Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-08-23
ACTOF us. KEPT
INDIA IN THE WAR
Americac Saved Money
Sy stem by Releasing
$780, 900, in Silver
MADE PRICES STABLE
People Demand Coin, Distrust.
ing Notes and Checks, With
Trade Balance Growing
Special Gable to Euening Public Ledger
copyright, 1918, by the Ne,o York Times Co

Special Cable to Evening Public Ledeer
Copyright, 1918, by the Nep York Times Co.
London, Aug. 90.
Inc enormous value of the services
which the United States rendered to
india by releasing 5000, ,OOo, 900 of her
silver reserve was detailed for the first
time by Sir James Meston, Finance Mem
Der designate of the Viceroy's Council
AS result Of her archaic currency
system, India became last spring a VIC
tim of her own wartime prosperity, and
II Congress had not needed the repre-
sentations of Lord Reading she might
nave met with financial disaster. Nomi-
i'aiiy, India has an adverse trade bal
ance of about S90,000,O00. but as the
war has cut off most of her imports and
Las increased the value and number of
ner exports. the balance in her favor
Is now about four times as great as
ncr former deficit. This, of course. sent
indian exchange up, and the value of
the rupee in London, normally one shill-
ing -FOUR pence, rose steadily to one
smiling and seven pence. Things began
sto look serious for Indian exporters
VINO feared the high rate would drive
purchasers away, and the Government
took steps to fix the exchange artifi-
cially.
But this did not meet the internal sit.
uation in India. There was an absolute
lack OF rupees. Sir James pointed out
that Indian iinanciers have always been
faced by the difficulty that the Indian
masses do not understand any modern
, currency systems. Numbers of them
don't know what checks or paper money
| are. They want actual hard cash, ant
they have an incorrigiblc habit of tax.
ing silver and gold coins and beating
| them into bangles and other ornaments
| for their wives.
This Is one form of saving but the
result in India for years has been knowr
as the sink of precious metals" Under
| the peculiar circumstance of the wal
this almost resulted in disaster. Prices
| were rising, but there was actual lacl
of currency to carry on business. The
! Government tried to meet the situation
! by issuing one-rupee notes, but the peo
| pie were suspicious of them. They
| thought it meant the Government .coult
|
a serious run on the currency reserves
developed. People from the country dis
tricts were hurrying to cash their notes
| and for few weeks the Government ha'
| a very anxious time. 90
! 1t was faced with the danger of hav
| ing to declare it's notes inconvertible
! and it knew If there was a lack of silve
at any one center the result would b.
most serious. Unrest would increas
enormously, recruiting would cease JUS
when it was most needed, the manufac
ture of munitions would be interrupte,
and exports of wheat, jutc. wood. cot
ton and other necessares for the Allie
4 would stop.
7 1t was the United States that save
the situation. By passing the Pttma
act, Congress gave India an opportu
] nifty to obtain silver, and, moreover. fix
ed the price at which the Washingto
treasury was to buy silver from tn
American mines to replenish its reserve
Some of this silver is now reachtn
India, and, with the rate of silver fixed
b, the Indian Government believes its cur
rency difficulties are over.
Sir James also laid stress on the neces
sity of the Allies comng to a decisio
as to raw materials, of which they con
troll the supply. Germany. he pointe
out. was already preparing CONNER
cial campaign for the period after tn
war and from the Indian and Allie
point of view it was most important fo
the Allies to agree on policy Una
would prevent the boches from captui
ling the very valuable raw materia
which can be obtained in INDIA an
sometimes in india alone.