In the matter of ascertaining this fact the exchange quotation on London is no guide, for the value of the rupee was 2s. _gold_ and not 2s. sterling. Had gold and sterling been identical the case would have been otherwise. But during the war, owing to the issue of virtually inconvertible money, the pound sterling had depreciated in terms of gold. We must therefore take as our standard a currency which had kept its par with gold. Such a currency was the American dollar, and the exchange quotation on New York is therefore more directly helpful in measuring the gold value of the rupee than is the sterling quotation on London. We can also employ the actual rupee-sterling quotation as a measure by comparing it with the amount of sterling the rupee should have purchased, as an equivalent of 11·30016 grs. of fine gold, when corrected by the prevailing cross-rate between New York and London.³¹³ ³¹³ The formula for this computation is as follows:— ───────────────────────────────────────────────────────────────── If x pence = 1 rupee = 11·30016 grs. fine gold, 23·22 grs. fine gold = 1 dollar, D dollars = 1 pound sterling = 240 pence. Then x \frac{11·30016 = \frac{11·680}{\textrm{D}} \times 240}{23·22 \times pence. \textrm{D}} ───────────────────────────────────────────────────────────────── Cf. Rushforth, F. V., _The Indian Exchange Problem_, 1921, p. 9. Compared with the par of exchange, the actual exchange, either on New York or on London, indicates a fall of the rupee which is simply staggering (_see_ table, p. 196). Consider, along with the external gold value of the rupee, its internal value in terms of sovereigns and bar gold (_see_ table, p. 197). [pg 196] _TABLE XXXIV_ _Actual Gold Value of the Rupee and the new Parity in Terms of Foreign Exchanges_