CO882-(1-2) — Page 299

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

1

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

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to make coins current at a nominal value above their real value. I do not believe that such a convention would be possible where a currency is sound and is of full value. For example-had the pound in Mauritius really represented a pound sterling, and as in that event must have been the case, the sove- reign was freely circulating in the island, with British silver only as a token of limited tender, it would have been impossible for any combination of men to have made a rupee equal to 28., or to th of a sovereign, so long as that same pound or sovereign would pay for 10 rupees imported from India. In that case no Indian labourer would have been content to receive rupees at the rate of 28. each, or ten to the sovereign, when he could procure a sove- reign for every twenty of such shillings, and with which in India he could buy 10 rupees. The depre- ciation of the currency, and the consequent absence of sovereigns from circulation, alone rendered that Convention possible. The same may be said of the Convention in Malta. So long as British silver was an unlimited tender at its nominal rate, gold was excluded, and the currency was depreciated. The limit of the tender of British silver to 40s., and the correction in the ratings of foreign coins, which I believe has been made, have placed the currency on a sound footing, and sovereigns now circulate freely. A convention, then, to render a particular coin current at a higher rate than its intrinsic value must fail, for if Sicilian dollars can be procured, as they can be, at the rate of 48. cach, in exchange for sovereigns, it will be impossible to maintain a value in the island, of 48. 2d. I am aware that after the 40s. silver tender was adopted, a new convention was formed for the purpose of keeping the Sicilian dollar at 4s. 2d; but I have a strong suspicion that this was merely a plan on the part of the banks to enable them to get out the dollars they had on hand at a high rate. They will probably have failed in their object, for they would rather be likely to increase their stock than diminish it. But whether or not, I do not believe it possible that such a convention can last. But the Malta people had one cause of complaint. If the measure recently adopted has had the effect of raising the currency to its full sterling value, as no means have been taken for adjustment of obligations, the debtors will have paid

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more than the just amount of their debts, by this appreciation of the currency.

55. With regard, however, to the Mauritius Convention of 1843, I believe there never WAE anything the effects of which were so much over- rated and misunderstood. I do not believe that it has in the slightest degree facilitated the importa- tion of coin. That must be determined by the state of the exchanges alone; no conventional rate or term which is given to a rupee in Mauritius, can make any difference in the price at which they can be bought in India with the bills on London drawn against sugar. They are drawn in sterling, and will buy just the same number of rupees, whether in the Mauritius they are called 28. or ls. 104d. In either case, a given quantity of sugar, or its repre- sentative in London bills, will buy just the same number of rupees. But the events of 1843 appear

to bave been much misunderstood, and are still so, judging by the evidence taken by the Rupee Com- mittee. The truth is, that the crop of 1842-3 suddenly fell down to 50,660,000 lbs. from 85,187,000 lbs. the year before; and again, in 1843-4, it was only 59,545,000 lbs. At the close of the shipping season in 1843, a great deficiency

in the supply of bills, the necessary consequence of the short crop, was experienced. The exchange upon London rose accordingly to 15 premium for Treasury bills, and to 8 and 9 premium for private bills at three months. This adverse exchange led

to a corresponding premium on coins and a drain of specie. The best proof of how little influence the Convention had at the moment, is, that although it declared that 2 rupees should be a dollar, yet for more than a year the rupee was at a high premium, being worth 53 to 57 cents in place of 50 cents, as fixed by the Convention. It was not until October 1844, when a good crop of sugar rendered billa abundant, reduced the exchange from 7 to 8 premium to 4 to 5 discount, and thereby furnished

the means of importing rupees cheaper, that they fell to the conventional rate of 50 cents.

56. But while I do not believe that the Conven- tion has answered any of the marvellous purposes attributed t freilitating the mpply of coin, it

is certain that it has altered the intrinsic value of the dollar in scenunt, and whatever injustice