HC Deb 26 November 1912 vol 44 cc988-9
13. Mr. TOUCHE

asked the lowest figure to which the sterling portion of the gold standard reserve sunk when a moderate strain was placed on it during the adverse trade conditions of 1908, and the amount before the transfer of a chance balance of £8,090,000 from India's surplus funds held by approved borrowers or on deposit in London?

Mr. BAKER

The lowest figure was £5,966,724 (securities being valued at market price). The Secretary of State does not understand the last part of the question.

14. Mr. TOUCHE

asked what became of the exchange profit on the transactions of bringing home balances at about 1s. 4 5–32d. (the bullion point) used to restore the gold standard reserve in 1908–9, and the £8,090,000 sold in India or London against them at or about 1s. 3⅞d.?

Mr. BAKER

The profit on bills sold by the Secretary of State in India above 1s. 4d. per rupee, or by the Government of India in London below that rate, is added to the general balances of the Government of India; and the usual practice was followed in the cases mentioned. But the Secretary of State did not sell at 1s. 4 5–32d. per rupee in 1908–9, nor did the Government of India sell at 1s. 37/2d.

Mr. TOUCHE

Why has not the profit been added to the gold standard reserve, to which it properly belongs?

Mr. BAKER

I have told the hon. Member that the usual practice was followed.

15. Mr. TOUCHE

asked whether it is in accordance with the recommendations of the Fowler Committee that a large portion of the gold standard reserve should be held in silver as at present, while a large portion of the paper currency reserve is held in gold to meet obligations which can only be demanded in silver?

Mr. BAKER

The silver branch of the Gold Standard Reserve was established on the recommendation of the Government of India in 1906. The holding of gold in the Paper Currency Reserve originated with the Gold Note Act of 1898, which was passed before the Fowler Committee was appointed, and is mentioned in paragraph 15 of its Report. It now continues under the Indian Paper Currency Act of 1910. It is not the case that the obligations against which the Paper Currency Reserve is held can only be demanded or met in silver. Notes are encashable in legal tender money, which includes sovereigns and half-sovereigns as well as rupees and subsidiary coins.