18th Aug. Arrer some five weeks' inaction, the Secretary of State for India has sold twelve lacs of telegraphic transfers at 1s. 8}d. The previous sale early in July at under 1s, 4d. had thrown India into hysterics, as we read in the home papers received by the Peshawur, and it had become necessary to explain that the measure recently adopted in India, the stoppage of the coinage of the rupee, was not intended to prevent the fluctuations of exchange. As the Overland Mail points out "he Secretary of State must realise his drafts at the best price he can get, and would assume a grave responsibility were he to try to force the market up by withholding them. He might find himself in an awkward position were he to allow credit to accumulate in India, and then find himself obliged later on, by a fall in exchange, which he really could not prevent, to realise at lower rates,"
While the times writes as follows (on the 13th ult.) in reference to the "very unreasonable outcry" in India "'Phis discontent seems to rest upon a misapprehension of the scope and objects of the policy adopted by the Government in accordance with the recommendations of the report of Lord Herschell's Committee. It was not intended to fix the gold value of the rupee absolutely at 16d., but to endea-your to steady it at or near that point. An impression appears to prevail in Calcutta that the Secretary of State for India has been acting unfairly in this matter, and that he was bound not to take one farthing less than the fixed rate of 16d. for the rupee. It is clear, however, that he had to take what he could get, and that this was determined not only by the currency law but by the existing state of the bill market. The rate of exchange between any two countries is not and cannot be fixed absolutely for all time. There is always a margin for fluctuation, not. a very large margin, but quite large enough to allow of a perceptible effect. Tat this is seen in the relations between England and France is a matter of everyday experience. According as the debts due from England to France are larger or smaller in amount than the debts due from France to England, the price of bills he has an enemy in Europe, and while between the two countries will vary as he is a firm member of the Tripleia matter of course. No one supposes that this is any sign of a change in the permanent value of the English sovereign or of the French franc. Indian alarmists are taking fright without cause, The gold value of the rupee is in no danger whatever from the fact that the Secretary of State has been forced to sell bills for half-a-farthing, or even a farthing, below par of exchange."
And the Globe declares roundly that the "hubbub" (in India) is simply absurd. The "Indian Government could not possibly establish a fixed ratio of exchange outside India.. The Indian Government requires eighteen-and-a-half millions in gold annually to meet home charges, and as it cannot do without this enormous supply, while holders of the metal are under no obligation to sell, the probability is that the rate of exchange will fluctuate almost as much as ever."
Text read from the printed page and cleaned; old type leaves the occasional error.