of coining in the decadence of the Mogul Empire, and if they had been so, the greater number would have disappeared from circulation. These coins were continually varying in their market value, and consequently the difficulty of rating them in any system of accounts was enormous. In fact, no one knew the value of the coins he possessed. All payments had to be made by the intervention of saraufs, or professional money-changers, which, of course, opened the door to abundance of fraud.

The East India Company were so inconvenienced by the multiplicity of coins in circulation that in 1766 they endeavoured to establish bimetallism, i.e., to issue gold and silver coins at a fixed legal ratio. But it entirely failed. They could not get their gold mohurs into circulation because they were rated much below the silver value of gold. In their perplexity they applied to Sir James Steuart, who was then the leading authority in economics. In answer to their request, he drew up a treatise for them, entitled "The Principles of Money Applied to the Present State of the Coin of Bengal," in which he demonstrated that it is not possible to maintain gold and silver coins in circulation together, when issued in unlimited quantities, at a fixed legal ratio different from the market ratio of the metals, but that the one which is underrated invariably disappears from circulation, and the one which is overrated alone remains current. This doctrine had been preached for more than four hundred years by all the greatest economists to the deaf ears of governments. But in 1805 the masterpiece on the subject, Lord Liverpool's "Letter to the King on the Coins of the Realm," was published, and immediately attracted the attention of the Court of Directors. Early in 1806 they addressed a minute to their Governments of Bengal and Madras, detailing the serious losses which had been incurred by the Indian presidencies from 1770 to 1802, from the circulation of so many gold and silver coins of different values in different districts. These losses had far exceeded their expectations. They

then expressed their entire concurrence in the doctrine which had first been suggested by Petty, and enforced by Locke, Harris, and Lord Liverpool, that the money or coin which was to be the principal measure of property ought to be of one metal only. They said that in India this metal should be silver. They said that coins of gold and silver cannot circulate as legal tenders of payment at fixed relative values as in England and India without great loss, occasioned by the fluctuating value of the metals of which the coins are formed. A proportion between the gold and silver coins is fixed by law, according to the value of the metals; and it may be on the justest principles, but owing to a change of circumstances, gold may become of greater value in relation to silver than at the time the proportion was fixed. It therefore becomes profitable to exchange silver for gold, so that the coin of that metal is withdrawn from circulation; and if silver should increase in its value in relation to gold, the same circumstances would tend to reduce the quantity of silver coin in circulation. As it is impossible to prevent the fluctuation in the value of the metals, so it is equally impracticable to prevent the consequences thereof on the coins made from these metals. They also said that there is a radical defect in the principle itself of giving a fixed value to metals in coin, that are in their nature subject to continual change.

This minute is of the utmost importance, because it is the first pronouncement by the Government of a great empire against bimetallism, after the bitter experience of its disastrous consequences for forty years. This minute was buried in the archives of the India Office, but in 1894 the India Office most courteously permitted me to make it public for the first time, and it gives a complete answer to the clamour for bimetallism with which we have been stunned for so many years.

The Government took no action on its weighty and important minute of 1806 till 1818, when it issued a new coinage of gold and silver. They changed the ratio of the

coins to bring them into conformity with the market ratio of the metals, and for the first time forced the silver rupee as legal tender on southern India, where gold alone had been the standard for thousands of years. They then declared these gold and silver coins to be equally legal tender to an unlimited amount. This action of the Government must strike us with amazement. In 1806 they had condemned bimetallism in the most scathing and unanswerable terms, and then in 1818 they attempted to establish it on a new basis!

In 1835 the Government at length gave up the attempt to maintain bimetallism as absolutely hopeless. They coined gold and silver rupees of equal weight and fineness. The silver rupees were declared to be the sole legal tender throughout India, but the gold rupees and other native gold coin were allowed to pass current, and be received at the public treasuries at their market value in silver. So matters remained till 1852. The great gold discoveries. which began in 1848 and 1849 seemed likely to cause a

Holland, in a moment of

great fall in the value of gold. undue panic, hastily demonetized gold, which it repented of afterwards, retraced its step, and restored its gold coinage.

Lord Dalhousie took the same alarm, and in the last week of 1852 he suddenly issued a notification that after January 1, 1853, no gold coin of any sort would be received at the public treasuries. By this unfortunate action gold was totally demonetized throughout India. By this astounding coup de finance, utterly without precedent in the history of the world, it was estimated that £120,000,000 of gold coin at once disappeared from circulation, and was hoarded away. This was literally a "bolt from the blue" on the Indian community. Then for the first time India became a solely silver-using country, and not from time immemorial, as many ill-informed persons imagine. This was a lamentable instance of legislating in a panic. This was one of the most important of the series of causes which

led to the recent monetary troubles of India, and for forty years we repented at leisure.

The demonetization of gold by Lord Dalhousie was soon felt to be a most disastrous error, and a strong feeling grew up in favour of restoring a gold currency. Some minor movements were made, but in 1864 a powerful and unanimous agitation was made throughout all India for the restoration of the gold currency. At this time the British sovereign had acquired a very large circulation throughout the country.

The Chambers of Commerce of Bengal, Bombay, and Madras and the Bombay Association took the lead, and were joined by many high officials and native bankers. They detailed the inconveniences of such a cumbrous currency as silver. From time immemorial, as I have already stated, until within the last few years, India had had an extensive gold currency, and the natives were very sensible of its superior advantages. The insufficiency of the existing currency had already caused severe financial embarrassments, and threatened the commerce of India with periodical and fatal vicissitudes. The exclusive silver standard and currency rendered direct trade with Australia and other gold-producing countries impossible, and forced a country with abundance of gold to traverse half the globe in search for silver before she could pay for her commodities. The superiority of gold would secure an immediate and intelligent welcome for it in India. The importation of gold into India had steadily increased for many years, though it was not legal tender. The natives themselves, i.e., the native bankers, had devised a remedy for the deficiency of the existing silver currency by using gold bars stamped by the Bombay Banks as a circulating medium. The exclusion of gold from the currency of India could not be justified or be considered other than barbarous, irrational, and unnatural. The only remedy was to introduce a well-regulated gold currency into India.

Several officials, under the instructions of the Govern

ment, held meetings of the bankers, merchants, and notables in important cities. They were unanimous in their approval of the scheme, and had no doubt of its success. They testified that sovereigns in great quantities were circulated in their districts, and were bought in large quantities by the natives. A large number of collectors in Southern India reported that large quantities of sovereigns circulated in their districts, and that the natives bitterly complained of the losses and inconveniences they suffered from their not being received at the public treasuries. The bankers were unanimously in favour of the sovereign being declared the standard unit, because it was the coin most familiar to them, being most abundant, and almost the only one used for equalizing the exchanges; and if a gold currency were established it would facilitate the introduction of a paper currency. This powerful and unanimous movement was the emphatic revolt of all India against the silver standard. The unanimous demand was, that the sovereign should be declared as the standard unit throughout India, because immense quantities of it were circulated throughout the country, and the natives were perfectly familiar with it. The whole of this movement is set forth in a Parliamentary paper entitled "East India Gold Currency," published in February, 1865, and no one has a right to form an opinion on the subject who has not carefully studied it.

In consequence of this movement the Indian Government addressed a memorial to the Home Government to authorize them to declare British and Australian sovereigns and halfsovereigns to be legal tender throughout the British. dominions in India at the fixed rate of 10 rupees to the sovereign! Such a proposal was foredoomed to failure because it was pure and unadulterated bimetallism, which the Indian Government had twice condemned and abandoned. It was a revival of the lowest and most barbarous economic ignorance of the fourteenth century.

Sir Charles Wood, Secretary for India, at once quashed this fatuous proposal, and read the Indian Government