PUBLIC RECORD OFFICE
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بستر
Reference :--
C.O. 882
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PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO
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was the difference between the value of the sovereign Under the and twenty shillings of British silver.
Orders in Council, both of 1825 and 1843, the tender of British silver was unlimited. To prevent the depreciation to which the unlimited use of a coin bearing, like British silver, a fictitious value, must necessarily tend, an arrangement was made in 1825, for a fixed rate of exchange for British silver, the Cominissariat officers in the Colonies being directed to give to all applicants a bill on England for 1001. in exchange for 1037., afterwards reduced to 1017. 10s., of British silver. This arrangement was put an end to by a Treasury Minute shortly before the issue of the Order in Council of 1843; it being supposed that British silver might be safely left to find its own value in the market, without the protection of this fixed rate of exchange. The consequence was, that when British silver brought into use, under the Order in Council of 1843, it was generally in excess of the quantity to which it ought to have been restricted in order to maintain it at par with gold. Thus the sovereign was frequently worth 218. in silver, sometimes even 228.; the issue of the rupee notes, being the same thing as adding so much British silver (for in this
WBS
they were cashed) to the circulation, of course had the effect of confirming this discrepancy between British gold and silver.
Lord Grey was engaged in correspondence with the Treasury, sometimes private and sometimes offi- cial, as to the right mode of remedying the anomalies which were thus found to exist in the system of engagements and metallic currency, and to have been added to by the issue of the rupee notes, from the time of the first operation of the paper-currency scheme in 1849, down to his retirement from office in February 1852. But no plan was devised in which Lord Grey the two departments could concur. leant to the adoption of the popular rating of the rupee at 2a.
This course he thought would not appreciably affect engagements, considering the long and exten- sive use of the rupee at this rate, and the habitual and latterly increased depreciation of British silver; it was recommended by the example of Ceylon,
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where the 28. rate had been long authorised, and had worked well; and it would do no harm, he thought, in driving British silver and other coins from oir. culation, if this should be its effect, as he admitted it most probably would; 28. being generally a good deal above the market value of the rupee. He held that the rupee by itself would answer every purpose in Mauritius as a standard of value and circulating medium, as it did in Ceylon. objected to the measure, as degrading the standard of value, assigning an untrue value to the rupee, and reversing the policy of establishing in the colo- nies a mixed circulation resting on the sterling standard. The Treasury were willing to raise the rupee to le. 10 d., in order that it might be given
The Treasury
its full intrinsic value, and they thought that if the dollar of account were at the same time lowered to
3r. 9d., and the rupee notes replaced by others expressed in sterling and for larger sums, this would bring the Government into accord with the community. Lord Grey declined this scheme, as the object of the community was to preserve its dollar standard and rupee circulation, both of which would be sacrificed by the Treasury plan.
A further plan, suggested privately by Mr. Wilson,
at the end of 1851, and proposed officially by Lord Grey to the Treasury in January 1852, of allowing the rupes to be legal tender at 2s. for small sums, such as up to 40s., also fell to the ground, for want
of complete concurrance between Lord Grey and the Treasury.
Sir
Pakington, when in office in 1852, left
the subject in the hands of the Treasury, who again recommended, with some modifications, the scheme which Lord Grey had declined. But this having been only done, just at the moment Lord Derby's Government retired, the question fell into the hands of the Duke of Newcastle, who referred
it back for the opinion of the new Treasury, without expressing any opinion of his own, by the Colonial Office letter of 31st March, 1853, which is one of the references answered in Mr. Wilson's present letter of Decmber 7, 1854.
While the dissussian as to the means of pemoving these currency anomalies was thus prolonged, a