Vol. VI, No. 3.] The Rupee and Indian Prices. 123 



[N.S.] 



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index number for commodities exported and consumed, as well 

 as in the general index number for all the selected commodities, 

 the prices of rice and wheat are wholesale prices, while the 

 prices of the other five grains are retail prices. It does not 

 appear that any valid objection can be urged to the mixing up 

 of wholesale and retail prices in the same index number, so 

 long as this distinction between the index numbers is clearly 

 grasped. 



Now let us see what the index numbers shew. Take first 

 the special index number for food-grains. The first thing that 

 strikes us, if we turn to the curve which represents this index 

 number, is the marked amplitude of the fluctuations. At a 

 glance we may pick out the highest points of the curve and 

 feel assurance that these mark years of famine and scarcity 

 1866, 1869, 1878, 1892, 1897, and 1900. Similarly the lowest 

 points mark the years of plenty. 



Now let us for a moment "damp" the extreme fluctua- 

 tions and try and see the general tendency of the curve. Be- 

 tween the years 1861 and 1883 it is impossible to say whether 



the general tendency is upward or downward. All that we can 



say is that grain prices in the latter year did not sink to the 

 same low level to which they sank in 1862, 1871, and 1875. 

 From 1883 onwards, however, there appears to be a decided up- 

 ward slope, and prices never again fall to anything like the 

 level of those of 1883, though they rise in 1897 and 1900 very 

 much higher than they did in 1878. These remarks apply to 

 the period 1861 to 1904. The latter year serves to mark the 

 beginning of a new period, the predominant characteristic of 

 which appears to be the existence of famine prices without 

 famine. We shall revert to this later. 



Now let us look at the line representing the index numbers 

 of the imported commodities. These are iron, copper braziers, 

 spelter (a commercial name for zinc), grey shirtings, grey yarn, 

 coloured yarn, sugar (Mauritius), raw silk (Canton), coal, kero- 

 sine oil, and salt. We see at a glance that there is very little 

 resemblance between the contour of this line and that of the 

 line just depicted. The next thing that strikes us is the great 

 rise in the import line during the sixties. We have already at- 

 tributed this rise to the cotton famine due to the American 

 War. We will now consider imports from 1873 onwards. 



A comparison of the import index line with Sauerbeck's 

 index line for gold prices is most instructive. We at once 

 notice a striking similarity between the lines especially during 

 the years 1873 to 1885. Both index numbers are so arranged 

 that each stands at 100 in the year 1873. ] Down to the year 



J Mr, Sauerbeck's index figures have been equated to the base year 

 1873. The original base year selected by Mr. Sauerbeck was 1871. 



