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
The rupee-sterling exchange was in reality a reflection of the
gold-silver exchange. When, therefore, it is said that the
rupee-sterling before 1873 was stable at 1 _s_. 10½ _d_., it merely
meant that the gold-silver exchange before 1873 was stable at the ratio
of 1 to 15½; and that the rupee-sterling exchange was dislocated after
1873 meant that the gold-silver exchange lost its old moorings. The
question which therefore arises is why was the ratio of exchange between
gold and silver disturbed after 1873, as it never was before that year?
Two factors have been appealed to as affording a sufficient explanation
of what then appeared as a strange phenomenon. One was the
demonetization of silver as the standard money medium by the principal
countries of the world. This movement in favour of demonetization of
silver was the outcome of an innocent agitation for uniformity of
weights, measures, and coinages. In so far as the agitation was aimed
at such uniformity it was in every way beneficial. But it also
exemplifies how the pursuit of good sometimes leaves behind a legacy of
evils. At the Great Exhibition held in London in 1851 the great
difficulty of comparing the different exhibits owing to the differences
of weights, measures, and coinages as between the countries of their
origin and other countries was amply demonstrated to the representatives
of the different nations assembled at that exhibition.¹³⁵ The question
of international uniformity in weights, measures, and coins was
discussed by the various scientific assemblies gathered at this
exhibition, and although nothing tangible came out of it, the question
was not allowed to be dropped: it was taken up at the Brussels
International Statistical Congress held two years after. Opinion had so
far advanced that the next Statistical Congress, held at Paris, issued a
declaration, which was confirmed by the Vienna Statistical Congress of
1859, strongly urging the necessity of bringing about the desired [pg
72] uniformity in the weights, measures, and coinages of different
countries.¹³⁶ Encouraged by the action of England, which had made in
1862 the metric system of weights and measures optional, the 1863
International Statistical Congress of Berlin resolved to invite the
different Governments “to send to a special Congress delegates
authorized to consider and report what should be the relative weights in
the … gold and silver coins, and to arrange the details by which the
monetary systems of the different countries might be fixed, upon a
single unit decimally subdivided.”¹³⁷ The significance of this Congress
can hardly be overlooked. It made a departure. At the former
Congresses the question debated was largely one of uniformity in weights
and measures. But at this Congress “that phase of it was subordinated
to uniform coinage and was well-nigh laid aside.”¹³⁸ Though the
resolution was a departure it should not have been fraught with serious
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