THE PRESENT PROBLEM IN INDIAN CURRENCY 679
extremes. Now the two extremes of the exchange value of our rupee during the period are 1s. 3 [7] / 8 d. and 1s. 6d. This may be surprising to some. For it is well-known that at one time the rupee had gone to 3 shillings and our statute recognizes the rupee as equivalent to 2s. gold. But in my opinion we must disregard that together. It may at once be said that among the reports published by the various committees, that were appointed from time to time to investigate into Indian currency none was so stupid as the report of the Babington Smith Committee on whose recommendations the statute was framed. It was such an ignorant Committee that it could not understand the problem it was appointed to investigate and consequently it ended by making a mess of things. As is wellknown the Committee reported that the value of the rupee should be raised to 2s. gold. That was tantamount to saying that the rupee had appreciated ; that in other words prices in India had fallen. How did the facts stand ? The following table conveniently sums up the whole story.
| Date | Price of Bar Gold in India (Bombay) per tola of 180 gr. | Price of silver in India (Bombay) per 100 tolas | Index number for prices in India 1913=100 |
|---|---|---|---|
| … 1914 … 1915 … 1916 … 1917 … 1918 (July) … “ (August) … (September) … 1919 (March) … | Rs. As. 24—10 24—14 27— 2 27—11 34— 0 30— 0 32— 4 32— 3 | Rs. As. 65—11 61— 2 78—10 94—10 117—2 … … 113—0 | … 112 125 142 178 … … 200 |
From the table it is evident that, far from having appreciated, the rupee had tremendously depreciated. The price of silver had no doubt risen beyond conception and the Committee adopted without much ado the conclusion that the rupee had therefore risen in value. As a matter of fact this very circumstance was proof positive that the rupee had gone down in value : in terms of silver