In the following pages I have attempted an exposition of the events leading to the establishment of the exchange standard and an examination of its theoretical basis. In endeavouring to treat the historical side of the matter I have carefully avoided repeating what has already been said by others. For instance, in treating of the actual working of the exchange standard I have contented myself with a general treatment just sufficiently detailed to enable the reader to follow the criticism I have

At the close of the Moghul Empire, India, judged by the standards of the time, was economically an advanced country. Her trade was large, her banking institutions were well developed, and credit played an appreciable part in her transactions. But a medium of exchange and a common standard of value were among others the most supreme desiderata in the economy of the Indian people when they came, in the middle of the eighteenth century, under the sway of the British. Before the occurrence of this e

Denomination of Coins issued by the Mint. Gross Wt. Troy Grs. Remedy in Weight Fineness Troy Grs. Remedy in Fineness. Legal-tender power I. Gold Coins (a) (i) Mohur 180 2 ⁄ 1000ths 165 Not Legal Tender at all. (ii) Third of a Mohur 60 65 (iii) Two-thirds of a Mohur 120 110 (iv) Double Mohur 360 330 II. Silver Coins (b) (i) Rupee 180 5 ⁄ 1000ths 165 2 ⁄ 1000ths Unlimited Legal Tender (ii) Half-rupee 90 5 ⁄ 1000ths 82·5 2 ⁄ 1000ths (iii) Quarter-rupee 45 7 ⁄ 1000ths 41·25 3 ⁄ 1000ths Legal Tender

TABLE XI Financial Year Average Rate of Exchange for the Year. Total Excess of Rupees needed to provide for the net Sterling Payments of the Year over those required to meet the Sterling Payments of 1874–75. Amount of this Excess due to (1) Fall in the Rate of Exchange over that of 1874–75. (2) Increase in gold Payments over those of the Year 1874–75. s. d. R 1875–76 1 9·626 86,97,980 41,13,723 45,84,257 1876–77 1 8·508 3,15,06,824 1,44,68,234 1,70,38,590 1877–78 1 8·791 1,30,05,481 1,14,58,670

“We have,” he wrote, “gold pieces representing fifteen, ten and five rupees respectively; and believed to represent these several sums very correctly, as regards the relative value of gold and silver … that … we should take the first opportunity to declare the gold coins legal tender to unlimited amount; that gold pieces should continue to bear the fixed relation to the rupee; that for a time it might be necessary to permit the rupee to remain legal [pg 120] tender to an unlimited amount, which

It will be recalled 277 that in Mr. Lindsay's scheme Indian currency was to be entirely a rupee currency; the Government was to give rupees in every case in return for gold, and gold for rupees only in case of foreign remittances. The scheme was to be worked through the instrumentality of two offices, one located in London and the other located [pg 165] in India, the former to sell drafts on the latter when rupees were wanted and the latter to sell drafts on the former when gold was wanted. Surp

TABLE XXV Annual Average. Exports to U.K. Imports from U.K. Merchandise. Bullion and Specie. Total. Bullion and Specie. £ I 1889–93 31,569,891 1,180,646 32,750,537 31,837,482 7,694,149 39,531,631 II 1894–98 26,329,764 2,215,049 24,544,813 28,963,180 6,750,736 35,713,916 III 1899–1903 28,709,819 2,089,656 30,799,475 33,498,480 7,301,172 40,799,652 IV 1903–8 36,784,628 2,232,857 39,017,485 47,294,311 9,586,706 56,881,017 — Percentage of Increase (+) or Decrease (−) in — Period II in comparison wit

“I should aim always … at keeping Indian prices stable in relation to commodities rather than in relation to any particular metallic or particular foreign currency. That seems to me of far greater importance to India.” It is, of course, a little difficult to understand how the remedy of high exchange which he supported was calculated to achieve that object. Raising the exchange was a futile project, in so far as it was not in keeping with the purchasing power of the rupee. As an influence govern