Vol. VI, No. 3.] The Rupee and Indian Prices. 1 17 



{N. 8.] 



notice one reason why, up to the year 1896, prices have not 

 risen more rapidly (we refer to the fall in gold prices in Europe 

 between 1873 and 1896). Doubtless there are other reasons. 

 Perhaps there was always food in India, enough and to spare 

 (except in years of widespread famine), if only it could have 

 been readily transported to the places where it was most 

 needed. 



We have now seen something of the purely Indian in- 

 cidents of supply and demand so far as the food-grains are 

 concerned. We would do well, however, to bear in mind the 

 fact that the prices of exported as well as imported commod- 

 ities are now determined largely by the supply and demand in 

 markets outside India. In other words the influence of gold 

 prices tends to become paramount. 



Whatever be the complex factors which really go to make 

 the prices of Indian imports and exports what they are, we are 

 still sure of one fact, — that it is the surplus of exports over 

 imports, which, prior to the closure of the Mints in 1893, 

 determined the quantity of the rupee coinage. The very 

 causes which gave rise to a higher level of prices of food-grains 

 also gave rise, as a less proximate and obvious effect, to such 

 an inflow of silver as enabled exchanges in food-staples to be 

 carried on without inconvenience at the higher level of prices. 

 The money filled the gap. Given a fixed figure for the export, 

 and putting loans aside, the question of what India will take 

 in exchange — whether iron, spelter, copper, cotton goods, gold 

 and silver ornaments, or, in the last resort after all other wants 

 which can be satisfied by imports have been satisfied, silver 

 bullion for coinage — is after all largely a question of the tastes 

 and predilections of the people themselves. 



If we would see the facts in clearer perspective we must 

 look beyond the great Merchant Houses which control the 

 import and export trade, and fix our attention tor a moment 

 on the cultivator, the consuming unit in the three hundred 



millions. 



Our reasons for going to the cultivator are twofold : first, 

 he is representative of about two- thirds of the population ; 

 next, he is the person who immediately profits by the higher 

 prices of food-grains. There exist several important social 

 classes above him, which subsist on fixed wages, or on what 



practically 



lasse 



do not profit by a higher level of prices of food-grains; in fact 

 they are the losers thereby. When all is said and done they 

 have less to spend on other things after they have satisfied 

 their most pressing needs. It is not to them that we should 



look for a stimulated demand. 



But, if we look to the cultivator we must not idealise him: 

 we must not abstract him from the realm of actual facts and 

 make of him an economic man, such as would thriftily set 



