MR. J. B. SMITH
Sir, I rise to move,That the increasing trade and commerce of India, and the consequent increasing demand for a portable circulating medium, require that a gold currency should be established in that empire.In India, and Eastern countries, silver is almost fee sole instrument of exchange, even for the largest transactions. This fact has important bearings upon our trade, which, with the East, differs from that with other countries. In the case of India, oar exports are insufficient to pay for our imports, and the consequent is that we have to pay the balance in specie. The extent of toe exports of specie to India, from the commencement of the present century, will be shown by Return moved for by my hon. Friend the Member for Aberdeen (Colonel Sykes); from which it will be seen that the balance of imports of specie, after deducting exports, into the provinces of Bengal, Madras, and Bombay, from 1801 to 1851, a period of fifty-one years, was £110, 662, 000, and from 1852 to 1863, a period of twelve years, it was £123,691,000. The average import 1574 for fifty-one years appears to have been about £2,000,000 per annum; but for the last twelve years it has increased to £10,000,000 per annum. Last year (1863), however, the import amounted to £19,367,000. Now, in order to obtain specie for the payment of our Indian imports, it is necessary that we should export our manufactures to countries producing specie. There would be little inconvenience in this operation, but the specie required by India is silver, while the chief production of the precious metals is gold. A double operation, therefore, becomes necessary, first to exchange our manufactures for gold, and then to exchange the gold for silver. But besides the ordinary demand for specie, to pay the balance of our imports from the East, a variety of circumstances have concurred to create an extraordinary demand for silver within the last fifteen years. About £50,000,000 have been invested in Indian railways. There has been the expense of the mutiny in India, a Persian war, two Chinese wars, an increased importation of a variety of Indian products, and this year an extraordinary importation of cotton, amounting probably from £30,000,000 to £40,000,000. In addition to the demand for silver from the East, there has been also a drain of silver to supply those countries which have demonatized gold. The discovery of gold in California in 1848, and subsequently in Australia, produced a great panic in the commercial world. Bank directors and writers, who were supposed to know more about such questions than any one else, predicted a serious decline in the value of gold, and a rise in price of all commodities. In 1850, Holland took the alarm, and demonatized her gold currency. Belgium followed her example. Russia, Spain, and Portugal prohibited the export of silver. In 1852, the East India Company, which previously to that time received gold mohurs at the treasury for fifteen rupees each, declined to receive any payments except in silver. The effect of this demonatizing of gold was, on the one hand, to create a great demand for silver, to replace the gold circulation; and, on the other hand, to increase the alarm occasioned by the influx of gold, by swelling the volume of gold which was rolling in from California and Australia. The natural supply of silver is limited; the demand for it has been exceptionally large. M. Chevalier estimates that the export of silver to the Levant and the East in 1575 l857 was £20,145,921, being more than double the yield of all the silver mines which supply the Western world. The exports to India alone, in the last twelve teats, amounted td £98,476,766, besides probably £30,000,000 to £40,000,006 to China. The exports of silver are still increasing: last year, to India alone, the export was equal to the whole production of the silver mines. It is surprising, under all the circumstances, that the advance in the price of silver in this country has been so small, for while it Ms advanced in India 10 to 12 per cent, it has only advanced here 1 to 4 per cent, and less disturbance has been hitherto created by this extraordinary state of things than might have been expected. This inordinate Eastern demand for silver, could not have been met without occasioning a great advance in price had it not fortunately happened that we have been able to obtain from1 France immense supplies of silver in exchange for gold. M. Chevalier says, the excess of exports over imports of silver from France, from 1852 to 1858, amounted to £45,080,000; and since then the exports have been in a like proportion. Until the gold discoveries, France had only a nominal circulation of gold, a small paper circulation, but an immense accumulation of silver coin. Her increasing trade and wealth had rendered her cumbrous silver currency inconvenient for large transactions, and she willingly availed herself of the profitable opportunity of an Eastern demand, to get rid of it in exchange for gold. By these means the demand for silver has been met with comparative ease; but this source of supply, however, cannot long continue unexhausted, and the produce of all the silver mines in the world being inadequate to meet the continued demand, some remedy is absolutely necessary to prevent the great commercial disturbance which must inevitably take place if a remedy be not applied. India has petitioned for a gold currency. A forcible memorial from the native Bombay Association to the Governor General sets forth—That from time immemorial, until some years ago, India possessed a gold currency. That the superior convenience of this circulating medium is well understood by the natives of this country. That the transport of a bulky and cumbrous silver currency entails-constant and useless expense upon the country, and its consequent sluggish circulation is a serious impediment to trade. That India is not yet pre- 1576 pared for a paper currency, which does hot circulate in the interior.The great amount of the trade of India —the probable increase from the development of its resources by the opening out of roads, has made it necessary to adopt a more portable and convenient currency to facilitate its large transactions. In ten years the commerce of Bombay has increased 250 per cent. In 1863 the imports and exports amounted at Bombay to £59,000,000; Calcutta, £34,000,000; Madras, £13,000,000; total, £106,000;000. A Government paper currency has been introduced with a view to facilitate commerce; but its circulation is small, and confined to the Presidency towns, while the great want1 is in the country. It will take a long time to establish a paper currency in a country like India, if it be possible ever to circulate it beyond the large towns. I confess, however, I should regret to see a Government paper issue successful. No profit can compensate for the danger of its introduction in a country where ignorance and religious excitement are the characteristics of the people, and where whole districts are continually disturbed by fanatical appeals to their superstitions. The mutiny, which was the result of these causes, cost about £100,000,000 before it was subdued. How greatly would our embarrassment have been increased, if in addition to the anxieties of that period, a demand, influenced by a panic, had arisen for the immediate conversion of the Government notes into silver. The indiscretion of officials might produce such a result at any moment. Only the other day we saw how the religious bigotry of the people was excited from one end of India to the other, in consequence of an attempt being made at Calcutta, for sanatory purposes, to induce the people to bury their dead instead of partially burning and then throwing them into the river. The fanatical cry was immediately raised, that the Government wished to destroy their religion. Of course the only object was to preserve the public health, and the Government finding that its object was misconstrued, wisely1 withdrew the order; but the incident showed the fanatical temper of the people. It appears to me, then, that the safest and best course is to adopt a gold, instead of the attempt to introduce a paper currency. Why should not India, which is equally prepared for it, adopt a gold currency as well as France? 1577 The world is not likely to be so inundated with gold, that its value will be more affected than that of silver. No doubt a general impression prevailed on the discovery of gold in California and Australia, that a serious decline in its value would take place, founded on the effects produced on prices by the influx of the precious metals on the discovery of America. This feeling was confirmed by the opinions of one of the most distinguished writers on these subjects in Europe, M, Chevalier, whose able work, On the Probable Fall in the Value of Gold, has been translated by my hon. Friend the Member for Rochdale (Mr. Cobden). Baron Humboldt, however, appears to have taken the largest views of this question. He wisely observed, in reference to the difference between the influx of silver on the discovery of America, and the recent gold discoveries, that "a small quantity of rain would flood a rivulet, which would have scarcely a perceptible effect on a mighty river." And this seems to be a correct analogy between the barbarous state of Spain— with little trade or enterprize — the "rivulet," into which the vast supplies of silver were poured on the discovery of America,— and the present world, "the mighty river," teeming with activity, industry, and enterprize, the results of the growth of civilization and the advance of science and invention. The effects of the influx of gold have not so far realized the anticipations of those who believed that it would raise the price of commodities. Notwithstanding that, since 1848, a larger amount of gold has been produced than America produced from the first voyage of Columbus to tie discovery of the mines of California in 1848, a period of 356 years, there is no evidence that the prices of commodities have been affected by this enormous influx of gold. Some commodities have no doubt risen, but the increase in price is in no way attributable to the influx of gold. The advance in cotton is the result, not of the influx of gold, but of the American war—of wine, the disease of the vine—of silk, the destruction of the silkworm, and so of other commodities. But let us take the price of wheat which Adam Smith adopts as the barometer of prices—The influx of silver on the discovery of America," he says, "caused a continuous decline in the price of wheat, until at the end of fifty years it required three ounces of silver to buy the same quantity of wheat which was previously bought with one ounce.1578 What have been the effects of the gold discoveries on the price of wheat in England? I find that the average price of wheat in 1847, the year before the discovery of gold in California, was 69s. 9d. per quarter; and now, in spite of the influx of gold since that period, the price instead of rising has fallen from 69s. to 39s. per quarter. An ounce of gold will, at the present moment buy 75 per cent more wheat than in 1847, the year before the discovery of gold; in fact, the price of wheat, taking the quality; into account, is as low now as at any period within the last half-century. Not only have writers been deceived as to the effects of the influx of gold on the price of commodities, but also in their expectations of vast accumulations of the precious metals in the national banks, such as they expected would render money almost valueless. There was, indeed, a great accumulation of bullion at the Bank of England at one period. In 1852, she held upwards of £20,000,000, the largest amount she ever held; but, within the last two months, her bullion was reduced below £13,000,000; and instead of money becoming almost valueless, she was obliged to raise the rate of discount to 9 per cent to keep her treasure from running away. In 1852, the bank of France held £24,000,000 of bullion; within the last two months, however, it was reduced below £10,000,000, and the rate of discount was raised to 8 per cent to prevent the efflux of her treasure. Sufficient allowance appears not to have been made by writers for the effect of the influx of gold in stimulating the production of commodities. If the production of commodities increase in proportion to the production of gold, their relative value will remain the same. Let us suppose all the commodities of the world, at the time of the gold discoveries, to be represented by the figures 100, and the precious metals then necessary to circulate the commodities to be also 100. An influx of the precious metals to double the amount, say to 200, without any increase in the quantity of commodities, would have the effect of doubling their price; but if commodities were also increased to 200, the relative value of gold and commodities would remain the same. There can be no doubt that the first effect of the gold discoveries was to create a disturbance in the relative value of gold and commodities. Half-a-million of men ceased to be producers, and 1579 were suddenly converted into wealthy consumers of commodities; prices rose; the abundance of money gave a stimulus, to increased production, until an equilibrium was restored between gold and commodities. There is; every reason, to believe that the production of commodities has kept pace with that of the preciou metals. We see an enormous increase of trade all the world over. Our own trade has increased nearly threefold since the gold discoveries, which could, not have taken place except by the increase of commodities. It is not improbable the production of gold has, reached its maximum; for while, on the one hand, fresh, discoveries are constantly made; on, the, other hand, the produce of California and Australia is reported to have fallen, off. By a Return, moved for by the hon. Member for Perth.(Mr. Kinnaird), it appears, that the exports from Victoria, for the last five years show a constant decline, namely:—
As the alluvial deposits become exhausted, recourse must be had to the working of the quartz rocks; gold mining then becomes a, manufacture, and comes into competition with other industries, and will not be continued unless it be equally profitable. Of the mines which may be abandoned, because at present unprofitable, many may remain as a reserve for future generations, when population becomes more dense, labour cheaper, and capital more abundant; in the same way that mines in this country, which were abandoned by the Romans as unprofitable, are now being scientifically worked, and are yielding large profits. Whatever falling off, however, there may be in the production of gold, we have at present experienced no diminution of the supply. The war in America having led to an irredeemable circulation of paper, a large amount of the gold previously circulating in that country has been exported, and this is sufficient to account for any diminution in the production of gold not being yet felt in Europe. The results of the influx of the precious metals, consequent upon the discoveries in ' California and Australia, have not then realized the expectations of those supposed 1580 to be best informed on these question. There have been no sufficient grounds for the alarm which led to the demonatization of gold. It is shown that the price of gold, as compared with commodities, has not declined, and that even the rise in the price of silver has not been occasioned by the influx of, gold, but by the enormous exceptional demand for it from the East. These facts are important in Considering the policy of adopting such a gold currency in India as will circulate from hand to hand, which it cannot be said that country has yet enjoyed; for although previously to 1852 the gold mohur was received at the Treasury at the fixed value of fifteen rupees (or fifteen times its weight in silver), being Intrinsically worth more than fifteen rupees in silver, none were paid in, so that the law was in effect a dead letter. In 1852, in consequence of the apprehension of a great decline in the value of gold from the discoveries of California and Australia, gold mohurs began to be paid into the Treasury at fifteen rupees: the Directors of the East India Company, however, then prohibited the receipt of gold at the Treasury, and silver became the sole legal tender. Had this prohibition not taken place, it is not improbably that India, like France, would by this time have had, in addition to its silver, a large gold circulation. Now, assuming that a gold coinage for India has become a necessity, is it desirable to coin in mohurs, to circulate English sovereigns, or to have an entirely new coinage? It has been suggested that sovereigns should he allowed to circulate in India; if, however, they are to circulate at the market price of silver, it will be equivalent to saying they shall not circulate at all, since all experience teaches us, that gold coins will not be voluntarily accepted by the public, if they be only allowed to circulate at a fluctuating value. In such cases they only circulate with money changers. Another suggestion is, that sovereigns shall be received at the Treasury for the value of ten rupees. Now, as the intrinsic value of a sovereign is ten and a half rupees, a plan like this would be; as great a joke as the Queen issuing a proclamation that spade-ace guineas would be received at tie English Treasury for twenty shillings. No doubt a continuous enormous demand for silver, and a short supply; may so raise its price in India; that a sovereign may temporarily pass for only twenty 1581 shillings; but what is wanted is, a permanent gold currency, a gold coin which will circulate from hand to hand, and be received for taxes and all other payments as in England and France. No such coin will thus circulate, unless it represent a definite and fixed value, the Queen's stamp being the certificate that it contains a fixed quantity of pure gold. Hitherto the proportion between gold and silver coins has been fixed at one to fifteen, but as gold is initrinsically more valuable than fifteen times its weight in silver, gold coins bear a premium, and only circulate with money changers. To provide a coin which shall circulate from hand to hand, a change in the relative proportions of gold and silver will be necessary. The most convenient coins for India would probably be gold pieces of five and ten rupees each. But if these gold coins were issued in unlimited quantity, there would arise the difficulty of a double standard. Without advocating a double standard, it is a fact worthy of note, that a double standard has existed in France for sixty years, and it has not been shown that any inconvenience has arisen from it. We all know that the argument against a double standard is, that as the price of gold and silver constantly fluctuates, debtors having the option to pay in either, would always pay their depts in the cheaper metal. If it be advisable to adopt a gold currency in India, it is worthy consideration whether it be possible to obviate this by a gold coinage made subsidiary to silver, taking the standard for instance of France, of a gold piece equal in value of fifteen and a half times its weight of silver, and so to limit the issue as always to preserve its value. I am aware that this is a novel suggestion, but it is acknowledged that even an irredeemable paper currency, if limited in quantity, will maintain an equal value to that which it represents; and why should this not hold good in a gold circulation, issued as subsidiary to silver? I remember having a conversation with the late M. Horace Say in 1851, on the subject of paper issues, arising out of the suspension of specie payments by the Bank of France at the Revolution of 1848. At that time there was a run upon the Bank for the purpose of hoarding, which would soon have exhausted its treasure: the Bank, therefore with the concurrence of the Government, suspended cash payments, and its notes became inconvertible. The first effect of 1582 this suspension of payments was, that its notes fell to a discount of 1 to 2 per cent, but this continued only for two or three days, for such was the skill exhibited in the management of the Bank in limiting its issues, that the notes were ever after wards of equal value, and sometimes even more valuable than specie. In Germany, some twenty years ago, the Prussian Government issued a limited quantity of notes, which were receivable for taxes, but which were found so much more convenient for carrying about than rix-thalers, that they bore a small premium, which I constantly preferred to give rather than be encumbered with silver. If such be the effect produced by the limitation of a paper circulation, why should not the limitation of a gold circulation be equally effective in preserving its value? It may be objected that the coins so issued would be melted, but having always a higher value than gold, because of their value as money, it would not be the interest of any one to melt coin in preference to cheaper gold. The existing large demand for silver from the East is exceptional, but may yet last for several years. I have reason to believe the Secretary of State for India is alive to the importance of the question; but let me urge upon the right hon. Gentleman, that prompt measures be taken by the Government to meet evils which, if neglected, may by and bye have a serious effect on the financial interests both of England and India.
Oz VALUE. 1858 2,555,263 £10,220,000 1859 2,280,525 1860 2,128,466 1861 1,978,864 1862 1,662,448 £6,642,624
To leave out from the word "That" to the end of the Question, in order to add the words "the increasing trade and commerce of India, and the consequent increasing demand for a portable circulating medium, requires that a Gold Currency should be established in that Empire,"—(Mr. John Benjamin Smith,)
§ Question proposed, "That the words proposed to be left out stand part of the Question."
§ COLONEL SYKES
said, he considered the subject one of very considerable importance and interest both to England and India; for it involved this question—how England was to pay for the annual debt she incurred to India for the sugar, cotton, tea, coffee, indigo, and other commodities she received from that country? The imports received from India had been from year to year increasing from £10,672,862 in 1854, to £34,133,551 in 1861, and to £48,434,517 in 1863, while the exports from England had 1583 been only increasing from £9,620,710 in 1854, to £15,346,426 in 1862, consequently the balance of dept was increasing in the same proportion. To meet that balance of dept England sent silver of India. Since 1801, by a Return on the table of the House, it appeared that the silver bullion sent to India amounted to £234,000,0000, increasing small quantities of gold. The question arose whether, owing to the annually increasing demand of silver bullion for India, the production of silver from the mines went on with a proportionate increase to the demand. Recently the prospect had become so unsatisfactory, that the Chamber of Commerce at Bombay had addressed a memorial to the Governor General, Sir John Lawrence, on the subject. That memorial stated that within the last ten years the trade to Bombay had been trebled, and last year the aggregate export and import of the three Presidencies amounted to £106,000,000. The total product of silver from the mines was only £10,000,000 per annum, while India took from us on an average silver to the amount of £11,500,000 of silver. The result was an increase in the price of silver. England must therefore either buy less of the products of India or pay in some other way than silver. There could be no doubt that the Natives of India would receive gold money. His right hon. Friend (Sir Charles wood) possessed in the museum that belonged to the East India company a collection of all the coins of India—the finest in Europe. It comprised specimens of coins from the time of Alexander's successors in Bactrea and the Punjab down to the present day. During a period of 2,100 years there is proof that gold monies had been in circulation among the people of India. There was no doubt, therefore, about the fact that his right hon. Friend had nothing to do but try to induce the people of India to accept his gold in the same form in which they had accepted it in former times. When he himself went to India he received his pay in gold rupees of about the size of spangles. The Madras army was then paid in gold currency called Pagodas or Hoons. There could be no questions, therefore, about the readiness of the people to accept a gold currency if given them under conditions to which he would presently refer. So lately as the time of Moolraj, gold rupees were coined at Mool- 1584 tan, and he (Colonel Sykes) possessed a specimen. But there was evidence that the people of India were quite satisfied to receive the gold coins of Europe, provide they were pure. On the Malabar Coast and in the Province of Canara and the Nielgherries gold coins of the Roman Emperors were frequently turned up. In 1851 at a village ten miles eastward from Cananore, on the slope of a hill, while persons were searching for gold dust, hundreds, indeed thousands, of Roman gold coins were found, ranging from the reign of Angustus Caesar down to that of Antonius Pius. General Cullen, the Resident in Travancore, was good enough at his (Colonel Sykes) request, to present speciments to the museum of the India company, where they now are. Why had these coins been sent there? The Romans, when they wanted to get the products of the Malabar coast, had nothing but gold to pay for them, for they had no acceptable manufactures to offer in exchange. So, again, the Venetians, when they traded with India, took with the figure of the Virgin Mary upon it; and that coin, under the name of the Pootlee or figured coin, still existed in India, and as treated entirely as a commodity at its market value. He next came to the conditions on which a coinage could be circulated among the people of India. The gold coins to which he had referred were all of pure gold. There never had been a standard of value in India; and when we talked of such a standard among ourselves we used a conventional term which was often a mockery. Why, formerly, when our gold coin was exported to spain in the Peninsular War to pay our army, people in England had to give 28s. for a gold guinea if they wanted one! There could be no such thing as a permanent standard of value. Supply and demand regulate the exchangeable value of all commodities, and gold and silver are only commodities. The gold mohur was nominallay worth fifteen rupees; and if the Government agreed to receive their taxes in gold mohurs they might get only fourteen rupees for each of them in the market; or, on the other hand, if mohurs were scarce, the Government might make a profit on them. The Government took its land tax in rupees, irrespectively of whether sixty pice or less could be got for each rupee. That would entirely depend on the market value of copper. What we wished to impress on the Secretary of States of India was that 1585 if he would introduce a gold coin of five or ten rupees, and have it of pure gold, of a certain weight, the people would take it. But then, again, the Government must take it at its market value, not at a convential price. At Madras since the years 1847–8 they had never coined a gold coin at the Mint; at Bombay since 1836 they had never coined a gold coin; in Bengal there had been very triffing additions made to the gold monies. It was objected to pure gold coin that it wore away rapidly. He had in his hand a note from a gentleman who had charge of the whole of the coins in the British Museum, and who was a great numismatist. The writer had thoroughly studied this subject, and he said—I have been thinking over the question of a gold currency for India, and have looked at the various regulations as given in Prinsep's Tables, vol li. p. 69, do., and also at the earliest gold coins we have bore, being these of Sardes and probably of Crœsus, or some other Indian king. I cannot from the former come to his conclusion, that because the introduction of a gold currency in India has not hitherto met with the success it seems to deserve, or because some mistakes appear to have been made in the manner of its introduction, that, therefore, such a step is impracticable; and from the latter, I should be included to argue strongly in favour of the durability of gold, if the coins should be struck thick, and considerably rounded, like the ancient Sandian money, and not fiat, like the present sovereign. The question of wear and tear is rather one for the chymist; but certainly these Sardian coins have lasted wonderfully since the sixth century B.C., and it is obvious that a surface considerably rounded in naturally much less liable to abrasion than our flat modern money. These Sardian coins are very nearly pure gold—that is, there is no intentional alloy—and I believe that if not required to be flat, like the sovereign, the proportion of alloy now used would not be required. It has been argued that if you introduced a pure gold currency into India the Natives would melt the coins down to make ornaments, and that you must insert a larger alloy than we do here, on the same principle tat you have added a considerable quantity of alloy to your rupees to render them less fit for subsequent native adaptation. I confess I should be inclined to leave a question of this sort to time and to the gradual operation of the good sense of the people.The writer continues—I imagine that any gold coinage struck for general acceptance in India must be quite pure, or at least as free from alloy as was the Greek gold, and that you could not expect the Natives to accept a gold coinage which was alloyed at all in the manner or degree that your present rupees are.That was the opinion of a gentleman whose extensive knowledge and experience rendered his authority well worthy the consideration of his right hon. Friend. He would tell his right hon. Friend that his 1586 sovereign would never circulate and be accepted as a currency in India in its alloyed state. If the Government would introduce a pure gold coin to ten rupees, which would be received back at its market price by the Treasury, he would succeed, but not otherwise.
§ SIR CHARLES WOOD
said, the question which his hon. Friend the Member for Stockport had brought before the Hose was very interesting and important and, from the attention which he had himself always paid to subjects of this nature, he felt a peculiar interest in it. When they came to discuss it in detail it would be found to be, perhaps, suited to the consideration rather of a scientific meeting that of the House of commons. There were, however, some general views on the subject which might be stated. He could not agree with his hon. Friend n his criticism on the paper currency of India. Two or three years ago the Government undertook to establish a Government paper circulation in India, in lieu of the partial circulation of private banks, which existed to the amount of about £3,000,000. Although the arrangements made in India for that purpose were so faulty that delay had occurred in extending the operation of the system, yet the present issue of paper amounted to about £5,000,000 in the Presidency towns. It was also not a little remarkable, that when there was great pressure at Bombay on account of the scarcity of coin, people were bringing in rupees in order to obtain paper in exchange. Measures had been taken to develop the system, and to establish centres of issue in the great centres of commerce in India, where a paper circulation would furnish a useful, safe, and convenient mode of conducting business. It was well known that bills of exchange were transmitted to a large extent from one part of India to another, and the Hindoos were remarkable clever in these commercial transactions; therefore, he saw no reason why they should not avail themselves in considerable degree of the facilities afforded by a paper circulation. He agreed with his hon. Friend, that the form of currency which existed in this country was the best. A gold standard coin of a certain fineness and weight, with subsidiary silver and copper coins, and a paper circulation of a limited amount on securities, and the remainder based on gold or silver in the banks. Whatever might be our own opinions, however, as to the best form of a 1587 currency, there could be no doubt that it was a very difficult thing to attempt a change in that respect and to bring such a system into effect in a laud where transactions were small, where there was little demand for gold, more for silver, and much more still for copper. Except under the pressure of a few months of last autumn, they had always been able to meet the demand for silver circulation, but they had been hardly able to meet the demand for copper. Looking to the greater value of gold coins, therefore, he had no doubt that gold would be circulated to some, but not to a very large extent, His hon. Friend had fallen into one or two inaccuracies, having probably been misled by the petition on the subject from Bombay. In times past silver was the only standard and the only legal tender in India, with the exception of a single gold coin in Bengal. When the currency was reformed some years ago a gold rupee, or, as it was called, mohur, was coined, which was equal to fifteen silver rupees. The mohur was not a legal tender, but it was received by the Government treasuries as the equivalent to fifteen silver rupees. It had been stated that this change was a dead letter, and that was in the main true. The people of India were not very partial to the gold mohur; they preferred pure gold, and no great amount of the coinage of gold was circulated in the country. That was the state of affairs up to 1853. At that time, and indeed until within the last year or two, there was an impression among philosophers and well informed persons that the discoveries of gold in California and Australia would tend to depreciate very considerably the value of that metal. The people of India were disposed to share this view, and began paying in the gold mohurs to the Treasury. The Government took alarm, and declined any longer to receive the gold coins at the treasury. His own opinion was that the alarm was unnecessary, for the ultimate loss to which the Indian Government could have been subjected would have been comparatively trifling. The amount of gold in circulation was not sufficiently large to affect the state of matters in the same way as it did in France when a change took place in its value. His hon. Friend said that the rule for receiving gold at the public treasuries had been a dead letter, and then added, that but for the prohibition of Lord Dalhousie, the same effect, would have been produced in India as had been produced in France of changing the currency from silver 1588 to gold. Surely it must be obvious that no such effect could have been produced by repealing a regulation which was a dead letter. The change in France arose without any alteration of the law from a change in the relative value of gold and silver. Both were legal tenders in France, a dept might equally be discharged by coins containing an ounce of gold, or by coins containing 15½ oz. of silver. Before the recent discoveries of gold, an oz. of gold was worth nearly 15¾ oz. of silver, and of course on man gave what was worth nearly 15¾ oz. when 15½ oz. would answer his purpose. After the discoveries of gold, an oz. of gold was worth only about 15½ oz. of silver and of course, everybody was glad to pay in gold what was worth only 15½ oz. of silver, when if the paid in silver, he must have given 15½ oz. Under the system of a double standard, and with the change of relative value of the to metals, this change took place in France; but the value of gold has never fallen so low as to reach its relative legal value to silver in India. The production of gold had now fallen off, and large discoveries of silver, and greater cheapness of producing it from the discoveries of new mines of quicksilver are anticipated; and if it should so happen that the relative value of gold and silver was restored to its former proportion all that had taken place in France would be reversed, and the currency of silver be again restored. It was good instance of the evils of a double standard.
The next question was, whether a gold standard should be substituted for a silver standard in India. There would be many advantages in having a gold standard; and the sovereign circulating there as well as in this county and Australia, but he was not prepared at present to undertake the responsibility which would be involved in substituting a gold for the present silver circulation in India, for such a change could not be carried into effect without a great disturbance of trade. Until the people were more accustomed to gold it would be a serious measure, and might be dangerous to remodel the whole circulation of India in the manner proposed; for a belief might be induced among the Natives that in arbitrarily altering the standard from silver to gold, the Government meant to take some advantage of them and that their whole properly would be put in jeopardy. He was not prepared to incur this risk, and then came the question, what steps could be taken to produce the desired effect of gra- 1589 dually introducing gold into circulation in India, and accustoming the people to its use. All through India the general request was, that the English sovereign should be received in the Government Treasuries as equivalent to 10 rupees. He admitted that the establishment of the sovereign in England, Australia, and India would be a great convenience, in commercial transactions, but the difficulty was how to do it. In the public accounts of India the rupee was taken, no doubt, as the tenth part of a sovereign, because for certain purposes it was convenient to reckon the rupee as equivalent to 2s.; but, in point of fact, that was not its real value, for a sovereign was worth more in the market than 10 rupees. The standard in India being silver the value of the sovereign there should be measured by silver, but he regretted to say that he had not been able to ascertain with any degree of accuracy what the value of gold in the Indian market was, although it ought to be as readily obtainable as the market value of silver in this country. The extent to which sovereigns could be substituted for silver coins in India, so as to obviate the necessity now imposed upon mercantile men of carrying great quantities of silver about with them, would depend upon the amount of sacrifice involved in receiving a sovereign as equivalent to 10 rupees. He found that during the last two years the sovereign had varied in value at Calcutta from 10 rupees and 1 anna, that is, about 1½d. to 10 rupees, and 4 annas, and a-half, that is, about 6¾. If that might be accepted as a real indication of the value of the sovereign, the sacrifice would not be great, and therefore he was disposed to try the experiment of receiving a sovereign in the Government Treasuries as equal to 10 rupees. No doubt this would give it a certain amount of circulation, because any person taking a sovereign up country, if he could not sell it in the market for what it was worth, would, at all events, be able to dispose of it by paying in into a Government Treasury. Still he did not present to say that this concession would have any great effect, because the intrinsic value of a sovereign was more than 10 rupees, but, as it would meet the wishes of the people, and would go some way towards introducing gold, he had no objection to such a measure. At the same time, he did not whish to be understood as giving any positive assurance on the subject, for he must first ascertain the opinion of the Indian Government itself. The memorial to 1590 Which the hon. Member for Stockport had referred was at present under the consideration of the Indian Government, who would doubtless announce what they thought practicable and prudent after receiving reports from different parts of India, and taking the opinion of the intelligent merchants; and meanwhile he did not think it would be right to give any positive directions from here. In point of fact, he did not wish at this moment to express any decided opinion as to what should be done, and he believed no good could be derived from attempting to come to a decision here until the views of the Indian Government were ascertained. He hoped, under these circumstances, that the hon. Member for Stockport would not press his Motion to a division.
§ MR. WATKIN
said, that the right hon. Baronet had not attempted to answer the question of his hon. Friend the Member for Stockport, but perhaps he had misunderstood the effect of the Motion. He had argued as if the proposal was to substitute a good for the existing silver circulation in India. What the Motion before the House really meant was that, in as much as the silver circulation was deficient, it should be augmented by the establishment of a gold circulation, in order that the increasing requirements of trade and commerce might be fairly met. But the right hon. Barenst had assumed that there was no gold coin but the British sovereign to supplement the Indian coinage. He (Mr. Watkin) thought that the use of the gold did not depend so much on the relative values of god and silver as on the size of the coin which would be introduced. Hon. Members who travelled in France knew the great convenience afforded by the introduction of a little gold coin, worth five frances, instead of the old silver five-franc pieces. If the right hon. Baronet would address himself to the question, whether he could not coin a gold piece representing a two-shilling piece, he might, without any destruction to trade, being in a useful coin into the British dominions in India.
§ MR. GOSCHEN
said, the hon. Member, in advocating the proposal that silver coin-age should be supplemented by a gold one, was really aiming at establishing a double standard. No doubt it would be desirable to supplement the gold coinage by a silver one, but it would be difficult to do that without creating a double standard. He understood that the Natives of India would not take a sovereign because it contained 1591 alloy, and if that were so, they would not be likely to take a gold token, which the gold rupee would be in the absence of double standard, unless it were of pure gold. Perhaps the only possible mode of doing it would be by the introduction of the sovereign in some such manner as that suggested by the right hon. Gentleman, and by its superior portability and other advantages it might possibly be brought into use.
§ Amendment, by leave, withdrawn.