312 PRICES 



able quantities ; but the figures which I have chosen 

 to illustrate the course of prices refer to barley, which 

 is not exported in any quantity. Indeed, the rise in 

 price has been more marked in the case of the cheaper 

 grains, such as barley, jowar, and gram, which are not 

 exported, than in the case of wheat. This indicates 

 that some general cause has been in operation affect- 

 ing all food-grains, and that the rise of price cannot 

 be attributed to the European demand for rice and 

 wheat. 



On the whole, I am inclined to think that Indian 

 prices in the nineteenth century offer a remarkably 

 good illustration of the quantitative theory of money. 

 When the number of rupees in circulation was com- 

 paratively small, the value of money was high and 

 prices were low ; when the circulation expanded, 

 the value of money fell and prices rose. Silver, in 

 fact, acted as a measure of value, exactly in the manner 

 which was to be expected, and showed no greater 

 stability than could have been expected of any other 

 metal. I do not contend that silver might not have 

 proved a more stable measure of value than gold, if it 

 had remained in general use throughout the world ; 

 I only contend that when the suppl}'- of it was very 

 largely increased, and the demand for it (as currency) 

 much diminished, the value of it in countries like 

 India, which kept their mints open, tended to fall. 

 This fall in India was arrested by the closure of the 

 mints. Since that event India has entered upon a 

 new phase of her monetary history, and the rupee 

 now circulates at an artificial value, which is fixed, 

 not by natural causes, but by the discretion of the 

 Government. 



