet at possible demands on it. Not onlymust 
the ability of Government to carry out their promises 
under ordinary trade conditions, be undoubted, but they 
mustbe perpared at all times to meet a sudden run on 
the food. A thoughtless word spoken in the bazaar 
might any day lead to a panic, and no consider- 
ations of the effect upon trade would restrain the 
rush that would ensue for gold. Rupees would 
appear from most unexpected quarters, and the de- 
mand would not be satisfied until the last available 
rupee was exohaged. What the effect on the money 
market woulu be can well be imagined. A move- 
ment f-ir this sort would probably be engineered by 
men like the gold dealers of Bombay, whose opera- 
tions have practically controlled the course of sterl- 
ing exchange during the past year. Were the gold 
supply to fail, the rupee would fall to a lower point 
than it has touched before, and the credit of the 
Government would be, to use a mild expression very 
seriously injured. ’ ^ 
I do not deny that a machine to save the loss by 
exchange and to remedy the evils which have arisen 
from the 1893 policy is required. £10,000,000 would 
not be too much to pay for it. The purchase might 
have been made some years ago had the Govern- 
ment placed any reliance on its efficacy, for the con- 
trivance was on view before the mints were closed 
and its action was explained by two of the members 
of the Indian Finance Committee. The Government 
elected, however, to try the most likely tool first. They 
have done so, and it has failed. The coming one may 
do the work, it is more likely to break down, but will 
