The Problem of the Rupee, Its Origin and Its SolutionAmbedkar, B. R. (Bhimrao Ramji)
History
The Problem of the Rupee, Its Origin and Its Solution
Ambedkar, B. R. (Bhimrao Ramji)
Currency question -- India
Another group of people who suffered from the fall of exchange because
of their obligation to make gold payments was composed of the European
members of the Civil Service in India. Like the Government to which
they belonged, they received their salaries in silver, but had to make
gold remittances in support of their families, who were often left
behind in England. Before 1873, when the price of silver in terms of
gold was fixed, this circumstance was of no moment to them. But as the
rupee began to fall the face of the situation was completely altered.
With every fall in the value of silver they had to pay more rupees out
of their fixed salaries to obtain the same amount of gold. Some relief
was no doubt given to them in the matter of their remittances. The
Civil Servants were permitted, at a sacrifice to the Government, to make
their remittances at what was called the Official Rate of Exchange.¹⁷⁵
It is true the difference between the market rate and the official rate
was not very considerable. None the less, it was appreciable enough for
the Civil Servants to have gained by 2½ per cent. on the average of the
years 1862–90¹⁷⁶ at the cost of the Government. The Military Servants
obtained a similar relief to a greater degree, but in a different way.
Their salary was fixed in sterling, though payable in rupees. It is
true the Royal Warrant which fixed their salary also fixed the rate of
exchange between the sterling and the rupee for that purpose. But as it
invariably happened that the rate [pg 98] of exchange fixed by the
Warrant was higher than the market rate the Military Servants were
compensated to the extent of the difference at the cost of the Indian
Exchequer.¹⁷⁷ This relief was, comparatively speaking, no relief to
them. The official or the warrant rates of exchange, though better than
the market rates of exchange, were much lower than the rate at which
they were used to make their remittances before 1873. Their burden,
like that of the Government, grew with the fall of silver, and as their
burden increased their attitude became alarmist. Many were the
memorialists who demanded from the Government adequate compensation for
their losses on exchange.¹⁷⁸ The Government was warned¹⁷⁹ that
Public-domain text, read in full here on John Shaqi.
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