TOWARDS A GOLD STANDARD 451
differ from what would be suitable in the case of a fall
in the value of silver.”*
Out of these possibilities what seemed to it to be proven was that “gold had risen in value since March, 1872,”† and therefore if any reform was to be effected it should fall upon the gold-standard countries to undertake it. Situated as the Government of India then was, it could have suffered itself without incurring much blame to be hurried into some kind of currency reform that promised to bring relief. To have refused to allow the exigencies of a crisis to rule its decisions on such a momentous issue as the reform of currency, need not imply a spirit of obstinacy. On the other hand, it bespeaks a spirit of caution which no reader of that illuminating despatch of October 13, 1876, conveying to the Secretary of State its decision to wait and watch, can fail to admire. But it is hardly possible to speak in a similar commendatory manner of the underlying attitude of the Government of India. Whether it is possible to hold that gold had appreciated but that silver had not depreciated may be left for logician to decide upon. But for a silver-standard country to refuse to undertake the reform of her currency system on the plea that it was gold that had appreciated was no doubt a tactical error. In military matters there is probably such a thing as depending on a position; but in currency matters there cannot be such a thing. The reason is that in the former strength sometimes lies in the weakness of the other. But in the case of the latter the weakness of one becomes the weakness of all. There can be no doubt, therefore, that the Government, in discarding its responsibility to do the needful in the matter, committed the same kind of mistake as a man who, in the words of Prof. Nicholson,‡ “should suppose that the ship cannot sink because there is no leak in the particular cabin in which he happens to sleep.”
That the attitude of inaction was unwise was soon brought home to the Government of India. Within a short space of two years it was obliged to reconsider the position taken in 1876. In a despatch dated November 9, 1878,§ the Government of India observed :—
“5. It was to have been expected that a subject so
encompassed with difficulties should not receive any early
- Commons Paper 449 of 1893. ‡ Money and Monetary Problems,
1895., p. 90.
† Ibid, par. 16. § P. P., C. 4868. of 1886, p. 18.