Vol. 6 · pages 636–640

MISCELLANEOUS ESSAYS Statement, Evidence, Reviews, Forewords etc.

NOTE The Royal Commission on Indian Currency and Finance visited India in 1924-25 to examine the financial system and to suggest the Reform of the Indian currency. The commission was comprised of the following members. E. HILTON YOUNG, Chairman R. N. MOOKERJEE NORCOT WARREN R. A. MANT M. B. DADABHOY HENRY STRAKOSCH ALEX R. MURRAY PURSHOTAMDAS THAKURDAS J. C. COYAJEE W. E. PRESTON G. H. BAXTER Secretaries A. AYANGAR Dr. Ambedkar explained his views in the statement submitted in reply to the questionnaire issued by the Commission. The statement and his evidence before the Commission are reproduced here along with the questionnaire.

1 STATEMENT OF EVIDENCE* Submitted by Dr. B. R. Ambedkar, Bar-at-Law to the Royal Commission on Indian Currency 1. In reply to the questionnaire issued by the Commission I beg to submit the following statement of my views. In dealing with the questionnaire issued by the Commission I will begin with question No. 4 because I believe that is the principal issue on which the Commission is asked to give a definite finding. 2. I am emphatic in my opinion that the Gold Exchange Standard cannot be continued with any advantage to India and for the following reasons :— (1) It has not the native stability of the Gold Standard. — A pure Gold Standard is stable because the value of gold in circulation is so large and the new additions to the supply are so small that the stability of the standard is not thereby appreciably affected. But in the case of the Exchange Standard the new additions are dependent upon the will of the issuer and can be augmented to such an extent that the stability of the standard can be appreciably affected thereby. (2) It is discretionary in issue without there being anything in it to regulate the discretion. —It is sometimes said that the Gold Standard is a hard standard which keeps the changing affairs of mankind tied to the wheel of nature over which human agency can exercise no control and that the Exchange Standard affords an escape from this frigidity. In reply to this it must be said that though a discretionary currency, it is so only when the currency is provided with some means which enables this discretion to be properly exercised. There must be some regulator by which the discretion left to the issuer is regulated. From this point of view an Exchange Standard is inferior to a Convertible Standard. A Convertible Standard and an Exchange Standard are alike in *Report of the Royal Commission on Indian Currency and Finance, Vol. II, Appendix 29, His Majesty s Stationery Office, London, 1926, pp. 235-39.