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 disappearance
 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 tradition
 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 between
 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 control
 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 depreciation
 a result of superfluity alone, and can find no efficacious
 remedy for it but contraction of supply. Thus if
rupees had depreciated, the obvious cause was excess pro-3T