632 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
the ratio instead of being lowered from 1 s . 6d. in the direction of 1 s . 4d. must be raised in the direction of 2 s . gold. In other words instead of an inflation there must be a further deflation of the currency. Second : the restoration of pre-war parity even nominally would be unjust. As a standard of deferred payment a currency should not disturb monetary contracts. If all debts now existing had been contracted in 1914 before the war, ideal justice would clearly require the restoration of the pre-war ratio. On the other hand if all existing contracts had been entered into in 1925 justice would require us to keep to the ratio of 1925. Two things must be borne in mind in this connection. Existing contracts include those made at every stage of preceding depreciations and appreciations and to deal fairly with all would demand that each one should be treated separately—a task impossible by reason of its complexity and enormity. Existing contracts are no doubt of various ages. But the great bulk of them are of very recent date and probably not more than one year old; so that it may be said that the centre of gravity of the total contractual obligations is always near the present. Given these two facts the best solution would be to strike an average between 1 s . 4d. and
1 s . 6d., and to see that it is nearer 1 s . 6d. and away from
1 s . 4d. This is substantially the view of Prof. Fisher, who observes: “The problem of a just standard of money looks forward rather than backward : it must take its starting point from the business now current, and not from imaginary pars before the war. One might as well talk of restoring the original silver pound or returning to the monetary standards of Greece and Rome.” In short, in matters of currency the real is the normal and therefore just.
- As regards the effects of a rising and falling rupee on trade and industry the point often sought to be made is that low exchange confers a bounty on trade and industry. But this is not the important point. The more important point is, supposing that there is a gain arising from low exchange, whence does this gain arise ? It is held out by most business men that it is a gain to the export trade and so many people have blindly believed in it that it must be said to have become an article of faith common to all that a low exchange is a source of gain to the nation as a whole. Now