[61]"Minutes of Evidence taken before the Committee appointed to inquire into the Indian Currency, 1893." "Report of Committee appointed to inquire into the Indian Currency, 1893." "Indian Currency Correspondence between the Government of India and the Secretary of State, 1893." "Abstract of the Proceedings of the Council of the Governor-General of India, the Viceregal Lodge, Simla, Monday, June 26th, 1893."
[61]"Minutes of Evidence taken before the Committee appointed to inquire into the Indian Currency, 1893." "Report of Committee appointed to inquire into the Indian Currency, 1893." "Indian Currency Correspondence between the Government of India and the Secretary of State, 1893." "Abstract of the Proceedings of the Council of the Governor-General of India, the Viceregal Lodge, Simla, Monday, June 26th, 1893."
[62]I may mention that formerly anyone could take bullion or ornaments in silver to the mints and change them for rupees.
[62]I may mention that formerly anyone could take bullion or ornaments in silver to the mints and change them for rupees.
[63]It is very difficult to form an accurate opinion on this point. Returns seem at first sight very conclusive, but you require a knowledge of facts which the returns do not disclose. For instance, in the Government return quoted in the "Economist" of September 30th, 1893, it would appear that, compared with 1873, there had been an enormous rise in the price of ragi—a millet which is the staple food of the people of Mysore. In the table, the prices of 1873 being taken as equal to 100, the rise from 1876 to 1880 is 209, from 1881 to 1885 the ratio falls to 103, and remains at that till 1890. Then, in 1891, it rises to 138, and in 1892 to 177. From this return the writer in the "Economist" concludes that the purchasing power of the rupee is now about 30 per cent. lower than it was in 1873. But to my mind the rupee price of ragi, judging by the returns and omitting periods of famine and scarcity, has probably only risen 3 per cent. The high price of the 1876-80 period was caused by the great famine, and the price in 1891 is to be accounted for by the partial failure of the ragi crop in that year—the country being on the brink of a famine—and this circumstance of course affected prices in the year following.
[63]It is very difficult to form an accurate opinion on this point. Returns seem at first sight very conclusive, but you require a knowledge of facts which the returns do not disclose. For instance, in the Government return quoted in the "Economist" of September 30th, 1893, it would appear that, compared with 1873, there had been an enormous rise in the price of ragi—a millet which is the staple food of the people of Mysore. In the table, the prices of 1873 being taken as equal to 100, the rise from 1876 to 1880 is 209, from 1881 to 1885 the ratio falls to 103, and remains at that till 1890. Then, in 1891, it rises to 138, and in 1892 to 177. From this return the writer in the "Economist" concludes that the purchasing power of the rupee is now about 30 per cent. lower than it was in 1873. But to my mind the rupee price of ragi, judging by the returns and omitting periods of famine and scarcity, has probably only risen 3 per cent. The high price of the 1876-80 period was caused by the great famine, and the price in 1891 is to be accounted for by the partial failure of the ragi crop in that year—the country being on the brink of a famine—and this circumstance of course affected prices in the year following.
[64]The amount that the Government would save is about 1,570,000 Rs. x.
[64]The amount that the Government would save is about 1,570,000 Rs. x.
[65]The reader will see that, for the sake of making even figures, I have taken the value of the exports at upwards of eleven millions less than they really are. The return of the trade of British India for 1891-92 is as follows:Rs. xPrivate imports81,310,119Private exports111,179,196Government imports2,844,926Government exports281,082Total tradeRs. x 195,615,323The above figures show that—The export trade isRs. x111,179,196The import trade isRs. x84,155,045Net excess exports of total tradeRs. x27,305,233
[65]The reader will see that, for the sake of making even figures, I have taken the value of the exports at upwards of eleven millions less than they really are. The return of the trade of British India for 1891-92 is as follows:
The above figures show that—
[66]I observe that one of the witnesses calculates the export tax thus proposed to be levied by forcing up the exchange to 1s. 6d. at 20 per cent., but I have obtained my figures from a highly competent authority, and I have no doubt they are substantially correct. I may add that the "Times" correspondent, telegraphing from Calcutta on October 23rd, says, "Exports cannot be profitably financed. The currency legislation alone is equivalent to 20 per cent. tax upon them."
[66]I observe that one of the witnesses calculates the export tax thus proposed to be levied by forcing up the exchange to 1s. 6d. at 20 per cent., but I have obtained my figures from a highly competent authority, and I have no doubt they are substantially correct. I may add that the "Times" correspondent, telegraphing from Calcutta on October 23rd, says, "Exports cannot be profitably financed. The currency legislation alone is equivalent to 20 per cent. tax upon them."
[67]As a set-off against the charges complained of, it should be remembered—a point which I did not take into account when formerly writing on the subject—that England bears the cost of the naval protection of India.
[67]As a set-off against the charges complained of, it should be remembered—a point which I did not take into account when formerly writing on the subject—that England bears the cost of the naval protection of India.
[68]I have since ascertained, on good authority, that, though the coffee of Brazil has not as yet come into competition with Indian coffee (as people used to the latter do not care for the former, and would not use it unless there was a very great difference in the value), the coffee from Costa Rica, Columbia, Guatemala, and Mexico (all silver-using countries) does so to a very considerable extent.
[68]I have since ascertained, on good authority, that, though the coffee of Brazil has not as yet come into competition with Indian coffee (as people used to the latter do not care for the former, and would not use it unless there was a very great difference in the value), the coffee from Costa Rica, Columbia, Guatemala, and Mexico (all silver-using countries) does so to a very considerable extent.
[69]It might be imagined from this statement that a low rate of exchange had been already setting back, or at least arresting, the hand of progress, and I therefore quote the following passage from p. 40 of the, "Report of the Currency Committee.""The following facts relating to the recent progress of India are taken from a paper read by Sir W. Hunter (one of the greatest existing authorities on the subject) at the Society of Arts, on the 16th of February, 1892."Between 1881 and 1891 the whole number of the Army had been raised from 170,000 to 220,000, and the number of British soldiers in it from 60,000 to 71,000, or, including reserves, volunteers, etc., to very much more. Many large and costly defensive works had been constructed, both on the north-west frontier and on the coast. In recent years almost all the public buildings have been reconstructed on a large scale."Railways, both military and commercial, have been greatly extended. Notwithstanding these extraordinary expenses, there were, during the twenty-five years which followed 1862, fourteen years of surplus and eleven years of deficit, yielding a net surplus of Rs. × 4,000,000. In 1889 the public debt of India, exclusive of capital invested in railways, showed a reduction since the mutiny period of Rs. × 26,000,000. The rate at which India can borrow has been reduced from 4 or 5 per cent. to a little over 3 per cent. The revenue of India, exclusive of railways and municipal funds, has grown between 1856-57 and 1886-87 from Rs. × 33,378,000 to Rs. × 62,859,000, and in 1891 it had increased to Rs. × 64,000,000, or, including railway and migration receipts, to Rs. × 85,750,000; and this increase is due to the growth of old revenue rather than to new taxation. Further, whilst the rent or land tax paid by the people has increased by one-third, the produce of their fields has more than doubled, in consequence partly of higher prices and partly of increase in cultivation. Further, in 1891 there were nearly 18,000 miles of railway open, carrying 121,000,000 of passengers and 26,000,000 tons of goods, and adding a benefit to the people of India calculated as far back as 1886 at Rs. × 60,000,000. Further, the Indian exports and imports at sea, which in 1858 were about Rs. × 40,000,000, amounted in 1891 to about Rs. × 200,000,000, and the produce thus exported has increased in quality and variety no less than in amount."What evidences of "a fatal and stunting arrestation of development"!
[69]It might be imagined from this statement that a low rate of exchange had been already setting back, or at least arresting, the hand of progress, and I therefore quote the following passage from p. 40 of the, "Report of the Currency Committee."
"The following facts relating to the recent progress of India are taken from a paper read by Sir W. Hunter (one of the greatest existing authorities on the subject) at the Society of Arts, on the 16th of February, 1892.
"Between 1881 and 1891 the whole number of the Army had been raised from 170,000 to 220,000, and the number of British soldiers in it from 60,000 to 71,000, or, including reserves, volunteers, etc., to very much more. Many large and costly defensive works had been constructed, both on the north-west frontier and on the coast. In recent years almost all the public buildings have been reconstructed on a large scale.
"Railways, both military and commercial, have been greatly extended. Notwithstanding these extraordinary expenses, there were, during the twenty-five years which followed 1862, fourteen years of surplus and eleven years of deficit, yielding a net surplus of Rs. × 4,000,000. In 1889 the public debt of India, exclusive of capital invested in railways, showed a reduction since the mutiny period of Rs. × 26,000,000. The rate at which India can borrow has been reduced from 4 or 5 per cent. to a little over 3 per cent. The revenue of India, exclusive of railways and municipal funds, has grown between 1856-57 and 1886-87 from Rs. × 33,378,000 to Rs. × 62,859,000, and in 1891 it had increased to Rs. × 64,000,000, or, including railway and migration receipts, to Rs. × 85,750,000; and this increase is due to the growth of old revenue rather than to new taxation. Further, whilst the rent or land tax paid by the people has increased by one-third, the produce of their fields has more than doubled, in consequence partly of higher prices and partly of increase in cultivation. Further, in 1891 there were nearly 18,000 miles of railway open, carrying 121,000,000 of passengers and 26,000,000 tons of goods, and adding a benefit to the people of India calculated as far back as 1886 at Rs. × 60,000,000. Further, the Indian exports and imports at sea, which in 1858 were about Rs. × 40,000,000, amounted in 1891 to about Rs. × 200,000,000, and the produce thus exported has increased in quality and variety no less than in amount."
What evidences of "a fatal and stunting arrestation of development"!
[70]This extraordinary assumption must evidently have been founded on another, if possible still more wonderful; namely that the American Government was composed of individuals so short-sighted that they would fail to take the precautions which men of ordinary common sense would be sure to adopt with the view of preventing, as far as possible, a sudden fall in the value of silver. But the American Government, as we know, naturally diminished its purchases of silver, and as no one supposes (except perhaps the Indian Government) that it can be so silly as at once to lose money and create a gratuitous disturbance by suddenly flooding the market with the silver accumulated, we see that, since the repeal of the Sherman Act, the price of silver, so far from having gone down, as anticipated by the Viceroy, has even slightly gone up.
[70]This extraordinary assumption must evidently have been founded on another, if possible still more wonderful; namely that the American Government was composed of individuals so short-sighted that they would fail to take the precautions which men of ordinary common sense would be sure to adopt with the view of preventing, as far as possible, a sudden fall in the value of silver. But the American Government, as we know, naturally diminished its purchases of silver, and as no one supposes (except perhaps the Indian Government) that it can be so silly as at once to lose money and create a gratuitous disturbance by suddenly flooding the market with the silver accumulated, we see that, since the repeal of the Sherman Act, the price of silver, so far from having gone down, as anticipated by the Viceroy, has even slightly gone up.