THE HOARDED GOLD OF INDIA.

Oamaru Mail, Volume XXXIX, Issue 12253, 2 June 1914, Page 7

THE HOARDED GOLD OF INDIA.

A MYSTERY OF MILLIONS

(By Lovat Frascr.)

Tlio. report of the Royal Commission on. Indian Finance :mcl Currency, which has just been issued., settles sonic controversies and starts others, but it .does nor clear up the mystorv-of the hoarded gold of India. From time immemorial India has absr>rljod gold as a sponge absorbs water". The (low of gold to India has always continued. In the last i-wv-lvo years sh<i has received £13!>.0!)0.0(K) in gold, partly in sovereigns and partly in bullion, in addition .to enormous quantities of silver. ]t all-goes into the country, but. verv little ever coines out. Lord Kothschild observed some years ago that lie had noticed rhat none of the smooth gold liars .sent to India I rom .England ever came back. What happens to this g resit stream of precious metal, which t-o'ntinnously disappears like those rivers iq.desert land* which lose themselves underground. The testimony of experts is most conflicting. Some say it is hoarded, while a few are roadv to, prove by a formidable array of statistics that it cannot be extensively hoarded. Those who be-

lieve t-hnt India possesses a vast store o; boarded treasure make the wildest guesses at its probable total. 'The most popular estimate of the hoarded wealth; of India pills the total at £300,000,000. which would amount to .CI per head of the population ; but sonic credible estimates are higher. The experts quarrel, again, about the probable effect of India's absorption of gold upon the world's 'money markets and the prices or commodities. Some say that all gold-using countries benefit thereby, while others, such as Sir Edward. I felden. appear to hold that "the drain n! gold to India" is a potential menace. The Commission, while declining to emdorse. either of these mutually destructive contentlons, has declared in effect thiit. an increased use of gold in India should not in future be encouraged by the' Government, but Iridia. already seems disposed to resent this recommendation. Whether gold is hoarded in India- or not is really a question of terms. AII j nations hoard gold upon occasion. If , England were threatened with a groat. ' war to-morrow we may depend upon it that there would be a rush for gold, on +he part of those people who possessed both foresight and a balance at the bank. It s estimated that during the' Balkan crisis the peoples of Central Europe obtained and 'hoanled t'OO.OOO.QOO in gold. India has been subjected to , iepeated' invasions and innumerable in- j ternal wars, and her people hare never completely lost their hereditary sense of insecurity. Banking facilities .are still sparse, and it weald "be surprising if Indians did net hoard.

But hoarding does not necessarily mean burying in the ground or concealment in the roofs of houses, though these practices are doubtless extensive. Mr >3. -\l. Kernes, a member of the Commission, tells a etory of a Brahmin in Eastern .Bengal, who even hoards currency notes in his roof. Once a week he retires privily and spreads them out in the sun to remove the A verv largo proportion of the boarded -wealth of India is, however, in the form of gold and silver ornaments. It is into these ornaments that the.bulk of the bullion and sovereigns, as well as much of the silver, disappears. One often sees in the bazaar of a" prosperous Punjab town little bovs naked save for one insufficient garment, but glittering with silver ornament*. The girls are far more lavishly laden. The frccniency of child murders in Tildin is almost entirely due to motives oi .robbery. With the growth ot prosperity gold ornaments arc largely replacing silver ones, especially among adults. One witness told the Commission that at the Ainrilsar fair well-to-do agriculturists, who formerly worn necklaces o: rupees, are now seen with strings of sovereigns round their necks. It is the women,-however, upon whom gold ornaments are chiefly lavished, and the cause is partly found in the Hindu - liwv*--of. - inheritance.. A Hindu cannot alienate anv portion of his property. either by will or by gift, to his wife or anv of tiie female members of his family. Hi? male heirs are nevertheless precluded by law from claiming jewellery or ornaments given bv him to his female relatives. These remain the property of the women, and thus curious custom, which is a very old. one. accounts for much ol the prevalence oi boarding in India. Mr Sundara Tyer,_ a Madras economist, says that with the spread of Western ideas Hindus now feel it their dutv to make a better provision for their wives and daughter -and other female relatives. The result has been an enormous increase in the melting of sovereigns to make gold ornaments. In a middle-class family, by the time a. girl is twelve or thirteen, fifty or one hundred sovereigns will have been collected for her dowry and converted into ornaments. These ornaments cannot be attached bv anv legal process or reclaimed by the giver. A Hindu wife must cease to wear the ornaments when her husband dies, but she then sells them and lives on the proceeds. (told ornaments are not. however, made only ps a provision for the women. They are a convenient method of guarding against a- rainy day. and they arc particularly popular with prospective bankrupts.' Mr Jyer quotes the case ol a merchant who failed, and who handed over all his available assets to the Ofiicial 'Receiver. It was afterwards found that he had Riven his wife jewellery and ornaments to the value ol over £600,000, but under the law the creditors could not seise a single one of those articles. Whether the sovereign is really popular in India is a subject of much argument. Some witnesses before the Commission held that it was because- notes kept in secret places might moulder or be eaten bv rats or white ants. Others maintained that the peasant feels .safer i frcni attack when he goes home from | the market with crisp ten-rupee notes , (each worth 13s 4d) tied im;in a corner o: his loin-c-loth, instead of jingling gold coins. A curious fancy of the Indian is his preference for the old ''shield" or "spake" sovereigns for melting purposes. So great is the demand for 'shield" sovereigns that they are sold at a premium, and banks made special arrangements to import them from En eland. . . The facts about hoarding m India, arc strange and endless, and although the educated and mercantile classes are now investing more freely in Government paper and industrial enterprises, it is to be feared that the recent widespread failures of native banks in "Western'lndia, the Punjab, and elsewhere, will produce an increase in the tendency to hoard. The real extent- of the smashes last autumn in India has never been fully disclosed, _ but the losses amounted to many millions, and carried misery into innumerable homes. During the height of the craze for "Swadeshi'' undertakings, in whieh none hut Indians were allowed to participate, the. maddest "banking'' institutions were started. Clever rogues soon realised that the populace did not perceive the difference between nominal capital and paid-up capital, and would put deposits into any "bank" with a resonant name if attractive interest was offered. Mr Kernes tells of one "bank" which advertised -£'20,000,000 as its nominal capital, and had no paid-up capital at

Legislation will soon stop these eccentricities. but the Indian agriculturist who is the chief hoarder, will certainly not. lie tempted from his ways by the impossible" expedient -of a huge Stare hank, which the Commission tentatively advances. Why the Commissioners should have suggested further inquiries into a project which is unsujted to the varied needs of the country is the chief puzzle of an otherwise able document.