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Put MAY 2 1921 79 Delhi, the - 1-7 -11 ' r. 2. , . r- " S 0 f stA et. riciZl /rut fu, 14.;$ (t& if)- / /4-Z-4 1144; 4,0 4---&-,1:11,-;k Ail. 142 *14 CA: lore, ii-)144,o1.14, io L3 Z----2( sLu., 54415 I- 54' ),;(4. 414 (.4 IT... ..t t41- kotA14.,, A-4 GitureAil Ufa t- 4-1 44 ir 14 Lai 1 (k, -yily Aj 4-tA w AO 14- &A (.41-( .r mkt 1.-4,11. ludrze CI-42,14.-e--1-1, 11-1A7 0% 44. \.>'e° '** dist .5'4;1, j." 26/2 %.0) ocii wy 4. m9 V77 "11/ 07"69/-71 m1277 ,37 6 "`7"/779,/ r, ey-fry 74,1A7 e-,p, en' It ; 114 4 44 h:A Al Jilt- 414.45, < / m i d Ai / 1 4 . e . 4 , 4 4 / A i f. 4 d our. t4? Zia 2 etrur,/, eki- A 44 i"i 44( *4 AAu 444 a AA A ot, Jal 1s. Ai 4.46A/C? 4/1ii 4 )1 44 14.1 44 L Aq alca,fr aM hi4 A;z7 L 4.4 1Aseaz. 4 4A (02a d s4..1 444 4 _ y4:4-b 1:1444.17 7L ith Jen, o ak. lanA 4,40 fork ft /2 4i iauoua!iy v42 6,( /44.4. ki;41 1a 6a. cicd ILA togaZ 44AAA 0.4,&A 4;i4 IA 1--0411"/, dl 1,44 rA htel klac.' 4:4. Jda4 2- Lazo, 144t irt dic 4)44. ..ft_ aaci 2114.,/ it744 ev K 64 44 Pie aid Sud &II A tio 4 )41 deni. )7t 104 4,41 k4/-acruZs dreA /44 444' 1-1- ritt le v140 ICOLI rialv 4: 14: lisc;u1 &44zz 44.41_424 d Eli)t 414.5 IA f. 7( ciA 4.4 firl 44- 4.'544A ptiA 4-; A d2, 21"-; 4 I 14:4-6-1(-477 1t4 A-2-74 out- 1444 /drIA., 1144 Atil% et,e 14.-k 6 NIOJ. Su (Peva, Ariel gs $- YA144.4 414 AdA 444,4 11-1 It7,10 4.4 °'c! so itzt 614 &-c? ,ta- IL IraaD4.4p 2F fitiA 44 4 ICLW k4A5 /4 G ;7 etA C A /(O-, A /rt..; 1;4 7,04.0) elitiqvu,u,, 4144 7. 4 do ii,/4 A.14 5 L4,1 k 16,; c A lad tiz,4 44.1AI At, Infrazal COPY -to Simla 26/7:1921] My dear Strong, I purposely refrained from answering your letter until your kind present arrived; it has now done so, and I assure you that it is not only an unalloyed delight to me, but a wonder to all beholders. I am really very grateful to you for your generous thought; it was doubly blest, for I Dave used it as an opportunity for insisting with the Navy:?[ that I should go up to Kashmir for ten days to try it. Seeing that it came from you (whom he always mentions with the greatest affection and respect) he has not been able to refuse; and I go on the 2nd of August. It is not the best time of the year, but it is the only time which I can fit in between meetings of our legislative Assembly. It is a great pleasure for us here, who live in a world of ernest dutiful highminded but mediocre men to see a first class artist like Lord Reading at work. It is a difficult time. The mere transition from a bureaucratic to a 'responsible' form of Govt ;would ordinarily afford enough problems; the position is complibated by the great outburst of nationist spirit which has led to the formation of a strong extremist party. The latter - anyhow the best of them - are not for violence or revolution; but you cannot in a country like InOla base your campaign on abuse of the European + his methods without le adiggsooner or later to trouble. I don't expect it on a large scale; but the Mahomedian element has been stirred to its depths by politicians appealing to religious prejudice, and some sporadic trouble we must I think have. been one of toleration and restraint so far; Our policy has we wanted to set the new reforms scheme to work, and thereby tosecure to ourselves the cooperation of the moderate elements in the country. I think we are succeeding in the latter aim, but meanwhile the Nationalist party has steadily won its way with the lower + less responsible elements in the population; it has caused a great deal of agrarian + industrial unrest, and I think that matters must soon come to a head between us. You cannot of course prophecy as to the exact form the contest will take; and If course one has no anxiety as to the result; but the times are full of interest: Financially we are in a somewhat curious position. Trade is more or less dead for the time, for our customers have failed us. Our war inflation was not equal to that of other nations, but it was undoubtedly heavy for India - she had always been accustomed to take her gains on the balance of trade in gold or silver, and as this was not possible during the war, we had to increase paper. We knocked off a good one last year, but the future process of reduction will be much slower. We could have got ourselves pretty straight but for the continuation of operations on the frontier, very costly and not very useful, which involve our working to a deficit instead of a surplus, in spite of very Ordinarily, with money still somewhat inheavy taxation last March. flated and with trade slack, we ought to have been able to set to work to fund our short term loans; but India is at present (I suppose in common with the rest of the world) disinclined to invest on long terms, and all we can do is to carry on with five + ten year bonds. This we are doing successfully, and without increasing interest. I think we could get a good deal of long term money at higher rates, but there is standard so much political outcry at the fall in capital value of our old in ability to get support securities (3 l/2% that I should doubt my lor the Assembly for a loan which would still further depreciate the old holdings. Further, we are still educating the public in the investing habit, and with a callow young investing public, it is dangerous to securities. It makes the value of do anything which will them very shy indeed of future long term investments. So that our policy at present is limited to short term renewals, in the steadfast hope that we shall in a year or two be able to do something substantial The world 'financiers are helping us bravely by on a long term basis. knocking down interest rates; your bold policy of raising them having attained its immediate purpose, you can I hope now afford to let the world get back to a lower level. I think that we are sound enough generally; we should be paying our way well but for trade oppression + war on the frontier; we are not of course adding unbacked paper to the currency (indeed last year we brought one issue down 20 crores; we have a metal backing of 56 per cent nominal and 63 per cent real, taking gold at full value, and we have an automatic arrangement for the early reduction of the remaining unbacked notes) and we are not adding appreciably to our Treasury Bills. The monsoon is going well, and if only we could see a revival of demand among our customers, I think we could look fate in the face again without The rest of the mistiving. As you see- it is all someone else's faults world has gone rotten + can't buy. Excuse a long erreed, and again - my very best thanks. sends you the kindest remembrances. Yours sincerely My wife (signed) W. Hailey This handwritting is difficult to read and so any stayement,copied here, should be checked ] EHK Delhi, the 4th December, 1922. Der Strong, Idany thanIcs for your letter of Aovember the 2nd and its account of the change of conditions in the United estates. Since you have written we have had the result of your elections and if 1 mistake not it sho ;.s a very 'EEE# considerable feeling against the present administration. ae are hoping here that this also means that your present tariff policy will undergo some change for 1 need not say that it is likely to hit us and Great Britain very hard. But what you say about the improvement in business is very encouraging. I home that it may mean the slow turning of the tide towards an improvement of trade generally throughout the world. dhen I wag in London McZenna told me that his anticipations and those of his friends in the Banks were that there would be a revival in 41AZ::47/The renewed trouble with European trade with the 44.44mtrea. Turkey has unsettled conditions and this may have accounted in great mart for the disappointment of his predictions. But one cannot help feeling that all the chances of a revival are there and that we only want some stability of political conditions to make rrogress. For ourselves we seem to be in for a much better time politically. One cannot prophesy about the East; there are always surprises in store; but for the moment the signs are o . The non-cooperation leaders seem to have split horelessly. The more intelli,:ent have been frightened by the success that has been attained in b1, reforms. You know yourself how great were the efforts we made to ensure that the new constitution sho7T1d function.; how 44.4414.944 we were in the face of criticism of the most outlandish nature and how even when opposition took the form of really violent agitation and open rst,n we still held our hands in the hope that moderate people would rally round us and that the great bulk of the population would get tired of the non-cooperative folly. ..epression is- always possible but it is seldom successful unless it can be attended by a psychological change in the population itself. -2- a!, 4-1q; p9cloq em zUITT PTnom eonpoad q.,711q. ;cu ueeq pequToddasTp eoua;sTsaed 0; VT,,, eRu-r,10 pua I peaTnbea a2aanoo pua TT;un siTu,Pu30 sq.uguaq-noTT pea:lecLiasTP. uT Tad uos ao 8,1"G °doll 1.gq; Pgq Sp-ca O. ;aasep .19111-T9 "",or 87 I Sas eq; eaom zueTTTel.uT uoT;oes To uoflaaad000-uou Slq PePToap req; eq; sseoons ;o smacuaa eT snoaeSuap o; aTe:; uoT;Teod eaTeep O. alzoo o;uT anc sTTounO) pua eq; sPa3q-19TP TTTI-s pup OM 011130 puns eq 112nca 6s3loeu eq. splaq-unq 0-4; ;gq; 4.01Z 0; UOCIO SMOTCI ;3 a ;uaoea aufleam uT 1.09IZe eATeoea mca; e Sett; !;no .nq eq; ;TTds sal euop en pooh STaaTuoT;aad aoTocea aaAo s;aoder: gotgM plua suoT;oes 910. Saqmog SouapTsaaa e;oTa;sTp mo:is vaq; q2noq; eq; Jo gq; 1,7.0T;s1J2g uT 212T;10.10 IgTola INV3dT4.ul leTIT 'seATAans TTT;s gq; iaaauaS epn;T;;a ;o aq; uoT;aindod sparrAo; ;uallluaaAo.0 saa0T.T.To aox aq; ae;;eq OM pTnctie 75 rpm ;.you nuit I pua eq; uoT;sa;sTuTuipa GAO :q.dop-3 Yr7 noes Sui5e;aATad OAN "r) q.o2 V -ft?, aqq. sat/ peflualio umo maTA Sa0;74T2S u0 STIaTaa;-na .SoTiod a'ql. (Una r"P -4- Thee is unfortunately at the same ti e an extraordinary depression in trade. The best test of this is that our railway receipts will be 5 crones down on the budget estimates. There is little export of ./14,41 whetA OL 4 AZe 1 ezedt44a-ffizi441, i.4.44-tellgfrIkVaasi-ec:Iviai4..nd Japan must take a good deal of our cotton. But internal trade seems dead for the time. The petty dealers are without cash or credit and it will be sometime before they can get going again. The Bombay market has been indulging in an orgy or speculEtions on lines which would astonish anyone accustomed to your spot transactions or the ready settlements of London. The consequence is that no one no,i, will touch industrial shares. There is plenty of loose money and it all comes into our loans. I have strong hopes that as E. result we mi{ht reduce the interest rates on the fund on 1nTer terms in our next summer's loan. I have toeygiven up the Finance Membership and taken over that or the Home Department; you will I think remember meeting my predecessor, Sir taken by Blactett of the Vincent at my house. My place is being Home Treasury whom of course you know -5well. But because I have deserted the Finance Department please do not de, ert me Gnd I beg you will Ellow me to continue the -,7rivilege of receiving your letters on the ..itates. I shall show this one to the Viceroy. / /via eidp.44, 7,A ctvrt ea 1.4 itti"1 to 41;4 74/1-, - S 44_2;e ot jZt diidfr 47/4,11 Cas" 4-40 ; 4t 64.4,. 4 d 14 114. ke, 41.4 S L-440' 4 Zzeid ealt,7444.A e4 41 z; 4// .4"->s aertrre2.." ati-G ,. (-4 A Lai" . /2IGO 40. 8 44 a trut_c IU refutiat42 C A-4" v4,4 9(4-14-P 4:t4 idotc cpd-7/1- hit pitc. /7.d. 04 1.A24) ni/l"(41',/Z. kw/A 44_ ce,t4.4/ Jez. Jet r-r44-tt2_ 0.2. 44.cez-t "76- aezi40 4%-z,- 4-1L P4-412 a. 44;t1 C1"11- ( Ad .4")4-1/0 144. 4, f4i,./)_ )- 4dV LA A.1.4 e-t 1-d-ft. 4 fat4/Cr-z: 12,..1 A 1-a- 4 41' rA Plea d4- / /lit 074 72G4p; S4 4.4114;zsg, C ;//' del Ci/7/1- IPZ41.1 eat .2144 :4-4 e 444- Cre1,1411.14i/i- ; dat aite/i," Ati-d At4 7sui IAA A Gt..4 A.7ui 07414 iktA ) On. if-Z-4-(4,v2 A SA%gy," god "-" 4 - Ar1V4 2i k;r4- fit 941( 4; lit )ice ditOtt_ 1A-.0 2A4- 0144 4r-g4pt coret ft-gild-4 /44.4 44% - 4t 1-44- 144.vi oc 414- ;-( r-ef 44.4 G4 44 4-6/to k; kAy 9 Gto-t ez,r744, / ffr711/ 74,t11.0 A ddi:4; lAtt 471 ited; 4Z,7: X /tt.e.4 44;e a tee /le erx 44_ cre_,; I) 54.J A-Vd161a-L. azt, i§a§ 4 ACkNOWLEDGED 4, 41- %I1( itd4 1-4-4! ez-eaz 4-71_ 440 Ati-0-74,4 .1 ,te )71 /3 4 A. ,eAg it; zit A41.41 &tse ) )45 A; 4-4-A;34 4s. AT 4 yit 4441),Al;ty .e4 .,4 4---77,244 ;/./ -.2,z;a-i,,z.e.; ;9 ;i /v4a/ 6:4 0-Ade 4-4 .44Aitta4 ed".0.1, i 47774_, 444L5 /41 .4/7/A 4:14 ir,-34.e, AN4ifif fd-,, `l 1074 Jvli yee-,z7;74_.e. L/i A4 .;4La,f44- /-4 2 1. 41441 s?/1)-t4. dd 4c I. 1'44 A4-,41.4" ZGIZ 1,44 457-7 7 1:7/cr "MI `4P7r lz'f "i'erenr i`47 A17. 7 lip r-111 "44/1'11' *77 1-,z, 7 117 _17 "lfry ,114.z, :17 Y1-7 C "ic -rr7 vit v7ifir" =Ivy Ai -'st-zr, .77y, 1-7 >,P9 vitc --71"r 7eYY 7 pi-7,v /Vilivi.$y ?1/P7 -iY Y_17 f'1"7 2 t-7( Ffrf7- r-p-svs 197,-/ ACKNOWLEDOED jut_ 14, 1924 Delhi, the 27th Liar 19241. Ey dear jtrollg, Very msny 25th. I showed it to Lord thanks indeed for yrs:ur heading who was much inter sted in it. is I ,.k) hope that your health I= now so far re-established that you can look with confidence on are Ja very large crowd in. tha . of the future and Ian sure that there people both in F,ngland and limerica wish. Things here ,taken from the e conomic standpoint are now going fairly well. There is no of busimssi but our balance of its inevitable effect on who join kind of a trade is the rupee; 1-,,r)om or even revival with slovay food prices are falling md some lins of business, such as tea and even jute, are doing :pile well. i;e have a good harvest bef:r us and this should mean a further fall of food prices. Pe opie in Calcutta are doing . business at a reasonable margin of profit and even 71,3:-L-a),y, which was at one t ia. e hardhit has had a revival owing to the hi,-Th prices of cotton. The Cotton Lilis there however are in for a bad time owing,:, to the cost of raw material and they cannot look a -air_ for some years to the sirice v.:A-y high profits they have made But I think it is fair to say that with this sinl exception th.lns in Li.dia are Mak on a pretty safe basis. Our ,state .r'inances are now almost re- established. The Inchcape Committee, which I had such difficulty in securing Wore I left the Finance Department, made heavy reductions -2- cularly in the Army, and this year we have man Ted with a little pullia and pushing in various directions to secui.e a balanced bud-76t. ae have wiped off nearly the whole of our floating debt and can look forward next Summer to strictly limited loan in India and (as we all hope) not a sterliir loan in London. If we can keep clear of those somewhat disastrous continually in the Frontier operations which but us back so 41404 keel; the last three or f.ur years, then e ought to bu on increase in our trail ray Lat,s and Customs Duties should slowly place us in incr.ased funds and indee: I think that frog this point of view we have an encouraging outlook. Politically, things are not so bad as they appear which threateled on the surface. Th, Non-Co-operation movement have our constitution from the Aitset and which really might eveloped into something like revolution is for the moment more all events some of them, or less dead. Its chief leaders, or at have come into our CouLcils and this in itself has produced a world thadt serics of incidents which naturally strike the outside make a with some astonishment. They deliberately attempt to which deadlock; our constitution 7ives us certain reserved powers and allow us to gamy on the administration,notwithstanding; there will no doubt be some agitation outside the Councils, but this a7itn.tion will be for a revision of the constitution which is somethi: Efferent from an agitation of a revolutionary tan ancy. I an clear myself that we must 7o v.ry slow in -3- go slow in constitutional r:vision, :ach stage good before we advance to another. Je are admittedly in difficulty owing to th avent of a Labour Government; its presence gives more hopes to extreue politicianL in India; on the other hand the Government is afrairl, of its critic's in 7n-land and is therefore in two minds. It will take us a little ti 'e to g:t a clear line of action and in the interval we are all just a little worried an anxious but I cannot say that we are in any .seriously perturbed. after all the most important -points the T:,neral econo-Lic conditions of the country GoTxnm nt also the !T neral attitude, of towards the people. Both these an, much better than they were three T:ars ago. Lord ..,eadir7 is well but I think h:: would love a little holiday which is difficult to ret. Loly Redding is courageous as ever bl:t I an afraid she i /really ilaite fit. I myself an ju2t going Rome on two months leave -t the end of which I take ovz the Governorship of the Punjab. That will be interesting though somewhat troublesome but I shall :/J-t anticipate trJuble and shall enjoy writing to you from Lahore. I am, Yours sincerely, To et Governor B. Strong, Federal deserve Bank of New York, New York. h/i4fdiaiL ;governor's Camp, INDIA. June 6th, 1924. JUL 14 1974 tT Lly dear strong, I just received yiur kind information of your daughter's wedding; it came while I was away on short leave to England, or I should have written to you before. I need not say how heartily I wish her happiness, and you will know what I mean when I say that I wish it wl:th a full, though with a very sore, heart. I had leave only for two months, so that I got one only in England: it was a great rush, but I succeeded in seeing nearly every one of iwportance, and I also got four days' real holiday in Scotland. I do not know what queer foresight led. my very English parents to give me a Scotch Christian name, but I retain the most fervent hopes that i shall finally become an inhabitant of that delightful country: Its a Liberal by conviction, I was affected, very grievously, by the state of English politics. I had talks with many Liberals, including Mr. Lloyd George; my difficulty was to see where their future lay. If they have any programme, Labour has gone one better; they are divided by mutual jealousie and their own young men are much depressed. At the moment, they seem to be deliberately marking time, with no policy of their own, critical to Conservatives and hostile to Labour; their one attempt is to invent a cry which will recapture the enthusiasm of Englishmen. But they represent the middle Classes, the shop- keepers, the retailers, and these have ceased to be the force they constituted in Gladstone's time; certainly, they are not now even a united force. One is driven irresistibly to the conclusion that the Anglishnan, acting rather on instincts than ideas, and rather on prejudices than principles, has no room room in his soul for a third party. He dislikes thinking; he demands a concrete and not a general policy, and, for the