, 1900-07-05
FREE COINAGE
ABOLISHED IN FAVOR OF THE
GOLD STANDARD.
Policy Carried Out Under Unfavornbie
Conditions, But the Country Is swar,ped
with Gold and Currency Has Increased
Effect of the Change Beneficial.

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 tine past seven years on the
question of the free coinage of silver:
In 1898 the mints of India. hat 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 II has been the policy of the
government to establish its fixed value
at Is. 4d. (32 %cents). which 1t has now
practically accomplished.
: Strong objections were made to ster-
%eotyping the rupee at is. 4d., on the
ground thai the normal value of trade
required a rupee at a lower sterling
value. 1t was further urged that a
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 ain
last year causing a distressing and
disastrous famine in large areas: be-
sides, the cotton spinning and weav-
H. - --- L. ~ tAaa
critical condition the past ear 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:
Imports. Exports. Total trade
iss7-1s9s ...s2ti.5oO.ooo s27a.5oo 900 1924. 600. 900
is99-1sOO -. PSI. 100000 s24.5co.O0O b75. 100000
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 a 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-
N quired for the famine districts OF In
n dia.
But the statistics for opium do not
support the allegation that the en-
hancement 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 measur passed the 18th of last
September to make gold a 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 the report appeared. 1t was
commended in making the sovereign
legal tender. gold would be boarded
n would fail 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-
~itories. they have been nearly
swamped with it, n the difficulty
has arisen from its plethora-not from
its scarcity.
The amount of currency reserve on
April /, 1899. was about $40, 0O0, 900,
and on March Z. 1900. il was about
s35 ,000, 0e0. The amount tha. mad ac-
cumulated in London was about
s4.5O0.0 600, making an aggregate of
about s39. 500. 900.
In a country like India. where It has
been the custom of the native popu-
lation to hoard silver. 1t will take
longer to adjust itself to a gold stand
ard; but il will be seen that the gov
eminent is a~ccumulating gold. and it
is gradually going into circulation,
now being a legal tender.
By the action of the government,
India has become a gold standard. and
will gradually become a gold currency
country, as the exchange value of the
rupee is now fixed at the rate of fifteen
rupees to the sovereign (s4.S6), or, in
other words. rupees are Interchange
able at that rate at the government de-
positories, and, with normal condi
tions 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 in
deciding the fiscal policy of other
countries, for her absorption of such
ceased, though the rupee will continue
to be the currency for the smaller
transactions. its exchange value being
fixed by the government.
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