103.9168/331b: Telegram

The Secretary of State to the Officer in Charge at New Delhi ( Merrell )

275. “For Ecker from Stettinius. Lend-Lease No. 8.

Preliminary conversations have been held with the British regarding need for silver for coinage purposes in India. It is stated that India will require 4 million ounces per month of silver for coinage purposes beginning in March, 1944. In order to be available for distribution in March, 1944, the first shipment must reach India in August or September, 1943.
It is alleged that because of substantial price rises the price of silver bullion may exceed the monetary value of silver, inducing melting of coinage. In order to prevent this, it is proposed to hold a larger stock of 100 million ounces in reserve to be sold in the market for the purpose of limiting and controlling the price of silver. This 100 million ounces would be furnished by the U. S., in addition to the silver required for coinage purposes.
The Indian Government will agree to return an equivalent amount of silver at the end of the war.
I shall appreciate a prompt investigation and report on silver conditions in India, including stocks controlled by the Indian Government in India or abroad, the extent of hoarding, coinage needs, the respective prices of silver bullion and silver in currency, and the feasibility of the proposed reserve as a means of controlling the price of silver.”