630 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
desiring to advertise themselves as friends of the people who want the reserve to be utilised for educating the masses. Any of these three may easily bring about a calamity in {he guise of a blessing, and all this in sheer ignorance of the principles of currency. It is therefore much better to introduce a currency system which will do away with the Exchange Standard and also the Gold Standard Reserve the maintenance of which may any day be a source of mischief.
- The following then are the requirements of my plan for the reform of the Indian currency :—
(1) Stop the coinage of rupees by absolutely closing the mints to the Government as they are to the public.
(2) Open a gold mint for the coinage of a suitable gold coin.
(3) Fix a ratio between the gold coin and the rupee.
(4) Rupee not to be convertible in gold and gold not to be convertible in rupees, but both to circulate as unlimited legal tender at the ratio fixed by law.
- What is to become of the existing amount of reserve if it is not wanted for currency purposes ? I myself would like it to be utilized by Government as ordinary revenue surplus for any public purpose that may seem to be urgent. But there will remain sources of weakness in the reformed currency which it is wise to recognise. Unlike the Fowler Committee, I am firm in my belief that the rupee currency once effectively limited will maintain its value without the necessity of any reserve. But there is just this chance that the existing volume of the rupee currency is so large that when there is a trade depression it may become redundant and may by reason of its excess lose its value. As a safeguard against such a contingency I propose that the Government should use part of the Gold Standard Reserve for reducing the rupee currency by a susbstantial margin so that even in times of severe depression it may remain limited to the needs of the occasion. The second source of weakness in the currency arises from the peculiar composition of the Paper Currency Reserve. That weakness lies in the existence of what are called “Created Securities.” I should like this portion of the Paper Currency Reserve extinguished as early as possible. For unless this is done the paper currency