TOWARDS A GOLD STANDARD 447
These are questions which have been determined by every nation that has adopted a gold currency. No doubt it is a difficult and important problem, but it cannot be insoluble, and it ought to be solved.”
Such in outline was the first proposal for a gold currency. It was projected before the fall in the value of silver had commenced, and was therefore more a culmination of the past policy than a remedy against the ensuing depreciation of silver. In that consisted, probably, the chief strength of the proposal. It was in good time to avoid the cost of hauling up the currency which later on proved so very deterrent and caused the defeat of so many other projects. Besides, it cannot be said that at the time the memorandum was presented the Government was not warned of the impending crisis; for the wave of demonetizing silver had already commenced two years before.* But, for some reason not known to the public, no action was taken on the proposal.
The second plan for the introduction of a gold currency was that of Colonel J. T. Smith, the able Mint Master of India. His plan was avowedly a remedy for the falling exchange.† The plan was set forth in the first essay in the brouchure, Silver and the Indian Exchanges, ‡ and may be described in his own words as follows:—
“6. Although it cannot be denied that the difficulty of
effecting this object of restoring the Indian exchange to its
normal condition is much greater now than it would have
been some years ago, owing to the decline which has already
taken place, yet there seems to be sufficient ground for
belief that, even now, if decided measures were adopted, it
would not be too late to restore the currency to its former
value for home (India)) payments; and that, too, without any
shock or disturbance; the principal step being that of putting
a stop to the coinage of silver on private account, at the
- Lord Northbrook, who was the Viceroy of India when this proposal was made, in his evidence before the I.C.C of 1898, Q. 8,447, suggested that the reason for his not adopting it then was that “that was a time when gold was appreciating, and it was impossible to do.” This is, of course, historically untrue except on the hypothesis that the propsal came for consideration long after it was submitted.
† Ho had previously taken part in the agitation for the introduction of a gold standard in India during the sixties with the sovereign as the unit. But that was as an advocate of the movement for uniformity of international coinage. Cf. his Remarks on a Gold Currency for India and Proposal of Measures for the Introduction of the British Sovereign, etc., etc. London, 1868.
‡ London, Effingham Wilson, 1876.