EAST INDIA CURRENCY.

HC Deb 08 August 1893 vol 15 cc1558-614

Mr. Chaplin,

Member for the Sleaford Division of Lincolnshire, rose in his place, and asked leave to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance—namely, the recent changes which have been made in the Currency of India, by the closing of the Indian Mints to the free coinage of silver with the sanction of Her Majesty's Government; but the pleasure of the House not having been signified, Mr. Speaker called on those Members who supported the Motion to rise in their places, and not less than 40 Members having accordingly risen:—

* MR. CHAPLIN

said: I make this Motion for the Adjournment of the House for the purpose of discussing a really important matter—namely, the changes which have recently been made in the currency of India with the sanction of Her Majesty's Government, and I venture to think that that is a discussion which has already been too long postponed. The postponement must not be in any way ascribed to our fault. Her Majesty's Government, in their discretion, persistently refused to allow any opportunity whatever of discussing this question before the change was made, although repeated appeals were addressed to them by gentlemen on both sides of the House; and since the change was made I found that it would be out of Order to do what I fully intended to do and what I had hoped to do—namely, raise this question upon the Vote on Account, and, consequently, there would have been no other opportunity of raising the question at all until we arrived at the time when the Indian Budget might be presented, which, judging from the announcement made this afternoon, will probably be in the closing days of the Session, and possibly in the month of October. Under these circumstances, I have had no hesitation whatever in resorting to the only expedient open to me—that of moving the Adjournment; and in view of the great importance of this change—the effects which it is likely to produce in all parts of the world, and, indeed, which it has produced already—I do not think that any apology is needed from me for moving the Adjournment. Now, I wish to say at once that whatever criticisms I may find it my duty to make upon the conduct of Her Majesty's Government at home I should find it very hard to blame the Government of India for the action which they have taken with regard to the currency of that country. Their position has been one of quite peculiar and exceptional difficulty. For year after year they have been urging on the attention of the English Government the great and growing troubles of their financial situation, and urging it in vain. This situation, they have pointed out with perfect truth, was owing to no fault whatever of their own; that the source of all their difficulties—namely, the constant fluctuations and the ever-recurring falls in the value of silver—was entirely beyond their control; that it was primarily due to and caused by legislation hostile to silver on the part of other countries; and that—and this is, perhaps, the most important of all their suggestions to the English Government—the only effectual way of meeting it was by promoting an International Agreement for the free coinage of silver as well as gold. This policy they recommended upon grounds and supported by arguments which, to the best of my knowledge, have never been contradicted—which have never been successfully disproved. The substance of those arguments will be found in a Despatch from the Government of India to the Secretary of State, and in a Memorandum by Sir David Barbour which was dated 21st June, 1892, and the effect of which, in a word, was this—that there was no country which would benefit so greatly or would receive such advantages from a uniform standard of value as Great Britain, having regard to the scope of her commerce and the immense transactions of her finance; that it would be a perfectly safe measure; and that it would be a final measure; whilst the adoption of a universal gold standard, even if it were possible, would not be without considerable risks. That is the language of the Government of India, which has been used over and over again towards the English Government in reference to this question. It is impossible, I say, for a responsible Government like that, or for any Financial Minister like Sir David Barbour, to make stronger or more urgent statements and representations than those which I have quoted; and though I particularly desire to avoid anything of dogmatism on a question which I know to be one of peculiar difficulty like this, and though I speak of my own views with all deference to those of others who differ from me, I do not hesitate to say that in the views which have been expressed from time to time by the Indian Government I absolutely concur. But to these appeals, and to all similar appeals, which have been made from time to time successive Governments in this country have persistently refused to listen; and the present Administration in particular have, in my judgment, been conspicuous for their hostility to silver and silver interests, and, indeed, I think that I may say to almost every proposal which has been made to promote the increased use of silver throughout the world. What has been the consequence of this state of things? It has been very simple, and as unfortunate as simple, for the Government of India have found themselves at last confronted with the danger of bankruptcy on the one hand, or the necessity of closing the Mints to the free coinage of silver on the other. It is this latter policy—which is not what they desired—which is open to innumerable objections, and which I believe is full of dangers not only to India itself, but to the commercial interests of the world at large, that has been practically forced upon them by the attitude of the English Government, and which they have at last been reluctantly driven to adopt. Now, that is the position with which we are confronted at this moment. It is not denied, even by the Government of India themselves, that this policy is open to grave risks, and to an almost countless number of objections; and I am bound to say that, in my opinion, it is only right that Parliament should at the earliest opportunity—though Her Majesty's Government have done their utmost to prevent it—consider the whole of this subject, and, above all, endeavour to ascertain what are the grave objections to this policy on the one baud, and what are the compensating advantages to be expected from it on the other. Now, as far as the latter are concerned, I think that they need occupy but little of our time, because, as a matter of fact, the single, the main advantage which was anticipated and hoped for from this policy—namely, the fixity of the rupee and the stability of the exchange between India and England—has not been by any means secured. If the Indian Government continue to be unable to tell their Council bills, as they are at present—and if you ask half the men of business they will tell you that that is what is going to happen—it will not be, and it cannot be, secured at all; and in that case the whole of your scheme will have failed in the special object for which all the risks of your policy, and all the objections to that policy, have been incurred. There remain to be considered the advantages to the employés and the servants of the Indian Government and the gain to the Revenue which the Government will appropriate by artificially raising the value of the rupee. As to the gain to the servants and employés of the Government, it is hardly worth considering. Even if the Government had succeeded in keeping the rupee at 1s. 4d., the gain would have been trifling. As it is, all the advantage they derive is the difference between an exchange of 1s. 2¾d., or whatever it had fallen to, and an exchange of 1s. 3½d., which it is to-day. With regard to Revenue, it is true that the Government will profit by artificially raising the value of the rupee. They will also escape the necessity of a direct increase of taxation. Yes; but how do they do this? They escape it in reality by nothing but taxation in another form, which is not quite so easy for the natives to discover. You escape a deficit in your Revenue by tampering with the currency of India and artificially raising the value of the rupee. But the effect of artificially raising the value of the rupee is to lower pro tanto the value of everything else. Every native who has debts to pay, or who has taxes or fixed payments to make, must give more of his produce in the future than he had to give before, for the purpose of meeting his obligations. Yes, you save £2,000,000—the loss of £2,000,000—of your Revenue. But at what a cost is this accomplished? Why, in order to avoid increased taxation of something like £2,000,000, you are indirectly, and by methods which you hope will not be discovered, going to mulet—and you have mulcted—the native population by ten times that amount. I am aware that that is a grave and serious charge to make, but it is a true charge; and in order to enable me to establish it, as I intend to do, I must ask the House to recollect three things. First, that the closing of the Mints in India to the free coinage of silver would necessarily be followed by a very heavy fall in the price of silver. Lord Herschell's Committee did not deny that. On the contrary, they expected it; and I make bold to say that to everyone who has followed this question with care that it was as absolutely certain that silver would fall as the first consequence of the closing of the Mints as that I am addressing the House at this moment. Secondly, the House must remember that the peasantry of India are, to a great extent, in debt. They have a large number of fixed payments to make, including land taxes and other things which have to be met. And, thirdly, there is an enormous amount of uncoined silver in the hands of the native population at the present time.

THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) Derby

What evidence have you of that?

* MR. CHAPLIN

Well, I will give the right hon. Gentleman the evidence in a few moments. But perhaps the right hon. Gentleman will kindly allow me to deal with each of my points in order. As to the first point—namely, the probability of a great fall in the price of silver—that is au accomplished fact already. There has been nothing like it in the history of silver since the world began. Silver in the same period has never fallen so much in relation to its value to gold as it has in the last fortnight. As to the second point—the indebtedness of the natives—I will ask the House to allow me to call attention to one single paragraph in the Petition which was addressed to Lord Herschell, as Chairman of the Departmental Committee. It is called the Memorial of the Industrial Association of Western India, and is addressed to Lord Herschell. After remarking that the steadiness of rupee prices—in other words, that the stability of the silver standard concurrently with the fall of gold prices and the exchange is the most remarkable feature of the situation—they say— The heavy burden of ancestral debt on the Indian peasant cultivators is another and older feature which cannot escape the consideration of your Lordships' Committee. I am afraid it did escape them, for very little notice indeed appears to have been taken of it. Then the Memorialists go on to point out as follows:— Your Memorialists observe that the large volume of the gold obligations of the Government is advanced to justify a departure from free trade in rupees. They humbly suggest that the silver obligations of the peasantry are twenty fold greater and more important than the gold obligations of the Government, so that while removing a minor evil a greater one of the same nature, but the results of which it is impossible to foretell, would be substituted for it. I should like to know where, on the part of the Departmental Committee or on the part of the Government, the slightest attention has been paid to this representation on the part of the native population of India. This Memorial, bear in mind, comes from au Association who are directly representative of the people of the West. And though it is our duty—as I hold it be our duty—as long as we continue to govern India at all, to govern it for the good of the people of that country, I say that the Government have absolutely ignored the protests of these people, and that in the change which you have made you have added enormously to their burdens, and inflicted a grievous wrong upon them. Now I come to the third point. The right hon. Gentleman asked me to give him some evidence of there being an enormous amount of uncoined silver in the hands of the native population. I readily accede to the challenge of the right hon. Gentleman. It is a matter of the greatest possible importance, and, therefore, I hope that the House will pardon me if I deal with it in detail. The authority of the first witness that I shall call will not be disputed. It is the evidence of the present Financial Minister of India, Sir David Barbour, and was given before the Gold and Silver Commission in 1888—of which Commission he was also a Member. Sir David Barbour begins by saying— That he has given much attention to the question of hoarding by the natives; that for about eight years he was employed in the interior of the country, and saw a great deal of the habits of the people; that it was beyond doubt that there was a large amount of hoarding both of gold and silver among the natives; and that it took the form of bullion, coin, or ornaments. In reply to other questions Sir David Barbour said— £130,000,000 of gold have been imported net into India since 1835–6, and there was a large amount in India before that date, and nearly the whole of this amount is now in hoard. That was only four or five years ago. Then he was asked this question— Could you give us any estimate of the amount of silver hoarded in India? And his reply was— From my personal observation and experience, I should be inclined to say that the amount of hoarded silver, exclusive of current coin, was greater than the amount of gold. Finally, in reply to a question from the hon. Member for North-West Manchester (Sir W. Houldsworth), he said— The amount of hoarded silver, not in coin, is nearly equal to that of gold. Now, there is no greater authority upon this question, I assume, than Sir David Barbour. I will not quote any experience of my own, though it did happen to me to pass a year of my life in that country; and certainly in those days it was notorious—for I had opportunities of going to every part of the country—that the natives of India had an enormous quantity of hoarded silver in the shape of ornaments, which every man and woman, and almost every child, wore; but I think it is clear, from the evidence given by Sir David Barbour before the Gold and Silver Commission, that this was, at all events, a subject that ought to have been examined most closely; and I confess I am surprised, under those circumstances, that the Departmental Committee did not take more evidence—more complete evidence—upon this subject than they appear to have done. I have examined the greater part of the evidence on that subject given before that Committee, and I find that only three or four witnesses were examined upon it at all. The name of one of them is Mr. Mackay. But Mr. Mackay is the leader of the agitation in favour of a gold standard; and his evidence upon this subject, therefore, as an interested person, must be taken cum grano. But even his evidence upon this subject is by no means positive at all. All he says is, that he does not think there has been a large amount of uncoined silver hoarded by the natives; and I am bound to say, from the general tenour of his evidence, it does not appear to be a question to which he had given sufficiently accurate attention. Two other witnesses were examined, who confirmed what Sir David Barbour had said upon the subject. I should like, if the House will allow me, to read the evidence of one of them. One was Mr. Baynes, who says, on this question, that— There is undoubtedly a large amount, indeed, of silver hoarded as ornaments by the people. And then there is the evidence of Sir F. E. Adams, who was asked if he thought it would be serious in its results to depreciate the value of that large amount of silver owned by the natives, and his reply was— That is a point, I think, which is exceptionally important, for this reason. Hitherto, the natives, if they have any money saved in rupees, melt them down, turn them into ornaments, and put them on their wives and children. They load them with silver ornaments, but they have always known one tiling—that if a pinch came they would be able to take those ornaments to the Mints and get rupees for them weight by weight. But if you fix the rate at 18d.—or at 16d. as the Government propose—the value of silver in the open market falls below that; and if they wish to sell a few ornaments, when they take them to the Mint they will not get weight for weight, but 20 per cent. less. That will lead to the widest possible dissatisfaction. I have quoted, so far as I know, the bulk of the evidence given, not only before the Gold and Silver Commission, but given also before the Departmental Committee upon this point; and I take it that, upon the most reliable evidence which has been obtained, there is an enormous amount of uncoined silver in the hands of the native population of India at the present time, amounting, as Sir David Barbour said, to the colossal sum of £130,000,000. This great amount of silver is held as a sort of reserve by the people—a reserve to be used in cases of necessity—in times, for instance, of famine, or in cases of marriage, or upon any great family occasion. Then they take their silver ornaments to the nearest money-lender, and they exchange them for rupees. In fact, this enormous hoard constitutes the savings of the poorer classes of the people of that country; and now, by a single stroke of the pen, by this arbitrary action of the Government, you have depreciated the whole of this enormous property to an extent of which I believe neither Parliament nor the people of this country had not the slightest idea, and yet the calculation is very simple. Perhaps the House will allow me to give them the calculation of the injury which has been inflicted upon the native population by this single arbitrary act of the Government. At the date of the closing of the Mints the price of silver was 38d. an ounce. A week afterwards it fell to 30d., and according to what I see reported to-day the price is 32½d That is to say, it has fallen from 38d. to 32½d., or 15 per cent., since the closing of the Mints. But 15 per cent. applied to £130,000,000 represents a sum of £20,000,000 sterling; and that is the precise amount, I believe, of the spoliation inflicted by this arbitrary action, sanctioned by the English Government, upon the native population of India. It is hardly credible, but, at the same time, I believe it to be absolutely true. And what is more, the Government have no excuse whatever on the subject; because I took it upon myself, being greatly interested in these questions, and having had the opportunity of studying them for some years, to put a question to the Chancellor of the Exchequer on this particular point on the 16th of June, some considerable time before the decision of the Government was taken. I asked the Chancellor of the Exchequer then that we might have a discussion upon this subject before it was finally decided; because I thought that when the facts were put before Parliament—unless I was entirely in error—it would hesitate before it gave its sanction to a course which appears to me, as regards the Indian people, to be fraught with nothing but mischief and injustice, and I do not hesitate to say that, unless I am altogether wrong in my facts, unless Sir David Barbour's evidence is altogether untrustworthy, or unless in the years since 1888 those enormous hoards have been made away with, that a more flagrant act of public plunder has never been perpetrated by a civilised Government, and if you were to attempt to do anything of this sort in England, the Government perpetrating it would not remain in power for a single week. The people of India are not represented in this House; but, in my humble judgment, it will be more than we deserve if we escape a worse disaster when the native population really begin to understand what is the true meaning of the closing of the Mints to them. The Prime Minister was asked in this House by one of his own supporters whether the Government meant to give any compensation; and he stated in reply that, as far as he was aware, the bullion in the possession of the natives was not affected at all, and there was no necessity to do anything in regard to them. The right hon. Gentleman's exact words were— With regard to the bullion in the hands of the native population, it does not appear that any step has been taken, or that they will be in any respect damaged in consequence. Well, I think I have shown that he was absolutely wrong, and I shall await the explanation of the Government with interest, and I think I am entitled to ask if they are in a position to dispute the evidence I have quoted and the statements I have made; and if they are not, do they intend deliberately to continue to inflict this great wrong upon the natives of that country? This is a question, I think, of great importance, and one to which the House is entitled to an answer. I pass to another point. It is not only the loss which has been inflicted upon the natives of India for which the Government is responsible; but they have succeeded, by this great exercise of financial ingenuity, in convulsing the financial constitution of the world literally from China to Peru. I do not know, I am sure, what the contraction of silver securities amounts to at the present time. I am almost afraid to think of it, but I have heard it estimated variously at from £100,000,000 to £200,000,000 already. I know it must be appalling, and I know it has spread consternation and alarm in financial circles in all parts of the world. The worst of it is that a very large proportion of these silver securities are held by people in this country. I ask the Government this question. Did they take all this into consideration before they gave their sanction to this action on the part of the Government in India? Do they think now that they are justified, by the trifling amount saved to the Government of India, in inflicting these enormous losses throughout the world, and upon thousands of English people who hold silver securities at the present time? These are questions which I am entitled to put to the Government, and to which Parliament is entitled to an answer. There is another point on which I should like to ask for some information. Did the Government, before taking this grave and serious action, have any communication whatever with the Government of the United States? The possible repeal of the Sherman Act was urged by Lord Herschell's Committee as one of the reasons for the recommendation they made. I want to know what was their authority for believing that the repeal of that measure was imminent or impending? I am told on what I believe to be the best authority—authority coming quite recently from persons in America—that before the closing of the Indian Mints there would have been little, if any, chance at all of any successful attempt to repeal the Sherman Act. But now, by your action in hurriedly closing the Mints in India, I think it is quite possible—indeed it is more than possible, it is probable—you will make the repeal of that Act inevitable. If that is so, what we have to look forward to is an immediate further fall in the price of silver; and then all the mischief you have done already, all the losses you have imposed upon thousands of people throughout the world, all the wrong you have done to the native population in India will be pro tanto increased and aggravated, and for the whole of that you will have to bear your just share of blame. Well, Sir, I come to another point. I do not know if the Government have considered the possible loss to the Revenue of India which is likely to arise from the exchange which they have brought about between India and other silver-using countries, and whether it will not counterbalance, or more than counter-balance, the gain which they expect from the artificial raising of the value of the rupee. Nor am I aware whether they have considered or taken any precautions against the dangers of spurious coinage in India, to which in future there will be a great temptation, which did not exist before. But I do know this—that both of these are possible contingencies—contingencies, indeed, of the greatest possible gravity. I understand that there have been some symptoms already of a diminution of Revenue from the export of opium to China; and I have heard whispers quite lately—something more than whispers indeed—that silver, which is all through these transactions still going to India, is being used for the purpose of spurious coinage already. That was told me not more than 10 days ago by a gentleman who may be regarded of very considerable authority on all questions dealing with India. [Cries of "Name!" and "Locality!"] I must refer the hon. Gentleman to my informant. It was told me in conversation, and I do not know whether it would be right for me to state his name without permission. There is one other subject to which I will refer for a moment. It is a question of supreme importance—Will the balance of trade, which hitherto has been favourable to India, under your scheme be maintained in the future? Great authorities tell me that all the probabilities are against it. The first effect of closing all your Mints, and of the great fall in silver which has followed, has been to set up between India and China and other silver-using countries on the one hand, and India on the other, an exchange which is extremely hostile to the latter country. All those silver countries of which I have spoken will in the future be in the enjoyment of a bounty, as against India, upon all their goods exported to that country, which India formerly enjoyed as against England. If, under these circumstances, the balance of trade should cease to be at any time favourable to India—and it is by no means an impossible contingency—then the collapse of your attempt to artificially maintain the value of the rupee will be complete. There are other objections which I desire to refer to, and which are patent to the whole world. You have a silver standard in India which fulfils the first essential of a standard—namely, stability. No one recognises this quality in a standard more emphatically than the Prime Minister. We had the advantage of hearing him speak on this subject on a memorable occasion. He said that the properties of a standard were fixity, steadiness, stability, and continuity. Fixity and invariability, lie said, were the first elements of a standard. Sir, I maintain that you have had these properties in the standard in India. The stability of the silver standard in India is shown by the course of the prices of commodities in that country. The prices in silver have for many years never practically varied. They have remained in that country almost precisely the same, notwithstanding the fact that the prices of commodities measured in gold in Europe and America, where you have a gold standard, have changed enormously during the same time. Well, all this is now to be done away with; you have abandoned the standard which was stable, in order to replace it, if you can, by a standard which has been proved by experience during the last 20 years to be singularly deficient in that quality. You are going to introduce this element of disturbance and of loss, and to inaugurate by artificial means an era of falling prices in India, where, hitherto, they have been so singularly steady. I say, if you can, because it is by no means certain at present that the establishment of a gold standard in India would be permanently possible. As a matter of fact, at the present moment India is in this extraordinary position: that she is actually without any standard of value at all, and the whole of the enormous currency of that country is an inconvertible token currency, with the nominal value of the rupee infinitely greater than that of the material of which it is composed. Surely I may appeal to the House and to the right hon. Gentleman himself whether that is a satisfactory or desirable state of things? It is a truly remarkable thing, and one of the most curious incidents we have witnessed probably during many years, that the present Prime Minister, who has achieved in the past such a reputation as a master of currency and finance, should now come forward in the character of the most prominent advocate at the present time of dishonest money in the world, and that he should regard that as a fitting and proper currency for our Empire in the East. Sir, there is one more objection to which I desire to call the attention of the House before I bring my observations to a close. The action the Government have taken with regard to the currency of India cannot possibly fail to intensify and aggravate the appreciation of gold throughout the world, which has done so much injury already, and of which there has been so much complaint. I know that some people deny that there has been any appreciation of gold at all. Those who take that line and uphold that argument have two other arguments to meet before they can expect their opponents to agree with them. If they do not believe in appreciation, at least they cannot deny that there has been an enormous fall in prices. That is not a matter of opinion, but a matter of fact which cannot be disputed. What is the cause of it? I suppose the Chancellor of the Exchequer will tell me it is the great increase of commodities throughout the world—in other words, it is due to over-production. I defy him to prove it. I do not believe that, in proportion to the needs of the world and the increase of population, there is any greater production now than there was 20 years ago. Have hon. Gentlemen opposite the least idea of what the increase in population is supposed to be? I was looking at some figures the other day which put the increase of the population of the world during the last 20 years at no fewer than 200,000,000 of human beings. Well, of course there has been a great increase of commodities. It is a merciful fact that there has been, otherwise one-half the world at the present moment would be going about naked, and the other half would probably be starved. That is the answer to your plea that there has been no appreciation of gold, and that the cause of the fall in prices is due to an increase of commodities alone. Moreover, if the increase of commodities had been the cause of the great fall of prices during the last 20 years, surely that fall would have been universal. How do right hon. Gentlemen account for the fact that the prices of commodities in silver-using countries have not fallen at all? That is a point which certainly a few years ago was absolutely placed beyond dispute. That is a fact to which Sir David Barbour, amongst others, appended his signature. The fact that in silver countries the prices of commodities have remained constant all these years, in my opinion, points most conclusively and directly to the fact that it is gold which has risen in value, and has been the real cause of the difficulty. Indeed, it seems to me it could not possibly be otherwise, because if you suddenly make a great increase in the demand for any given commodity without any corresponding increase in the supply, that commodity must become comparatively scarcer, and, therefore, dearer than before. It seems to me these are questions which gentlemen like the Chancellor of the Exchequer, who deny the appreciation, and who appear to be rather disposed to treat it with ridicule than otherwise, are bound to grapple with and answer before they take the stand on that position. If that is not enough, I can point to a long list of authorities in support of my view of this question. I can offer them the results of the system of index figures, as worked out by the economists—by Dr. Giffen, by Soetbeer, and Sauerbeck—all of them arriving independently at the same results. I can also refer them to the exhaustive writings of Dr. Giffen—to the speeches of the right hon. Member for St. George's, Hanover Square (Mr. Goschen), the late Lord Beacousfield, and the late Lord Iddesleigh, who signed his name to a Report which connected the fall of prices with the great appreciation of gold. I can also refer to the opinion of the majority of the Members of the Gold and Silver Commission, for although the Members of that Commission were at first equally divided, one of their number—I refer to the right hon. Member for Bodmin (Mr. Courtney)—has since lie-come a convert to the views which I am endeavouring to lay before the House. With this mass of opinion against them, the onus probandi rests, I say, upon the Government, and on those who dispute the proposition, to disprove the appreciation of gold; and I say that in what they are doing now the Government are going to aggravate all the misery and all the evils that result to nations from a great appreciation of the standard of value. They have already had some warning not to continue in the path which they have begun to tread. Only the other day one of their most respected and trusted supporters resigned his seat in consequence of their attitude—chiefly, as I understand, upon this question, and I believe that others are not unlikely to follow his example. I have only one more question to ask. What is it that has brought about this crisis? The action of India was determined by the failure of the Conference at Brussels to arrive at any understanding, and for that failure I have always held that the English Government and the official Representatives of England were mainly responsible. I am perfectly content to rely upon the statements in the Blue Book. The Indian Delegate is outspoken in his condemnation of their attitude, and declares that nothing but their action stood in the way of an agreement. Then one of the Members of Lord Herschell's Committee said that he was drawn to the conclusion that the Home Government was the only substantial obstacle to the agreement. I think I have said enough to show that there is great danger in the course which the Government have taken, and that the compensating advantages which they expect are not sufficiently great to justify them. The Government alone are responsible for this great change, which is so full of elements of danger and difficulty for the future, not only with respect to India, but, with respect to this and other countries; and the Government should, I maintain, take this opportunity of justifying their policy, if they can.

Motion made, and Question proposed, "That this House do now adjourn."—(Mr. Chaplin.)

* THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) Derby

If I did not know that this subject occupies the mind of the right hon. Gentleman, as it seems to me, to the exclusion of all others, I might be disposed to blame him for occupying an hour or more of the time of the House upon it at this moment. The last half-hour occupied by his speech be devoted to the disputed and disputable question of bimetallism, and his observations had very little connection with the subject of India, if any at all. I do not complain of my right hon. Friend, for I know that if the end of the world were to come—si fractus illabatur orbis—ho would be found in the last hours of the universe delivering an oration upon the subject of bimetallism. But I do not propose to enter into a general argument on that topic. The fact is that I have boon informed by the Leader of the Opposition (Mr. A. J. Balfour) that upon that question I am superannuated. He declared in the City the other day that no man over 60 years of age was capable of being converted to bimetallism. Whether he said that because he found that most of the prominent City Authorities had passed that period of life I do not know. Berhaps it was his way of accounting for the fact that he found so few converts in that part of London. At any rate, his declaration must be my excuse for not entering into a general argument upon the question of bimetallism. But when the right hon. Gentleman challenges the conduct of the Government with reference to the Indian currency I am quite prepared to answer him. The course that the Government have taken was indicated to them most distinctly in the Report of the Royal Commission of 1888, which my right hon. Friend the Member for Bodmin (Mr. Courtney) signed, although he has since repudiated it according to the right hon. Gentleman opposite. That Report pointed out the dangerous and mischievous effects that bimetallism would have in India if it were adopted. The Commissioners said— There would be at least a serious risk of substantial mischief to the people of India.…Any change having the effect of lower- ing silver prices, while taxes and charges remained unaltered, might occasion serious discontent; and if it, were seen to be a consequence of political action, it might create political dangers as grave as any that are likely to result from a continuance of the present conditions, further, if it be true that cotton manufactures in India have been fostered and stimulated by the fall in silver, it would be a serious matter, and certainly likely to engender great discontent, if by an act of the State the manufacturing industry thus created were seriously hampered, if not destroyed. …It would be questionable in point of justice and policy for this country to take from India by legislation any benefits the latter may have derived from changes in the value of precious metals which are in no wise due to such legislation. Although we have not felt ourselves able to recommend that this country should enter into negotiations with the view of establishing a bimetallic system of currency, we have indicated that we are fully sensible of the concessions which have been urged by the Government of India; and we think that every proposal which seems calculated to diminish these difficulties and to ease the existing situation is deserving of very careful consideration, and that an earnest endeavour should be made to adopt any which should appear to promise substantial advantage without the risk of greater evils.

MR. CHAPLIN

Who is that signed by?

SIR W. HARCOURT

I will tell the right hon. Gentleman. It is signed by Lord Herschell—

* MR. CHAPLIN

Quite so; that is the Minority Report.

* SIR W. HARCOURT

So you say, on the ground that yon have converted the right hon. Member for Bodmin. But it is those views that have been adopted by the Government, and by which they are prepared to stand. This Report is signed by Lord Herschell, Sir Charles Fremantle, Sir John Lubbock, Lord Farrer, Mr. Birch, and by the convert, Mr. Leonard Courtney. They also said— While we cannot recommend that the Mother Country should run any serious risk in altering its system of currency in order to assist the Dependency (of India), we think that the Government of the latter should be allowed a free hand to deal with the problem as it considers best in its own interest. That was the position taken up in 1888, and by it Ave abide. We believe that to alter the fundamental principles regulating the currency of this country would be an evil to the United Kingdom and to the Empire. The right hon. Gentleman, who is naturally extremely anxious to east blame upon the present Administration and to relieve everybody else, says that the difficulties of the Indian Government were created by our conduct respecting the question of bimetallism. The right hon. Gentleman says—and says truly—that the Indian Government were in favour of bimetallism. In 1886, when I was Chancellor of the Exchequer, I had the honour to make a reply to a Despatch of the Indian Government in favour of bimetallism; but, in the language of the Commission of 1888, the English Government, and not the present Administration only, have declined to entertain the question of bimetallism. The right hon. Gentleman says that in 1892 there was a Despatch from the Indian Government requesting that bimetallism should be established by International agreement. The right hon. Gentleman said that was a conclusive argument; but did the then Chancellor of the Exchequer think the argument conclusive? What was his action? The Government of the United States desired that a Conference should be called together for the express purpose of entertaining and discussing the question of bimetallism; and the late Chancellor of the Exchequer, very wisely and sagaciously, absolutely declined to allow English Representatives to go to a Conference summoned for such a purpose. But the right hon. Gentleman said that any proposal for the larger use of silver was one very proper to be considered, and he would give every liberty to the English Delegates to discuss these matters. What happened then? The right hon. Gentleman the Member for Sleaford said—"See what the present Government did at Brussels, which led to these fatal consequences" he spoke of. What did the Government do at Brussels? The first thing that happened at Brussels was that the United States proposed a Resolution that— In the opinion of this Conference, it is desirable that some measures should be found for increasing the use of silver in the currencies of the nations. What was the view of the Conference on that? England was almost the only Power at the Conference that was prepared to support that Resolution. The opinion of Germany was that— Germany, being satisfied with its monetary system, has no intention of modifying its basis. The Delegate of Austria-Hungary said— I am obliged to declare I shall be unable to give an opinion on the Resolution, or take part in the vote. Russia said the same thing; Italy said the same thing; and the Representatives of the majority of the Powers absolutely refused to accept the Resolution. M. Tirard, the French Delegate, asked what was the use of their Entertaining any such question after the declaration by their respective Ministers that neither Germany, nor Austria-Hungary, nor England had any intention of modifying their monetary systems, with which they declared themselves satisfied. That, I venture to say, was a true declaration of the state of the opinion of the Great Powers of Europe in reference to a monetary standard. What was the consequence of the speech of M. Tirard? The Delegate of the United States expressed not unnatural surprise at the course France had taken in the matter. In 1881 France and the United States were acting together in the interests of bimetallism; but in 1892 they ceased to act in that direction. The language of Mr. Cannon, the able Delegate of the United States, was that of extreme astonishment that France no longer favoured bimetallism. But that is not all. When the Conference came to be adjourned, the Delegate of Italy proposed that the condition of adjournment should be that, when the Conference met again, they would attempt to Discover an equitable basis for an agreement which should not infringe in any way the fundamental principles of the monetary policy of the different countries. That meant that if the Conference met again bimetallism was not to be discussed. The Italian Delegate said that whatever was proposed must be something which would not affect the monetary basis adopted in the different countries; but even subject to that condition the German Delegate refused to vote in favour of the adjournment. The Conference was to have met again on May 30; but a telegram came from the United States of America saying that the Conference was postponed. So much for the Conference. What was the position of the British Government at that time? When the Conference adjourned the English and Indian Delegates declared most expressly that the Indian question was reserved, and would be dealt with entirely independently of the Conference, leading the members to believe that it would be dealt with before the Conference met again. Indeed, Lord Herschell's Committee was already sitting. Well, now, what is the charge of the right hon. Gentleman against the British Government? The Indian Government was in favour of bimetallism. The Government said—"We are not prepared to adopt bimetallism yet; but we will consider, on account of the difficulty of your situation, any proposal you may make." The right hon. Gentleman treats this plan as if it were one invented by us, and forced upon the Indian Government. He said that Sir David Barbour was a great financial authority. Of course he is a great financial authority; and if you want to see a most conclusive defence of the plan adopted in India you have only to read Sir David Barbour's statement, presented to this House some days ago. The plan is the plan of the Indian Government. The scheme which has been adopted is precisely the scheme that they recommended, with some slight alteration approved by them. We said to the Indian Government—"We will not adopt bimetallism in India; we think it dangerous and mischievous for India; but any other proposal that you put forward will have the fullest consideration at our hands." I do not wish to labour the matter at any length: but anyone who desires to understand the utter baseless-ness of what the right hon. Gentleman has said in condemnation of the plan has only to read the speech which Sir David Barbour made in the Indian Legislative Council, and which has been laid on the Table of the House. I am not going into the details of the amount of un-coined silver in India. Lord Herschell stated only last night in the House of Lords that that is an entire delusion.

MR. CHAPLIN

On what evidence?

* SIR W. HARCOURT

He heard the evidence. I take the evidence of Sir David Barbour and the Lord Chancellor as worth all the information derived from the sporting tour of the late Minister for Agriculture.

* MR. CHAPLIN

I quoted Sir David Barbour's evidence at great length upon this subject. The right hon. Gentleman has never even touched it, or the evidence I quoted from Lord Herschell's own Committee.

* SIR W. HARCOURT

Yes, I have.

MR. CHAPLIN

No; you have not.

SIR W. HARCOURT

Sir David Barbour is the recommender of this plan. The Indian Government sent it to us. We made a slight modification, which they deemed an improvement and accepted; and, therefore, to quote Sir David Barbour's evidence in 1888 against the plan which he sent to England, and almost at his instance was passed through the Legislative Council in India, is really unfair. We accept all responsibility in this matter. But it was our duty to ascertain what, in the opinion of the Indian Government, barring bimetallism, was the best plan for the people and the Government of India. That was the plan sent home for our consideration by the Indian Government and Sir David Barbour, and which we adopted. That is the plan which, in the language of the right hon. Gentleman, was the arbitrary action of the English Government. What was the arbitrary action of the English Government? We adopted the recommendations of the responsible Government of India. If the right hon. Gentleman thinks he is doing a service to this country or to India by saying that the plan with reference to the currency of India recommended by the Indian Government and sanctioned by the Government at home is a flagrant act of great public plunder, and if he considers that a patriotic line to take, I do not agree with him. What he is endeavouring to do is to incense, if he can, the people of India against the determination of the Government of India, sanctioned by the Government of Great Britain. Will he succeed in that? I hope he will not. I believe that all the arguments upon which he founds his statement are utterly futile; and, therefore, I venture to characterise that statement as mischievous in the highest degree. he says this plan is a spoliation of the Indian people. Who is it that he attacks as the author of the plunder? Lord Lansdowne, because he was President of the Council that passed this Act; he was the head of the Government that recommended this policy; Sir David Bar-hour; aye, and the right hon. Gentleman the Member for Bodmin (Mr. Courtney). I do not mean to say we disavow in any sense our responsibility; but what we did was to gather together what we thought the ablest and most competent body of men to advise us in this matter. They came to the conclusion to recommend this plan, respecting which the right hon. Gentleman thinks it worthy of himself and of the colleagues who sit around him to inflame public opinion in India. With reference to the results of this policy, no man can, of course, undertake to predict. I am willing to take the opinion of men who have recommended it, and of those who will have to carry it out. We accept the whole responsibility, but we did not profess to be as good judges as they are of the financial and social condition of India with relation to this important matter, or of what was the best and wisest course to take in confessedly difficult circumstances. We believe we have taken the best and most prudent method of informing ourselves as to what is the best thing for the Indian Government and the Indian people. We do not believe, with the right hon. Gentleman, that the Government in India or the Indian Council at home have deliberately recommended and carried out a policy of spoliation of the people of India. On the contrary, we believe that, so far from their being guilty of an act of public plunder, they have recommended in the circumstances that which they believed was best for the Indian Government and for the Indian people.

* MR. CHAPLIN

Not for the Indian people.

* SIR W. HARCOURT

Is your charge, then, against Lord Lansdowne and Sir David Barbour and the Council in India that they do not care for the Indian people? That is a most undeserved, but a most, heavy censure upon the Government of India. I think we should do them a great injustice if we took any other view than that in recommending this course they recommended that which they considered good, not only for the Indian Government, but for the Indian people. That is the answer I have to give on the part of the Government. We submitted the proposals of the Government of India to the most competent authorities, and we have given it all the consideration we could, and we have adopted and sanctioned the plan of the Indian Government, and carried it into execution. And now the right hon. Gentleman gets up, in the midst of the important business in which we are engaged, to endeavour to make mischief, if he can, in Hindostan. And why? Because he knows that this action is the death of bimetallism. [Cries of "No, no!"] "No, no!" say hon. Members. "Hope springs eternal in the human breast." Hon. Members are more simple than the right hon. Gentleman, who is anxious to make mischief, not only among the native populations in India, but on the Money Market in this country. It is said that the Indian Council cannot sell its bills. That is not the fact. The reason why it has not sold its bills below the present price is perfectly well known, and when the right hon. Gentleman makes a statement of that kind it shows how little be knows of the Money Market. Is that opinion shared by commercial authorities in India? I have made it my business to look daily at what is the opinion in India on this subject. The right hon. Gentleman quoted the views expressed in several of the Indian newspapers, and, continuing, said—"I wonder what is the opinion of Lancashire on this change." The people of Calcutta—and I believe the merchants of Lancashire—do not share the views of the right hon. Gentleman. It is said that we ought to have consulted the United States upon this matter, and that our proceedings may imperil the Sherman Act. But surely that part of the right hon. Gentleman's imputation falls to the ground. Does he suppose that the Government of the United States are particularly anxious to support the Sherman Act? We told the Conference at Berlin that we regarded this Indian matter as a question quite apart from the general question of European currency. We have acted upon the best information we could obtain, and, in my opinion, this miserable Party attack is only made for the purpose of delaying an important Bill. I say you have no right to make currency a Party implement for purposes of this kind, nor to play ducks and drakes with the interests of your Indian Empire in the hope that you may waste an hour or two in intercepting the progress of a certain Bill.

MR. A. J.BALFOUR (Manchester, E.)

I am aware that my right hon. Friend the Member for Bodmin (Mr. Courtney) has oven a greater title than I have to speak on this question, and I will not intervene between him and the House for more than a few minutes. But after the extraordinary outburst we have just heard, some words from this Bench will, I think, be desired by the House. My right hon. Friend has been accused by the right hon. Gentleman, who cannot even discuss currency without plunging about in these absurd recriminations which are clear to him at all times, and possibly appropriate at some times, but which are certainly not appropriate on the occasion of a Debate initiated in a speech which was not only powerful in argument, but temperate in tone. The right hon. Gentleman has accused my right hon. Friend of desiring to delay more important business.

* SIR W. HARCOURT

The right hon. Gentleman accused us of being guilty of a flagrant act of public plunder. I do not know whether the right hon. Gentleman calls that "moderate" language.

MR. A. J. BALFOUR

I will come to that point directly. But surely one phrase hardly justifies the long personal peroration which the right hon. Gentleman has thought proper to inflict upon the House. He accused my right hon. Friend of having spoken an hour. I doubt the accuracy of that statement; but, in any case, the right hon. Gentleman opposite has taken just as long to answer my right hon. Friend. This is a question of the very first importance, and no reasonable man will dare to get up and say it is not a proper subject for the House of Commons to discuss. If it be a proper subject for the House to discuss, I should like the right hon. Gentleman to tell us at what other time it could possibly have been discussed. My right hon. Friend was unable to raise it when the Vote on Account was before the House; and as we have been deprived of every other opportunity by the action of the Government this is the only opportunity we could get of bringing the matter forward. So much for the change of impropriety in bringing the subject on at this stage. I pass to the more important question of the view we take as to the general course of the policy of the Government opposite, with whom alone we are now dealing in this matter. I will at once frankly admit that when they acceded to Office the Government found themselves in an exceedingly difficult position with regard to this question. They were not prepared in any way to sanction bimetallism. I admit that that is not a question in which the Government of the day could be expected to take a definite line, unless they felt they had behind them a backing of public opinion in this country which would justify such a great and far-reaching change. But I think they might have gone into the Brussels Conference showing themselves alive to the extraordinary gravity of the situation as regards silver, and desirous of doing what lay in their power to mitigate the evil which every man of common sense, except the right hon. Gentleman opposite, regards as a very serious question—namely, the violent depreciation in the value of silver, and its practical exclusion from a large number of currency purposes which it has hitherto served. The right hon. Gentleman referred to the action of the United States. I am not disposed to defend the Sherman Act, but I should view the condition of a Finance Minister in this country who regarded as a matter of absolute indifference to himself what happened to silver as something approaching to lunacy. Though the right hon. Gentleman has not repudiated the responsibility of his own Government, he has endeavoured throughout the whole course of his speech to throw the responsibility for what has occurred in India upon the Indian Government alone. I quite admit that there were phrases in his speech inconsistent with that interpretation; but I now allude to the general tenour of his speech. Over and over again he said—"This is what you are saying of Lord Lansdowne and of Sir David Barbour. This is what has been recommended by Lord Lansdowne and Sir David Barbour." That statement of the attitude of the Indian Government is not a fair one. They have been forced to take the unhappy step which they have taken, because their connection with this country compels them to adopt a financial system which shall be accepted by the Government at home. The plan they have adopted is not the plan they desired to adopt. It is the plan they were forced by the Government at home to adopt. I do not throw the responsibility on this Government, or any other Government; but I say it is unfair to throw the re- sponsibility on the Indian Government. They took this plan, not as a good plan, but because something had to be done. They found themselves in the position of having to pay a gold debt in England, and that difficulty grew from year to year as silver fell. Like other debtors in an embarrassed position, they looked about for some scheme which would get them out of their difficulty, and they were forced to adopt a scheme which would get them out of their difficulties at any cost. Is any responsible statesman prepared to adopt the plan of an inconvertible currency—a currency as inconvertible and as artificial in its value as was ever issued by any Government in the world? To do that in a country like India is to take a step which every human being must regret, and, in addition to that step, you are forced to this conclusion—that if the plan of the Indian Government succeeds, and if the rupee be appreciated as they hope to be able to appreciate it, the result must be to injure every human being in India who possesses a store of uncoined silver. My right hon. Friend has been accused of endeavouring to sow dissension in India between the Government and the population because he has ventured to point out what is, no doubt, an economic fact. He may be wrong in saying that the uncoined silver amounts to £130,000,000; but of this there can be no doubt—that if the Indian Government do succeed in artificially raising the value of the rupee until it reaches 1s. 4d., the effect must be to turn all uncoined silver into mere merchandise, and, what is more, into depreciated merchandise. My right hon. Friend cannot be accused of sowing dissension between people merely because he has pointed out an undoubted truth of that description. Of course, he neither intended nor did he accuse the Indian Government of a desire to plunder the Indian people. All he stated was that the Indian Government must pay their gold debts; that they are at their wits' ends to know how to do that; that to throw additional taxation on the Indian people to any serious extent would be to shake the very foundations of the Empire; and that, therefore, they were forced to this unhappy expedient of having to substitute for a free and natural coinage a coinage as artificial and as unnatural as any issue of inconvertible paper ever was in the world. I am sure the House will feel that the Home Government and the Indian Government have, rightly or wrongly, been driven to take a step which, since the suspension of the Bank payments in 1797, has never been taken, either by England or by any country under the control of England. It is undoubtedly one of those financial crimes for which necessity may, indeed, be an excuse, but which remains none the less a financial crime. I regret the Government, while admitting they were forced to take this step, have not uttered one word of regret at the adoption of a system which sins, as I think, against every principle of sound finance, and not the least against those principles of sound finance on which the Government are the first to plume themselves. I suppose they will fall back upon the plea of necessity; they will say what we have done is unfortunate, is deplorable, is contrary to every recognised—[Mr. W. E. GLADSTONE and Sir W. HARCOURT: Not at all.] Oh, they do not say that. Then I suppose I may interpret that interruption from the Prime Minister and the Chancellor of the Exchequer as indicating that, in the opinion of Her Majesty's present financial advisers, it is a good system, a defensible system, a system consonant with all recognised financial and currency principles, to establish a form of legal tender the value of which shall depend upon the arbitrary action of the Executive from day to day. That is what yon have done in India, beyond all question. It rests now with the Executive to settle as they please what shall be the value of the rupee. By the exercise of their discretion in that matter, they may, at their own sweet will, increase or diminish the burden of every private or public debt payable in silver from one end of the country to the other, from the Himalayas to Ceylon. That that should be admitted by the Government, not as an unhappy necessity, but as a system which on its own merits they are prepared to advocate and defend, I confess staggers me, especially when I recollect the doctrines of financial purity which they have more than once defended from those Benches. I recollect the Prime Minister only the other day repeating across the House a famous question of Sir Robert Peel's—"What is a pound?"

MR. W. E. GLADSTONE

I have no recollection, but it is a most innocent imputation. I am quite ready to ask the question for the accommodation of the right hon. Gentleman, but it does not happen to be true.

MR. A. J. BALFOUR

There is no imputation. I suppose there is no harm in my saying it. I cannot believe my memory wholly deceives me in the matter. As I say, the Prime Minister asked, "What is a pound?" And I ask "What, under his new system, is a rupee?" I know what a rupee was under the system that prevailed in India six months ago. A rupee was a certain amount of silver, the exchange value of which depended upon the amount of silver in it and upon that alone. Well, what is a rupee now? It is something which depends for its value not on the amount of silver in it, but absolutely upon the administrative discretion of the Indian Mint as to how many of these inconvertible coins they will allow or not. I should like to know what, in the opinion of the right hon. Gentleman, constitutes a rupee at the present moment? As I have said, the closing of the Mints to the free coinage of silver is a public misfortune occasioned by necessity. How could the Government avoid taking the step they have taken? Granting, for the sake of argument, that bimetallism is impossible for this country; granting, also, that they would not even permit the Indian Government to negotiate with other countries, and granting that something had to be done, what other course could they pursue than that which, as a matter of fact, they have pursued? I will state where the error lays. They have not adequately realised that in the depreciation of silver we are suffering under a world-wide misfortune; that it is not a thing we can despise, not a thing which, from the lordly platform of a single gold standard, we can afford to look down upon and say—"This may concern that country, but not us." England as much as any other country must suffer if silver loses its place amongst the measures of exchange value over a large part of the world. Had they seen that, I think they would have gone into the Brussels Conference in a different spirit from that which, as a matter of fact, animated them; and I believe if they had gone in with a real desire not to establish bimetallism for this country, but to do everything they could to aid those countries that were prepared either for themselves to adopt bimetallism or to find some demand for silver, much might have been done. If they had held out this threat of stopping the Mints in India in such a way as it would have been believed in by other nations of the world, I believe they would have found ready to their hand a diplomatic lever through the operation of which much might have been effected. But they threw the whole of the advantage of the situation away. No one thought this step would be taken by the Indian Government. The nations of the world were of opinion, rightly or wrongly, that the difficulties of the currency would ultimately force England to be bimetallic. They were prepared to wait until that event occurred; and until that event occurred they did not think anything would be done by this country to increase the difficulties and the stringency of the position. There are many ways of telling people what you mean to do, and I do not think that the right hon. Gentleman told them this in a way that convinced them of the danger. After all, the Conference of last year was not the first Conference on the question. Before this our Delegates have held out to the Conference the hope that if something were done by other nations in the direction of bimetallism we would, on our part, engage that the Mints of India would always be kept open for the free coinage of silver. That promise has never hitherto had any effect, because never up to the present time has any foreign nation contemplated the possibility of the Indian Mints being closed to silver. Knowing this was contemplated; knowing Lord Herschell's Committee would very likely recommend this scheme in default of a better one, if the Government had made it clear to all Foreign Delegates that the price of silver was going to be attacked, first in India and then probably in the United States, my belief is they would so thoroughly have frightened some of these gentlemen that something not unimportant might have resulted from the labours of that Conference. In that connection it may be worth while reading a short statement as to the position of France. The Chancellor of the Exchequer appeared to me to entirely misinterpret that position. He quoted at length certain earlier statements of M. Tirard, and he alluded in the briefest possible manner to the latest statement M. Tirard made. That statement is not consistent with the impression left by the right hon. Gentleman on the House that France was hostile to bimetallism. This is the statement I wish to submit to the House— Mr. Cannon thought the Latin Union, or, to be more exact, France, in whose name M. Tirard had spoken, was less friendly to bimetallism than England. M. Tirard declared he had said nothing of the kind; on the contrary, he had said that France was bimetallist, and that, if she would not resume free coinage of silver, and if she would not absolutely become bimetallic, it was only because England and other countries of Europe had declared, in the most formal way, that they intended to remain monometallic. That quotation does not correspond with the impression left on the House by the right hon. Gentleman.

SIR W. HARCOURT

I do not wish to be misunderstood. I stated that what M. Tirard said was that it was of no use Franco going into bimetallism when Germany, Austria, and England would not.

MR. A. J. BALFOUR

The fact is, that both Austria and Germany considerably modified the position they had taken up to which M. Tirard alluded; and, although these things are incapable of proof, I repeat my strong impression that if Her Majesty's Government had shown the slightest knowledge of the gravity of the situation as regards silver, and if they had made it clearly apparent that their closing of the Indian Mints was not a mere brutum fulmen, but was the beginning of a policy they were prepared to carry out, they would have found other nations would have been not unprepared to assist Her Majesty's Government by some means to prevent the destruction of silver as one of the currencies of the world. I am convinced that this question is one of the first importance to every man in this country; and, although this is not the occasion—and I should be the last man to make it so—for advocating any particular views of my own as to the way in which we ought to solve the great currency difficulties of the world, it is incumbent upon every man in this House, whatever his convictions may be, to realise that there is a great currency difficulty, and that we ought, in no spirit or pharisaic optimism, to set our shoulders to the wheel and to do what we can to rehabilitate what has been, what ought to be if we are to remain prosperous, a great measure and medium of exchange in the civilised world—namely, that silver which has been always associated with gold in carrying on the commerce of mankind.

* SIR J. LUBBOCK (London University)

said that, although there was much in the speech of the right hon. Member for Sleaford (Mr. Chaplin) in which he did not concur, he could not fail to recognise that the great change made in the currency of India was a matter which to a great extent affected the trade of India and also that of this country; and they were anxious to know the intentions of the Government, with reference to which there still remained a considerable amount of doubt. Whether we agreed with it or differed from it, no one could deny that the Report of Lord Herschell's Committee was a very able and interesting document; and if he ventured on some points to differ from the eminent men who constituted that Committee, it was with the greatest diffidence and hesitation. Nevertheless, it had not carried conviction to his mind. In the change which they had recommended in the Indian currency, they seemed to have been much influenced by the experience of France. He could not, however, think that their description of the Freuch currency was correct. They said— Here is a currency winch, for all practical purposes, appears to be perfectly sound and satisfactory, but which differs from our own in most important particulars. It is sometimes called étalon baiteux, or limping standard; hut, inasmuch as the Mint is open to gold and closed to silver, the standard is really gold, whilst a very large proportion of the currency is either inconvertible silver or notes payable (at the option of the bank) in silver or gold, maintained without difficulty at the above-mentioned artificial ratio. It could not surely be called either a satisfactory currency or a gold standard. If they took bills on Paris they were paid in 5 f. pieces. If they had Bank of France notes, the Bank could legally pay them, and did practically pay them, in silver. Theoretically, no doubt, they could take gold to the French Mint and have it coined; but if they did they would lose money, and therefore naturally nobody did. The power of taking gold to the Mint and having it coined was, therefore, no real privilege, and the French standard was not, in reality or practice, a gold standard. It might be asked, then, why are not the gold coins exported; but it must be remembered, firstly, that they could not go to the bank and demand coin; secondly, that it was much below its full weight; and, thirdly, because the amount was limited. To all intents and purposes, then, the French standard was a silver standard. Nor did it seem to him that the Committee fully considered the alternative suggestions which had been made. For instance, the proposal to impose a duty on silver, which appeared to some preferable to the closing of the Mint, was dismissed in a sentence, because they said that, taking the average amount of coinage, it would only produce annually Rx. 600,000, which would not balance the Budget. But it was obvious that it would gradually raise the value of the rupee 10 per cent. The course proposed had raised the rupee from a shade under Is. 3d. to nearly 1s. 4d., or just under 8 per cent. An Import Duty of 10 per cent., in addition to the profit on coinage, would have gradually raised the Rupee 10 per cent., and would therefore have given the Government an increase slightly greater than the present arrangement. In fact, the Committee at the moment forgot the effect it would have on the Exchanges. The suggestion of an Import Duty would have been preferable to the present plan in two other ways. In the first place, it would not have affected the value of silver ornaments, which the natives of India had always regarded as a reserve in times of need. They would retain their equality with rupees. This would be a great advantage, and he was not free from some apprehension as to the effect which might be produced on the native mind, when they found that the Government had taken a step which would lower the value of all their uncoined silver in relation to rupees. The second advantage would be as regards the Mints of Native States. The Committee and the Indian Government treated this matter very lightly, and he hoped they might be right; but, at any rate, the question would not have arisen under the plan of an Import Duty. But what were the intentions of Government? They had entirely failed to elicit any clear or consistent statement. The Prime Minister stated on June 26 that the Government intended to introduce a gold standard into India. A few days ago the Under Secretary told him that the Government did not intend to alter the present law, under which rupees were a legal tender to any extent. In reply to another question on the 21st, the Prime Minister stated that they did not at present intend to issue gold against rupees. Well, then, if they left rupees as a legal tender to any extent, and did not intend to undertake to issue gold against rupees, in what sense did they mean to introduce a gold standard? He put that question to the Under Secretary for India, who, however, gave no answer—that was to say, none of his own; but he gave a reference to a speech by Sir David Barbour, the Finance Minister of India. Now, unfortunately, Sir D. Barbour was no clearer in his statements than the Government in this House. In his speech on the introduction of the Bill, Sir David Barbour said— I now move for leave to introduce the Bill, which is intended to amend the Indian Coinage Act, 1870, and the Indian Paper Currency Act, 1882, with the object of altering the Indian monetary standard from silver to gold. It is not intended to do more at present than stop the free coinage of silver at the Indian Mints, and, as a provisional arrangement, to provide for the issue of rupees at those Mints in exchange for gold at the rate of 1s. 4d. per rupee. The making gold coins legal tender, the settlement of the permanent rate of exchange between gold and the silver rupee, and the other measures necessary for the final and effective establishment of a gold standard in India, will be provided for by future legislation and in the light of future experience. Sir David Barbour, in the Memorandum which he issued, said that— For the purpose of introducing a gold standard into India we might stop the free coinage of silver, adopt measures for accumulating a store of gold, and when what was considered a sufficient stock of gold had been obtained, we might open the Mints to the free coinage of gold, make gold coins legal tender, and guarantee, by means of our accumulated stock of gold, the exchangeability of silver for gold coins according to their face values. That was what he understood was the intention of the Indian Government, and it was quite contrary to the statement made by the Prime Minister that they did not intend to undertake to give gold value for rupees.

SIR W. HARCOURT

Not at present.

SIR J. LUBBOCK

Then do they intend to give a gold value for rupees?

SIR W. HARCOURT

Only under such conditions as are mentioned in the very words from which my right hon. Friend is quoting.

* SIR J. LUBBOCK

But this is what Sir David Barbour said in his Memorandum— I do not recommend this plan. The accumulation of a sufficient store of gold would be a measure too expensive for a country situated as India is, and when it had been accumulated and the exchangeability of the silver coins for gold coins had been guaranteed by means of it, there would be a very great risk of the whole stock of gold being drawn away in exchange for silver rupees. If this should happen—and I think it would happen, unless our stock of gold was very large indeed—the gold standard would cease to exist, and we should find ourselves exactly where we started. Had Sir David Barbour entirely altered the opinion which he expressed in his own Memorandum? He wished to ascertain where they were. He thought that any undertaking to give gold for rupees would be open to two grave objections. In the first place, it would be a tremendous liability for India. The amount of rupees in existence could not be determined with any approach to accuracy. They were estimated in the evidence before Lord Herschell's Committee as certainly amounting to £200,000,000, and very possibly to £300,000,000. Now, suppose that the rupee rose to 1s. 4d., and the Government undertook to give gold for rupees at that price. Then, as the Chancellor of the Exchequer had told them over and over again, they could not foresee what the production of silver would be, and it was quite possible that they might have a very great production of silver which might alter the relations between gold and silver, and the contingency foreseen by Sir David Barbour might arise. Suppose, then, that the output of silver increased, and the ratio fell! This was not so very improbable; and if it did happen, the consequences to Indian finance would be absolutely ruinous, and the future state of the Indian Government would be far worse than the position in which they now found themselves. There was another very strong objection. Lord Herschell's Committee pointed out that— There is still another element to be considered. If the effect of the proposal of the Indian Government were sooner or later to cause a demand for gold in India which does not now exist, it might raise the value of gold as against all other things, including silver. In other words, the gold price of silver might be still further diminished. The increased demand for gold would not be confined to its use as coin, but also, in Sir avid Barbour's opinion, for hoarding also. It is very probable," says the Report, "however, that the substitution of a gold standard for a silver standard would lead to an increased rise of gold instead of silver for hoarding. This must tend to raise the value of gold, and he wished to ascertain what were the intentions of Her Majesty's Government in this matter. Were they really going to undertake the tremendous liability of undertaking to give gold for rupees? He sincerely hoped that they would pause before they came to any such determination as that. There were some who seemed to think that monometallists advocated the use of gold, and gold only. That was not so. He was a mono-metallist, but he had always been of opinion that it would be a misfortune if the use of silver were to be abandoned for the purposes of currency. Individually, he did not believe in the great appreciation of gold which the right hon. Gentleman the Member for Sleaford believed to have taken place. At the same time, he did consider that so great a demand as would result from the adoption of a gold standard by India would tend to raise the value of gold, and consequently to decrease prices. This would be a serious matter. India, no doubt, was fully entitled to arrange her currency with reference to her wants; but such a course would, in his judgment, be injurious to England, and still more so to India. He did not desire to occupy the time of the House by going fully info the effect which would follow from the adoption by India of a gold standard; but he hoped if any such step should be contemplated, considering the momentous results which would follow, the House would be given an opportunity of considering the question. He did not wish to put any difficulty in the way of the Government, or to embarrass them in any way, because it was too grave a subject to the trade and commerce of this country to be made any question of Party. But what he was endeavouring to do was to impress upon the Government that to undertake to give gold for rupees would be a most tremendous liability, and one which he thought they ought not to undertake. Changes in currency were very undesirable, and, although he did not think the step that had been taken was altogether a wise one, still, under the circumstances, he thought the best course they could adopt now was to allow what had been done to remain, and see how it worked. But he hoped that the Government would not undertake to introduce a gold standard into India in the sense in which he understood the gold standard; and if it were really proposed to carry out the suggestions contained in Sir David Barbour's speech in introducing the present Bill, he hoped the Government, before finally agreeing to any such step—which would have very grave consequences—would give the House the opportunity of considering the matter and of expressing their views upon it.

MR. S. SMITH (Flintshire)

did not wish to detain the House, but desired, on behalf of several of those who sat on his side of the House—supporters of the Government—to state that they regarded with great sympathy, and generally concurred in, the views put forward by the Leader of the Opposition (Mr. A. J. Balfour). They believed, with him, that the action taken by the Indian Government was, if a necessary, a very unfortunate evil. Some of them foresaw as long as 20 years ago that this would be the effect of the demonetisation of silver by several European nations. They saw perfectly well that the revolutionary movement could not stop there, and they also saw that it would bring immense misfortunes upon the trade and commerce of the world. It had brought those great misfortunes as they all knew; that 15 of the last 20 years had been years of great depression, which had brought great pressure upon the industrial and working classes, and really transferred a large portion of the capital of this country most unjustly from the hard-working classes to the money-lending classes. It had greatly added to the weight of public burdens and of private debts. All these evils had resulted from the demonetisation of silver and the inevitable appreciation of gold. The Indian Government have now taken the course of closing its Mints to silver, and thereby greatly reduced the value of that metal. The American Government would most probably repeal the Sherman Act, and there would again be a further immense fall in the value of silver until, probably next year, it would be only 2s. an ounce. The effect of that would be to place the nations of Europe and of America, which still retained a very large amount of silver in circulation as a full standard in exchange, in an awkward and dangerous condition. he had one practical suggestion to make, which was this that if there should arise among the nations of the world an agreement that this intolerable state of things could not be continued, and there should be a determination to re-erect the old bimetallic system which existed almost everywhere at the beginning of this century—he said that should such a movement take place in the course of a year or two now, they could offer these nations the certain advantage, on condition of the establishment of bimetallism throughout the world, of opening the Mints of India to the free coinage of silver at the ratio of 1s. 4d. per rupee. He believed it was impossible to go back to the old ratio. Bimetallists must make up their minds to 1s. 4d. to the rupee. If they could offer to do that; if all other countries would do the same—England to retain its present gold standard—it would be a great advantage to all other countries, and might prevent a very serious state of affairs.

* MR. COURTNEY (Cornwall, Bodmin)

I must congratulate my right hon. Friend the Member for the London University (Sir J. Lubbock) on having devoted the whole of his speech to the question immediately before us, which can scarcely be said of the distinguished Members who have initiated and conducted the discussion. We had a Motion made to call attention to the action of the Indian Government, supported by the Government at home. We wandered from a discussion of that question into the general question of bimetallism, and into the question of the conduct and transactions of the Brussels Conference. Later on the Debate threatened to circle about the small issue of my personal con- sistency. In what I have to say I shall confine myself, I hope, almost entirely to the matter which has been immediately brought under the consideration of the House. Perhaps I may be allowed to make one or two preliminary observations before entering upon a discussion and examination of the criticisms made upon the Report of Lord Herschell's Committee; and I must, before saying anything more, express my regret that this subject was introduced—unavoidably perhaps—without any kind of notice to those who are intimately concerned in it, so that it was not until about half-au-hour before it was brought on that I knew there was any intention whatever to open an attack on the Committee upon its conclusions, and of course I had no opportunity whatever of consulting my fellow-Members of the Committee. I think the House will pardon me for a moment if I say a word or two upon this question of personal consistency or inconsistency. It is worth while recalling to the House that out of 12 Members of the Gold and Silver Committee, although we were divided into six to six, as to the practical action to be approved we were unanimous, with the exception of two doubtful dissentients, upon the possibility of maintaining an International ratio between gold and silver. Ten were distinct, and the other two only wavering in their allegiance, that bimetallism was a system which could be introduced and maintained, and that if a fit ratio were selected there would be reasonable hope of its being continued and upheld, and the transactions of the world could be conducted on the ratio so agreed upon. That was the conclusion of at least 10 out of 12, and I may say some of the most stalwart Members of the monometallic six, who were in favour of maintaining our gold standard without any alteration, are still unhesitating in their adherence to the conclusion which we laid down at that time, that the bimetallic system could be maintained, and the only question was whether it was prudent or imprudent to adopt it. That was my position when I signed with the other five Members the Report which discouraged any change of our system. A change is a very serious thing. It is a serious thing in itself, and I think it is still more serious in the effect it must have upon the minds and consciences of men. The alteration is one by which, although, in fact, you might fulfil a promise in its truest sense by payment in an altered medium, still it is an alteration which must shock many persons and be difficult to understand, and is likely to interfere with the rectitude and constancy of the public conscience. At the time I signed the Report of those who discouraged any alteration, I was hopeful—although there was appreciation of gold—that that appreciation might be stayed, and, at all events, I thought we had better wait before countenancing any alteration. Subsequent reflection showed me that there was conclusive proof that there had been, I will not say an appreciation of gold to the extent suggested by the right hon. Member for Sleaford (Mr. Chaplin), but a very serious appreciation of gold which has had a very considerable effect upon the social, economic, and industrial condition of this Kingdom—a fact that deserves the most serious attention of all persons concerned in the government of this country. Now, Sir, with respect to the immediate subject before us, we, the Members of Lord Herschell's Committee, had a very limited task confided to us. We were handed over a certain proposal made by the Indian Government, and asked on the part of the Home Government to say— Is there sufficient reason why we should not assent to these proposals of the Indian Government? And if you think they should be assented to with a difference, tell us what the difference is which you suggest should be introduced into their plans? We were entirely debarred from going outside the question of considering the particular plan; and my noble Friend Lord Farrer and Sir Reginald Welby made an addition to our final Report, in which they called attention to the limitation of the issue submitted to our consideration, and stated that in consequence of that limitation they had not entered upon the examination of questions that otherwise might have occupied our attention. I also, in an additional note, called attention to the limitation, and I took occasion very briefly to say I thought, although bound by that, that our examination of the real issue was very imperfect in consequence of our examination being so limited; be- cause it appeared to me if we were really to examine the whole question as trustees, guardians, and controllers of the Government of India, we should not only examine the plan which the Government of India submitted to our consideration, but we were also bound to take into consideration any action of our own which interfered with a freer choice on the part of the Government of India, so that if our action interfered with what might be a benefit to the Government of India we should reconsider that action. It has been confessed by the Chancellor of the Exchequer that what the Government of India proposed to us for examination was by no moans their first choice. If they could have had any kind of hope of obtaining from the Government at home any prospect whatever of the consideration of a bimetallic agreement that was what they would desire. That was what they urged again and again, and it was only when they wore reduced to what we may call practically a state of despair that they fell back on the plan submitted to us, and they said—"Since you will not accede to what we desire, then let us take some other action." As the Government, at home is specially charged with the care and surveillance of what is done in India, they should feel no desire to shirk that which India itself desires; and if they will reconsider the evidence before them, and the opinions and dispositions of other Governments and of other nations, I think they will have reason to believe they are the main substantial obstacles to doing something which would more strictly meet what we know to be the desire of the Indian Government. Putting that aside, the Committee had to consider whether the scheme submitted by the Indian Government was practicable, and whether, if practicable in its essence, they could mould its form in any way so as to remove any objections which might apply to it in its orignal shape. The proposal was simply this: to stop the free coinage of silver, and, if necessary, to reduce the amount of that coin in circulation so as to bring the rupee to boar a strict relation to the value of a sovereign. They suggested that that could be done, in the first place, by refusing the free coinage of silver and limiting the quantity in circulation, and also by admitting the sovereign as a legal tender, or receiving it at the Treasury as the equivalent to a certain number of rupees—giving rupees in exchange for gold, hut not giving gold in exchange for rupees. The argument of the Indian Government was that if you go on reducing the stock of rupees in circulation, you will bring up the value of the individual rupee, so that in the end you may make 10 rupees worth no more than a sovereign, and persons will be willing to come—if you make that an operation of trade—and give a sovereign, receiving 10rupees in exchange. I do not say the Indian Government proposed to screw up the rupee to this extent; I am only stating their principle broadly, so as to be better understood. Some hon. Members will think it an extravagant supposition that you could by any possibility bring about such a state of things as would make the rupee again worth 2s, and so restrict the circulation of the rupee as to bring it up to the gold standard. Whether practicable or not we did, in our consideration of the question, lay it down as a guiding principle and idea of our Report and of action which would be taken upon it that we would do as little as possible to disturb the present value of the rupee. We said, in effect, we will not screw it up to a greater value, much less screw it up to 2s.; but we will, if possible, take it where it is and stereotype its actual value at the moment. And that was practically what we proposed. We assented to the proposal that the Government should stop the mintage of rupees at once; and if they were willing to exchange rupees for sovereigns at the rate of 15 rupees to the sovereign they could afterwards, if necessary, reduce the stock of rupees so that the rupee would come up to 1s. 4d. Experience justifies those conclusions. France has got an enormous gold and silver circulation, but the minting of silver has been stopped there. There is an enormous silver circulation in France, and yet there is practically no depreciation in the franc. Twenty-five francs are still equal to one sovereign, and the relation of the franc to gold is kept up in spite of the enormous quantity of silver by the stoppage of the free coinage of silver. You cannot get in France, as a matter of right, gold in exchange for silver. You must go and ask for it, and you may have to give a small premium in order to get it; but gold and silver do circulate together without any trace of a discount of the one in relation to the other. We believe that can be done in India which has been done in France. It has also been done in Holland and in her Batavian Colonies. There the circumstances are identical with the circumstances of India, though the area is less and the transactions and proportions of currency smaller. The Dutch guilder circulates in the Dutch East Indies as an article of value at a fixed relation to gold simply because the Dutch have stopped the coinage of guilders in order to keep silver at that fixed value. This experiment is now to be tried in India, and I deprecate any conclusions being prematurely drawn as to what the result will be. Of course, it has a great effect upon men's minds; and for a little time some people lost their heads, the value of things went down, and the markets became entirely dis-organised. Such things will occur. They throw little light on the ultimate settlement. I am rather surprised that the rupee has already got so near 1s. 4d.; but allow time to pass so as to permit the stock of coined silver to diminish, and it will assuredly work up to 1s. 4d., just as it has done in France and Holland. I think the proposals of the Committee are not open to the grave charges that have been made against them by the right hon. Member for Sleaford, for they have left things as they were, although they have, undoubtedly, prevented a further depreciation in the rupee. With regard to the immense amount of uncoined silver in British India, upon which the right hon. Gentleman has dwelt, the statements that are made from time to time do not appear to be capable of exact verification. But we had some facts before us that could be verified, and which seemed to point to this conclusion—that the silver which has been pouring into India for so many years has not remained there in the form of uncoined silver, but has passed into the Mints, and that the hoards, apart from personal ornaments—which, no doubt, are considerable—have been and are hoards of coined money. In fact, the hoards which were discovered at the death of two or three great Indian Princes were coined and not uncoined metal; and the value of these will, of course, not he affected by the action the Government has taken. Some figures given in the Report are very instructive, and much more important than the vague estimates put forward by witnesses, and referred to by the right hon. Member for Sleaford. I have now before me a statement of the imports and exports of silver into British India from 1870 to 1893, arranged in quinquennial periods. The statement also gives the amount of coined silver. The first quinquonium shows that the net silver imports were valued at 3,063,000tens of rupees, and the amount coined was Rx.2,931,000, nearly the same amount. In the next quinquennium the net imports of silver were Rx7,000,000, the amount coined Rx.8,490,000. And so I might go on. But the total result for that period is that the net imports of silver were Rx.165,000,000, and the amount coined Rx.152,500,000. Therefore, by far the greater part of the silver poured into India has gone into the Mints and come out in the form of coined rupees, which will not be subject to depreciation, but to appreciation, for, as the currency is contracted, the rupee will go up. The right hon. Member for the University of London favours a plan of import duty. We have no doubt an affection for our own offspring. It was proposed by him in the form of a fixed percentage ad valorem on silver imported into India. That, no doubt, would have the effect of adding a certain percentage to the value of silver in British India; but it would leave altogether untouched the range of variations between silver and gold. They would go up and down as they do now, and the ratio of variation between the two would be subject to continual alteration. What is intended and desired is to have a steadiness of relations between them, and that cannot possibly be secured by the proposal of my right hon. Friend. There is another plan which is extremely ingenious, and which altogether avoids any interference with the internal stock of silver in India, and for which something may be said. It is the plan that silver should be freely received at the Mints from day to day, but subject always to a variation of issue, so that the amount of rupees given out in exchange for the new silver brought in would be reduced in order that the rupees given out should always be of the same value in relation to gold. There must be a constant variation in the seniorage on the silver in order to attain that object. If the silver fell to one-half of its former value, the rupees given out would be one-half the number formerly given out. This is a scheme which requires much care, and, in effect, it would only bring about precisely what is to be brought about by the scheme which we thought we could not recommend the Government to withhold its assent from—that—namely, to give to the coined rupee a fixed although an artificial value in relation to gold. My right hon. Friend the Member for East Manchester (Mr. A. J. Balfour), who delivered a speech of extreme lucidity on the subject, spoke of the present situation of the silver currency in India as one quite unparalleled. Now, it is really not unparalleled, inasmuch as that there is something very like it in the situation, not merely of the currency of Holland, but of France. The value of the 5-franc piece in France is not determined by that amount of silver in that piece. It bears an artificial value through the limitation and stoppage of the coinage of silver in France. Nor do I think he himself has prescribed exactly the limits within which this variation will work. Of course, the upper limit is the limit of 1s. 4d. The lower limit would be defined, of course, by the value of raw silver itself. If the Indian Government surreptitiously and secretly took to coining rupees, that would entirely defeat what is the object of that Government. They would get a little gain from that coinage, no doubt; but their desire is to screw up the rupee in order that their rents may be maintained—that their revenue may not fail would be entirely defeated; and you, therefore, have the best possible guarantee that they will not do anything to depreciate the rupee. The superior amount is 1s. 4d., and the inferior amount is the price of the rupee at the time of the stoppage of the Mints to free coinage; and it will gradually pass from that limit, say, 1s. 3d., by the reduction of the quantity in circulation, until it comes up to Is. Id. When it conies up to 1s. 4d. the circulation will become automatic; for then it would be worth while for the Government to buy silver and coin rupees, since it would be worth while for people to bring gold sovereigns and exchange them for rupees so coined. You secure a gold standard by that process, because you have the rupee brought to an artificial fixed relation to gold, and gold to rupees. Well, Sir, I have only one more observation to make. There is one question demanding the attention of the House—namely, how far the money transactions of the world should be attached to one metal, even if that metal has not appreciated; but that question was not before us. The Currency Committee had no choice—they were compelled to answer the question put before them, and in answering it I take leave to say they took precautions to avoid the difficulties pointed out by the right hon. Gentleman the Member for Sleaford, and indicated by the right hon. Gentleman the Member for London University (Sir J. Lubbock).

MR. VICARY GIBBS (Herts, St. Albans)

said, he thought there was one fallacy into which the right hon. Gentleman the Member for Bodmin had fallen, and that was in saying the course recommended by the Committee had only kept things where they were, and could be said not to aggravate the evil. It was perfectly true that it had kept the rupee from falling; but the mischief from which trade was suffering was not the depreciation of the rupee, but of silver, and that depreciation had been very much aggravated by the action of the Government. The Chancellor of the Exchequer complained of time being occupied on this matter for Party purposes to keep them from more important matters. ["Hoar, hear!"] He saw that another right hon. Gentleman who had not been present during the Debate took advantage of that remark of his. ["Question!"] He imagined that this was very much to the question. It was very much to the question whether or not this was a matter of as great importance as the giving of Home Rule to Ireland. He considered, speaking now not as a Party man at all, hut as a merchant, that it was of more importance to a large number of his constituents and others in this country who had placed their investments in silver-using countries, and who constantly found their property immensely depreciated by the action of this Government. Moreover, when they were blamed for bringing forward this question, let it be remembered that they never had an opportunity of expressing their opinion on this action before it was taken. The Chancellor of the Exchequer, in a speech of considerable duration, did not touch the points raised by the right, hon. Member for Sleaford against this measure. Let him remind the House again of some of these objections. One of them was that it would establish a false system of coinage in India. Not a word was said by the Chancellor of the Exchequer in defence of that course. It was perfectly true that when the Leader of the Opposition said that such a course was unfortunate he said "No, no!" but in a speech of three-quarters of an hour, when he had an opportunity of saying whether or not it was unfortunate, he did not touch that question for a moment. Then let them take another point—the injury to the people of India who had hoards of uncoined silver or silver ornaments. That was a point which was touched upon by the right hon. Member for Bodmin (Mr. Courtney), who said that the bulk of the hoards of the Prince of Scinde or other Princes was found to be not uncoined but rupees, and that, consequently, such a hoard would not be affected in any way by the passing of this measure. But he would remind the right hon. Gentleman that those of them who believed that there was a large amount of hoards of uncoined silver in India believed that these were the hoards of the peasantry of India represented by the ornaments worn by their wives and children; and, consequently, that what was the case with large Indian Potentates would not really disprove what were believed to be the practices of the peasantry and common people of the country. Then there was the question of trade. People who had placed their investments in silver-using countries had suddenly found their property immensely depreciated by the action of Her Majesty's Government, and very serious injury had, at the same time, been done to the trade of the country. Another point to which the attention of the Chancellor of the Exchequer was called, but which he did not deal with, was the aggravation which would be caused in the general scramble for gold. It was perfectly true that there would be no attempt on the part of the Indian Government to form a reserve of gold; but it was equally true that their action tended still further to depre- ciate silver, and to do away with silver as currency. Ought they not to consider whether the Sherman Act would be injurious or the reverse to this country? However strong an admirer one might be of a system, he would say that it was undesirable for one nation to inflict injury upon another as regarded silver. There certainly seemed to him to be one advantage, and one only, which had accrued from the action of the Indian Government, and that was that it had proved conclusively the extent to which the value of metals depended upon their use as currency. The Chancellor of the Exchequer had jeered at them, and said they should not be so angry were it not that they knew that this was the deathblow to bimetallism. But bimetallists themselves did not think so. He saw a bimetallist opposite him—a supporter of the right hon. Gentleman—who agreed with him entirely in saving that this proved the cardinal proposition advanced by bimetallists, that gold and silver differed from every other commodity in this: that their value must be artificial because their value depended on the action of the law in issuing them, or not issuing them, as currency. Therefore, the objection to this matter was not because it gave a blow to bimetallists, but because it had all the disadvantages urged against bimetallism, rightly or wrongly, and lacked the stability which would be gained by International concord. He would not further detain the House, but he was sure the Chancellor of the Exchequer would agree with him that one who was engaged himself in commerce and had an hereditary interest in this question had a, right to say a few words, however imperfectly he might express himself on the subject. He did not mean to suggest that the Government had any malignant intention of robbing the people of India. He recognised that they had acted at the request of the Indian Government; but he held they were not doing it at the wish of the Indian Government, any more than they could say that a condemned man who had the choice given him of being hanged or shot and chose the latter method "wished to be shot." The Indian Government saw they were going to be bankrupt if they did not take action; they knew that our Government would not allow them to take the measures which they believed would be for their advantage—which had been pointed out by Sir David Barbour—they saw they were between the devil and the deep sea, and they chose the deep sea.

* MR. EVERETT (Suffolk, Wood-bridge)

I hope the House will pardon mo in uttering a few words on the great question before it. I think the House has not for many years past discussed a matter so pregnant with great consequences as that we are now considering. Undoubtedly it is a misfortune that in order to bring the subject forward we have had to interfere with another great and interesting discussion; but I am one of those who think that this matter is of even greater importance than Home Rule. At any rate, our discussion on the subject now is opportune, because the Parliament of America has just re-assembled for the purpose, almost the exclusive purpose, of considering the same important question. And we know that in India there is the keenest interest felt as to what will be the ultimate result of the clauses proposed to be introduced there. Both the East and the West are wrestling at the same time with this great currency problem. I can imagine no subject more suitable for Parliament to have the opportunity of expressing its opinion upon than this. It was with the greatest amazement that I hoard of the measures which the Government had consented to and sanctioned with regard to India. They contain three propositions. The first is to tamper with the currency; the second is, in some rough kind of way, to fix the ratio between the two precious metals, or, at any rate, between the rupee and the sovereign, and, in the third place, they propose to do this by means of the most artificial character, resting upon no solid principle—no principle of finality, and no principle, so far as I know, that has ever been recognised and applied in any civilised State in the world before. And if I was amazed at the proposals, I was still more amazed at the source from which they came. It is within the recollection of the House that the Chancellor of the Exchequer, not many months ago, held up his hands in pious horror at the bare idea of tampering with the currency, and mocked at the idea of artificially raising the value of silver, and still more at the idea of giving a ratio. But now the Government of which he is the financial head has come forward and proposed to do these very things. I do not know where to turn for an instance of grosser inconsistency. The action of the Chancellor of the Exchequer on the one hand, and his recent utterances with regard to this matter on the other, are in extremest opposition. What is it that the Government propose to do? They propose to tamper with the currency, and for the purpose of their experiment they have chosen a nation six times as populous as our own, and a helpless nation—a nation which is dependent upon us, which has not an articulate voice to speak for itself. It is proposed in this wild and reckless experiment to contract their currency. If Hon. Gentlemen marked the description of the proposed new system which was given by the right hon. Member for Bodmin (Mr. Courtney), they would notice that he dwelt again and again on the fact that the essence of this system is to contract the currency—to artificially lessen the number of rupees, the ordinary circulating medium, and the standard money of the people of India. I have read the Report of the Currency Commission, and I notice that they say that in India the rupee has shown signs of redundancy. What does that mean? The real meaning of it is that the poor ryot toiling in the burning sun to earn the rupees with which to pay the landowner, and the Government tax, and the money lenders, is getting his rupees a little too easily. They do not cost him toil enough, so the Government, has interfered to increase his difficulty in obtaining the money without which he cannot pay his way. The Government, with heartless and almost incredible cruelty, are deliberately going to increase the ryot's difficulty in obtaining his rupees, and to depreciate the value of his produce. Every rupee the unfortunate tiller in that country obtains with which to pay his way he has to buy, and to buy with his labour; he is not born with silver rupees in his mouth, but only with hands and arms with which to labour for them. And now a Liberal Government, of all Governments, has interfered and tampered with these poor and helpless people's money in a way which will increase the toil they will have to give to procure the means of paying their debts and rent and taxes. Besides that, the uncoined silver which some of them hold— which, whatever be the exact amount, is unquestionably a very large quantity—is also artificially depreciated in its money value by the same change; and the produce of the fields, the great wealth of India, is to be depreciated in price by the arbitrary limitation of the number of rupees. What is now proposed in India may do something to lessen the difference between the sovereign-using and the rupee-using countries; but it will create a new chasm between China and other countries where the rupee is not legal tender but silver is. The Indian people, who, by the plentiful supply of silver, have been spared, during the last 20 years, many miseries which England has been going through while gold has been appreciating, will now have all the difficulties of an appreciating standard artificially imposed upon them. I think it is a grave responsibility for the Government to treat them thus; and it is monstrously inconsistent for a Government which does not believe in artificial changes of values, or in any tampering with the currency, to introduce a mighty change like this, which opens a new train of evils such as these I have described. To my mind what is even more astonishing is that this enormous change—the ultimate issue of which no man can foresee—has been made with out consulting Parliament, though Parliament was sitting at that very time, and we all know that this Parliament contains many hon. and right hon. Gentlemen who thoroughly understand monetary questions and the enormous importance of making changes in the standard of value. It astonishes me that this should have been done without giving them an opportunity of expressing their opinion, and of assisting the Government by their counsel and advice. In dealing with the unquestioned difficulty in which India was placed the Government have rushed headlong into this mad and rash change, which has plunged the monetary world into confusion, and may lead to the very gravest world-wide disasters. I think their conduct is worthy of the severest reprobation. Now let me turn for a moment to the effect that this change will have in gold standard countries. The great economical fact of the last 15 years, as will be more clearly realised as years go by, has been the steady appreciation of gold. As Lord Beaconsfield said in 1879—"Gold is appreciating every day, and as it appreciates the lower become prices. "Anybody who measures the value of gold by commodities will find that gold has appreciated 50 per cent. since then, and all the facts in our experience during recent years confirm the fact that gold is rising in value. It is owing to this that those who possess mortgaged land or houses find the mortgage steadily swallowing up the whole of the property. Many who have got a long lease of farms, &c, and have so agreed to pay yearly a certain amount of money, have found the value of gold mounting up so, and the value of produce going down so, that they have not been able to pay their rents, and have been broken. The Irish farmers have found this with their Court-fixed rents, fixed for 15 years. And they now have to face a still greater danger; they are buying the land and entering into a contract to pay a certain amount of gold yearly for 49 years. If the appreciation of gold goes on, the inevitable effect will be that the value of produce will become so low that the arrangement will break down through the inability of the buyer to pay, as Archbishop Walsh has clearly pointed out in a recent pamphlet. This action of the Government in regard to Indian currency can have no other effect in regard to gold than to increase its appreciation, from which we have already suffered such grievous effects. It appears to me that the Government cannot understand what they are doing. They have struck a terrible blow at the poor farmer in the East with one hand, increasing his difficulties and lowering the value of his produce, and with the other they smite in the same way the fanners in the West and in our Colonies, who are surrounded by sufficient difficulties already. I am very glad to have had an opportunity of saying a word or two upon this question; and I do hope that the gentlemen who sit on these Benches, below and around me, will incorporate along with their political objects the all-important one of removing all restrictions from our Mints, and so relieving the agricultural and other toilers of the realm. The Prime Minister has been identified with many great reforms; and if he could only be got to discern the fact that our standard of value is no longer a fixed and steady one, but an instrument cruelly and increasingly op- pressive to the debtor and almost equally hurtful to the producer, and would try to bring about a re-marriage of King Gold and Queen Silver, who together reigned so long over the nations of the earth, he would, I am sure, be doing something which would be to the great and lasting benefit of all mankind. I hope the Government will reconsider the course they have taken with regard to India, and will include in their enlightened advocacy of the principle of Free Trade the no less important principle of free Mints.

* MR. NAOROJI (Finsbury, Central)

I wish to offer a few observations. What was the first necessity from which this agitation began? That there ought to be a gold currency or a stoppage of coinage. There are two considerations, and India has one peculiar consideration, and that is that it has to remit to this country, whether rightly or wrongly, a certain sum of money yearly—namely, £19,000,000 in gold. Whatever you make of silver in India, as far as the people of India are concerned, they do not benefit in the slightest way in the remittances to this country, because they have to remit a certain quantity of produce, which ought to be able to provide £19,000,000 worth of gold in order to pay for the Home charges. Therefore, any effort made of changing or tampering with the currency, or any other plan devised, will have no effect whatever on the necessity of sending a certain quantity of produce according to the price of gold. If gold rises in value, they (the Indian people) will have to send so much more produce; if it falls, they will have to send so much the less, be the proportion of silver what it may in India. In that respect the argument, and the principal argument, held out by the currency people and those who advocated the restriction of silver coinage—namely, that it would be a benefit to the people in India to restrict the coinage—is not borne out by the facts. Nothing of the kind will happen; the people of India will have to send a certain quantity of produce in accordance with the price of gold. So far, therefore, the unique political position of India, which has caused all this difficulty and the embarrassing of the Indian Government, is not in the slightest way improved by the plan the Government have adopted. The agitation began from the loss that the Europeans in India began to suffer for their remittances to this country. No such agitation arose between China and England, or any other country which had not to make any compulsory and political remittances in gold. The original agitation in favour of the appreciation of silver began with the European servants, who desired to have some change in order that they should receive some higher exchange for their remittances than the value of silver allowed. Now, on that point the Government of India made up its mind. The Government of India wanted to give some higher or fixed exchange to the Indian officials for their own remittances only. Now, that was bad enough, and from this place I have complained of that. The Government of India have not paid the slightest consideration to the effect it would have on the people of India. But what is the result of the new arrangement? Here is a rupee artificially made worth 1s. 4d., whereas its real worth may be 1s., 1s. 1d., or 1s. 2d. The change, or whatever the difference will be, is not merely a gain to these Indian officials for that portion of their salaries which they have to remit to this country, but it is an advancement of their whole salary. And not only all the Europeans, but all the native servants, have a higher value rupee paid for their salary in place of that which financially the price of silver would admit. The result is, therefore, that this would-be remedy is a pure loss to the unfortunate taxpayer of India, for he will have to find so many more valuable rupees in order to pay every servant so much more than his salary is. Suppose my salary is worth 100 rupees, I would receive 100 rupees, the artificial value of which will be 110 rupees. And this will apply to all salaries. In that way, therefore, there would be an extreme disadvantage, and the wretched taxpayer will have to find the difference. Next, suppose you take a man who has to pay an assessment of 10 rupees, and to pay those 10 rupees to the Government he has to sell part of his produce. Now, in order to pay the now 10 rupees, he will have to part with 10 to 16 per cent, more produce than he formerly did. In every way, therefore, it is the taxpayer that has to suffer the loss arising from the mistake that the Government have made in adopt- ing this policy. The Government is fortunate in one respect: that the injury that will be done through their plans has been, to a certain extent, modified by what is now happening in America, as many mines have been shut up. In America now there is also a chance of abolishing the Sherman Act, and the result of that will be, of course, a fall in the price of silver. But, on the other hand, if the repeal of the Sherman Act stops the American miners from working their mines, that will save India from the mischief. Our fate depends on the action of the United States. You may bring forth any quantity of abstract argument on one side or the other. The common sense of the matter is that the plan now adopted will simply be an addition to the burdens of the taxpayer; and unless it fortunately happens that the price of silver rises by reduction in its production the future of the Indian taxpayer will be certainly very terrible indeed. I want to say that the chief defect of this plan is that it was not necessary at all; that even from the Government point of view it was not necessary; but that as the plan is taken the whole effect of it is that the Indian taxpayer will have to suffer a great deal of loss in order to carry it out, unless he is saved by the rise in the price of silver. There are many fallacies running about—we heard one from the right hon. Gentleman the Member for Sleaford (Mr. Chaplin)—to the effect that the balance of trade is in favour of India, and that fallacy has done more mischief and harm to India than any other thing. I cannot now enter into a discussion of it, but I hope to be able to show some time that nothing is further from the fact than to suppose there is a balance of trade in favour of India. I do not want to take up more time, but I want to sum up that the result of the present system will be that the burden of taxation upon the people of India will be very largely increased, unless the silver kings of the United States diminish their production of silver, and allow the price of silver to rise. But all these artificial methods adopted by Government for raising the price of silver will only complicate the currency; and that the Front Bench should be ready to defend a tampering with the currency in India is, to my mind, a very sad thing. I will make just one remark with reference to the position of India in connection with the Front Bench. India under the Crown, in her relations with the Governments here, whether Conservative or Liberal, has, in one respect, been very unfortunate as compared with the time of the rule of the Company. When India was ruled by the Company the Company came before the House as before an independent tribunal. Now the Front Bench and the India Office are so much associated and identified that the Front Bench is put in the false position of defending the despotic, secret, and irresponsible India Office in everything they do. The result is, India is not able to get that redress and that independent judgment of an independent tribunal which she got in the time of the Company. This is made much worse by there being no periodical overhauling of the Indian Administration, and the mischief may go on increasing, till, perhaps, a day may come when it is too late to mend. It is of the utmost importance that the affairs of the India Office and the Government of India ought to be examined periodically; for this simple reason: that the House cannot follow the business or events of India from day to day. The House must have special occasions to study and understand Indian affairs, pass judgment upon them, and introduce necessary reforms. Why should not the Front Bench, as an independent body, sit in judgment upon the India Office, instead of always sitting there in defence of the India Office, no matter whether right or wrong? It is a false position, and injurious to India. We believe that the Government have made a great mistake in interfering and tampering with the currency unnecessarily. We know gentlemen on the Front Bench are against such tampering with it; but they are put in a false position, and they have to defend the very thing they would otherwise not defend. There is no reason whatever why the currency of India should be tampered with while the currency of England should not be tampered with. I hope some plan may be devised by which the Government in England may become an independent tribunal in reference to the conduct of the Government of India, and may hold the Indian Government in check, and control them instead of defending them in everything they do. The present system of Indian administration is in several respects very injurious to India, and whatever is injurious to India must and will be injurious to England.

The Chancellor of the Exchequer rose in his place, and claimed to move, "That the Question be now put."

Question, "That the Question be now put," put, and agreed to.

Question, "That this House do now adjourn," put accordingly, and negatived.