Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-08-10
Report of the Committee on midas
Monetary System.
CONCLUSIONS FINALLY REACHED
No international Agreement on
Bimetallism Likely.
ITS REIGN AIDE

III uipitHidttc 4udEteES copies u Tie re-
port just presented to the British houses
of parliament by the committee which in
vestigated the currency of India have been
received 1t is on this report that Lord
George Hamilton, secretary of state for
India, has based his announcement, with
In the last few days, that India would go
to the gold standard
This announcement has attracted much
attention in the United States. because of
the indirect influence it would have on the
questions of gold and silver in the United
States. Moreover, the conclusions are, to
some extent, connected with the negotia-
lions carried on some months ago by Sena-
tor Wolcott and others, representing this
country as TO international bimetallism.
The committee was made up of the most
influential statesmen and financiers of
England, and the testimony before them
was given by such eminent authorities as
Lord Rothschild, head of the great firm of
Rothschild; Lord Aldenham, former gov
ernor Of the Bank of England; the Earl of
Northbrook, former governor general of
India; Sir Alexander Mackenzie lieutenant
governor of Bengal Professor Marshall of
the University of Cambridge, and, indeed.
practically all of the students and scholars
of economic questions in Great Britain.
The sessions were private, and the testi-
mony as well as the final report, has now
been made public for the first time.
India's Monetary System.
The report first sets forth the origin and
present condition of the monetary system
of India. and then says:
I'VE proceed to consider the question
whether in the light of the six years ex-
perience gained since 1893 it is desirable
to reverse the policy initiated in that year.
and to reopen the Indian minis to the I'M
restricted coinage of silver. In our opin-
ion any measures for gradual reopening
would be so fully and Immediately dis
counted to defeat the precise objects
for which they are suggested. 1t is obvi-
GUS moreover, that the certain prospect of
heavy fall in the exchange would at once
drive capital from India.
The policy of opening the minis at some
future date to silver stands a different
footing when urged by those who look for
ward to an International agreement and
consider that there is reasonable hope of
such an agreement within limited period
Such persons aim directly at a stable ex-
change between India and the United
Kingdom and advocate delay only in order
reached.
with regard to this anticipation, we
confine ourselves here to stating that the
negotiations of 1897 with France and the
United States of America, having proved
fruitless. no fresh proposals far
are aware have been, or are being. made
by any of the governments concerned.
I'VE come next to the suggestion that the
present system of closed minis handicaps
India in her industrial competition with
countries on a silver standard. This aspect
of the question was considered by Lord
HerScE ellis committee, who expressed the
opinion that even if we assume the argu-
ment as to stimulus check to produc-
ton to be sound. the effect of each sue
cessive fall in exchange must be transitory
ana could continue until circumstances have
brought about the inevitable adjustment.
In this opinion we concur. and evidence
has been laid before us which shows that
prices and wages nave risen in China since
silver has fallen in price and the local cop
per currency has appreciated in terms of
silver"
Effect on Foreign Trade.
In this connection, touching the effect of
closed minis foreign trade, the report
quotes the opinion of the government of
India in 1892, as follows:
Il. That a country. as whole, makes
gain in its International trade by deprecia-
received for its exports is balanced by the
extra price paid for its imports.
- That the producer Of article of ex-
port may make a temporary and unfair gain
from depreciation of the standard at the
expense of his employees and of other per-
sons to whom he makes fixed payments.
3. But that this gain. while not per-
manent, is counterbalanced by tendency to
over production and the consequent reac-
ton and depression by a liability to sudden
falls in price as well to rises and by the
check to the general increase of interna-
uonai trade which necessarily results from
the want of a common standard of value
between countries which have intimate COM
mereial and financial relations"
we are unable to find that ANYTHING has
occurred since the closing of the Indian
mints to silver to throw doubt on the
soundness OF the views expressed in 1892
by the government of India
TO reopen the Indian minis to silver
without an International agreement would
necessarily result, according to all past ex-
perence in renewing the instability of ex-
changes between India and gold standard
countries. 1t is generally recognized that
fluctuations of exchange constitute an OBJ
stacle to International trade the true inter-
ests of which are to be sought in a stable
monetary power of exchange Since over
four-tifths of India's sea-borne foreign
trade is with gold standard countries it fol-
lows that the balance of advantage is heay-
| lily in favor of stability of exchange with
go1d standard countries; and, accordingiy
| considered by itself, the instability of ex-
change which must be anticipated from
reopening the Indian mints to silver, is a
powerful argument against taking this
step"
The report then discusses the principle
of gold standard and says:
A Gold Standard.
"At the present time the practical al
tentative to silver monometlIism is a gold
standard, that is to say, gold as the meas
ure of value in India, either with gold cur
rency or a gold reserve.
"Four-hfths of the foreign trade of India
is with gold standard countries, and for
this reason 1t is desirable that India should
have the same measure of value as those
countries. The change to a gold basis
has been presented to us by Prof. Marshall
of Cambridge as like a movement toward
bringing the railway gauge on the side
branches of the worlds railways into
unison with the main lines
"a further and certainly not a less i'm
portant consideration for a country like
India Is that an established gold standard
is the simplest and most effective means of
attracting capital"
After further arguing the desirability of
gold standard the report states:
For these reasons We conclude that
steps should be taken to avoid all posi-
bility of doubt as to the determination not
to revert to silver standard, but to pro-
coed with measures for the effective es-
tablishment of a gold standard"
Interior Department Changes.
The following official changes have been