TOWARDS A GOLD STANDARD 481
and in India. Looking forward, as we do, to the effective establishment in india of a gold standard and currency, based on the principles of the free inflow and outflow of gold, we recommend these measures for adoption.”
These recommendations were accepted by the Secretary of State,* who decided that—
“the policy of keeping the Indian Mints closed to the unrestricted coinage of silver shall be maintained,”
and called upon the Government of India as soon as it deemed expedient to
“take the necessary steps for making the British sovereign a legal tender and a current coin, and make preparations for the coinage of gold under the conditions suggested by the Committee.”
The first recommendation of the Committee was given effect to by the Government passing an Act commonly called the indian Coinage and Paper Currency Act (XXII) of 1899. That Act made the sovereign and half-sovereign legal tender throughout India at the rate of Rs. 15 and Rs. 7½ respectively, and authorized the issue of currency notes in exchange for them.
Along with placing the Indian currency on a gold basis, the Government was anxious to open a Mint for the free coinage of gold. But as the coin to be issued from the Mint was the English “sovereign” the Government of India was entirely in the hands of the British Treasury. According to the provisions of the English Coinage Act of 1870, it was necessary to issue a Royal Proclamation in order to constitute an Indian Mint a branch of the Royal Mint, a matter entirely dependent on the consent of the Treasury. It was the intention of the Government of India to announce the Proclamation simultaneously with the passing of the Act making the sovereign legal tender. Indeed it held back the legislation pending the arrival of the proclamation.† and proceeded with it reluctantly when it was advised that there was likely to be “some further delay over the Proclamation owing to legal and technical questions.” The objections raised by the Treasury, though merely technical, at first seemed to be quite insuperable,‡ and had it not been for the conciliatory attitude of the India Office the negotiations would have broken
- See despatch dated July 25, 1899, No. 140 (Financial), C. 9421 of 1899.
† Cf. the speech of the Hon. Mr. Dawkins on the Indian Coinage and Paper Currency Bill, dated September 8, 1899.
‡ Cf. H. of C. Return 495 of 1913, p. 14.