Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1897-10-23
ENeLAHD's ANSWER
CONTINUED from page ~

rise in exchange, which If the ratio OF
15h to were adopted, would be to
about 23d. to the rupee. Such rise
ought to kill out export trade for time
at least, unless public was convinced
that the arrangement would be perma-
nent and have the effect intended.
THE paralize of trade and industry
would be prolonged and would be &C
companied by acute individual suffer-
ing. None of those advantages ex-
pected would be attained and the coun-
try would pass through critical period
which would retard it's progress for
years. The position would be disas-
trous alike to the state, to individuals
and to the trade generally. The ex-
change value of the rupee having risen
suddenly, would fall equally suddenly
to a point far lower than the present
level, probably to Cd. and even lower.
Such fall, apart from other disastrous
results, would necessitate additional
taxation to the amount of many
crores."
The reply then proceeds to point out
that the proposed agreement would be
a much more serious question for In
dia than for the United States and
France, as the whole risk Of disaster
from failure would fall upon India. If
the agreement broke down the United
States and France could take precau-
tions against a depletion of their gold
reserves, but in India the rupee, when
the collapse came would fall headlony
and the government would have no
remedy against fiuctuation in the ex-
al, Of Tn6ia'S Cfon6ord nf
value with the fluctuation in the price
of silver.
For" continues the reply, "if the
Indian minis are reopened to silver
now, it will be practically impossible
for the government ever to close them
and, if it were possible, it would only
be after very large additions had been
made to the amount of silver in circu-
lation."
After noting that the effect of th,.
adoption of the scheme would probably
be an increase in prices in France and
the United States but a decrease i'll
India" change with France and the
United States would contemplate with
equanimity, but which would be man
ifestly impossible to India" the reply
suggests, the United States is doubt
less partly inspired in making it's pro-
posals by fear of experiencing some
of the difficulties and dangers which
India has already surmounted after
years of embarrassment"
Then follows the opinion: india is on
the point of securing stable exchange
at led. per rupee, and it would be exceed
ingly foolish to throw away the position
already attained by an acceptance of pro-
lr !, ;n1, r,t1 Tod lafv
tended object, would place India perma
nently under the silver standard with all
its admitted disadvantages. Nothing but
assured success could justify India in
joining in the experiment, and our belief
is that the proposals will fail to secure a
permanent ratio of 15l2 to l. One reason
for this conclusion is that the arrange
ment would rest on too narrow a basis.
The union of two countries. with third
lending assistance. is a very different
thing from the international union of IA
majority of the important countries of
the world. advocated by the Indian gov
eminent in dispatches forwarded in
March and June, 1892, and in February
and September, 1885, We doubt whether
any two or three nations in the world.
unless one of them were Great Britain.
could establish the required stability. II
is certain that France, the United States
and India could not
The reply then presents various reasons
why the experiment would not succeed.
First. France and the United States.
seeing the prospect of a total disappear
ance of gold coinage before the price of
silver had been raised to the intended
data, might take measures to prevent the
export of gold.
Second. either country might be reduced
to a paper currency, in which case the
agreement would cease to operate.
Third three-sided agreement would be
omen to greater risk of tprmiD1 fiOn nv
one or two parties than a many-sided in
terna tional agreement: besides which.
either France or the United States might
some day think some other nation bene-
hitting at its expense and this would lead
to discussions as to the eXpediency of ter
minating the agreement, discussions only
less serious than actual termination.
For these reasons alone, without con-
sidering the objections to the particular
ratio proposed. We do not hesitate" con-
tinues the reply, ito recommend that your
lordship refuse to give the undertaking
the desired assistance. We shall be will
ing to consider what effect the co-opera-
ton of any other nations. if secured may
have on the problem. but we believe that
our best policy is to link ourselves to
Great Britain"
Then they proceed to argue that the
ratio of 15A to is too high. Differing
SO widely from the existing ratio, it would
immensely increase the difficulty In
deeu, III IL could be secured and MAIN
tanned successfully, We should object to
the ratio in the interest of Inaia, and we
recommend to your lordship in behalf of
India. to decline to participate in or to
90 anything TO encourage the formation
OF union based thereon.
AS we have already pointed out, the
sudden rise in the exchange value of the
rupee would be so disastrous to India in
dustries especially planting in which
european capital is SO largely embarked,
that, in our opinion, the true interests of
India demand that any measures to attain
stability of exchange for gold and silver.
should be based upon a rate not greatly
differing from 16d the rupee"
Having discussed the probable effect in
| various directions upon India's local in
terests. the dispatch raised a reply in the
negative, adding: I'VE presume that a
| union based upon a ratio low enough TO
suit our interests would not be accent
| able to France and the United States.''
In conclusion. the dispatch intimates
that The present proposals might have
| been favorably considered in 1892. but the
experience of the last few years has made
the position very different
| 1t also notes that THE conditions nm
der which we have had to reply to your
iordship's dispatch preclude our consult
! ing with the commercial and banking
1 communities of India. but even had an
| other reply been possible, it could only
have been after the fullest preliminarv
/ consideration by our banking and com.