It is alleged sometimes that India does not want [pg xiii] gold coins. I feel considerable difficulty in believing that gold coins of suitable size would not be convenient in a country with the climate and other circumstances of India. The allegation is suspiciously like the old allegation that the “Englishman prefers gold coins to paper,” which had no other foundation than the fact that the law prohibited the issue of notes for less than £5 in England and Wales, while in Scotland, Ireland, and almost all other English-speaking countries notes for £1 or less were allowed and circulated freely. It seems much more likely that silver owes its position in India to the decision which the Company made before the system of standard gold and token silver was accidentally evolved in 1816 in England, and long before it was understood: and that the position has been maintained not because Indians dislike gold, but because Europeans like it so well that they cannot bear to part with any of it. This reluctance to allow gold to go to the East is not only despicable from an ethical point of view. It is also contrary to the economic interest not only of the world at large, but even of the countries which had a gold standard before the war and have it still or expect soon to restore it. In the immediate future gold is not a commodity the use of which it is desirable for these countries either to restrict or to economize. From the closing years of last century it has been produced in quantities much too large to enable it to retain its purchasing power and thus be a stable standard of value unless it can constantly be finding existing holders willing to hold larger stocks, or fresh holders to hold new stocks of it. Before the war the accumulation of hoards by [pg xiv] various central banks in Europe took off a large part of the new supplies and prevented the actual rise of general prices being anything like what it would otherwise have been, though it was serious enough. Since the war the Federal Reserve Board, supported by all Americans who do not wish to see a rise of prices, has taken on the new “White Man’s Burden” of absorbing the products of the gold mines, but just as the United States failed to keep up the value of silver by purchasing it, so she will eventually fail to keep up the value of gold. In spite of the opinion of some high authorities, it is not at all likely that a renewed demand for gold reserves by the central banks of Europe will come to her assistance. Experience must gradually be teaching even the densest of financiers that the value of paper currencies is not kept up by stories of “cover” or “backing” locked up in cellars, but by due limitation of the supply of the paper. With proper limitation enforced by absolute convertibility into gold coin which may be freely melted or exported, it has been proved by theory and experience that small holdings of gold are perfectly sufficient to meet all internal and international demands.