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



1885 the lines remain very close together and singularly similar 

 in contour. From 1885 to 1888, while a heavy fall in exchange 

 has set in, the import line rises, and then oscillates about a 

 level slightly lower than the level of the latter year, at a time 

 when the prices of food-grains are subject to great fluctuations 

 with the general level perceptibly rising. 



It is a most useful exercise to convert Mr. Sauerbeck's 

 index numbers for gold prices into index numbers for silver 

 prices at the rates of exchange which prevail in each year. 1 

 The resultant line is almost coincident with the import line. 

 Here then lies the key to the riddle. The movements in the 

 rupee prices of imports have at all times been ruled by the 

 movements in gold prices in Europe. We see at a glance 

 how much steadier as a measure of value of these commodities 

 the rupee has been than the gold sovereign. Since 1893, how- 

 ever, or at any rate since the rupee arrived at Is. 4td., the 

 steadiness of the silver prices depends entirely on the steadiness 



of the gold prices, and this will be the case so long as the rupee 



is maintained fairly steady about Is. 4d. 9 in fact the import line 

 becomes almost a replica of the gold line. 



Xow as regards the two index lines for articles exported 

 and consumed and the general list of selected articles, they are 

 so close in position and so similar in contour that we may 

 consider them together. The effect of adding imports to the 

 articles exported and consumed is simply to bring the index 

 line of the latter a little nearer to the import index line, the 

 representation of food- grains being so strong as to preserve its 

 general contour. We will now follow the index figure line for 

 the whole of the selected commodities. These include the food- 

 grains and the imported commodities. The remaining things 

 (which enter into the index figure for commodities exported 

 and consumed and have been incorporated in the general 

 list of selected commodities) are—tea, sugar, ghi, hides, raw 

 cotton, raw jute, raw silk, saltpetre, raw wool, castor oil, seeds, 

 coal, manufactured cotton, gunny bags, dressed skins, lac, 

 indigo. Some of these are further subdivided : for example, 

 there are four sub-classes for tea, two for sugar, three for jute, 

 etc., so that the weight given to all the articles is not the same. 

 It is necessary here to repeat a warning. These index numbers 

 are not based on the actual or estimated consumption stand- 



1 e.g., we want to convert the gold index figure for the year 1897 

 into a silver index figure. The rate of exchange in that year was about 

 1-3*4, the rate of exchange in 1873 may be taken as 1-10-3. The gold 

 index figure for 1897 is 56. The corresponding silver index figure is 



10-3 



12 223 



— — .56 = -— . 56=81 approx. 

 3*4 154 



