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



It is a remarkable fact that the index numbers afford us 

 little or no indication of the nature of the great monetary 

 change that was effected in 1893. By the closure of the mints 

 in that vear the old means of settling the balance of trade 

 between Europe and India became no longer feasible. People 

 were deterred from sending silver to India for the purpose of 

 coinage by the uncertainty and risk attending its ultimate 

 acceptance by the mints. It is, in fact, essential to the 

 maintenance of exchange that the dates and hours of the 

 purchase of silver by Government shall not be proclaimed from 

 the housetops. It is to this uncertainty existing in the 

 minds of the public with reference to the time and quantity of 

 the issues, and not to its scarcity in circulation, that the so- 

 called monopoly value of the rupee is due. 



So far as prices after 1893 are concerned, it is not to be 

 surprised at that they should exhibit some fluctuation, having 

 regard to the great rise in exchange between 1895 and 1898. 1 



We have already had occasion to notice the effect of this 

 rise on the price of imports. From December 1898, onwards, 

 exchange has remained fairly steady at about Is. 4dL Now let 

 us see what was happening to gold prices. Between December 

 1902 and December 1906, the Economist Index number shews 

 a rise of 25 per cent in gold prices in Europe. Also in those 

 years the export and import trade was peculiarly brisk. These 

 facts go some way to explain how it is that the prices of food- 

 grains have risen, without the occurrence of famine, or at least 

 with only such distress here and there as is clearly ascribable to 

 local crop failure, above the level that is commonly assigned 

 as the level of famine prices. The truth must be faced that the 

 measure of prices as a criterion of famine seems to have failed. 



To those who argue that the prices of food-stuffs would 

 not have risen but for the great currency change of 1893, we 

 would reply that the rise is one of the surest indications of the 

 triumph of the policy of the closure, for it shews in a way that 

 nothing else could shew, that trade is in a flourishing condition. 

 Had it been possible for exchange to remain steady at 12 

 annas the rupee, trade would f no doubt, have exhibited just as 

 vigorous a development, but rupee prices would have risen 

 33 per cent, above their present level. The partial failure of 

 food-grains to respond to the influence of gold prices in Europe 

 before 1893 can only be regarded as an indication of the 

 damage inflicted on trade by a fluctuating and unstable rupee. 



No doubt the change, like most secular changes in the 

 economic world, involves a redistribution of burdens as between 

 class and class, but, if one thing can be considered more 

 certain than another, it is that it is not the poorer classes who 



1 Exchange on demand bills in Calcutta stood at Is. 0| 

 1895, and rose pretty steadily to Is. 4/^d. in January, 1898. 



