1876 by A. M. Lindsay, treasurer of the Bank of Bengal. The idea was suggested to him by reading Ricardo's Proposals for an Economical and Secure Currency.[1] Lindsay published a pamphlet on the subject in 1892 entitled Ricardo's Exchange Remedy, a Proposal to Regulate the Indian Currency by Making it Expand and Contract Automatically at Fixed Sterling Rates with the Aid of the Silver Clause of the Bank Act. London (Effingham, Wilson & Co.), 36 pp.
The first step toward applying Lindsay's idea was taken in 1893, when, as a consequence of the work of Sir David Barbour and the other members of the Herschell Committee on Indian Currency, the Indian Mints were closed to silver and, consequently, the rupee was given a scarcity value above that of its contained silver.
The second step was taken in 1898 when a gold reserve was begun. The full-fledged gold exchange standard was first put in force in 1900, when rupees in India were virtually made redeemable in gold in London through bills of exchange on London.
A different plan for preventing money in silver standard countries from sinking in value relatively to gold was to impose a seigniorage on silver coinage increasing as the price of silver decreased. This proposal was made by Henry Coke before the Herschell Committee in 1893 (§139). In principle, it is nearer the proposal of this book than is the gold exchange standard.
Fuller information concerning the gold exchange system and other plans of currency reform will be found in E. W. Kemmerer's Modern Currency Reforms, Macmillan, 1916.
C. Irredeemable Paper Money. This dangerous expedient has always had its advocates, and these have
- ↑ Ricardo's plan, however, did not go further than merely to propose abolishing gold coin and substituting gold bullion as a reserve, using paper for actual circulation, the Government to sell and buy gold, for paper, at the pleasure of the public, with a slight margin (1⅛%) between the two prices. It will be seen that Ricardo's proposal was like that of this book except that the prices set were not to vary.
