672 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
It is this controversy that I wish to make the subject matter of this paper. At the outset it is necessary to realise that this controversy involves two distinct questions : (i) Should we stabilize our exchange and (ii) What should be the ratio at which we should stabilise ? These two questions are distinct questions. But when one reads what the two parties have to say one sees that neither the Government nor its opponents have made it clear whether their aim is to alter the worth of our unit of account, i.e. to put a new value on it or to stabilise it at its existing value. I am afraid there can be very little advance in the direction of rehabilitation of our currency until these two questions are completely separated. For, not only is the aim of altering the worth of a currency distinct from that of stabilising true that those who want to alter the worth of the currency wish in the end to stabilise it when the worth desired is attained.
But so far as the transit period is concerned, to say that we are stabilising the currency when we are altering its worth is to create confusion. For, the latter involves a deliberate policy of changing the ratio ; while the former means a deliberate policy of keeping it steady.
Before I enter upon the discussion of these two-distinct questions it is, I think, necessary to make sure that we understand exactly how an exchange ratio is determined. For unless we grasp this, we can never intelligently follow the bearings and implications of the two questions that arise out of this controversy. To put it simply, an exchange ratio between two currencies or units of account means the value of one in terms of the other. Now, a unit of account is value in terms of another unit of account not for its own sake, unless it is wanted as a curio, but for what it will buy ; so that we can say, for the purpose of introducing the subject in a concrete form, that Englishmen will value Indian rupees in as much as and in so far as those rupees will buy Indian goods. On the other hand, Indians will value English pounds in as much as and in so far as those pounds will buy English goods. It, therefore, follows that if rupees in India rise in purchasing power or remain stationary or rise less rapidly while pounds in England fall in purchasing power (i.e. if the Indian price level falls relatively to the