Vol. 6 · pages 671–675

656 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES and who have not yet been able to bring it round ?—My point is,even if we were in a position to go back within a measurable distance it would not be always wise or advisable to go back supposing we could. 6145. I will come to that later on ; I am only trying to point out to you that it may be said the comparison you are stating here between India and the other countries is one which cannot stand as far as currency problems and conditions are concerned. So far as the “could” is concerned, I mean the difference between whether we should and whether we could even if they (those countries with depreciated currencies) wanted to they could not go back ?—Very good; you have put it much better than I could have. 6146. Therefore if you compare India with the countries which got back to pre-war parity you find that those who could did go back to the pre-war parity ?—Yes, for instance England ; but there was also a strong current of opinion even in England that they should not. 6147. I mean in spite of the strong current of opinion you refer to they have reconciled themselves to the pre-war parity and you do not hear much complaint now about having gone back ?—I could not tell. 6148. You do not know, I see ; unless it can be said that those who went back made a mistake, there won’t be anything particularly objectionable aganist those in India who want to return to the pre-war parity ?—No, I don’t say that. I am really raising the question whether it is desirable. 6149. Now regarding the desirability of it, lower down you say the view is wrong ; you say both these views are fallacious. You say the restoration of pre-war parity is not a restoration of the prewar price level. Now do you think that exchange should be used as a lever for attaining price levels ?—No. 6150. Then, it does not appear to me very fallacious ?—No, I say this, although you cannot always say exchange and price level move together, yet ……… 6151. Excuse me, my question was, do you suggest that exchange should be used as a lever for adjusting price levels ?— No, I do not say that.

657 MINUTES OF EVIDENCE 6152. Therefore a change of ratio from that point of view was not desirable, as a lever for the adjustment of prices ?— Yes, it was not. 6153. No country has done it unless you can show that it was particularly desirable in the case of India as an exception ?— But it has happened in all countries. 6154. Which countries ?—All countries. 6155. If I may make my question clearer ……….. ?—I do not think your question was put very clearly. 6156. I sometimes do put my questions not very clearly, admit. Which countries which could attain to pre-war parity did voluntarily go past it in order to adjust their internal price levels ?— No, of course they did not do that. 6157. Therefore where is the fallacy ?—Fallacy in this sense ; some people in doing this imagine they are going back to the old price level. That is a fallacy, because 1s. 4d. in 1914 is not the same as 1s. 4d. in 1925. 6158. But I mean those who do not base the demand for 1s. 4d. on the question of prices at all, they would not be making that fallacy ?—No. 6159. Then lower down you mention another point, I think. “If by restoring pre-wa r parity is meant the restoration of the pre-war level of prices, then the ratio instead of being lowered from 1s. 6d. inthe direcction of 1s. 4d. must be raised in the direction of 2s. gold.” Then you say “the restoration of pre-war parity even nominally would be unjust.” What have you in your mind by the words “even nominally” ?—Without looking to the price level. 6160. I thought you yourself agreed.......?—Supposing now, in 1925,1s. 4d. is the ratio as compared to 1914, that would be only a nominal change because prices have certainly changed. 6161. Where is the nominalness in regard to those who ask for 1s. 4d. as being the pre-war rate ?—You are asking for a definite change from 1s. 6d. to 1s. 4d. I take my starting point, as I have stated at the end of the statement from what we find actually there. I say, “In short, in matters of currency the real is the normal.” I therefore start from 1s. 6d. as the normal.

658 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 6162. Now supposing the exchange to-day, when we are discussing the thing, was 1s. 8d., I take it you would urge the same ground for 1s. 8d. being confirmed as you have for 1s. 6d. being confirmed ?—Yes. 6163. So whether exchange had gone up to 1s. 6d. or not the ground would prevail irrespective of what other countries have done ; and irrespective further of how that point was reached ?— May I just explain it in my own way ? 6164. If you please.—The way in which I look upon this problem is this. To-day we have 1s. 6d. That to my mind means a certain price level. If you want us to go back to 1s. 4d., it seems to me we have to raise our prices. Without increasing the volume of currency we certainly cannot reach 1s. 4d., it seems to me we have to raise our prices. Without increasing the volume of currency we certainly cannot reach 1s. 4d. gold. Therefore the complete question to my mind is, shall we raise our prices from what they are today, so that we can go back to 1s. 4d. ? Now I being a member of the labouring community, feel that falling prices are better. That is my view of the matter. 6165. Let me take it the other way. You say, as you put it, that, being a member of the labouring community, that means from the point of view of the labouring class it is undesirable ?— Yes, and I may go further and say that from the national point of view too falling prices are better than rising prices. 6166. Now I suppose you heard the arguments that are being advanced that a high exchange, an exchange which is worked up to a higher point than where it has been 15 or 20 years at a stretch is undersirable in the interests of the producer. What would you say to that ?—All that it means is a depression of profits. I do want to make a distinction,—I do not know how far people will appreciate that,—between depression of industry and depression of profits. I think that distinction was made by Professor Marshal in his evidence before the Gold and Silver Commission. There might be a depression of profits, that is to say, the enterprising class may not get all that they would get if prices were to rise ; but it does not necessarily follow.

659 MINUTES OF EVIDENCE 6167. Excuse me ; cannot I refer to the producer ? We will come to the investor later if you don’t mind. But what about the producer : in his case the higher the exchange the less the number of rupees available to him ?—It does not matter to him at all, because he supends it. His cost of production also falls ; therefore it makes no difference. If he got 15 rupees, and if the 15 rupees purchased a certain amount of goods, and if five years hence he got 10 rupees, and that 10 rupees purchased as much as 15 rupees before, the change is only a change of counters. 6168. When the adjustment is complete ? But until then there is disturbance ?—Yes. 6169. Now let us look at it as far as the present goes. You think that the average Indian cultivator rarely employs any labour and cultivates with his own hands ?—Well, I suppose he does employ a certain amount of labour. 6170. In the ordinary course, for the adjustment to be complete, you would expect that the wages he pays to his labourers also go down ?—Yes. I mean if he wants to get the same amount of profit, I would say yes. 6171. Very well, if the wages of the farmer’s labourer have not gone down you would admit that to that extent the farmer has a smaller profit ?—Smaller profit, yes, I admit that. 6172. And in cases where the farmer is just able to make both ends meet he loses ?—No. He does not get profits, but he does not lose. Profit is something else ; it is surplus. 6173. Where a farmer or a class of farmers in a district make just enough to make both ends meet they would be losing, inasmuch as the labour charges have not gone down in proportion ?—I do not know how you define profit. I define profit as surplus income. 6174. After paying all charges of production ?—Yes. 6175. If in 1921 a farmer made both ends meet and in 1924 when exchange was stabilised at 1s. 6d. as far as his produce is concerned and his labour charges have not gone down, he would certainly make less ?—He would lose part of his profits. 6176. He will save so much less ?—I would stick to the word “profit.”

660 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 6177. He will make less profit ?—Yes; there would be a depression of profit. 6178. To that extent of course the producer will be a loser ?— If you think that he had a legitimate right to that profit, then of course you would be right in saying that he loses ; but not if it was a merely differential gain. 6179. As 1s. 4d. it was merely a differential gain ?—Yes. 6180. Lasting for a period of 25 or 23 years ?—As I say it all depends upon how you define it. 6181. How would you define it yourself ? So long as he is able to recover all that he has spent in production I do not think that he would be a loser. 6182. And you would apply that test to every person ?—I would say that he has made both ends meet. 6183. Do you think that would be the maximum which the average citizen would like to apply in his own ease ?—I can give no opinion upon that, I am afraid. 6184. Now, you mention in paragraph 8 : “Two things must be borne in mind in this connection,” and lower down you say : “Existing contracts are no doubt of various ages.” What sort of contracts have you in mind there ?—Leases for instance : and other contracts also, such as building contracts and so on. 6185. How would they come in with the question of exchange ?—They are money contracts just the same ; they are all money contracts. 6186. Every contracts, then, you mean ?—Yes. 6187. If a man was putting up a house in a mofussil rural place for 4,000 rupees, that also would come under this ?—Of course ; it is investment of money. 6188. You have in mind everything that involves investment of money in the country ?—Yes ; it has purchasing power. 6189. Then you say : “Given these two facts, the best solution would be to strike an average between 1s. 4d. and 1s. 6d.” Why did you mention an average instead of 1s. 6d. ?—I say so because in 1925 there may be some contracts which were made when the ratio was 1s. 4d. Some contracts may be still subsisting made at that period when the purchasing power was at the rate of 1s. 4d.,