What then would be the cash effect (1) on the finances, and (2) on the people, were the Government successful in forcing up the gold value of the rupee by one rupee a sovereign? The saving that the Government would effect in remitting money to England to pay home charges would amount to about L1,570,000,[64] but as the amount is liable to loss by exchange we must make a deduction, and, in round numbers, the sum that the Government would save is about a million and a half sterling. Now as to the people of India. What the Government gains, i.e., a rupee a sovereign, the seller of produce must lose, as exporters could afford to give them just so much less than they now do. Now, taking the exports of India at one hundred millions,[65] the currency measure of the Government would cause a loss to producers of 7 per cent., which is equivalent to a tax on the exported productions of India of seven millions. The result of course is, that to get little more than one million and a half into the Treasury, the Government proposes to take seven millions out of the pockets of the people. Now I have no wish to pose as what is commonly called an expert, and I naturally shrink from any idea of criticising that long chain of financial luminaries which, beginning at the Council Chamber at Calcutta, stretches through the rooms of the Currency Committee which recently sat in London, right up to that Cabinet over which the greatest of financial luminaries presides, but I trust I may be allowed to go as far as to say that the arrangement made by Mr. Gladstone's Government which is the body ultimately responsible—does not seem to be of a very alluring character, as it entails on India, viewed as a whole, a loss of L5,500,000. And this cheering result has apparently been viewed with such satisfaction by the financial experts, that it is to be regarded as merely a small instalment of the blessings they have in store for the happy toilers whose destinies they have been empowered to influence. For if the policy of taking five and a half millions sterling out of the pockets of the people in order to put about one million and a half into the financial till is a good one, the extension of the process, up to certain limits, must be equally so. For such an extension the Indian Finance Minister is evidently prepared, as one may see by looking again at the sentence I have quoted from the speech, in which he declares that "it is not intended to do more at present (the italics are mine) than aim at a rate of 1s. 4d." This, coupled with statements subsequently made, and by what the Currency Committee has suggested as to a farther increase if it should seem necessary, shows that the Government evidently contemplates a rise to 1s. 6d.; and indeed this must obviously be the case, as the anticipated gain from a rise to 1s. 4d., when put against the probable loss on opium, and the allowances to be made to Government servants to compensate them for the loss they sustain on home remittances, would go far to swallow up the gain to the State from a 1s. 4d. rate. Supposing, then, that the Government should be able to carry out its project of a 1s. 6d. rate, the blessings previously showered on the producers will be trebled; so, of course, will be the gain to the Exchequer; and the account will then in round figures stand thus:—gain to the Exchequer on home remittances, L4,500,000; loss to the producers, L21,000,000; or, in other words, the levy of an export tax of 21 per cent. on all the productions of India,[66] and a total annual loss to India considered as a whole of L16,500,000 sterling. This seems pretty well for a beginning, but it is really a very small part of the results that may with certainty be anticipated from the measure, which, as Sir David Barbour says, will have far-reaching effects. Of this, as we shall see, there can be no doubt whatever. Of the direct loss we can form a rough calculation; the indirect losses are indeed incalculable. But let me proceed.

We have seen that, at the least, the Government proposes to impose, and will impose if it can force up the exchange, an export tax (or what is practically an export tax) of 7 per cent., which is to be ultimately raised to 21 per cent. And we have now to follow out the effects of this on the producers, the people generally, and the financial prospects of the State.

The producers in India of articles for foreign export either, as the planters generally do, send their produce for sale to London, or, as the main body of producers do, sell them to merchants who export the goods. Both these classes of producers are of course much benefited by a low rate of exchange—the former when they sell in gold and remit money to India to pay for the up-keep of their estates, and the latter when they find that the merchant can afford to pay more rupees than they could when exchange was higher. If then, to put the case in a more precise way, the Government succeeds in forcing up the gold value of the rupee, and the merchant is thereby compelled to turn his sovereign into 15 rupees instead of 16 rupees, it is obvious that to make the same profit as before he must give the seller of produce one rupee less. Now let me take the business with which, as a planter, I am most familiar. I have roughly estimated the total value of the coffee annually produced in Mysore at L870,000, and if, for the sake of even numbers, we knock off L70,000, a 7 per cent. export duty on this will amount to L56,000, and if the Government could raise, as it proposes, the rupee to 1s. 6d., L168,000 a year would be the price that the measure would entail on a portion of the inhabitants of the native state of Mysore on this single article of export. But this direct cash loss is far from being all; and if the reader will turn back to the Introductory Chapter, and to that on Coffee Planting in Coorg, he will there find an explanation of the extraordinary effect produced by the introduction of capital into the rural districts of India, and of the remarkable effects it produces on the prosperity of the people, the development of the agricultural resources of the country, and the finances of the Government. But, for the convenience of the reader, I may briefly repeat here what I have pointed out in greater detail in the chapters alluded to.

From the estimate given of the profits of well-managed European plantations which have been formed on the best land (vide chapters on Coffee Planting in Coorg, and in Mysore), it is evident that, though these would be greatly injured by the exchange being forced up, they could still make fair profits; and, indeed, it is conceivable that, from the losses that the Government measure would entail, they might ultimately be in as good a position as they are now; for there are large amounts of poor lands which, if the Government policy is pursued, would be thrown out of cultivation, either partially or entirely, and the diminished production and demand for labour would, of course, be of great advantage to the estates which survived. And what would largely accelerate the decrease of cultivation would be the fact that if the exchange is forced up all confidence in the Government will naturally be shaken. For how can producers have any confidence in a Government which, instead of levying on the country as a whole the increased taxes it requires, seeks to attain its financial ends by manipulating the currency in such a way as to reduce to the producers the prices of the commodities they grow for export? And if the gold value of silver is to be forced up to 1s. 4d., and with the declared possibility of its being forced up to 1s. 6d., what is more likely than that the Government may persevere with this disastrous policy whenever it again finds itself in financial straits? And is it not evident that the present financial policy of the Government, and the possibility of its being further pursued, must give that shock to confidence which will at once repel capital and injure credit? And is it not equally evident that if the gold value of the rupee can be forced up in the manner proposed, the first effect of this will be shown in a large decline in the demand for labour? Now, as pointed out in the chapters previously alluded to, the results of an increased employment of labour are quite different from what they would be in England, where an increase of employment given to labourers merely means an increase of comfort amongst the working classes, and of the profits of the shopkeepers with whom they deal. For in India, the introduction of capital to be spent in labour in the rural districts means a social revolution, as large numbers of the labourers set up as cultivators the moment they have saved enough capital to do so. In some cases they give up working for Europeans, in others they combine agriculture with occasional months of work on the plantations, or other sources of employment; the whole lower classes of the people are thus elevated, and this tells at once on the finances, enabling (1) rents to be more easily paid, and (2) because the finances improve as more land is brought under cultivation. Now, not only would a large diminution of employment take place in connection with coffee-planting were exchange forced up, but the same cause would act on the growers of pepper, cardamoms, and other products, and the prosperity of the province would be thrown back, and the same kind of result would obviously occur in any part of India which grows articles for export.

But there is yet another result from this truly far-reaching measure, as Sir David Barbour justly calls it, which to my mind is the most important of all—the bearing of it on famines; for we all know that the population is rapidly increasing, and that of all apprehensions which haunt the minds of those responsible for the safety of India, those as regard famines are by far the greatest. And here I must ask the reader to turn back to my Introductory Chapter, and consider the facts relating to famines—facts which show how constantly the fear of famine lies before the Indian administrator, both from a financial and humane point of view. I ask him carefully to survey these facts, and then consider what effect the forcing up of the gold value of the rupee is likely to have on famine-producing causes. And is it not evident that the effect of the measure in diminishing the demand for labour must be enormous; that if less money is spent on labour, less will be spent in improving and developing the agricultural resources of India, in digging wells and other famine-preventing works; and that if the labourers fail to find the amount of employment they can now readily obtain, the greater will be the financial burden thrown on the hands of the State in times of famine and scarcity? And must it not be equally evident to anyone possessed of the humblest form of human reason that the Government had far better exhaust every taxational resource before embarking on a course which, if the anticipations of Government are realized as to silver, will be ruinous to the country, and which, at a vast direct and indirect cost to the people, will only, as I have shown, afford a comparatively speaking trifling financial relief to the State? But it is time now to pass to other points connected with the measure. And first of all let us glance at the evident political results that must arise from it.

From what has been previously said, it is evident that the Government has arrayed against itself every class in India excepting its own civilian and military servants, and to these we have only to add, not another class, but only a small proportion of the mercantile class. With the exception of some just complaints they had to make as regards charges[67] that had been unjustly thrust on the Indian Exchequer, and which I myself made in the "Times" and elsewhere long before the Congress was even thought of, the agitators of the Congress had no serious grounds to go upon. But who can say that now? Up till lately there was no cause for discontent. India has never been more prosperous, and has never shown greater, or nearly as great signs of progress, as she has within the last twenty years. Not only has the demand for labour been abundant, but in many instances it has exceeded the supply. The rates of wages had largely increased, and were producing, as I have previously shown, an accelerated quickening of attention to the development of the resources of the soil. All that the country wanted was to be let alone, and if the financial conditions required increased taxation, no agitator could have successfully complained of this, seeing that it could only have been imposed on account of that cheapening of silver which has been one of the great causes (railways were the other) of the increased prosperity which all classes have enjoyed in recent years. But, if the Government measure raises the gold value of the rupee, the agitator will be able to point out that, at an enormous cost to the producers of India, the Government has only obtained a most trifling financial relief, and be able to complain with justice that the Government has lessened the profits of the agriculturist and diminished the employment for labour. What an admirable advantage has the monetary measure of the Government conferred on the popularity of British Rule in India!

I have alluded to the losses that the measure must inflict on the planters of Southern India, and my remarks on that head apply equally to the tea-planters of India; but the latter have, besides, a special grievance which they share in common with the tea-planters of Ceylon, and this grievance is also shared in by the coffee-planters, though, as far as I can see, hardly to the same extent. This well-founded grievance lies in the fact that if no international agreement (and there seems no probability whatever of such an agreement ever being come to within any time to be even guessed at) is come to between the silver-using countries in the East, the tea-planters of India and Ceylon will be brought into unequal competition with their rivals in China, and the coffee-planters of India and Ceylon will in like manner be unfairly weighted in their competition with the coffee producers of Brazil. With reference to the tea-planters of India and Ceylon the case is very clear, and it is perfectly obvious that if in India you have silver artificially raised in value relatively to gold, and that in China silver remains unprotected, the Chinese will be able to accept a smaller gold value for their tea than the Indian producers, and the difference in the exchange may be such that China may regain her former position in the tea market, and that Indian teas may be partially driven from the field; and if we add to that that the Indian tea-planter will, in consequence of exchange being forced up, have fewer rupees to pay his coolies than he has now, it is evident that the result of the Government measure will be most serious to this industry. The evidence (Currency Committee) that relates to Ceylon is very decisive on this point, and the witnesses examined with reference to tea expressed extremely depressed views as to the ruinous results that must arise if the monetary policy of the Indian Government can be carried into effect. From the correspondence that has passed between the Government of India and the Secretary of State for the Colonies, it would seem that India has no objection to Ceylon establishing its own mint for the coinage of silver (the silver coins at present in use in Ceylon are rupees) and the island would then be in the same position as other silver-using countries. But if Ceylon starts its own mint, and is thus able to prevent the evils of the artificial scarcity of silver to be created in India with the view of forcing up the gold value of the rupee, then it is plain that Ceylon tea-planters would retain their present advantages, which arise from a low rate of exchange, and thus be able to carry on their business on far more advantageous conditions than their Indian rivals.

To estimate the effect on the Indian coffee-planters with reference to the effect of the monetary policy of the Government in placing the Indian at a disadvantage as regards his competition with the Brazilian planter would be difficult, and I am not in a position to form a decisive opinion on the subject; but I may mention that the manager of the London and Brazilian Bank informed the Currency Committee that the production of coffee in Brazil has largely increased, and will still further largely increase, owing to the greater facilities of communication, and also the direct influence of a low rate of exchange. The last-mentioned fact gives, I may observe, one more instance of the direct effect of a low rate of exchange in stimulating production, and so swelling the volume of exports. If, then, the Brazilians are to retain, and we are to lose, the benefits of the cheapness of silver relatively to gold, it is evident that the coffee-planters of India must be handicapped in their competition with those of Brazil; but I do not hazard a decisive opinion as to the exact weight of the competition, as I am uncertain as to how far our quality of coffee comes into competition[68] with the quality produced in Brazil.

I must now at least allude to the effects of the measure on the trade, manufactures, and railways of India. I regret that I am unable to go more fully at present into a consideration of the effects on them of this ill-starred measure, but all that the general reader requires to know is, to use the words of Sir Frank Adam (one of the most important witnesses examined by the Currency Committee), that if the Government succeeds in forcing up the gold value of the rupee, China would be able to undersell India in tea and rice; the Bombay manufacturers would receive fewer rupees for their wares, and, as in the case of opium, the advantage would go to the Chinese and Japanese; the railways would have little to carry from the interior if the rupee prices went down. Finally, I may observe that the gold industry of India would be largely injured, and that, especially, mines struggling towards a successful issue would be seriously hampered if the gold value of the rupee were forced up.

Brief though my survey of this great subject may be, I trust I have said enough to expose the harmonious rottenness of the monetary policy of the Government, and by this I mean a rottenness so complete that it is impossible to find a single redeeming feature in the measure that has been adopted. It is rotten economically, it is rotten financially, and it is, if possible, still more rotten from a political point of view. Those who have knowledge enough to understand the bearing and ultimate evil effects of the measure are angrily arrayed against the Government now, and when the ryots and labouring classes of all kinds experience the fall in prices and dearth of employment that will assuredly follow if the Government should be able to force up the gold value of the rupee, and are able to trace this to the action of their rulers, widespread and serious will be the abiding discontent which will take possession of the people.

I cannot conclude this short notice of a great subject without commenting on what, at first sight, seems the remarkable fact, that the Government in India, as represented by the Viceroy, and those merchants who are represented by Mr. Mackay, President of the Currency Association, have admitted that a low exchange has been a stimulus to the progress of India, and that producers have gained by it. It is true that the Viceroy declared in his speech in Council of June 26th, 1893, that "to leave matters as they were meant for the country as a whole a fatal and stunting arrestation [sic, probably a misprint for arrestment] of its development."[69] But the cat escapes later on in the speech when a hope is expressed that one of the effects of the measure will be "that capital will flow more freely into the country without the adventitious stimulus which we have hitherto been unable to refuse." The Viceroy thus admits, what everyone knows, that a low exchange has acted as a stimulus to the progress of India, and in doing so has given away the whole case for the Government. But no one has ever denied the admission in question except Mr. Mackay; and his absolute denial, when questioned on the subject, that the producers of India would be affected by the measure, was subsequently eaten up by himself in cross-examination towards the close of his evidence given before the Currency Committee. But it is of course the rule, to which there are few exceptions, that those who are engaged in the unfortunate business of bolstering up an indefensible case, invariably let out something which is absolutely destructive to the cause they are advocating; and we find another instance of this at p. 191, Appendix I. of the "Report of the Currency Committee." And if Mr. Mackay has given away the whole case in London, one of his followers equally did so in Calcutta when a deputation, headed by Mr. Mackay, was received by the Viceroy. And on this occasion Mr. W. O. Bell Irving, as representing over 3,300 square miles of land in Lower Bengal, stated that he "was not prepared to contend that in certain respects the ryots and zemindars have not benefited from the depreciation of the rupee." We thus see that both the Government, as represented by the Viceroy, and the most active supporters of the present monetary policy, have admitted that the measure would have injurious effects on the producers of India—in other words, on those on whom the financial stability of the empire entirely rests.

And the producers of India have as little reason to be satisfied with the action of the Currency Committee which was presided over by Lord Herschell as they have with the Government in our Eastern Empire. A glance at the first page of the Report, and at the professions of the witnesses examined, will show that this is the case. The Committee was requested by Mr. Gladstone's Government to form, inter alia, "a just estimate of the effect of a varying, and possibly much lower exchange, upon the commerce and people of India." Now, the people of India almost entirely live either directly (and I think about ninety per cent. do so directly) or indirectly on the land; and yet, though in England there are to be found persons who, like myself, are Indian landowners, and who, from having lived amongst the people in the rural districts, are well able to testify to the effects of the measure on the welfare of the people, not a single Indian landed proprietor was called before the Committee. If a Parliamentary Committee were called upon here to consider any proposed measure that would widely effect the people of England as a whole, and the landed classes in particular, would it not be scandalously unjust if not a single landed proprietor, or any person directly or indirectly connected with land, were requested to give evidence before it? But notwithstanding that a certain proportion of the witnesses were Indian officials, and that the examination of representatives of the classes chiefly concerned (the producers) was carefully left out, the weight of the evidence was entirely against the monetary policy of the Government. And yet the committee supported the Indian Government. So that this measure has been passed after a partial investigation, during which the most important points that ought to have been minutely examined were never even touched upon, and even then in the teeth of the majority of the witnesses examined, and whose opinions, from their character and position, were of great value. Were it not that the Committee was composed of English gentlemen, who would not wittingly do anything but examine into matters to the best of their ability, it would really seem, after a careful survey of the whole situation, as if this Committee was a mere sham got up as a shield to protect a foregone conclusion.

There can be little doubt that the Indian Government and the Currency Committee were acting under the idea that (1) India had been pushed into a financial corner, and (2) in fear of the result of the probable repeal of the Sherman Act in the United States; and so, urged on by a panic-stricken feeling to rush somewhere, the Government began in haste to burn the whole house down in order to roast its financial pig. As to the first point, the state of the finances in India no doubt requires all the care and economy that can be exercised; but to imagine, as many people seem to do, that it has exhausted its taxational resources, is ridiculous. The salt tax, taking the price all over India, is lower than it was fifteen years ago, and this could be raised without hardship to the people. Import duties might be imposed to the amount of several millions. Then, considerable charges now defrayed from current revenues might be passed to capital account, as they would be in England. And if the worst came to the worst an export duty of three per cent. might be imposed, for though is would not be good policy to do so, it would still be better than the seven per cent. export duty the Government would practically levy were exchange forced up to 1s. 4d., and obviously very much better than the twenty-one per cent. export tax which the Government evidently look forward to, for, as we have seen, it is aiming at a 1s. 6d. rate. A large saving, too, might be effected by going back to the old system of having a local European force in India. Let anyone consider these points, and weigh the remarkable and interesting statement quoted from Sir William Hunter, and he will at once see that the condition of India generally is full of hope (or at least was so till the monetary policy was announced), and that its taxational resources are by no means exhausted. It should also be considered that as the Government has not only spent large sums in recent years in defensive works and public buildings, and at the same time paid off debt to the amount of twenty-three millions, it would be perfectly justified in borrowing, if it were necessary, in order to meet temporary difficulties.

Now let me turn to what is the dominant cause of the monetary policy of the Government—the dread that if the Sherman Act were repealed exchange might sink even as low as a shilling per rupee.[70] What if it did? Let us examine the consequences of that to India considered as a whole. The apprehension in question was proclaimed in the Viceroy's speech of June, 26th, 1893, and in considering the consequences of a 1s. rate of exchange, he pointed out that this would entail an increase of Rs. x 7,748,000 in the remittances required to be made for the home charges of the Government, being, curiously enough, almost the exact sum which the people of India would lose on their exports were exchange forced up to 1s. 4d. by the monetary policy of the Government. But as the producers of India would gain largely by the 1s. rate of exchange, the total account would stand thus:—loss to the Government say, for the sake of round figures, seven millions; gain to the producers, twenty-one millions; total gain to India, considered as a whole, fourteen millions. So that if the very worst anticipations of the Government were realized India would be a large gainer by the fall to a 1s. rate of exchange, and the finances could be squared by increased taxation, which, if levied considerably on imports, would be distinctly a popular measure. And, in any case, the agitators could have no ground to go upon, as I have shown, as the increased taxation could be amply justified.

One word more. I cannot refrain from calling attention to the remarkable circumstance that Mr. Gladstone's Government has in a single year adopted two measures which are highly objectionable from political, economical, and financial points of view—the Home Rule Bill for Ireland and the Currency Measure for India; and that both were forced on by arbitrary and tyrannical action. For just as the Home Rule Bill was forced through the House of Commons with inadequate examination and discussion, so was the Currency Measure forced through, not only without adequate investigation, but in the teeth of the majority of those whose opinions were laid before the Viceroy, and in the teeth of the majority of the witnesses examined before the Currency Committee. But arbitrary and tyrannical action seems to be the order of the day with the Gladstonian Government; and it is worthy of notice in this connection that it forced an Opium Commission on India merely to buy a few votes in the House of Commons, and, with the grossest injustice, provided that India should pay for a part of the cost. The outcry raised has, indeed, brought about a reduction of the charge that was to have been made, but, from a statement made in the "Times," I observe that the Government has clung to the travelling expenses of the members of the Commission, which are to be charged to India, and probably with the view of proving that extreme meanness is not one of the national failings.

As the English reader might imagine that the Indian Government was solely responsible for this measure being passed into law, I may point out that the decision of the Cabinet was required and obtained in connection with the Currency Measure. From such a Government the producers of India, while they have everything to fear, can have nothing to hope. Our sole hope depends upon its being turned out, and replaced by an Unionist administration which will either annul the suicidal policy that has been adopted, or at least suspend its action till a full and searching investigation has been made into all the immediate and all the consequential results that must arise from the measure in question, should the Government be able to force up the gold value of the rupee. If the facts adduced in this chapter are substantially correct, the verdict cannot be doubtful, for these facts prove that the Government proposes to levy what is practically a heavy export tax on the products of India, and in a form, too, most injurious to its best interests, and ultimately to the finances of the State. And I say in a form most injurious, because the Gladstonian Government (for the Cabinet is distinctly responsible for the policy proposed to be carried into execution) has practically adopted a policy of protection, not for the benefit of the productions and industries of India, but for the protection and encouragement of the productions and industries of those silver-using countries which now compete with India. Of all the grotesquely ludicrous policies that have ever been adopted by perverted human reason this surely is by far the most absurd. By one and the same measure to stamp down the progress of India and promote the progress of other silver-using countries; to diminish the traffic on Indian railways, and correspondingly increase the traffic in such countries; to diminish the volume of India's trade and increase that of other Eastern countries; to raise a comparatively small sum for the Indian Exchequer at a vast cost to the producers of India; to diminish the amount of capital that would otherwise flow into the hands of the people, and to, at the same time, sacrifice all its consequential effects; to diminish employment for labour and increase the causes that aggravate famines and scarcities; to ultimately diminish the financial resources of our Indian Empire; to create a serious cause of dispeace (a useful Scotch word) between us and the people we govern;—such are some of the effects that must be produced should the Government be successful in carrying out that monetary policy which it has forced on India in the most arbitrary and tyrannical manner. Can we wonder then that Sir David Barbour, the Indian Finance Minister, said that the measure would have "far-reaching effects, and ought not to be attempted unless under the pressure of necessity?" No such necessity, as I have completely shown, has arisen. Out of its own mouth, then, does the Government stand condemned.

In this connection it may be interesting to quote the opinion of the great Duke of Wellington, who, speaking in the House of Lords in 1833 (July 5), said, "My lords, I wish the noble lords opposite had taken the advice of Sir John Malcolm upon the subject of forming an independent body in London, representing the interests and carrying on the concerns of India. My lords, it is persons of this description who interpose an efficient check upon the Government." Unfortunately for India there is no such body, and the final decision on this great question has rested with a Cabinet composed of men who know nothing of Indian interests, and who, indeed, have no time to attend to them, seeing that their thoughts require to be almost exclusively devoted to a consideration of those vote-catching, parochial politics with the aid of which alone the Government can hope to maintain its balance on the political tight-rope.

I may observe, in conclusion, that, as regards the effects of the depreciation of silver on a silver-using country, we have, in the case of Mexico, circumstances exactly parallel to those in India, and in the "Times" of October 21st, 1893, a most interesting analysis is given of the report of our consul at Mexico—Mr. Lionel Carden—as regards the effects on that country of a further serious depreciation of silver. Mr. Carden sums up his conclusions on the hypothesis that the present value of the dollar, which is 3s. 1d., falls to 2s. 6d., and proceeds then to examine into the effects of such a fall on the country considered as a whole. He estimates the losses to the Government and the railways which would arise from the sums they have to pay in gold, and then puts against them the advantages that the fall in silver would confer on miners, agriculturists, and manufacturers. His final conclusions are as follows:

"In striking a balance between the advantages and disadvantages arising to different interests in Mexico from a depreciation of silver, it must be borne in mind that the losses which would be sustained by the Government and the railway companies are essentially limited in their amount, whereas the benefits that would accrue to certain of the productive industries are susceptible of indefinite extension. Moreover, an increase in the productiveness of the country would make itself felt at once in an increase of the revenue of the Government, as well as of the railways. The only conclusion, then, at which it is possible to arrive is that a low price of silver, if permanent, would not only not be prejudicial to Mexico as a whole, but would conduce to its ultimate benefit by the stimulus it would afford to the development of its immense agricultural resources."

Yes. The losses from the payments that have to be made in gold are a comparatively speaking fixed quantity, while the gain to the people from cheap silver will yield wide-spreading consequential benefits far beyond the reach of calculation. This, too, is the case as regards India; we require for it a Government which can appreciate, and act up to, this view of the situation.

FOOTNOTES:

[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.

[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.

[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. x Private imports 81,310,119 Private exports 111,179,196 Government imports 2,844,926 Government exports 281,082 —————- Total trade Rs. x 195,615,323

The above figures show that—

The export trade is Rs. x 111,179,196 The import trade is Rs. x 84,155,045 —————- Net excess exports of total trade Rs. x 27,305,233

[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.

[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. x 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. x 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. x 33,378,000 to Rs. x 62,859,000, and in 1891 it had increased to Rs. x 64,000,000, or, including railway and migration receipts, to Rs. x 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. x 60,000,000. Further, the Indian exports and imports at sea, which in 1858 were about Rs. x 40,000,000, amounted in 1891 to about Rs. x 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.

THE END