There has been an interesting example recently of a country which, more perhaps by chance than by design, has secured the advantages of a relatively stable level of internal prices at the expense of a fluctuating exchange, namely India. Public attention is so much fixed on the exchange as the test of the success of a financial policy, that the Government of India, under severe reproaches for what has happened, have not defended themselves as effectively as they might. During the boom of 1919–20, when world prices were soaring, the exchange value of the rupee was allowed to rise by successive stages, with the result that the highest level reached by the Indian index number in 1920 exceeded by only 12 per cent the average figure for 1919, whereas for England the figure was 29 per cent. The Report of the Indian Currency Committee, on which the Government of India acted somewhat clumsily without enough allowance for rapidly changing conditions, was avowedly influenced by the importance in such a country as India, especially in the political circumstances of that time, of avoiding a violent upward movement of internal prices. The most just criticism of the Government of India’s action, in the light of after-events, is that they went too far in attempting to raise the rupee so high as 2s. 8d.,--a rate not contemplated by the Currency Committee. Prices outside India never rose so high as to justify an exchange exceeding 2s. 3d. on the criterion of keeping Indian prices stable at the 1919 level. On the other hand, when world prices collapsed, the rupee exchange was allowed to fall with them, again with the result that the lowest point touched by the Indian index number in 1921 was only 16 per cent below the highest in 1920, whereas for England the figure was 50 per cent. The following table gives the details: +--------------+----------+------------+-----------------------------+ | | | | Value of Rupee in Sterling. | | | Indian | English +--------------+--------------+ | | Prices. |Prices.[46] | Purchasing | Actual | | | | | Power Parity.| Exchange. | +--------------+----------+------------+--------------+--------------+ | Average 1919 | 100 | 100 | 100 | 100 | | Highest 1920 | 112 | 129 | 115 | 152 | | Lowest 1921 | 95 | 65 | 69 | 72 | | Average 1922 | 90 | 64 | 71 | 74 | +--------------+----------+------------+--------------+--------------+ [46] _Statist._