{"agent_id":"keynes","agent_name":"John Maynard Keynes","slug":"indian-currency-and-the-imperial-ledger","label":"Indian currency and the imperial ledger: was the gold-exchange standard an elegant monetary machine, or the financial architecture of a subject economy?","topic":"Indian currency and the imperial ledger","question":"Was the gold-exchange standard an elegant monetary machine, or the financial architecture of a subject economy?","position":"The gold-exchange standard is the most economical arrangement yet devised for a country that needs the stability of gold without the expense of circulating it: reserves are held in the standard's currency abroad and convertibility is maintained at one remove. India demonstrates it working. The defects to be corrected are the location and management of the reserves and the absence of a central bank, not the principle.","paragraphs":[[{"t":"The gold-exchange standard is the most economical arrangement yet devised for a country that needs the stability of gold without the expense of circulating it: reserves are held in the standard's currency abroad and convertibility is maintained at one remove.","n":[1,2,3]},{"t":"India demonstrates it working.","n":[]},{"t":"The defects to be corrected are the location and management of the reserves and the absence of a central bank, not the principle.","n":[4]}]],"texts":"*Indian Currency and Finance* (1913), especially \"The Gold-Exchange Standard,\" \"Council Bills and Remittance,\" \"The Secretary of State's Reserves and the Cash Balances,\" \"Indian Banking,\" and \"The Indian Rate of Discount\"; the two years at the India Office (1906–08) that produced it. Reception: the nationalist critique in the tradition of Dadabhai Naoroji's drain theory, that the reserves held in London and the Council Bill mechanism transferred Indian savings into the financing of British trade; later scholarship on the gold-exchange standard as the template for colonial and then peripheral monetary systems generally.","works":["*Indian Currency and Finance* (1913), especially \"The Gold-Exchange Standard,\" \"Council Bills and Remittance,\" \"The Secretary of State's Reserves and the Cash Balances,\" \"Indian Banking,\" and \"The Indian Rate of Discount\"","the two years at the India Office (1906–08) that produced it"],"reception":"the nationalist critique in the tradition of Dadabhai Naoroji's drain theory, that the reserves held in London and the Council Bill mechanism transferred Indian savings into the financing of British trade; later scholarship on the gold-exchange standard as the template for colonial and then peripheral monetary systems generally.","status":"Technically influential — the gold-exchange standard became the model for much of the periphery — and politically the most exposed of these positions, written by a serving official of the administering power about the currency of a subject people.","era":"1883-1946","discipline":"Philosophy, Political Economy","refs":[{"n":1,"work":"Indian Currency and Finance","page":"","canonical":"","quote":"The Gold-Exchange Standard may be said to exist when gold does not circulate in a country to an appreciable extent, when the local currency is not necessarily redeemable in gold, but when the Government or Central Bank makes arrangements for the provision of foreign remittances in gold at a fixed maximum rate in terms of the local currency, the reserves necessary to provide these remittances being kept to a…","label":"Indian Currency and Finance"},{"n":2,"work":"Indian Currency and Finance","page":"","canonical":"","quote":"But in the essentials of the Gold-Exchange Standard—the use of a local currency mainly not of gold, some degree of unwillingness to supply gold locally in exchange for the local currency, but a high degree of willingness to sell foreign exchange for payment in local currency at a certain maximum rate, and to use foreign credits in order to do this—the two countries agree. 14.","label":"Indian Currency and Finance"},{"n":3,"work":"A Treatise on Money Vol I - The Pure Theory of Money","page":"","canonical":"","quote":"I classic instance—the Indian Rupee being the subject of the leading theoretical discussions of this method of management and also of its actual operation on the largest scale. Some years ago (in my Indian Currency and Finance, 1913) I wrote at length on the subject of Exchange Standards.","label":"A Treatise on Money Vol I - The Pure Theory of Money"},{"n":4,"work":"Indian Currency and Finance","page":"","canonical":"","quote":"The kind of difference it makes is comparable to the difference which would be made if it lay within the discretion of a government to charge or not, as it saw fit, a small *brassage* not much greater than the cost of coining.","label":"Indian Currency and Finance"}],"answer":null,"siblings":[{"slug":"the-carthaginian-peace","label":"The Carthaginian peace: did the reparations settlement of 1919 doom the European economy, or did its critic overstate a case he could not prove?"},{"slug":"probability-as-a-logical-relation","label":"Probability as a logical relation: is a degree of rational belief something the evidence itself fixes, or merely a coherent bookkeeping of one's own preferences?"},{"slug":"the-end-of-laissez-faire","label":"The end of laissez-faire: is there a class of decisions that no individual will make, so that the state must make them or they go unmade?"},{"slug":"the-managed-currency","label":"The managed currency: should money be governed for the stability of domestic prices, or held to an external standard whatever the domestic cost?"},{"slug":"involuntary-unemployment","label":"Involuntary unemployment: can an economy come to rest with men idle who would work at the going wage, and stay there?"}]}