16 
MONEY 
Nor is there any reason why such coins should not, 
when convenience suggests it, be made of the same 
metal as the standard coin. When Lord Randolph 
Churchill was Chancellor of the Exchequer it was 
proposed to reduce the metallic contents of the half- 
sovereign, while keeping it in circulation at the 
rate of two to the pound. The coin is subject to a large 
amount of abrasion, and it was thought it might as 
well contribute towards its own maintenance, so to 
speak, by being issued in the first place at a profit. 
Towards the end of the nineteenth century this 
principle that sufficiency of demand and properly 
limited supply will keep the value of a coin above 
that of its metallic contents was applied to standard 
coin in several parts of the world, of which India was 
the most important. 
The Indian Government was troubled in various 
ways, unnecessary to describe, by the change in the 
ratio of value between gold and silver. The standard 
was silver, and a silver coin, the rupee, was the unit 
of account. The ratio of value which had prevailed 
for a long time between the value of gold and silver 
in the markets of the world made the value of the 
rupee to the gold sovereign or pound sterling about 
10 to 1, so that in ordinary language in England 
the rupee was said to be about 2s., while in India 
the pound was said to be 10 rupees. But the ratio 
was rapidly changing, so that it was said in England 
that the rupee was falling, and in India that the 
pound was rising. The Indian Government wished to 
stop this movement, and also to link up India with 
the Western world, in which the gold standard was 
predominant. After some resistance on the part of 
the British Government, it was allowed to adopt a 
scheme under which the supply of rupees to the 
currency was to be so restricted as to keep their 
value up to the ratio of 15 to ti» “r. The possi- 
”