The problem Of the Rupee 2

Contd

17. It is an opinion supported by the best authorities, and proved by experience, that coins of gold and silver cannot circulate as legal tenders of payment at fixed relative values...... without loss; this loss is occasioned by the fluctuating value of the metals of which the coins are formed. A proportion between the gold and silver coin is fixed by law, according to the value of the metals, and it may be on the justestprinciples, but owing to the change of circumstances gold may become of greater value in relation to silver than at the time the proportion was fixed, it therefore becomes profitable to exchange silver or gold, so the coin of that metal is withdrawn from circulation; and if silver should increase in its value in relation to gold, the same circumstances would tend to reduce the quantity of silver coin in circulation. As it is impossible to prevent the fluctuation in the value of the metals, so it is also equally impracticable to prevent the consequences thereof on the coins made from these metals....... To adjust the relative values of gold and silver coin according to the fluctuations in the values of the metals would create continual difficulties, and the establishment of such a principle would of itself tend to perpetuate inconvenience and loss."

They therefore declared themselves in favour of monometalism as the ideal for the Indian currency of the future, and prescribed:—

"21. ......... that silver should be the universal money of account (in India), and that all ...... accounts should be kept in the same denominations of rupees, annas and pice.......

The rupee was not, however, to be the same as that of the Moghul Emperors in weight and fineness The proposal that

"9. ......the new rupee ...... be of the gross weight of—

Troy grains                     ...           180

Deduct one-twelfth alloy         ...               15

And contain of fine silver troy grs.         165"

Such were the proposals put forth by the Court of Directors for the reform of Indian currency.

The choice of a rupee weighing 180 grs. troy and containing 165 grs. pure silver as the unit for the future currency system of India was a well-reasoned choice.

The primary reason for selecting this particular weight for the rupee seems to have been the desire to make it as little of a departure as possible from the existing practice. In their attempts to reduce to some kind of order the disorderly currencies bequeathed to them by the Moghuls by placing them on a bimetallic basis, the Governments of the three Presidencies had already made a great advance by selecting out of the innumerable coins then circulating in the country a species of gold and silver coin as the exclusive media of exchange for their respective territories. The weights and fineness of the coins selected as the principal units of currency, with other particulars, may be noted from the summary table 1. (Page 344)

To reduce these principal units of the different Presidencies to a single principal unit, the nearest and the least inconvenient magnitude of weight which would at the same time be an integral number was obviously 180 grs., for in no case did it differ from the weights of any of the prevailing units in any marked degree. Besides, it was believed that 180, or rather 179.5511, grs. was the standard weight of the rupee coin originally issued from the Moghul Mints, so that the adoption of it was really a restoration of the old unit and not the introduction of a new one.^[f16] Another advantage claimed in favour of a unit of 180 grs. was that such a unit of currency would again become what it had ceased to be, the unit of weight also. It was agreed ^[f17]that the unit of weight in India had at all times previously been linked up with that of the principal coin, so that the seer and the manual weights were simply multiples of the rupee, which originally weighed 179.6 grs. troy. Now, if the weight of the principal coin to be established was to be different from 180 grs. troy, it was believed there would be an unhappy deviation from the ancient practice which made the weight of the coin the basis of other weights and measures.

 

	Silver Coins.			Gold Coins.
Issued by the Government of	Territory in which it circulated.	Date and Authority ofIssue.	Name.	Gross Weight Troy Grs.	Pure ContentsTroy Grs.	Name	Gross Weight Troy Grs.	PureContents Troy Grs.
Bombay	Presidency		Surat Rupee	179.0	164-740	Mohur	179	164.740
Madras	,,		Arcot „	176.4	166-477	Star Pagoda	52-40	42.55
	Bengal,Bihar and Orissa Cuttock	Regulations XXXV of1793 XII of 1805	Sicca Rupee (19th Sun)	179.66	175-927	Mohur	190-804	189-40
			Furrukabad
Bengal	Ceded Provinces Conquered Prov-	XLV of 1803	Rupee(Lucknow	173	166.135
	inces		Sicca of the
			45th Sun)
	Benares Provin-	III of 1806	Benares Rupee	175	168-875	—	—	—
	ces		(Muchleedar)

Besides, a unit of 180 grs. weight was not only suitable from this point of view, but had also in its favour the added convenience of assimilating the Indian with the English units of weight#.

#Ibid. para. 28. How the English and the Indian systems of weights were made to correspond to each other may be seen from the following:—

Indian		English
8 ruttees	= 1 massas	= 15 troy grs.
12 massas	= 1 tola (or sicca)	= 180 troy grs.
80 tolas	= 1 seer	= 2.5 troy ponds
40 seers	= 1 mound (mun)	= 100 troy pounds.

While these were the reasons in favour[f18] of fixing the weight of the principal unit of currency at 180 grs. troy, the project of making it 165 grs. fine was not without its justification. The ruling consideration in selecting 165 grs. as the standard of fineness was, as in the matter of selecting the standard weight, to cause the least possible disturbance in existing arrangements. That this standard of fineness was not very different from those of the silver coins, recognised by the different Governments in India as the principal units of their currency, may be seen from the following comparative statement.

 

 

 

 

 

 

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