4
THE PRESENT PROBLEM IN INDIAN CURRENCY-I*
2 Shillings Versus 1s. 4 d . Ratio
The Great European War was the most abnormal event within living memory. During its disastrous course it touched nothing which it did not upset. But of all the things it touched none received a more violent shock than did the currency system that today one finds that the German mark, the Austrian crown, the Russian rouble, the French franc and the Italian lira, to mention only a few of the world’s chief units of account, have lost their moorings and travelled far and wide from their original parity. Even the British pound succumbed and the rupee which was never in the thick of the war escaped the fasteners contrived by its guardian to keep it steady.
In the course of reconstruction which has followed the close of the War it is natural to find people desirous of a return to the prewar conditions of currency. In sympathy with this universal demand there has arisen to India a party with a definite programme in that behalf. In the opinion of this party Indian currency should be stabilized at the ratio of 1s. 4d. to the rupee which was the pre-war ratio of Indian currency. To this demand the Government of India seems to be opposed, not because that ratio is not good but because in its opinion it is not better. It wants or rather aims at having a 2 shilling ratio for the Indian currency. As every one is aware many Governments in Europe, apart from the wisdom of doing so, would indeed be thankful if they could only restore their currencies to their pre-war ratios—so far are they away from them.Indian currency on the other hand has already reached its pre-war ratio. In view of this the attitude of the Government of India in not being satisfied with a return to the pre-war conditions seems to be that of a naughty child always asking for more.
*The Servant of India — April 1, 1925