470 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
florin or rupee, made of the value of 2s. and containing 4 per cent, weight in gold and the balance in silver.* The seventh was to establish independent gold and silver standards without any fixed ratio of exchange between them.† or with some slight inducement for the use of gold in transactions of larger denominations.‡‡ Although the Government of India was not in agreement with these clever if not crazy plans of currency reforms, it agreed in the aim they had in view, namely, to place India on a gold basis without involving the actual use of gold in place of the existing rupees in circulation. With this aim in view it revived for adoption the more simple and more scientific plan of Colonel Smith. As a preliminary, the Government reverted to the policy of the resolution of the Bengal Chamber of Commerce, to the adoption of which it saw such “fatal objections” in 1876. In the despatch dated June
21, 1892, which contained the proposals, the Government of India asked for nothing more. In the words of their author§ they proposed
“ ……That the Indian Mints should be closed to the unlimited coinage of silver, and no further steps taken until the effect of closing the Mints had been ascertained.
“The ratio at which the change from silver to the gold standard should be made was subsequently to be settled and it was said that a ratio based on the average price of silver during a limited period before the Mints had been closed would probably be the safest and most equitable. When this ratio had been settled, the Mints were to be opened to the coinage of gold at that ratio, and gold coins were to be made legal tender to any amount.”
These proposals were submitted for examination to a Departmental Committee, commonly known as the Herschell Committee. They were said to be defective in one important particular, and that was the absence of due recognition of the necessity of a gold reserve for the maintenance of the value of the rupee. Many people felt doubtful of the success of the proposals unless
- By Stalkart, ibid, p. 322 ; also a very similar one by Merington, ibid, p. 316.
† By Perry, ibid, p. 323.
‡‡ By Claremonth Daniell, ibid., p. 292.
§ Sir David Barbour, The Standard of Value, 1912, pp. 202-3. Italics not in the original.