On the theoretical side there is no book but that of Professor Keynes which makes any attempt to examine its scientific basis. But the conclusions he has arrived at are in sharp conflict with those of mine. Our differences extend to almost every proposition he has advanced in favour of the exchange standard. This difference proceeds from the fundamental fact, which seems to be quite overlooked by Professor Keynes, that nothing will stabilise the rupee unless we stabilise its general purchasing power. That the exchange standard does not do. That standard concerns itself only with symptoms and does not go to the disease: indeed, on my showing, if anything, it aggravates the disease. When I come to the remedy I again find myself in conflict with the majority of those who like myself are opposed to the exchange standard. It is said that the best way to stabilise the rupee is to provide for effective convertibility into gold. I do not deny that this is one way of doing it. But I think a far better way would be to have an inconvertible rupee with a fixed limit of issue. Indeed, if I had any say in the matter I would propose that the Government of India should melt the rupees, sell them as [pg vii] bullion and use the proceeds for revenue purposes and fill the void by an inconvertible paper. But that may be too radical a proposal, and I do not therefore press for it, although I regard it as essentially sound. In any case the vital point is to close the Mints not merely to the public, as they have been, but to the Government as well. Once that is done I venture to say that the Indian currency, based on gold as legal tender with a rupee currency fixed in issue, will conform to the principles embodied in the English currency system. It will be noticed that I do not propose to go back to the recommendations of the Fowler Committee. All those who have regretted the transformation of the Indian currency from a gold standard to a gold exchange standard have held that everything would have been all right if the Government had carried out _in toto_ the recommendations of that Committee. I do not share that view. On the other hand, I find that the Indian currency underwent that transformation _because_ the Government carried out those recommendations. While some people regard that Report as classical for its wisdom, I regard it as classical for its nonsense. For I find that it was this Committee which, while recommending a gold standard, also recommended and thereby perpetuated the folly of the Herschell Committee, that Government should coin rupees on its own account according to that most naïve of currency principles, the requirements of the public, without realising that the latter recommendation was destructive of the former. Indeed, as I argue, the principles of the Fowler Committee must be given up if we are to place the Indian currency on a stable basis. [pg viii]