HC Deb 10 December 1912 vol 45 cc225-6
6. Mr. TOUCHE

asked the Financial Secretary to the War Office, as representing the Secretary of State for India, if he will say whether he is satisfied that the amount of the Gold Standard Reserve is sufficient for all possible demands, having regard to the development of India's trade requiring annually larger remittances Eastward, and the consequential risk of larger adverse balances having to be met in times of depression, coupled with the transfer of capital from India in any political trouble; and can he say if his views are shared by the Government of India?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Harold Baker)

"Sufficient for all possible demands" is a very wide term. But the Secretary of State is satisfied that the recent decision to allow the reserve to rise to £25,000,000 before any part of the profits of coinage is used for other purposes provides for all probable demands. In fixing this figure the Secretary of State acted in consultation with the Government of India and in accordance with their views.

7. Mr. TOUCHE

asked the Financial Secretary if he can refer to any Statute or authority which provides that satisfaction of the obligations against which the paper currency reserve is held can be demanded otherwise than in silver?

Mr. H. BAKER

By Section 3 of the Paper Currency Act of 1910 currency notes are payable to bearer on demand. The Act does not give the bearer any specific light to demand payment in silver or in any other particular form of money, and the notes are therefore payable, at the option of the Government, in whatever money is legal tender in India—that is, under Sections 11 and 12 of the Indian Coinage Act of 1900, in sovereigns, half-sovereigns, rupees, or half-rupees.

Mr. TOUCHE

Has the holder of the note a right to demand payment in legal tender other than silver?

Mr. H. BAKER

If the hon. Member will look at the latter part of my answer he will see that whatever money is legal tender can be used, such as sovereigns, half-sovereigns, rupees, etc.

Mr. TOUCHE

Does not that represent the right of the Government to pay silver obligations in gold and not the right of a holder of a note to demand payment in gold? That would be paying 1s. 4d. for what is worth only 9d.

Mr. H. BAKER

Perhaps the hon. Gentleman would give me notice of that.