110 Journal of the Asiatic Society of Bengal. [March, 1910. 



because it might happen that both standard and token are 

 appreciating with regard to commodities in general , but the 

 token less quickly than the standard, and so we should have 

 redundancy a concomitant of appreciation. So far then as 

 India is concerned we would confine the meaning of redun- 

 dancy to such an increase of the rupee currency as actually 

 results in a fall in exchange. How redundancy may occur, and 

 under what circumstances, are very difficult questions. The 

 experience of countries which have used token coinages, and 

 more particularly of those which have issued inconvertible 

 paper, all goes to shew that there exists a fairly wide margin of 

 issues, and that it is only when that margin is exceeded and 

 public confidence is shaken that redundancy occurs. 



Those who are ever ready to sound the tocsin of redun- 

 dancy would do well to reflect on the case of countries like 

 Brazil and Austria Hungary, in which large quantities of 

 inconvertible paper have been maintained over considerable 

 periods of time at fairly steady rates of exchange. In the case 

 of Brazil it was only under an extraordinary increase of issues 

 (more than £30 millions in three years, the paper issue in 1892 

 amounting to no less than £51,372,700) at a time of failing 

 credit consequent on the establishment of the Republic that the 

 exchange, the par gold value of which is 27d., fell to figures 

 ranging from 10 \d. to 15£d. 



Having so far cleared the way we are now in a position to 

 outline a method of enquiry. This method consists in an 

 analysis of the available facts as regards supply and demand in 

 respect of commodities; secondly, such facts connected with the 

 history and nature of the monetary medium as have a more 

 obvious bearing on the subject ; thirdly, the facts as regards 

 prices in the concrete; and then, after a brief discussion of the 

 present character of the rupee in relation to exchange, a 

 resume of the inferences and deductions which may be rea- 

 sonably drawn from the facts. The present paper does not 

 aim at finality : it is merely suggestive of methods which it is 

 hoped may serve to throw a little light on this complicated 

 question of prices. 



We shall then proceed to the consideration of supply and 

 demand in respect of commodities, and more particularly in 

 respect of food stuffs. The importance of food stuffs to India 

 is hardly capable of exaggeration. Compare for a moment 

 agricultural India with manufacturing England. In the latter 

 country about 23% of the population is rural and 77% urban. 

 India, on the other hand, is more than 66% agricultural and 

 less than 34% non-agricultural. It would be well to bear this 

 fact in mind before generalising from the one country to the 

 other. When, therefore, we come to the discussion of supply 

 and demand it is natural that the food grains should absorb 

 our attention. 



