BPSC 70th CCE Prelims General Studies · Question 55 of 143

Correct — D, Sir Austin Chamberlain. The body appointed in 1913 was the Royal Commission on Indian Finance and Currency, and it is universally known by the name of its chairman as the Chamberlain Commission. Austen Chamberlain — the booklet prints 'Austin' — was a senior British Conservative politician who had already served as Chancellor of the Exchequer, and he presided over an inquiry into how India's monetary system should be organised, in particular whether the gold exchange standard then in operation should be retained. The Commission reported in 1914, endorsing the existing arrangement, and its recommendations were then largely overtaken by the First World War. The reason option (a) is dangerous is that John Maynard Keynes really was on this commission — he was its youngest member, he had published Indian Currency and Finance in the same year, 1913, and he contributed an annexe proposing a state bank for India. Being the most famous name attached to a body is not the same as heading it, and questions of this type are built precisely on that confusion. The other two are men from different decades of the same debate. James Wilson came to India as the first Finance Member of the Viceroy's Council in 1859, founded The Economist in Britain, introduced the income tax in India in 1860 and set in motion the government paper currency that followed in 1861 — half a century before 1913. Sir W. R. Mansfield is a nineteenth-century name, again far removed from a body appointed in 1913. Only Chamberlain fits both the year and the office of chairman.

• (a)J. M. Keynes — The classic trap, because it is half true. Keynes was a member of this very commission, its youngest, and he published Indian Currency and Finance in 1913 and wrote an annexe proposing a state bank for India. He did not chair it. A question asking who headed a body is testing exactly the distinction between its most famous member and its chairman.
• (b)James Wilson — Right subject, wrong half-century. Wilson was the first Finance Member of the Viceroy's Council, arriving in 1859, and he introduced the income tax in India in 1860 and initiated the government paper currency that followed. He died in India in 1860, more than fifty years before this Commission was appointed.
• (c)Sir W. R. Mansfield — A nineteenth-century name. It appears here because a candidate who has learned a list of currency committees without their dates may recognise it and reach for it without checking that it belongs to a different era altogether.

India's monetary arrangements under colonial rule were settled through a sequence of committees and commissions, and the exam expects the sequence with the names attached. The problem they were all addressing was the same: the rupee was a silver coin, the value of silver against gold fell steeply in the late nineteenth century, and India's obligations to Britain — the Home Charges — had to be paid in sterling. The Herschell Committee of 1892 responded by recommending that the Indian mints be closed to the free coinage of silver, which was done in 1893. The Fowler Committee of 1898 recommended a gold standard with the British sovereign as legal tender, giving rise to what became known as the gold exchange standard. The Chamberlain Commission of 1913–14 reviewed that system and endorsed it. After the war, the Royal Commission on Indian Currency and Finance of 1926, chaired by Hilton Young, recommended a gold bullion standard and the creation of a central bank, and that recommendation eventually produced the Reserve Bank of India Act of 1934, under which the Bank began operations on 1 April 1935. Reading the chain in order is what makes each individual name memorable.

Two discriminations decide questions in this area. The first is chairman versus member, and it is worth building the habit of asking, whenever a body has a famous name attached to it, whether that person chaired it or merely sat on it. Keynes and the Chamberlain Commission is the standard example; the Commission carries Chamberlain's name for the same reason the Hilton Young Commission carries his. The second is the date filter. Each of the wrong options here is a real figure in Indian currency history, but from a different decade — Wilson from 1859 to 1860 — so writing the year beside each name when you first learn the list disposes of them instantly. It also helps to remember that Royal Commissions were named after their chairmen almost as a rule in this period, so if you can recall that this body is 'the Chamberlain Commission' you have already answered the question. Bihar aspirants should note that the same chain of committees supplies several distinct one-line questions — which committee closed the mints, which recommended the gold standard, which recommended a central bank — and the chain is short enough to learn whole.

• The Royal Commission on Indian Finance and Currency was appointed in 1913 under the chairmanship of Austen Chamberlain, a former Chancellor of the Exchequer, and reported in 1914; it is known as the Chamberlain Commission
• John Maynard Keynes was its youngest member and published Indian Currency and Finance in 1913, contributing an annexe that proposed a state bank for India
• James Wilson, founder of The Economist, was the first Finance Member of the Viceroy's Council from 1859, introduced the income tax in India in 1860 and initiated the government paper currency that followed
• The earlier steps in the sequence were the Herschell Committee of 1892, on whose recommendation the Indian mints were closed to free coinage of silver in 1893, and the Fowler Committee of 1898, which recommended a gold standard
• The next Royal Commission, chaired by Hilton Young in 1926, recommended a central bank for India — the recommendation that produced the Reserve Bank of India Act, 1934, under which the Bank began operations on 1 April 1935

• Choosing the most famous name on a body instead of its chairman; Keynes was a member of this commission, not its head
• Learning a list of currency committees without attaching a year to each, which leaves nineteenth-century names looking plausible for a 1913 body
• Confusing Austen Chamberlain with Neville Chamberlain; the currency commission belongs to the elder, a former Chancellor of the Exchequer

BPSC asks colonial economic history as bare identification — who headed which commission, in which year, and what it recommended — and stocks the option list with genuine figures from adjacent decades rather than invented names. UPSC rarely asks a commission's chairman; it asks what the commission recommended, or tests the institutional outcome instead, such as when the Reserve Bank was established or nationalised.

• practice — not a real PYQ

  Which Royal Commission recommended the establishment of a central bank for India, leading eventually to the Reserve Bank of India ?

  • (a)The Chamberlain Commission, 1913
  • (b)The Hilton Young Commission, 1926
  • (c)The Fowler Committee, 1898
  • (d)The Herschell Committee, 1892

  Answer(b) The Hilton Young Commission, 1926 — formally the Royal Commission on Indian Currency and Finance, whose recommendation led to the Reserve Bank of India Act, 1934.

• practice — not a real PYQ

  Who was the first Finance Member of the Viceroy's Council, who introduced the income tax in India in 1860 ?

  • (a)Austen Chamberlain
  • (b)James Wilson
  • (c)J. M. Keynes
  • (d)Lord Hilton Young

  Answer(b) James Wilson — founder of The Economist, who came to India in 1859 as the first Finance Member and introduced the income tax the following year.