Simla, 27th June.
In the nurse of the debate on Currency reforms ut yesterday's meeting of the Vicereyal Council, Sir David Barbour said:—I have an important Bill to introduce, which affects the Indian monetary standard, and as it is essential that the Bill should, if approved, be passed xt the present sit ti of the Council, I beg that the standi orders may be suspended.
The Viceroy declared the rules suspended, Sir David Barbour then said:—I nu move for leave to introduce the Bill which is intended to amend the Indian Coinage Act of 1879 und the Indian Paper Currency Act of 1882, with the object of altering the Indian monetary standard from silver to gold, It is not intended to do more at present than to stop the free cninge of ver at the India Mints, and asa provinal arrangement to provide for the issue of rupees at those Mints in exchange for gold at the rate of is, 4d. per rupee, and the making of gold coins legal tender." The tlement of the permanent rate of exchange between gold and the silver rupee and other measures necessary for the final and effective establishment of a gold standard in India will be provided for by future legislation and in the light of future expe-nonce. If it had fallen to my lot to intro-Auce this Bill some twenty yearsago no doubt that it would have been received with some surprise, and would have met th considerable opposition. It certainly would have been necessary for the mover of such " Bill to explain at great length the nature of a monetary standard, the dange which might be expected if India uni tained a silver standard, and the advantages to be gained by substituting gold for silver, and it would have been difficult at that time to have brought' forward arguments in support of so momentous a change, which would have commanded general xssent. The events of the last twenty years and the discussions to which they have given rise have, however, greatly simplified the task, Weare only too familiar with the evils from which we have suffered in recent years, and the gloomy prospects before us, if we retain a silver standard, are fully recognised. Neveitheless, the question of a monetary standard is surrounded by so many difficulties, and the change which it is now proposed to make will have such far-reaching results, that must trespass on the patience of the Council whi'e I review as briefly as may be the history of the use of precious metals as money, and show in what way and under what circumstances we have arrived ab the present position; what lies before us, if we retain the silver standard and why it is that her Majesty's Govern: me +t and the Government of India have to the conclusion that we must, attempt. the formidable task of alton the Indian monetary standard from silver to gold. Very many articles have been used as the standard of valu in diferent countries, and at different times; but for reasons which will be found in any work on money, and which 1 need not enumerate, gold and silver were sven dix-covered tu be the best materials fcr use as a standard of value and the medium of exchange in countries which had any pre-8 to civilisation, and they cane to in a special sense aa precious metals, There is no doubt that in the instance they passed from hand to and by weight as they still do in many paris of China, "In countries where buth metals are circulated in this manner trouble and contusion will arise, as have arisen the present day, from variations in the relative value of the two anetals. The rulers of such countries found it necessary to declare " ratio ut exchange at which gold and silver would be received in payment of taxes or tribute—a ratio which was declared tive an arbitrary ratio, but approx. imately the market ratio of the day—and the object of declaring it was to prevent disputes between persons who collected taxes and those who paid them, and no doubt also to get rid ut the risk of fraud on the part of tax-collectors. The fixing ut a ratio had, a8 we now know, " remarkable influence under certain conditions in pres venting or limiting " fluctuation in the relative stability; and the practice to which I have just referred is the origin of what has been known in recent years by thesumewhnt awkward name of bimetallism—a system which has prevailed in more or less imperfect form from earliest times up to " very recent period. I alall have occasion to refer at n later period to this system of using both metals xt the ratly declared by authority, but for the present T pass to the next great. step in the development standard of value and medium of circula-min, namely, the introduction of the prac tice of coining. L need not enlarge on the advantages which resulted from the intro:
this reform, as the conver is obvious of having weight and of pieces of metal in daily use as the circulate medium certified by authority, One invention leads to another, "ud from the introduction of the practice ut coining and the issue of crined money, by authority, sprang the idea of " legal tender, In very ourly times a creditor could demand his shekel of fine silver, but subsequently he became entitled under the law only to what the ruler of a country, or his officers, certified to be the shekel of fine silver, Most valuable inventions are liable to be abused, and the invention of coined money issued as legal tender has not proved an exception to the rule. As rulers in early mes were subject to no little restraint, and not usually more enlightened than their subjects, they were readily induced to make profit by certifying as (sy) a shekel of silver a coin which contained leas than the full quantity of the metal. Te was n easy transaction from a debased coin ton made of a totally different metal, and that to something which was neither or metal. The best example of proceedings of this vote which we are familint with in the present day is the issue of what is called "inconvertible paper money," or, in other words, pieces of paper which the Government of the day declares to be legal tender, but which are not convertible coin, and' opend for their value partly ona limitation of the quantity issued anc partly in the hope that they may some day be made convertible into coin on demand, Thave now shown thet progress towards
Text read from the printed page and cleaned; old type leaves the occasional error.