Robert Lansing to Benjamin Strong Jr.
Title
Robert Lansing to Benjamin Strong Jr.
Creator
Lansing, Robert, 1864-1928
Identifier
WWP18716
Date
1919 August 18
Description
Robert Lansing writes Benjamin Strong Jr. regarding the Indian currency.
Source
Benjamin Strong Jr. Papers, New York Federal Reserve Bank
Contributor
Russell C. Leffingwell
Language
English
Text
Ammission,
Paris.2861, August 18, 12:00 noon.
For Strong care Morgan Harjes and Company from Leffingwell.
Appreciate currency difficulties of Indian Government; silver rupee was originally taken coin standard being gold sovereign or its equivalent, the Indian Mohur, on the basis of fifteen rupees per sovereign and gold in Indian paper money reserve still counts on that basis which equals thirty-two point forty-four cents per rupee. Can understand why Indian Government, not desiring to put gold in circulation nor to buy silver at present market price and coin it into rupees for circulation at a loss, should progressively raise rate for rupee transfers thus permitting purchase and importation of silver for coinage purposes without loss. It follows nevertheless that Indian Government, sending gold into India against rupee transfers at present market prices derives therefrom a very large profit which raises question whether such profit derived from gold obtained in this market should not accrue to United States Government or United States merchants. This government will not sanction an arrangement which virtually means gold taken from this market is received in foreign markets at a discount from standard of such markets. It is just as distasteful to us in present case as when Spain placed discount on American gold sent to that market. This is a matter between the governments and the general subject has been under discussion between Rathbone and Blackett. In view this and fact that this situation is intimately related to and directly involves tenuresterms our agreement with British Treasury for sale of silver to India.Do you not think embarrassment would be avoided by your advising Reserve Bank to be guided by wishes of American Treasury?
Lansing
Paris.2861, August 18, 12:00 noon.
For Strong care Morgan Harjes and Company from Leffingwell.
Appreciate currency difficulties of Indian Government; silver rupee was originally taken coin standard being gold sovereign or its equivalent, the Indian Mohur, on the basis of fifteen rupees per sovereign and gold in Indian paper money reserve still counts on that basis which equals thirty-two point forty-four cents per rupee. Can understand why Indian Government, not desiring to put gold in circulation nor to buy silver at present market price and coin it into rupees for circulation at a loss, should progressively raise rate for rupee transfers thus permitting purchase and importation of silver for coinage purposes without loss. It follows nevertheless that Indian Government, sending gold into India against rupee transfers at present market prices derives therefrom a very large profit which raises question whether such profit derived from gold obtained in this market should not accrue to United States Government or United States merchants. This government will not sanction an arrangement which virtually means gold taken from this market is received in foreign markets at a discount from standard of such markets. It is just as distasteful to us in present case as when Spain placed discount on American gold sent to that market. This is a matter between the governments and the general subject has been under discussion between Rathbone and Blackett. In view this and fact that this situation is intimately related to and directly involves tenuresterms our agreement with British Treasury for sale of silver to India.Do you not think embarrassment would be avoided by your advising Reserve Bank to be guided by wishes of American Treasury?
Lansing
Original Format
Letter
To
Strong, Benjamin, 1872-1928
Files
Collection
Citation
Lansing, Robert, 1864-1928, “Robert Lansing to Benjamin Strong Jr.,” 1919 August 18, WWP18716, Benjamin Strong Jr. Papers, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.