652 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
Committee, they felt that for a large circulation of the rupee they had not any reserve and the Fowler Committee in paragraph 60 of their Report suggested that if the Government coined rupees and keep profit to itself, that profit should be utilised as a reserve. Sir Edward Law who came on the scene in 1901, the period from which the coinage of rupees commenced, also felt that the volume of rupees was so large that some amount of reserve was necessary ; and I think he went on coining rupees sheerly because he felt that the reserve was wanted and the reserve could not be had in any other way except by coining rupees.
You only think that ?—No, my point is this : I have read the despatch very closely and I feel that if Sir Edward Law had disclosed there that the rupee was coined to a premium because people did not want gold or any other thing to use in currency, then I could have understood that the rupee was coined in answer to the demand of the people. But there is not a single thing to that effect to be found in the despatch. He simply says that when we introduced reforms we did not take into account paragraph 60 of the Fowler Committee’s Report.
But he also, I think, in that despatch to which you refer laid down that there ought to be a gold reserve which estimated at 7 millions or something like that. Against this you say that he was issuing rupees ?—Quite so. Gold standard reserve is kept in gold. I say no reserve was wanted.
You make a general statement here, Dr. Ambedkar, “Unfortunately there is abundant proof of such perversion in the history of the currency system in India. Already we have had foolish administrators who had been obsessed with the idea that a reserve was a very essential thing and who had therefore gone on issuing currency without any other consideration but that of augmenting the reserve” and you are now repeating it to the Chairman ?—I have used a much milder expression than that used by Professor Cannan himself in his book.
But is it not the case that in 1895 that was actually suggested by a well-known Bombay financier and turned down by the Finance Member at the time ?—I find that in the despatch.