Aprjl I. 1898.] THE TROPICAL 
•inment, the critical condition o£ the producer's in- 
terests in Ceylon and in India, as well as the ur- 
gent necessity for action without delay. As lar. 
T. N. Christie well remarked in 1893 : — '■ The interests 
of every class in the colony are wrapped up in its 
producing interests.’’ 
Before dealing with the second paragraph of your 
letter of the 3lst January 1898, it may be convenient 
and useful if I briefly state what has been done by 
the Planters’ Association of Ceylon, on the subject 
hitherto. In August 1893, the following resolution 
passed at a general meeting of the Planters’ Asso- 
ciation was forwarded to Government : — 
Resolution referred to. — “ That the Government be 
urgently requested to take immediate steps to appoint 
a Commission to consider and report upon (1' the 
probable effect in Ceylon of the recent action of the 
Indian Government in putting an artificial value on 
the rupee; (2) the measures which it may be expe- 
dient to take to protect the interests of the colony 
under the altered nature of the currency, as, in the 
opinion of the Association, the prosperity of the 
colony has been seriously endangered.” 
Ih reply Government stated that a Commission 
would be appointed to enquire and report as to the 
robable euect in Ceylon of the recent action of the 
ndian Government in restricting the coinage of ru- 
pees and the measures which it may be expedient 
to take to protect the interests of the Colony, in 
consequence of the altered nature of the currency 
while Government guarded itself from being under- 
stood to express any assent to the opinions expressed 
in the last paragraph of the resolution quoted above. 
In this connection attention is also invited to the 
Marquess of Ripon’s despatch, on the subject dated, 
Downing Street, July 7th 1893, and to the action of 
the Ceylon Association in London — Sir Arthur Gordon 
(njw Lord Stanmore) addressing a general mee'ing 
of the Association said, “The moat important subject 
that has engaged our attention, as it must have en- 
gaged the attention of all engaged in Eastern affairs 
is the great silver qnestion. We now know that Lord 
Herschell’s Committee has made its report, and that 
the report has been sent out to India for consider- 
ation of the authorities of chat Country.” It is sa- 
tisfactory to record that several gentlemen i-epresn- 
tative of Ceylon’s producing interests, gave evidence 
before Lord Herschell’s Committee. 
The Ceylon Silver currency Commission reported 
to Government in February 1894, and since then 
many of the conclusions arrived at by the Commis- 
sion have been verified and few, if any have been 
disproved. The Association therefore considers that 
the Silver Currency Commission’s Report 1891 shouH 
form an important document on which a case can 
be prepared to prove the detriment to the produ- 
cing interests of Ceylon and India caused by the actoin 
of the Indian Government in putting an artificial valae 
on the rupee. The Planters’ Association proposes 
to approach the Secretary of State for the Colonies by 
Memorial, also to secure that a deputation from 1 he 
Ceylon Association in London shall wait upon him 
thereon, and will further urge the Governor of Ceylon 
to write a despatch to the Secretary of State on 
the subject. As Ceylon has, of course, no locus standi 
with the Secretary of State for India except through 
the Colonial Office, the Planters’ Association may 
not accordingly be able actually to combine with you, 
nor perhaps to advocate the precise measures which 
you suggest, but its action will be contemporaneous, 
and will have practically the same object in view. 
Adverting to the second paragraph of your letter 
under reply the Planters’ Association is in full agree- 
ment with the conclusions expressed in paragraphs 
14-20 and 24-28 of the Ceylon Silver Currency Com- 
mission Report hereto appended for reference, and 
need only point to the diminished dividends declared 
by local Tea Companies in 1897-1898 notwithstanding 
increased crops. That this diminished profit in the 
tea industry caused, in a large degree, by high ex- 
change has very seriously checked further extensions 
of tea cultivation admits of no doubt. 
AGRICULTURIST. 715 
It is surely almost unnecessary at this date even 
to indicate that competition with silver-using coun- 
tries where the currency is a bullion value, currency 
Will soon be impossible by virtue of the enormous 
difference between the bullion value and the artificial 
value of the rupee amounting at the moment to 
about 60 per cent, and it is incredible that the Indian 
Government is not well aware of that. It is an 
unfortunate fact in the case, that the millions of 
India, who are the ehief sufferers, are quite incapable 
of understanding the cause of their reduced profits 
and trade, and even if thev did have ho means of 
immediately making their voices heard; while the 
few who are gainers by the high rate of exchange are 
not only intelligent and educated but are intimately 
connected with the Government itself, or are suffi- 
ciently strong to influence the Government. It is a 
significant fact that those who without question gain 
most by a high exchange are European Govern- 
ment Officers, and that those are the strongest advo- 
cates of the present policy of the Indian Govern- 
ment in the face of such representations as the 
producing interests can bring and have brought 
forward. 
It is probably an erroneous assumption that the 
rupee would ever have fallen to its present builion 
value (say lOd), and that if it had, the Indian 
Government would have been unable to meet its 
liabilities and it is probably correct that if the mints 
were reopened there would be an immedate rise in 
the price of silver, and therefore of the bullisn 
value of the rupee. Again had the Indian Govern- 
ment by its action not so severely crippled all the 
producing industries of its country, the popnlation 
would have been in a condition to bear some addi. 
tional taxation, indirectly, perhaps by means of an 
export tax. 
All are agreed that cheap capital is absolutely 
necessary to develop the resources of CeylOh as of 
India and that staple exchange will tend to attract 
capital. Capital however seeks profits not stability of 
exchange alone and where here are no profits capital 
will not flow. Moreover the high rate of exchange 
mduces the witdrawal of capital to London and 
hinders its return to India for the simple rsasons 
that vnth diminished or no profits there may also be 
loss oj capital in getting it back again. Capital will 
inevitably flow where there is most profit and 
prosperity, but apart from this, stability of exchange 
is just one of those objects of the policy of the In- 
dian Government which it has certain not attained.' 
One of the worst features of the case is that the 
Indian Government by its action has rendered 
remedial steps exceedingly difficult. Having paralysed 
the producing industries, an export tax must tempo- 
rarily be severely felt. Having closed the mints and 
raised the price of the rupee as well as depressed the 
Value of silver, it is difficult, if not impossible, to re- 
open the mints without inflicting enormous loss on 
holders of merahandise for the time being. 
In conclusion the Association would draw your 
attention to the report of Mr. David Yule’s speech at 
the meeting of the Calcutta Bank, January 26th, which 
commends itself as an able exposition of the case from 
the producer’s point of view. 
Mr. Yule among other matters, emphasis the want 
of confidence that prevails, and how essential it is to 
establish confidence. When confidence is established 
the Planters’ Association agrees in believing that 
capital would again flow freely to Ceylon and India 
that probably the only sensible remedy to the present 
unfortunate position of India and Ceylon is to gradu- 
ally to re-open the mints to the coinage of silver 
under certain conditions. In view of the different 
conditions prevailing in Ceylon, and that this Colony 
should not be involved in the same financial disaster 
as the Indian Government were the rupee to fall to 
its intrinsic value the Association would not be ore- 
pared to join in a request for the imposition of an 
export duty on produce. — I am, dear sir, yours faith- 
‘““y- A. Philip, 
Secretary to the Planters’ Association of Ceylon. 
