586 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
not propose to touch the gold-standard reserve, which must
remain as it is as the ultimate guarantee of our currency
policy. My proposal does not interfere with the existing
arrangements in any way, but is merely supplementary to
them …… Let the Government of India accumulate gold
to the maximum limit of its capacity, but let the surplus
gold which it cannot absorb be coined and circulated if
the public chooses to do so. With our expanding trade
and the balance in our favour, gold will continue to be
imported in ordinary time, and if the facilities of minting
are provided in India, it will go into circulation. ”*
These are surely not the ways of promoting a gold currency. Indeed, they run counter to it. So long as the coinage of rupees goes on gold will not enter into currency. Indeed, to cry out on the one hand against the huge drawings of the Secretary of State and the consequent transfer of Indian funds to London and their mismanagement by the Secretary of State, and on the other hand to permit him to manufacture additional token coinage of rupees, is to display not only a lamentable ignorance of a fundamental principle of currency, but also to show a complete failure to understand the precise source from which the whole trouble arises. It is true that the Government of India cannot bind the Secetary of State to any particular course of action,† and he often does override the provisions of the Annual Budget. But the question remains. How is it that he is able to draw so much more after 1893 than he ever did before ? It must be remenbered that whatever the Secretary of State does with the funds in London he must pay for his drawings in India. Before 1893 he drew less because his means of payment were less ; after 1893 he drew more because his means of payment were greater. And why were his means of payment greater ? Simply because he had been able to coin rupees. Indeed, the amount of drawings are limited by the demand for them and by his capacity to coin rupees. It is therefore foolish to blame the Secretary of State for betraying the interests of India and at the same time to permit him to coin rupees, the very means by which
- S.L.C.P., Vol. L, pp. 637-38. Italics not in the original.
† The legal position of the Secretary of State and the extent to which he can be bound by the provisions of any law passed by the Government of India were well explained by Sir James Westland in his speech on the Indian Paper Currency (Amendment) Bill, which afterwards became Act II of 1898 ; compare also the peculiar wording of that Act.