d between the Government of
India and the Secretary of State for the Colonies, it would seem that
India has no objection to Ceylon establishing its own mint for the coinage
of silver (the silver coins at present in use in Ceylon are rupees) and
the island would then be in the same position as other silver-using
countries. But if Ceylon starts its own mint, and is thus able to prevent
the evils of the artificial scarcity of silver to be created in India with
the view of forcing up the gold value of the rupee, then it is plain that
Ceylon tea-planters would retain their present advantages, which arise
from a low rate of exchange, and thus be able to carry on their business
on far more advantageous conditions than their Indian rivals.

To estimate the effect on the Indian coffee-planters with reference to the
effect of the monetary policy of the Government in placing the Indian at a
disadvantage as regards his competition with the Brazilian planter would
be difficult, and I am not in a position to form a decisive opinion on the
subject; but I may mention that the manager of the London and Brazilian
Bank informed the Currency Committee that the production of coffee in
Brazil has largely increased, and will still further largely increase,
owing to the greater facilities of communication, and also the direct
influence of a low rate of exchange. The last-mentioned fact gives, I may
observe, one more instance of the direct effect of a low rate of exchange
in stimulating production, and so swelling the volume of exports. If,
then, the Brazilians are to retain, and we are to lose, the benefits of
the cheapness of silver relatively to gold, it is evident that the
coffee-planters of India must be handicapped in their competition with
those of Brazil; but I do not hazard a decisive opinion as to the exact
weight of the competition, as I am uncertain as to how far our quality of
coffee comes into competition[68] with the quality produced in Brazil.

I must now at least allude to the effects of the measure on the trade,
manufactures, and railways of India. I regret that I am unable to go more
fully at present into a consideration of the effects on them of this
ill-starred measure, but all that the general reader requires to know is,
to use the words of Sir Frank Adam (one of the most important witnesses
examined by the Currency Committee), that if the Government succeeds in
forcing up the gold value of the rupee, China would be able to