The Industrial Revolution

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Monograph

Identifikator:: 1027928145

URN:: urn:nbn:de:zbw-retromon-159926

Document type:: Monograph

Author:: Cunningham, William http://d-nb.info/gnd/128907487

Title:: The Industrial Revolution

Place of publication:: Cambridge

Publisher:: The University Press

Year of publication:: 1922

Scope:: xxii S., S. 404-886

Digitisation:: 2021

Collection:: Economics Books

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32 MODERN MONETARY SYSTEMS duction, and Mr. Walras, an economist and a mathema- tician, proceeding from this simple idea, endeavoured by means of accurate scientific calculations to establish a constant parity between Indian silver and British gold. The Indian Government, impressed by the same idea, de- cided, on the advice of an expert Commission, to adopt a plan of monetary reform based on principles which will emerge from the following account of its provisions. The Indian law of the 26th June, 1893, can be shortly summarised. As a first step iz abolished the free coinage of rupees; the new parity was fixed at 15 rupees to one pound sterling, or 16 pence to the rupee; in theory, individuals who had payments to make in India were allowed to obtain rupees at the above rate in exchange for pounds sterling ; but the law contained no provisions to make this trans- action possible in practice. Lastly, no provision was made for the conversion of rupees into pounds sterling with a view to payments in England by inhabitants of India. The Government of India, in abolishing the coinage of rupees, certainly reckoned on the efficacy of contraction in gradually raising the exchange to the desired level. The normal development of business, and above all the native habit of hoarding, necessitated the annual coinage of rupees in large quantities in order to maintain the mone- tary stock of the country ; in these circumstances, the cur- rency could be rapidly reduced by merely suspending coinage for a few years. It was thought that the exchange could thus be raised, and with the same idea in mind it was hoped that the value of the rupee could be prevented from rising above the desired rate by resuming coinage at the right moment. Nevertheless, considered objectively, the step taken by the Government of India will be seen to have a much deeper significance. Under the system of free coinage which had been applied ro the rupee, anyone having a debt to pay in India had always been at liberty to discharge it by sending silver bought at the market rate and having it coined at Bom- bay. Hence the price of silver, plus the costs of transmission,

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