CHAPTER IV 
THE RECOVERY OF THE EXCHANGES BEFORE THE WAR 
OF 1914 
§ 1. Monetary Reform in India: its exact scope and significance; 
adoption of the gold standard in a new form. 
THE monetary crisis which resulted from the disappear- 
ance of bimetallism might have found a logical solution in 
a return to it, if the assumption by certain States of the 
burden of regulating at their own risk monetary relations 
between gold and silver standard countries could have 
been avoided, i.e., by its universal adoption. All efforts in 
this direction failed before the opposition of British tradi- 
tion and met with various other objections, in particular 
the widespread fear that, with an increase in the world 
stock of coin, it would depreciate in value. 
Meanwhile, the crisis became increasingly serious as 
silver depreciated. In 1893 it had lost nearly half its value, 
and the rupee, which before the silver crisis was worth 27 
pence at the official par of exchange, had fallen to about 14 
pence. Thus, faced by the impossibility of any general 
concerted action to establish stable monetary relations be- 
tween gold- and silver-standard countries, the latter made 
every effort to find a remedy. 
So in this same year, 1893, British India made a first 
attempt to raise the value of its silver currency and to con- 
trol its rate. The opinion of the day had not got beyond 
the crude notion, still widely held, which lumps together 
under the general term of “depreciation” both exchange 
phenomena and internal phenomena, sees in this deprecia- 
tion a result of superfluity alone, and can find no efficaci- 
ous remedy for it but contraction of supply. Thus if 
rupees had depreciated, the obvious cause was excess pro- 
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