§ Mr. FREWENasked the Under-Secretary of State for India, if he will explain why, with a smaller population, less abundant crops, and far lower prices, as shown by the index numbers of the Government of India, over twenty-six crores of rupees were coined in 1906–7 and presumably absorbed, for, if not absorbed, why was the Indian currency thus inflated, whereas in the past year of abounding exports and unprecedented prices, especially for opium, no new legal tender silver has passed those mints.
§ Mr. MONTAGUIt is obvious that the fact that additional coinage was needed in 1906–7 and not in 1910–11 was due generally speaking to the difference between the commercial and financial conditions prevailing in the two years. Further possible explanations are: (1) a difference between the amounts of currency in circulation at the beginning of the two years respectively, which would affect the need for replenishment; and (2) changes in the habits of the people with regard to the use of the three most important forms of currency in India, namely, notes, silver coins, and gold coins. It would not be suitable in an answer to a question to attempt the delicate and difficult task of estimating the extent to which each of these causes was, or may have been, at work.
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§ Mr. FREWENasked the Under-Secretary of State for India whether his attention has been called to the Annual Report of the United States Secretary of the Treasury, which Report for 1908 estimates the world's production of silver for the year 1906–7 (page 131) at 165,054,497 ounces, as also the estimated consumption that year in the arts (page 37) 91,835,000, which shows the balance available for all the world's currencies (73,219,497 ounces) to be considerably less than the amount of silver coined by the Government of India during that year (£11,628,844); did the Government of India in 1906–7 purchase more than all the available production of the world's mines, while in 1910–11 that Government bought none; and, if so, will he consider the advisability of devising some system of purchase by the Indian Government less calculated to convulse our exchanges and embarrass our export trades with China; and will he explain how the value of purchased silver, 1906–7, was £11,628,844, seeing that in the official reply to the hon. Member for Hythe, 22nd July, 1907, it was stated that, excluding the recoinage of old rupees, £15,180,000 was coined that financial year?
§ Mr. MONTAGUThe attention of the Secretary of State has not been called officially to the Estimates by the Secretary of the United States Treasury mentioned by the hon. Member; nor has he any reason to believe that the purchases of silver required for coinage in India are calculated to convulse our exchanges and embarrass our export trades with China. The difference between the value of silver bullion purchased for coinage and the value of rupees issued from the Mints in 1906–7 is due to the well-known fact that the rupee is worth more than the silver that it contains.