Vol. 6 · pages 351–355

336 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES money ? The difficulties of barter have ever formed an unfailing theme with all economists, including those who have insisted that money is only a cloak. Money is not only necessary to facilitate trade by obviating the difficulties of barter, but is also necessary to sustain production by permitting specialization. For, who would care to specizlize if he could not trade his products for those of others which he wanted ? Trade is the handmaid of production, and where the former cannot flourish the latter must languish. It is therefore evident that if a trading society is not to be out of gear and is not to forego the measureless advantages of its automatic adjustments in the great give-and-take of specialized industry, it must provide itself with a sound system of money.* At the close of the Moghul Empire, India, judged by the standards of the time, was economically an advanced country. Her trade was large, her banking institutions were well developed, and credit played an appreciable part in her transactions. But a medium of exchange and a common standard of value were among others the most supreme desiderata in the economy of the Indian people when they came, in the middle of the eighteenth century, under the sway of the British. Before the occurrence of this event, the money of India consisted of both gold and silver. Under the Hindu emperors the emphasis was laid on gold, while under the Mussalmans silver formed a large part of the circulating medium.† Since the time of Akbar, the founder of the economic system of the Moghul Empire in India, the units of currency had been the gold mohur and the silver rupee. Both coins, the mohur and the rupee, were identical in weight, i.e., 175 grs. troy‡ and were “supposed to have been coined without any alloy, or at least intended to be so.”§ But whether they constituted a single standard of value or not is a matter of some doubt. It is believed that the mohur and the rupee, which at the time were the common measure * For the whole of this discussion, cf. H. J. Davenport, The Economics of Enterprise (1913), Chapters II and III. † Princep, J., Useful Tables, Calcutta, 1834, pp. 15-16. ‡ Robert Chalmers, History of Colonial Currency, 1893, pp. 336, 340. § Dr. P. Kelly The Universal Cambist, 1811, p. 115.

337 FROM A DOUBLE STANDARD TO A SILVER STANDARD of value, circulated without any fixed ratio of exchange between them. The standard, therefore, was more of the nature of what Jevons called a parallel standard* than a double standard† That this want of ratio could not have worked without some detriment in practice is obvious. But it must be noted that there existed an alleviating circumstance in the curious contrivance by which the mohur and the rupee, though unrelated to each other, bore a fixed ratio to the dam, the copper coin of the Empire.‡ So that it is permissible to hold that, as a consequence of being fixed to the same thing, the two, the mohur and the rupee, circulated at a fixed ratio. In Southern India, to which part the influence of the Moghuls had not extended, silver as a part of the currency system was quite unknown. The pagoda, the gold coin of the ancient Hindu kings, was the standard of value and also the medium of exchange, and continued to be so till the time of the East India Company. The right of coinage, which the Moghuls always held as Inter jura Majestatis, § be it said to their credit, was exercised with due sense of responsibility. Never did the Moghul Emperors stoop to debase their coinage. Making allowance for the imperfect technology of coinage, the coins issued from the various Mints, situated even in the most distant parts of their Empire¶, did not materially deviate from the standard. The table * Money and Mechanism of Exchange (1890), p. 95. † Dr. P. Kelly’s view is that they circulated at their market ratio ( loc. cit. ). On the other hand, Sir R. Temple says : “In ancient and mediaeval India the relative value of the coins of each metal was fixed by the State, and all were legal tender virtually without any formal limitation” (“General Monetary Practice in India,” Journal of the Institute of Bankers, Vol. II, p. 406). On another occasion he said :” The earliest Hindu currency was in gold with a single standard. The Mohammendans introduced silver, and in later times up to British rule there was a double standard, gold and silver” ( ibid., Vol. XV, p. 9). In contrast to this it may be noted that the Preamble to Currency Regulations XXXV of 1793 and other Currency Regulations of early date make it a point to emphasize that under pre-British regime there was no fixed ratio between the mohur and the rupee. ‡ Cf. Prof. S. V. Venkateswara, on “Moghul Currency and Coinage” in the Indian Journal of Economics, July, 1918, p. 169; and F. Atkinson, The Indian Currency Question (1894), p. 1. § According to the Mohammedan historian, Khafi Khan, it enraged the Emperor Aurangzeb when the East India Company in 1694 coined some rupees at Bombay “with the name of their impure king” ( Imperial Gazetteer of India, Vol. IV, p. 515). ¶ It is stated in the Imperial Gazetteer of India (Vol. IV., p. 514), that in the early days of the Moghul rule, there was only one Mint—at Delhi—which struck the Imperial coins. The Emperor Sher Sha was the first to introduce a plurality of Mints for coniage purposes—a practice continued and extended by the later emperors until between the reigns of Akbar and Bahadur Shah II the Mints numbered about 200. From the East India Moral and Material Progress Report for 1872-73 it is clear that not every Mint was open to the coinage of all three metals, gold, silver and copper; but that some Mints coined only gold, others silver, and the rest copper; (see Report, pp. 11-12).

338 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES below of the assays of the Moghul rupees shows how the coinage throughout the period of the Empire adhered to the standard weight of 175 grs. pure.* Name of the Rupee Weight in pure Grs. Name of the Rupee Weight in pure Grs. Akbari of Lahore 175.0 Delhi Sonat 175.0 Akbari of Agra 174.0 Delhi Alamgir 175.0 Jehangiri of Agra 174.6 Old Surat 174.0 Jehangiri of Allahabad 173.6 Murshedabad 175.9 Jehangiri of Kandhar 173.9 Persian Rupee of 1745 174.5 Shehajehani of Agra 175.0 Old Dacca 173.3 Shehajehani of Ahmedabad 174.2 Muhamadshai 170.0 Shehajehani of Delhi 174.2 Ahmadshai 172.8 Shehajehani of Delhi 175.0 Shaha Alam (1772) 175.8 Shehajehani of Lahore 174.0 So long as the Empire retained unabated sway, there was advantage rather than danger in the plurality of Mints, for they were so many branches of a single department governed by a single authority. But with the disruption of the Moghul Empire into separate kingdoms these branches of the Imperial Mint located at different centres became independent factories for purposes of coinage. In the general scramble for independence which followed the fall of the Empire, the right to coinage, as one of the most unmistakable insignia of sovereignty, became the right most cherished by the political adventurers of the time. It was also the last privilege to which the falling dynasties clung, and was also the first to which the adventurers rising to power aspired. The result was that the right, which was at one time so religiously exercised, came to be most wantonly abused. Everywhere the Mints were kept in full swing, and soon the country was filled with diverse coins which, while they proclaimed the incessant rise and fall of dynasties, also presented bewildering media of exchange. If these money-mongering sovereigns had kept up their issues to the original standard of the Moghul Emperors, the multiplicity of coins of the same denomination would not have been a matter of much concern. But they seemed to have held that as the money used by their subjects was made by them, they could do what they liked with their own, and proceeded to debase their coinage to the extent * Prinsep, J., op. cit., p. 18.

339 FROM A DOUBLE STANDARD TO A SILVER STANDARD each chose without altering the denominations. Given the different degrees of debasement, the currency necessarily lost its primary quality of general and ready accceptability. The evils consequent upon such a situation may well be imagined. When the contents of the coins belied the value indicated by their denomination they became mere merchandise, and there was no more a currency by tale to act as a ready means of exchange. The bullion value of each coin had to be ascertained before it could be accepted as a final discharge of obligations.* The opportunity for defrauding the poor and the ignorant thus provided could not have been less† than that known to have obtained in England before the great re-coinage of 1696. This constant weighing, valuing, and assaying the bullion contents of coins was, however, only one aspect in which the evils of the situation made themselves felt. They also presented another formidable aspect. With the vanishing of the Empire there ceased to be such a thing as an Imperial legal tender current all through India. In its place there grew up local tenders current only within the different principalities into which the Empire was broken up. Under such circumstances exchange was not liquidated by obtaining in return for wares the requisite bullion value from the coins tendered in payment. Traders had to be certain that the coins were also legal tender of their domicile. The Preamble to the Bengal Currency Regulation XXXV, of 1793, is illuminating on this point. It says :— “The principal districts in Bengal, Behar and Orissa, have each a distinct silver currency ..................... which are the standard measure of value in all transactions in the districts in which they respectively circulate. ***** * It was this necessity for ascertaining the true bullion value of the debased coins which gave rise to that class of money-changers known as Shroffs, who specialized in the business of evaluating the coins at their proper discount from the standard purity by means of the dates and other characteristics engraved upon them. † It is stated that Dr. Roxburgh, who was an eye-witness, was so much impressed by the sufferings of the poor owing to the bad state of the currency that he urged upon A. Dalrymple, in a letter dated June 30, 1791, to give prominence to the evils by inserting a paper in his Oriental Repertory (2 vols., London, 1808), “on the current coin in circulation over the Company’s Territories which might be productive of the most solid and lasting advantage to the Governing and the Governed,” and added, “ You may be able to correct the evil, by which you will certainly go to heaven, if the prayers of the poor avail, and I may get a step nearer paradise.” Observations on the Copper Coinage wanted in the Circars, by A. Dalrymple, London, 1794, p. 1.

340 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES “In consequence of the Ryots being required to pay their rent in a particular sort of rupee they of course demanded it from manufacturers in payment of their grain, or raw materials, whilst the manufacturers, actuated by similar principles with the Ryots, required the same species of rupee from the traders who came to purchase their cloth or their commodities. “The various sorts of old rupees, accordingly, soon became the established currency of particular districts, and as a necessary consequence the value of each rupee was enhanced in the district in which it was current, for being in demand for all transactions. As a further consequence, every sort of rupee brought into the district was rejected from being a different measure of value from that by which the inhabitants had become accustomed to estimate their property, or, if it was received, a discount was exacted upon it, equal to what the receiver would have been obliged to pay upon exchanging it at the house of a shroff for the rupee current in the district, or to allow discount upon passing it in payment to any other individual. ***** “From this rejection of the coin current in one district when tendered in payment in another, the merchants and traders and the proprietors and cultivators of land in different parts of the country, are subjected in their commercial dealings with each other to the same losses by exchange, and all other inconveniences that would necessarily result were the several districts under separate and independent governments, each having a different coin.” Here was a situation where trade was reduced, to barter, whether one looks upon barter as characterized by the absence of a common medium of exchange or by the presence of a plurality of the media of exchange ; for in any case, it is obvious that the want of a “double coincidence” must have been felt by people engaged in trade. One is likely to think that such could not have been the case as the medium was composed of metallic counters. But it is to be remembered that the circulating coins on India, by reason of the circumstance attendant upon the diversity in their fineness and legal tender, formed so many