Vol. VI, Xo. 3.] The Rupee and Indian Prices. 119 



[N.8.] 



commodities fell away rapidly along with gold prices except 

 for a temporary rise in 1873, till 1885, and "from 1887 to 1902 

 the general level of these prices remained fairly steady. As 

 regards the high prices that prevailed between 1862 and 1867 

 we shall presently see that this may be accounted for by the 

 cotton crisis in Europe consequent on the Civil War in America. 



From whichever point of view we look at the matter, there 

 is no indication in the prices of these imported commodities 

 that the quantity of money that flowed into India before 1893 

 was more than enough to enable the food«grains to be ex- 

 changed with facility at their higher level of prices in the local 

 marts, and the causes of this upward tendency in prices we 

 have found, not in the quantity of the circulating medium, but 

 in causes affecting supply and demand in the Indian markets. 

 In order to see more clearly how the money filled the gap we 

 will pass in very brief review the more salient features of the 

 rupee coinage between the years 1835 and 1893. 



The present rupee coinage was first made legal tender all 

 over British India by the Company in 1835. Yearly issues 

 were made up to the year 1893. The issues previous to 1840, 

 bearing the date 1835, and those previous to 1862, which all 

 bear the date 1840, are at the present moment in process of 

 withdrawal. The volume of the currency at the beginning of 

 the period must have been comparatively small. Probably the 

 amount in active circulation did not exceed forty crores. The 

 Californian gold discoveries began in 1847, and were speedily 

 followed by the Australian in 1851. Holland, taking alarm, 

 hurriedly changed her standard from gold to silver, but revert- 

 ed to her former standard as soon as she saw that the dis- 

 coveries of gold were quickly followed by large discoveries of 

 silver. The Government of India was not altogether free from 

 the contagion, and in 1852 Lord Dalhousie practically demone- 

 tised gold by refusing to accept it at the treasuries. 



The boom in the Indian cotton trade due to the cotton 

 famine caused by the American Civil War of 1861-65 at once 

 occasioned a well-marked rise in prices all over Western India. 

 We notice as a secondary result of this boom an unprecedented 

 influx of silver, and very heavy coinages throughout the decade 

 1856-1865. In fact the gross coinage during that decade 

 amounted to no less a sum than 98 crores of rupees as against 

 35J crores in the preceding and 39 crores l in the succeeding ten 

 years. Here then is such a vast accession to the coinage as 

 might be expected, at any rate in theory, to cause deprecia- 

 tion. 



Now we have already seen that there occurred about the 

 year 1860 a marked rise in the general level of prices of the 

 food-grains. We further traced one probable cause of this to 



1 " Statistics of British India/' Part IV (a), 190> f p. 3ft. 



