Resumption of Specie Payments in Austria-Hungary
Journal of Political Economy
The question, however, remains: Is there good reason to believe that the adoption of such a course would have the effect of definitely fixing the value of the rupee, now become a subsidiary coin ? The English precedent unquestionably favors the opinion that there is every reason for that belief. The rupee would, of course, though subsidiary, be unlimited legal tender; but so was the silver coinage of England in the eighteenth century, and so is the silver coinage of a great part of Europe now.
... art of Europe now. This subsidiary coinage would, in the case of India, form practically the whole currency; but we know that it does that in the case of Java at present without any unsatisfactory result. The main ground for believing that the measure would be successful in definitely fixing the value of the rupee is this: that, under the new system, a state of things would be brought into existence in which the rupee circulation, owing to the fact that its being received in all paymentss due to government at a fixed ratio to gold, would be continually in process of being redeemed, to all intents, in gold. The revenue bears a proportion of about four-fifths to the total circulation, and that proportion would be directly redeemed annually. It is this virtual redemption in gold that, as Professor Laughlin remarks, in America maintains the value of silver and of the certificates based on it, which are not actually redeemable in gold, at a parity with United States notes which are, and the principle that is thus seen to operate in America would certainly not fail to operate similarly in India. As to the bank notes, they are promises to pay in rupees now, and should remain promises to pay in rupees still, with this difference that, if the parity of the rupee with gold were successfully maintained, they would, in effect, be precisely equivalent to promises to pay in gold.