A RETURN TO THE GOLD STANDARD 587
he is able to betray. If a gold currency is wanted, and it is wanted because the rupee is a bad standard of value, then what is necessary is not to put a limit on the drawings of the Secretary of State or the opening of a gold Mint, but a short enactment stopping the coinage of rupees. Then only gold— made legal tender, at a suitable ratio with the rupee—will become a part of Indian currency.
That the stoppage of rupee coinage is a sufficient remedy is amply corroborated by the now forgotten episode in the history of Indian currency during the years 1898-1902. Within the short space of a year and a half after gold had been made legal tender the Hon. C. E. Dawkins, notwithstanding the fact that there was no gold Mint, was able, in his Budget speech in March, 1901, to observe :—
“India has at length emerged from a period of transition in her currency, has reached the goal to which she has been struggling for years, has established a gold standard and a gold currency, and has attained that practical fixity in exchange which has brought a relief alike to the private individual and to the Government finances.”*
So great was the plethora of gold that Mr. Dawkins further remarked †:—
“ …… We have been nearly swamped …… by gold …….”
The transformation in the currency position which then took place was graphically described by Lord Curzon, the then Viceroy, in the following words ‡ :—
“Mr. Dawkins …… has successfully inaugurated the new era under which the sovereign has become legal tender in India, and stability in exchange has assumed what we hope may be a stereotyped form. This great change has been introduced in defiance of the vaticinations of all the prophets of evil, and more especially of the particular prophecy that we could not get gold to come to India, that we could not keep it in our hands if we got it here, but that it would slip so quickly through our fingers that we should have even to borrow to maintain the necessary supply. As a matter of fact, we are almost in the position of the mythological king, who
- Financial Statement, 1900-1, p. 14.
† Ibid., p. 19.
‡ Ibid, p. 167.