§ 7. Mr. RUPERT GWYNNEasked the Under-Secretary of State for India, if, in view of the increase in the depreciation in the value of the securities held in the Gold Standard Reserve from £932,759 on 31st July to £1,064,824 on 16th October, representing a further loss in eleven weeks of £132,065, he has considered the question of realising the securities and henceforth following the recommendations of the Fowler Committee that the reserve should be held in gold, thus increasing confidence and avoiding the risk of further loss and the difficulty of realising, even at depreciated prices on forced sales, should a time of financial stress make it necessary to utilise the reserve?
§ The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Harold Baker)The form of the Gold Standard Reserve is varied from time to time to secure greater ease of realisation, and the matter is constantly considered; but so large a change as the hon. Member suggests is not now contemplated. In the period mentioned by the hon. Member the depreciation was less than the amount stated. The valuation on 31st July referred to was based, at the request of the hon. Member for North Islington, on the middle market price, while that on 16th October was based, in accordance with the India Office practice, on the minimum. If the two calculations had been on the same basis the depreciation in the period mentioned would have been shown as £104,354. I may add that in the same period £143,688 was received as interest, bringing the Vital interest receipts to £3,242,584.
§ Mr. R. GWYNNEAre we to understand that the change will be made gradually and not at once?
§ 8. Mr. TOUCHEasked what portion of the paper currency reserve is held out of India?
§ Mr. HAROLD BAKERThe Indian Paper Currency Act provides for the holding of securities and gold by the Secretary of State in Council as part of the reserve; and securities for £2,666,000 and £5,700,000 in gold are so held in this country. The gold is in the custody of the Bank of England.
§ 9. Mr. TOUCHEasked what was the largest amount of rupees held in India during the adverse trade conditions of 1785 1908 and its metallic value at the then current market price of silver as distinguished from its token value?
§ Mr. BAKERThe largest amount held in 1908, in paper currency reserve and gold standard reserve combined, was 4,774 lakhs, on 22nd November, 1908. The bullion value of these, at the then current price, was £17,049,147.
§ Mr. TOUCHEMay I ask if that was taken for the purpose of the reserve at the token value or the metallic value?
§ 10. Mr. TOUCHEasked whether the Secretary of State's drawings, by weekly sales of Council bills, are now limited to the amount of the home payments he has to make during the year on behalf of the Government of India?
§ Mr. BAKERAs announced by Sir Guy Fleetwood Wilson in introducing the Financial Statement for the current year, additional bills will be sold, so far as resources permit, if there is a sufficient demand for them. The answer is, therefore, in the negative.
§ 11. Mr. TOUCHEasked what, if any, part of the gold standard reserve is now held in silver?
§ 13. Mr. TOUCHEasked when the coinage of new rupees from purchased silver commenced this year, and how many have been coined?
§ Mr. BAKERCoinage began early in September; 47,900,000 rupees had been coined up to the 9th November.
§ 18. Mr. R. GWYNNEasked if Sir Felix Schuster is governor of the Union of London and Smiths Bank, with whom the sum of £1,250,000 of the Indian cash balances was placed on deposit during this year, and is also chairman of the Finance Committee of the Council of India; if he is in receipt of a yearly salary; and if the Finance Committee advises as to the utilisation of the cash balances as well as the purchases of silver?
§ Mr. BAKERSir Felix Schuster is Governor of the Union of London and Smiths Bank, and had been so for eleven 1786 years when appointed to the Council of India by Lord Morley in 1906. He has been chairman of the Finance Committee of the India Office since 13th July, 1911, and is in receipt of a salary as member of Council. The part taken by the Secretary of State's broker, the Accountant-General of the India Office, and the Finance Committee respectively in arranging short loans and deposits from the home balances of the Government of India was stated in replies to questions asked in the House on the 5th November. The procedure has been approved by successive Secretaries of State and the Council. The fact that the banks with which deposits are made include those with which Members of Council are connected has been specially considered by the Secretary of State in Council and approved by him.