650 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
Then, finally, as regards the question of a rising and falling rupee ratio, your opinion is summarised in paragraph
You say : “Now if it is realised that a low exchange means high internal price, it will at once become clear that this gain is not a gain from one class at the cost of another class in the country.” Which class gains and which class loses ?—The business class gains ; the labouring class does not. The price of all factors of production does not change. Wages do not change as rapidly as price and these are the classes who suffer.
Have you any suggestion to make, either from the theoretical or practical point of view, as regards the important provisions as to the currency arrangements to provide elasticity to meet seasonal demands ?—As I hinted, of course, very briefly, if we want to make our currency elastic for seasonal proposes, we must some how see that the commercial paper which has given rise for trade transactions is converted to currency. So that commercial paper should be made more a basis for the issue of the currency than Government bonds. I think it would be to the good of India if we adopt the proposals in the German Imperial Bank. They adopted, of course, more or less the English Banking Act of
1894 with variations so as to suit the seasonal demands.
That is a provision for the extension ?—For the extension for the time being of paper issues under certain regulations.
That is a provision, is it not, for the extension of the fiduciary issue ?—Exactly.
In return for the payment of a proportional tax ?— Yes, I think it is a sufficient safeguard for both.
(Professor Coyajee.) The chief merit of the gold standard is, according to you, that it places certain definite limitations against possible fluctuations ?—Exactly.
But, of course, there are certain things, for example, the provision from the mines is not based on how much currency is required by a country ?— Yes ; I may say that I am in favour of a gold standard simply because compensating systems are not workable. If they are workable, I would at once reject the