Kansas agitator. [volume] (Garnett, Kan.) 1890-1905, 1898-01-28

IN Circula lion.
India is proving the quantitative
theory of money. The gold value OF
the silver bullion in rupee is about
20 cents. The gold value of coined
silver rupee is about 80 per cent above.
A year ago its value was reported by
the United States consul to be 2S.S
cents. Writers in India are complain
ing that the rupee has appreciated
about 80 per cent compared with bar
silver and has placed the trade of In
dia at the mercy of those countries
There the silver coin used is not linz
tied in amount by closed minis, and
where the value of all silver coins
keeps on level with the value of sill
yer bullion. The gold standard advo-
Gates in both England and India know
that the cumulative theory of money
is true, and that is just the reason why
the minis of India were closed. Had
they not believed in that theory the
minis of India would be open today.
Were the cumulative theory not true,
the silver rupee would be always at
a par with silver bullion. That being
the case, closing of the minis could do
no good, for bullion would circulate as
| freely as coined rupees, and the gov
eminent might as we'll continue 10
turn bullion into rupees on demand.
But the quantitative theory being
true, the government of India decided
to utilize that fact and place great
! gulf between the coined rupees and
the mass of uncoined silver. They
said: I'VE will stop the further coin
age of silver and the supply being thus
limited demand for them as an ex-
change medium will keep them from
falling further, even though uncoined
silver continue to fall. They limited
the quantity to keep up the quality.
There is nothing behind the rupee. 1t
is itself coin of ultimate redemption.
The thirty per cent of gold value above
the value of the bullion in each rupee
is what some are pleased to call nat.
Yet that 30 per cent of fiat in each
rupee is worth gold in London.
Were silver bullion to drop in value
to nil, the rupee would not be al
fected so long as the minis were kept
closed, thus keeping down the guam
tity of the circulating medium. The
only influence that would be felt on
the value of the rupees in addition to
quantity of legal coins, would be the
"dumpy" rupees that are even now
constantly appearing there. These So
called "dumpy" rupees are coins made
illegally, presumably by connivance OF
the rajahs and others. These are
knowingly received and circulated by
the 3OO,OOO,0OO people Of India. Many
of the fair-minded English in India
say that this coinage is illegal but not
dishonest, and that the government
will never be able to suppress it. This
will always act as one factor retarding
the appreciation of the stock Of rupees.
but it is doubtful if the illegal coins
exist in numbers sufficient to produce
any very obvious effect. They influ-
ence the value of the other rupees only
as they increase the mass. Here is
another proof of the truth of the
quantitative theory. These illegal
ones circulate at a par with the legal
ones, and far above the gold value Of
the bullion in them. This is not be-
cause they cannot be told from the
others, for they are of finer silver than
those coined by the government and
are readily detected. They can be used
in all commercial transactions that do
not involve q payment to the govern
ment.
The commercial transactions of India
are of sufficient volume to keep the
rupees far above the gold value Of the
silver contained in them: for the abili-
ty of a nation to use money is de-
termined by the volume Of its CONNER
cial transactions. But what is the
volume of commercial transactions in
India compared with the volume Of the
commercial transactions in the United
States? The commerce of India is in
significant when compared to that OF
this country If the business of India
can raise the rupee 80 per cent above
the bullion value, the commerce Of the
United States can raise to a par with
gold and keep there all the silver that
could in any way or at any time find
its way into this country.
H. THURSTON.