CO882-(1-2) — Page 292

PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

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lasted until 1838, when by a proclamation the error in the relative rating of 1 and 2-frano picces and 5-frane pieces was corrected, but not the general error of the rate at which silver had been computed. This proclamation reduced the rate of the 2-frane piece from la. 8d. to lɛ. 7fd, and of the 1-frane piece from 10d, to 9fd., at which, as with 5-frano pieces, the dollar in secount could then be paid with 3449 grains of silver, or at the rate of 3a. 10d. sterling. But as this rate wa rather higher than that of the rupee of 165 grains, at which, according to the old rating, we have seen the dollar could be paid with 344-3 grains of silver, or at the rate of 3. 104d. sterling, French money imme- diately left the island, and the circulation became almost exclusively, as it was certain to do, one of rupees, as the cheapest mode in which debts could be discharged. This is a remarkable example of the fine sensibility of a currency to the law of intrinsic value. Under the valuation of 1825, French money was the cheapest way of paying debts according to that rating, and nearly the entire circulation consisted of it; chiefly of 1 and 2- franc pieces. But in 1838, when the new rating turned the scale of advantage in favour of rupees, though only to the extent of barely the one-eighth of penny in a dollar, French silver at once disappeared, and rupees took its place. This con- tinued undisturbed until 1843. In that year an attempt was made to correct the original error made in 1825 in the rate at which silver coins had been computed in sterling, and a proclamation was issued based upon the proportion of 15·7 of silver to *ʼn of gold (or rather at 5s, an ounce, which is very near that proportion, and professing at the time to follow it, though it gives only 4s, 11 d. the ounce), in place of 58. 2d. the oz. By this new regulation the dollar in account was to be paid with 854:8 grains of pure silver, according to exact computation, or if in rupees, with 360 grains, that coin being undervalued at 1a, 10d, in place of 1s, 10d., which is its precise intrinsic value.

30. But here again the Treasury fall into an error, the result of which, had it been really opens- tive, would have been, vary greatly to, appreciate the dollar in account, In 1895 the dollar in socount was determined to be 48., or one-fifth of a pound

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sterling, because it had previously been computed at

5 francs of French money, or 10 livres, representing 344.9 pure silver, and as 5 francs, or 344-9 grains silver, at 58. 2d. an ounce, represented 4s., the 5-franc piece was fixed in the proclamation at that rate in ster- ling money; that is, a dollar currency was fixed at 4s. sterling, because it represented 5 francs, and be- cause 5 francs, according to the erroneous compu- tation of 1825, were equal to 48. Not regarding this fact in 1843, it was sought to retain the value

of the dollar at 4. sterling, in the new amended rate, while the 5-franc piece was reduced by the amended rating to 3s. 104d., which is as nearly su possible the correct rate which it should have been from the first, that is, 344-9 grains. But if a dollar in account and 5 franca were identical, which they had always been before and after the Proclamation of 1825, then the dollar of account should also have been reduced in 1843, as well as the rating of silver coins.

31. But the interposition of the Convention of 1843 prevented the appreciation of the dollar in account, which must otherwise have taken place to an extent of 34 per cent. By this Convention the dollar was made to represent only 2 rupees, or 330 grains silver, or 38. Bjd, sterling. Thus, while the act of the Treasury would have appreciated the dollar in 1843 by 34 per cent, or by lŝd, the Convention of the island depreciated it by fully

4 per cent, or by 24. From that time to the present day the dollar in account has represented

9 rupees, or 3. 8fd. sterling.

82. It may be said that prior to 1825 it was the custom of merchants, in converting dollars into pounds sterling, for the purpose of drawing bills on London, as it is still to compute them at 5 to the pound sterling; but although that may have been the case then, and still is, yet any difference between that nominal division and the intrinsic value of the rupee in the coins of the island, was always adjusted by the rate of exchange at which the bill was drawn, and must continue to be so.

33. Thus, then, the important question which must arise in the adjustment of the Mauritius cur- rency of “What is a dollar?"" is to be answered as follows:

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