The reason why Mr. Lindsay paid no attention to the question of limitation in setting up his exchange standard is largely that, notwithstanding the great reputation he has achieved as an author of a new system, he was profoundly ignorant of the true doctrine regarding the value of a currency. Neither he nor the hosts of currency-mongers who during the nineties exercised their ingenuity to devise plans for remedying Indian exchange troubles,³⁶⁷ understood that to stabilize the exchange was essentially a problem of stabilizing the purchasing power of currency by controlling its volume.³⁶⁸ The gold-exchange standard ignores the fact that in the long run it is the general purchasing power of a currency that will ultimately govern its exchange value. Its aim is to stabilize exchange and allow the problem of purchasing power to go hang. The true policy should be to stabilize the purchasing power of the currency and let exchange take care of itself. Had the Chamberlain Commission considered the exchange standard from this point of view it could not have called it a sound standard when in its fundamentals it was the very reverse of it. [pg 241] ³⁶⁷ _See_ Chap. IV. ³⁶⁸ Cf. evidence of Mr. Lindsay before the Fowler Committee, Q. 4,190–95, where he asserted that exchange had nothing to do with the quantity of money in circulation. Now some one who remains unconvinced of the weakness of the exchange standard may say that in examining its stability we have taken only those occasions on which the standard has broken down. Thinking such a treatment to be unfair, he might say: How about the years during which stability was maintained? Is there nothing to be said in favour of a system that maintained the gold value of the rupee from 1901 to 1907, or from 1909 to 1914? The question is a pertinent one, and the position that underlies it is supposed to be so strong that those who hold it have asked the opponents of the exchange standard either to admit that it is a stable standard or to show that under that standard the rupee has _invariably_ failed to maintain its gold value.³⁶⁹ ³⁶⁹ Dodwell, “A Gold Currency for India,” _Economic Journal_, 1911; _Report on the Enquiry into the Rise of Prices in India_, 1914, p. 94.