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Indian Currency and Finance 2nd ed. Edition Keynes
Digital Instant Download
Author(s): Keynes, John Maynard
ISBN(s): 9781139520195, 1139520199
Edition: 2nd ed.
File Details: PDF, 10.36 MB
Year: 2012
Language: english
the collected writings of
J O H N M AY NA R D K E Y N E S
Managing Editors:
Professor Austin Robinson and Professor Donald Moggridge
John Maynard Keynes (1883–1946) was without doubt one of the most influ-
ential thinkers of the twentieth century. His work revolutionised the theory
and practice of modern economics. It has had a profound impact on the
way economics is taught and written, and on economic policy, around the
world. The Collected Writings of John Maynard Keynes, published in full in
electronic and paperback format for the first time, makes available in thirty
volumes all of Keynes’s published books and articles. This includes writings
from his time in the India Office and Treasury, correspondence in which he
developed his ideas in discussion with fellow economists and correspondence
relating to public affairs. Arguments about Keynes’s work have continued
long beyond his lifetime, but his ideas remain central to any understanding of
modern economics, and a point of departure from which each new generation
of economists draws inspiration.
Keynes’s first book, published in 1913, was Indian Currency and Finance. He
had served briefly from 1906 to 1908 in the India Office in Whitehall; then as
the administrative link between the Government of India and the British par-
liament. He quickly became involved in the problems of the Indian currency
and the then important and fascinating issues concerning the gold-exchange
standard. He continued to work on these problems, with the encouragement
and help of his former colleagues, after he had returned to Cambridge. The
book which resulted, and his known mastery of the problems involved, led
to Keynes’s first major incursion into public life as member of the (Austen
Chamberlain) Royal Commission on Indian Finance and Currency. The
important contributions he made to its work are recorded in detail in Volume
XV of this series, which forms a complement to this volume.
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THE COLLECTED WRITINGS OF
JOHN MAYNARD KEYNES
VO LUM E I
INDIAN CURRENCY
AND FINANCE
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© The Royal Economic Society 1971, 2013
www.cambridge.org
Information on this title: www.cambridge.org/9781107618565
A catalogue record for this publication is available from the British Library
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CONTENTS
General introduction page vii
Preface xv
3 PAPER CURRENCY 26
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GENERAL INTRODUCTION
This new standard edition of The Collected Writings of John
Maynard Keynes forms the memorial to him of the Royal Eco-
nomic Society. He devoted a very large share of his busy life to
the Society. In 1911, at the age of twenty-eight, he became editor of
the Economic Journal in succession to Edgeworth; two years later
he was made secretary as well. He held these offices without inter-
mittence until almost the end of his life. Edgeworth, it is true,
returned to help him with the editorship from 1919 to 1925;
MacGregor took Edgeworth's place until 1934, when Austin
Robinson succeeded him and continued to assist Keynes down to
1945. But through all these years Keynes himself carried the
major responsibility and made the principal decisions about the
articles that were to appear in the Economic Journal^ without any
break save for one or two issues when he was seriously ill in 1937.
It was only a few months before his death at Easter 1946 that
he was elected president and handed over his editorship to Roy
Harrod and the secretaryship to Austin Robinson.
In his dual capacity of editor and secretary Keynes played a
major part in framing the policies of the Royal Economic
Society. It was very largely due to him that some of the major
publishing activities of the Society—SrafFa's edition of Ricardo,
Stark's edition of the economic writings of Bentham, and
Guillebaud's edition of Marshall, as well as a number of earlier
publications in the 1930s—were initiated.
When Keynes died in 1946 it was natural that the Royal
Economic Society should wish to commemorate him. It was
perhaps equally natural that the Society chose to commemorate
him by producing an edition of his collected works. Keynes
himself had always taken a joy in fine printing, and the Society,
with the help of Messrs Macmillan as publishers and the Cam-
bridge University Press as printers, has been anxious to give
Keynes's writings a permanent form that is wholly worthy of him.
vii
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INDIAN CURRENCY AND FINANCE
The present edition will publish as much as is possible of his
work in the field of economics. It will not include any private
and personal correspondence or publish letters in the possession
of his family. The edition is concerned, that is to say, with
Keynes as an economist.
Keynes's writings fall into five broad categories. First there
are the books which he wrote and published as books. Second
there are collections of articles and pamphlets which he himself
made during his lifetime (Essays in Persuasion and Essays in
Biography). Third, there is a very considerable volume of
published but uncollected writings—articles written for news-
papers, letters to newspapers, articles in journals that have not
been included in his two volumes of collections, and various
pamphlets. Fourth, there are a few hitherto unpublished
writings. Fifth, there is correspondence with economists and
concerned with economics or public affairs.
This series will attempt to publish a complete record of
Keynes's serious writing as an economist. It is the intention to
publish almost completely the whole of the first four categories
listed above. The only exceptions are a few syndicated articles
where Keynes wrote almost the same material for publication in
different newspapers or in different countries, with minor and
unimportant variations. In these cases, this series will publish
one only of the variations, choosing the most interesting.
The publication of Keynes's economic correspondence must
inevitably be selective. In the day of the typewriter and the filing
cabinet and particularly in the case of so active and busy a man,
to publish every scrap of paper that he may have dictated about
some unimportant or ephemeral matter is impossible. We are
aiming to collect and publish as much as possible, however, of
the correspondence in which Keynes developed his own ideas in
argument with his fellow economists, as well as the more signi-
ficant correspondence at times when Keynes was in the middle
of public affairs.
Apart from his published books, the main sources available to
viii
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GENERAL INTRODUCTION
those preparing this series have been two. First, Keynes in his
will made Richard Kahn his executor and responsible for his
economic papers. They have been placed in the Marshall Library
of the University of Cambridge and have been available for this
edition. Until 1914 Keynes did not have a secretary and his
earliest papers are in the main limited to drafts of important
letters that he made in his own handwriting and retained. At
that stage most of the correspondence that we possess is repre-
sented by what he received rather than by what he wrote. During
the war years of 1914-18 Keynes was serving in the Treasury.
With the opening of the 1914-18 records, many of the papers that
he wrote have become available. From 1919 onwards, through-
out the rest of his life, Keynes had the help of a secretary—for
many years Mrs Stevens. Thus for the last twenty-five years of
his working life we have in most cases the carbon copies of his
own letters as well as the originals of the letters that he received.
There were, of course, occasions during this period on
which Keynes wrote himself in his own handwriting. In some of
these cases, with the help of his correspondents, we have been
able to collect the whole of both sides of some important inter-
change and we have been anxious, in justice to both correspon-
dents, to see that both sides of the correspondence are published
in full.
The second main source of information has been a group of
scrapbooks kept over a very long period of years by Keynes's
mother, Florence Keynes, wife of Neville Keynes. From 1919
onwards these scrapbooks contain almost the whole of Maynard
Keynes's more ephemeral writing, his letters to newspapers and
a great deal of material which enables one to see not only what he
wrote, but the reaction of others to his writing. Without these
very carefully kept scrapbooks the task of any editor or bio-
grapher of Keynes would have been immensely more difficult.
The plan of the edition, as at present intended, is this. It
will total twenty-one volumes. Of these, the first eight will be
Keynes's published books from Indian Currency and Finance, in
ix
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INDIAN CURRENCY AND FINANCE
1913, tothe GeneralTheory in 1936, with the addition ofhis Treatise
on Probability. There will next follow, as vols. ix and x, Essays in
Persuasion and Essays in Biography, representing Keynes's own
collections of articles. Essays in Persuasion will differ from the
original printing in two respects; it will contain the full texts of
the articles or pamphlets included in it and not (as in the original
printing) abbreviated versions of these articles, and it will have
added one or two later articles which are of exactly the same
character as those included by Keynes in his original collection.
In the case of Essays in Biography, we shall add one or two other
biographical studies that Keynes wrote later than 1933.
There will follow three volumes, xi to xiv, of economic articles
and correspondence, and one volume of social, political and
literary writings. We shall include in these volumes such part of
Keynes's economic correspondence as is closely associated with
the articles that are printed in them.
The further six volumes, as we estimate at present, will deal
with Keynes's Activities during the years from the beginning of
his public life in 1905 until his death. In each of the periods into
which we propose to divide this material, the volume concerned
will publish his more ephemeral writings, all of it hitherto un-
collected, his correspondence relating to these activities, and
such other material and correspondence as is necessary to the
understanding of Keynes's activities. These volumes are being
edited by Elizabeth Johnson, and it is her task to trace and
interpret Keynes's activities sufficiently to make the material
fully intelligible to a later generation. Until this work has pro-
gressed further, it is not possible to say with exactitude whether
this material will be distributed, as we now think, over six
volumes, or whether it will need to be spread over a further
volume or volumes. There will be a final volume of bibliography
and index.
Those responsible for this edition have been: Lord Kahn, both
as Lord Keynes's executor and as a long and intimate friend of
Lord Keynes, able to help in the interpreting of much that would
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GENERAL INTRODUCTION
otherwise be misunderstood; Sir Roy Harrod as the author of his
biography; Austin Robinson as Keynes's co-editor on the Eco-
nomic Journal and successor as secretary of the Royal Economic
Society. The main editorial tasks have been carried by Elizabeth
Johnson. She has been assisted at different times by Jane
Thistlethwaite, Mrs McDonald, who was originally responsible
for the systematic ordering of the files of the Keynes papers, and
Judith Masterman, who for many years has worked with
Mrs Johnson on the papers.
XI
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EDITORIAL FOREWORD
Indian Currency and Finance was Keynes's first book, published
in 1913. The background to Keynes's interest in Indian currency
problems, acquired during his service in the India Office from
1906 to 1908, will be found in volume xv of this edition of The
Collected Writings of John Maynard Keynes. His concern with
these problems led to his appointment to the Royal Commission
(1913) on Indian Finance and Currency. His contributions to the
discussions of that Commission and to the form and content of
its report will also be found in that volume.
The text of this volume is unchanged from that of the original
edition as reprinted in 1924. It departs from that text only in a
less lavish use of capitals than Messrs Macmillans' printers
adopted in 1913, and in the addition of a few names to the index
prepared for it by his father, John Neville Keynes (see jfMK,
vol. xv), who in this capacity would appear to have been more
well intentioned than systematic.
One addition has been made. It was natural that Keynes
should assume a familiarity in those for whom he was writing
with the identities and responsibilities of those chiefly concerned
in the problems of Indian finance. To help a later generation to
which many of these names are quite unknown, we have added
a very short list of biographical notes on the principal dramatis
personae.
Xlll
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PREFACE
When all but the last of the following chapters were already in
type, I was offered a seat on the Royal Commission (1913) on
Indian Finance and Currency. If my book had been less far ad-
vanced, I should, of course, have delayed publication until the
Commission had reported, and my opinions had been more fully
formed by the discussions of the Commission and by the evidence
placed before it. In the circumstances, however, I have decided
to publish immediately what I had already written, without the
addition of certain other chapters which had been projected. The
book, as it now stands, is wholly prior in date to the labours of
the Commission.
J. M. KEYNES
King's College, Cambridge
12th May igi3
xv
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DRAMATIS PERSONAE
ADIE, Walter Sibbald. B. 1872. Cambridge, Senior Wrangler 1894, Rowing
Blue 1895. Entered I.C.S. 1896. Service in Bengal. In finance departments
of various provinces, 1899-1903. Accountant general in various provinces,
1908-12. Collector of Murshedabad, 1917-29. D. 1956.
xvii
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INDIAN CURRENCY AND FINANCE
DAD ABHO Y (Sir) Maneckji Byramji. B. 1865. Called to Bar (Middle Temple),
1887. Advocate Bombay High Court, 1887. Member of the Governor
General's Legislative Council, 1908-20. Governor of Imperial Bank of India,
1920-32. Served on the Council of State, 1921-37. President of the Council of
State, 1933-6 and 1937-46. Member of Indian Fiscal Commission and of
Royal Commission on Indian Currency and Exchange. K.C.S.I. 1936;
K.C.I.E. 1925; C.I.E. 1911. D. 1953.
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DRAMATIS PERSONAE
HAMILTON (Rt Hon.) Lord George (Francis). B. 1845, third son of 1st Duke
of Abercorn. M.P. for County of Middlesex, 1868-85; for Ealing Division,
1885-1906. Under-secretary of State for India, 1874-8. First Lord of
Admiralty, 1885-6, 1886-92. Secretary of State for India, 1895-1903.
Subsequently Chairman of various Royal Commissions, etc. G.C.S.I. 1903.
D. 1927.
INCHCAPE (James Lyle Mackay), 1st Earl of. B. 1852. Went to India, 1874.
Merchant, later senior partner, in Mackinnon, Mackenzie and Co., Calcutta,
Bombay, Karachi, etc., and in numerous other business concerns in India.
Chairman of the Peninsular and Oriental and British India Steam Navigation
Companies. Member of many commissions, etc. Member of Legislative
Council of the Viceroy of India, 1891-3; member of Council of India, 1897-
1911. Member of Lord Cunliffe's Committee on the Currency Question,
1918. Earldom, 1929. D. 1932.
LUBBOCK (Rt Hon. Sir) John (later Lord Avebury). B. 1834. Banker: head
of Robarts, Lubbock and Co. Member of numerous Royal Commissions, etc.
Author of many works, particularly in the field of fauna and flora. President
of numerous societies, including Institute of Bankers, London Chamber
of Commerce and Statistical Society. Vice-president of Royal Society.
D. 1913.
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INDIAN CURRENCY AND FINANCE
MONTAGU (Rt Hon.) Edwin. B. 1879 (second son of 1st Lord Swaythling).
M.P. for Cambridgeshire, 1906-22. Parliamentary secretary to Chancellor of
Exchequer, 1906-8; to Prime Minister, 1908-10. Parliamentary Under-
secretary of State, India, 1910-14. Chancellor of Duchy of Lancaster, 1915;
financial secretary to Treasury, 1914-16. Minister of Munitions, 1916.
D. 1924.
NORTHBROOK (Thomas George Baring), 1st Earl of. B. 1826. M.P. for
Portsmouth for many years. Under-secretary for India, 1859-61 and 1861-4.
Viceroy of India, 1872-6. First Lord of Admiralty, 1880-5. Barony, 1865;
Earldom, 1876. D. 1904.
XX
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