Iowa state bystander. [volume] (Des Moines, Iowa) 1894-1916, 1900-07-06
INDIA'SF FREE COINAGE
ABOLISHED IN FAVOR OF THE
a GOLD STANDARD.
Policy Carried Out Under Unfavorable
Condition., but the Country II swsraped
with Gold and Currency Has Increased

Consul General r. F. Pattison, who
is at Calcutta, has reported as follows
to the state department regarding the
course taken by the government of In
dia in the past seven years on the
question of the free coinage of silver:
In 1893 the minis of India, that had
previously been open to the free coin
age Of silver. were closed, except to
such coinage as was required by the
government to supply the currency
for the business Of the country: and
since that time the exchange value Of
the rupee has fluctuated greatly, al
though it has been the policy of the
government to establish its fixed value
at Is. I'D. (32 cents), which it has now
practically accomplished.
Strong objections were made to ster-
eotyping the rupee at Is. 4d., on the
ground that the normal value of trade
required a rupee at a lower sterling
value. 1t was further urged that q
rupee appreciated to Is. 4d. would
check exports, and especially would
exercise an evil influence on the opium
trade with CHINA silver currency
country.
The policy of the government has
been carried out under the most ad-
verse conditions, the plague covering
many districts, and the failure of rains
last year causing a distressing and
disastrous famine in large areas; be-
sides, the cotton spinning and weav-
Ing industry has been In more or less
critical condition the past year. In
spite Of these conditions, the total
value of trade during the ten months
ending December 81, compared with
preceding years, has been, in round
numbers:
,s-1sss ...aaa PSe 80 s2s5ee eee @
! 'sss1 2SsS S e. Is go
1t was in its effect on the export
trade that the enhancement OF the
value of the rupee was chiefly dreaded;
but the figures do not justify the fears
expressed, although there has been a
serious decline in the export OF wheat
and OF rice, owing-as regards the lat
ter especially, which would otherwise
have been exported-to its being re-
Quired for the famine districts OF In
dia.
But the statistics for opium do not
support the allegation that the en-
hancelnent Of the rupee and the fall in
the exchange of China on India would
check the opium trade. The demand
has been brisker, and the average price
higher the past year.
! The measure passed the 18th Of last
September to make gold legal tender
| in India was the outcome Of the In
dian currency committees report, but
the government was subjected to con-
siderable pressure to defer action
when tho report appeared. 1t was
commended In making the sovereign
legal tender, gold would be boarded
and would fall to reach the govern
ment repositories, so that Its gradual
accumulation would be arrested, and
the government would be driven into
borrowing for its stock of gold: but
the measure was passed, and the re-
| suit is known. Instead of gold ceas-
ing to reach the government depos-
tories, they have been nearly
swamped with it, and the difficulty
has arisen from Its plethora-not from
its scarcity.
The amount Of currency reserve on
April /, 1899, was about $10,00O,000,
and on March Z, 1900, 1t was about
335 100000 The amount that had &C.
cumulated in London was about
34,500,0 900, making an aggregate OF
about $39, 5000
In a country like India, where 1t has
been the custom Of the native popu-
latlon to hoard silver, it will take
longer to adjust itself to a gold stand
ard; but it will be seen that the gov
eminent is accumulating gold, and ii
is gradually going into circulation
now being legal tender.
| BY the action Of the government
India has become a gold standard, and
will gradually become gold currency
country, as the exchange value of the
rupee is now fixed at the rate of fifteen
rupees to the sovereign ($4.86), or, In
other words, rupees are interchange.
able at that rate at the government de.
positories, and, with normal condi.
lions of trade, that rate will probably
be maintained.
India, which has been such a vast
reservoir for silver, now being out Of
the list of silver standard countries
must have an important influence IL
deciding the fiscal policy of othe,
countries, for her absorption Of such
ceased, though the rupee will continue
to be tho currency for the smalle,
transactions, its exchange value beine
fixed by the government.