the enormous increase in the production of that
metal made within the last few years; gold,
moreover, being obtainable cheaply from adjacent
countries, whereas silver must be brought
from a distance at a large expense. By the
proposed change, it must also be remembered,
not only would sufficient silver be left for
general purposes of currency, but any excess in
the production of gold would be exhausted, and
a healthy balance preserved between the two.
It is the silver currency which causes India to
be the " sink" of the precious metals, for she
can do nothing but absorb it, seeing that it can
be exported only at a loss. And this
notwithstanding that in consequence of her own
overgrown demand for silver, India cannot obtain it
unless burdened with at least ten per cent of
charges beyond its value in Europe. Under a
gold standard India, instead of being the last
country to receive the metal of which her
currency was composed, would be the first; for,
whereas silver comes to her now from long
distances, gold would come to her then from close
at hand. At present Australia has to send her
gold to England to purchase silver before she
can buy Indian commodities. The "prohibitive
currency," as it has been called, thus
shuts out India from commercial intercourse
with neighbouring countries, and cannot but
tend to cripple her interior development.
Under the change proposed, India, instead of
being the absorber of silver, would be the
distributor of gold. The ten per cent of charges
upon the one metal would be reduced to some
two or three per cent of charges upon the
other; so that money would be obtained, not
only relatively cheaper with regard to price, but
materially lower with regard to charges. Money
being cheaper, other commodities would be
cheaper also, and India would have a standard
at once convenient and cheap, instead of
cumbrous and dear, as under the present system.

The argument that the change cannot be
effected without breach of faith to the public
creditor, and prejudice to contracts made under
a silver currency, is met by the rejoinder that
government, in borrowing money, gives no
pledge, direct or indirect, that no reform of the
financial administration shall ever take place,
and that in all cases of public contract the
understanding must be the receipt of an equivalent
amount under the standard which regulates
value at the time of payment. This was the
course taken by the government of England in
adopting the gold standard in 1816, and though
there existed at the time a far greater public
debt, and a currency at least equal to that of
England, the change was made without question
or complaint. If a gold standard were now
adopted, it is impossible that depreciation could
take place before the expiration of the guarantee
on existing loans, which is all we have to
do with at present. It is estimated that the
world requires about eighteen millions sterling
of gold per annum to supply her existing wants.
If, in addition, there be a demand from India
equal to her present demand for silver, say
twelve millions sterling, there would be an
annual consumption of thirty millions. Considering
that the present production of gold is about
twenty-five millions yearly, it is clear that unless
very extraordinary circumstances arise, the value
of the metal must be obtained, and it is at least
as likely that the present mines may be exhausted
as that new ones will be found.

The idea that a gold currency would be
unpopular with the natives, is combated by the
fact that there is a growing tendency towards
the change, unrecognised by law. India shows
her appreciation of intrinsic value by largely
importing the most precious metal, although it is
not a legal tender, and gold bars, bearing the
stamp of the Bombay banks, pass in the interior
for an equivalent sum in rupees. With regard
to the alleged inconvenience of the change, it is
suggested that along with gold coins rupees
might still continue a legal tender to the extent
of five hundred, the limit to be modified, perhaps,
as circumstances might suggest. These would
circulate as freely, and could gradually, as they
were returned into the government treasuries,
be replaced by silver token coins, so that the
change would be effected almost imperceptibly
and without inconvenience to anybody.

The latter suggestion leads to the natural
question— Why not have a double standard?
Do not interfere with silver, but let gold come
in to its relief. Against this arrangement it is
argued that the system has been tried in
England, America, France, and elsewhere, without
success. In England and America silver
became so scarce that it was found necessary to
introduce a gold standard with a subsidiary
silver token coinage; and in France at the
present day, where the double standard still
nominally prevails, a natural adjustment to a single
gold standard is fast taking place, the limited
silver currency being so worn and depreciated
as to be no longer profitable as bullion. There
is, in fact, say the opponents of the system, a
principle of antagonism in the double standard
which cannot be overcome. The two metals
will not harmonise. They are in opposition to
each other, and the weaker goes to the wall.
On the other hand, it must be remembered that
the countries where a single standard is now
in force, have not resorted to this measure
until it has been proved to be demanded by
the working of the double system. It may be
well supposed that the people of India would
be discontented at the abolition of the rupee by
one fell swoop; but were a gold standard
introduced in conjunction with it, and they found
the rupee more profitable to sell as bullion
than to pass as currency, they would scarcely
complain of a result so much to their advantage.

With regard to a paper currency, which has
for some years been an understood project of
government, it is argued, I think, very soundly,
that it could be best introduced on the basis of
a gold or double standard. The chief legitimate
object of a paper currency is to set free
capital which, besides being saved from wear
and tear, may be profitably employed for