HC Deb 01 March 1906 vol 152 cc1296-7

To ask the Secretary of State for India what amount of Council drafts on the Indian Treasuries since 1st April, 1905, have been brought to account in excess of the £19,250,000 sterling as entered in the Indian Government's Budget last March; what are the circumstances to which such excess drawings are attributable, and to what purposes have these funds been applied; what are the present amounts of the Indian Government's cash balances, both silver and gold, in India and at Home; if the latter largely exceed the amounts usual in former years; has due consideration been given to the effects on Indian commerce of such large withdrawal of funds formerly available in the Presidency banks for Indian trade purposes; are the recent accumulations of gold here on Indian account due to the artifically established rate of exchange arranged for in 1900; and what is the amount on balance of enfaced rupee paper remitted from or returned to India during the present financial year.

(Answered by Mr. Secretary Morley.) The amount received by the Secretary of State in Council on account of bills and telegraphic transfers in the period from 1st April 1905, to 26th February 1906, is £27,172,530, being an excess of £9,339,530 over the estimate of £17,833,000 for the period from 1st April 1905 to 31st March 1906 which was included in the Budget of the Government of India in March 1905. The excess is due to the large trade demand which it is the practice of the India Office to meet as fully as possible. Of the excess mentioned above, a portion has been used for the purchase of silver, a portion has been invested on account of the gold reserve fund, and a portion, has been temporarily added to the paper currency reserve in England, against a corresponding withdrawal in India. At the end of January 1906, the Treasury balances of the Government of India amounted to Rs. 14,71,00,000 (£9,810,000) of which £240,000 was in gold. On the 26th February 1906 the balance held by the Secretary of State in Council was £7,850,000; on the corresponding date in the four preceding years the figures were as follows:—26th February 1905 £10,323,000; 26th February 1904, £5,914,000; 26th February 1903, £5,086,000; 26th February 1902, £3,560,000. The effect of large sales of Council bills and transfers (which in the present year have been accompanied by heavy coinage of rupees) is not to diminish, but to increase the funds available in India for trade purposes. The holding of gold by the Secretary of State in Council and by the Government of India, as part of the Paper Currency Reserve, is one of the consequences of the successful establishment of a gold standard in India. The amount of rupee paper standing on the books of the Bank of England was on 31st March, 1905, Rs. 16,67,99,800 (£11,120,000), and on 31st January 1906, Rs 16,25,03,400 (£10,834,000), a decrease during the present financial year of Rs. 42,96,400 (£286,000).