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States might take, and the uncertain position of finance to which this gave rise, in a country like India, was pregnant with danger; that it was "no exaggeration to pronounce such a state of affairs, from our point of view, intolerable;" that the uncertainty regarding the future of silver discouraged the investment of capital in India, and it was impossible to borrow silver except at an excessive cost; that the frontier and famine railways, and the coast and frontier defences were imperatively required, and could not be postponed indefinitely; that the abandonment of the famine and frontier railways already in hand would be a wasteful measure, if not a practical impossibility, and even a temporary check in their progress was greatly to be deprecated; that large sums required by municipalities for sanitary arrangements were subject to heavy and increasing rates of interest, mainly caused by the prevailing distrust of silver securities and the uncertainty regarding the future; that the interests of the European officers of government also demanded recognition, as the cost of remittances formed a heavy item in their expenditure, and officers whose pensions were fixed in rupees found their resources seriously crippled on retirement and return to England, whilst the increased income tax that had become necessary fell with severe incidence on those who had already suffered largely by the fall of exchange; that the question of future relations of gold had been allowed to drift for fully twelve years; that recent events had brought into greater prominence the evils with which the world is threatened by the state of the currency, and the Government of India was of opinion that it was a favorable time for reopening the whole question.

The evils connected with the present state of affairs were so serious that the adoption, sooner or later, by international agreement, of measures which should bring about a stable ratio between gold and silver appeared to be only a question of time, and the sooner it was taken in hand the easier would be the task and the more satisfactory the result.

The Lords of the Treasury replied to this in a very extraordinary dispatch.* They objected that the Government of India offered no definite indication of the nature of the international agreement which should supply the solution of the question. They quoted the utterances of Mr. Goschen and Mr. Gibbs at the International Monetary Conference of 1878 to prove that a fixed ratio between gold and silver was impracticable, although it was notorious that since that time Mr. Gibbs had not only publicly recanted that opinion, but was a strong supporter of the opposite view, and that Mr. Goschen had entirely modified his views on the subject.

The Lords of the Treasury further added that whilst it was admitted that some benefits might be derived by the European officers of government from the remedy proposed, it would exercise an injurious effect on the Indian taxpayer; that monetary changes of so grave a character ought not to be discussed unless there was a reasonable ground for anticipating a practical result; that nothing had been said about the reduction of expenditure, although it might safely be concluded that the control of its expenditure was far more within reach of the government than the regulation of the market value of the precious metals; that her Majesty's government would take no measures for summoning or cooperating in a new monetary conference until they had previously determined what policy they would initiate or could consent to, and that there was nothing in the correspondence which should induce them to depart from the instructions given to their delegate in 1881.

In September, 1886, at the request of the Royal Commission appointed to inquire into the depression of trade, a Royal Commission was appointed to inquire into the recent changes in the relative value of the precious metals. The commission was composed of twelve members impartially selected

* The whole of this correspondence was published in the Indian Pioneer of July 5, 1886.

and consisting of a fair proportion of monometallists, bimetallists, and those who had no particular bias. After patient investigation extending over a year and a half, six members of the commission agreed to recommend the adoption of bimetallism by England in conjunction with the other leading nations, while the remaining six members, though declining to concur in this recommendation, were nevertheless irresistibly led by their investigations to admit in full every principle for which the bimetallists contend. They admitted:

1. That there had been a considerable increase in the use of gold for currency.

2. That the evils of fluctuation are undoubted.

3. That the want of a fixed ratio constitutes a very serious evil.

4. That the bimetallic system of France exerted a considerable influence on the relative value of the two metals.

5. That notwithstanding changes in the production and use of metals, the bimetallic system of France kept the market price of silver approximately steady at the ratio of I to 15%.

6. That it is reasonable to suppose that the bimetallic system of France should be capable of so maintaining that ratio.

7. That the Latin Union in 1873 broke the link between gold and silver, and when this link was broken the silver market was open to all the factors that affect the price of commodities.

8. That, as far as they could forecast, if international bimetallism were accepted by the United Kingdom, Germany, the United States, and France, a stable ratio might be maintained.*

* Two of the members expressed a doubt on this point. One of these (Sir John Lubbock) has since endeavored to weaken the force of this admission by arguing that "the report had not stated that a stable ratio would be maintained but that it might be maintained, two very different things"-but the context does not support this contention, for the paragraph continues thus: "We think that if in all these countries gold and silver could be freely coined and thus become exchangeable

9. That there is no danger of a disappearance of gold under a bimetallic system.

10. That it might be difficult to suggest any motive to induce a contracting power to secede from international bimetallism.

II. That they were alive to the advantage of the adoption of a uniform bimetallic standard, as a step toward the adoption of a common international monetary standard.

12. That no measure has been suggested that claims to be anything like so complete and thorough a remedy as the adoption of the system known as "bimetallism."

Notwithstanding these important admissions in favor of bimetallism, these six gentlemen were not prepared to join their colleagues in recommending that England should negotiate with other nations a treaty embodying a bimetallic arrangement. Their principal reason for refusing to adopt the admitted remedy for the evils which they acknowledged to be consequent on the demonetization of silver in Europe, is a vague, unreasoning and undefined dread of some imaginary evil, a fear that the change proposed is a "leap in the dark," that the public mind is not prepared for it, that the "novelty of the proposal would excite apprehension," that the matter needs "much more discussion and consideration in the financial world and by practical men than it has yet received." But to return to a system which has been proved by the experience of three-quarters of a century to have been eminently successful, can scarcely be classed under the category of a "leap in the dark; moreover, further discussion can scarcely have been needed after nearly two years patient investigation which has thrown a flood of light on the subject, and has practically converted the monometallists of the commission into timid bimetallists.

against commodities at the fixed ratio, the market value of silver, as measured by gold, would conform to that ratio and not vary to any material extent."

One of these six members-Mr. Leonard Courtney, M. P., has subsequently declared in public that he now favors the adoption of an international agreement, on a bimetallic basis.

Important as were the admissions of the members of the Royal Commission, the government has taken no action whatever in regard to their report. In 1890 the prospect of legislaation paving the way to free coinage of silver in the United States, caused an appreciation of silver to an extent of twenty-five per cent, but as soon as all hope from such legislation was disappointed, the price of silver again fell back to its former level. Sir David Barbour, the Finance Member for India, has stated that this appreciation of silver was attended in India by a trade depression which, doubtless, if the appreciation had continued, would have extended throughout the country and influenced prices and wages; but an appreciation of the standard is not immediately followed by a fall of retail prices, still less by a fall of wages which follows more slowly. The accumulation of silver in the treasury was unprecedented; and the rate of discount lower than had ever been known; and as Sir David Barbour has remarked, "the appreciation of the standard is not necessarily attended by a positive and manifest scarcity of the metal, leading to a want of current coin to carry on the ordinary transactions of daily life. It does not affect retail transactions sooner than wholesale transactions; it does not lead to a scarcity of metal in the bank, and is not accompanied by a high rate of discount. On all these points the conclusions to be drawn from recent events, are in full accordance with the principles of what I will call orthodox political economy, and are fatal to the contentions of those who lately argued that there could have been no appreciation of gold, in reliance upon certain phenomena which, if they had been able to interpret them correctly, would have proved the exact contrary of that for which they were contending." In 1892, the Government of India stated that they had always been desirous of aiding the settlement of the silver question by an international agreement, and they implored the Home Government to withdraw from its attitude of hostility to international bimetallism, and so remove the only obstacle that stood in the

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