CO882-(1-2) — Page 319

PUBLIC RECORD OFFICE

Reference :-

LICO. 882

1

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO

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The parties who argued the case with the Trea-

sury,

contended that, looking at the level of the standard between 1825 and 1843, so far as this could be traced through the alternations of rupees, doub loons, francs, and inconvertible paper, dollar engage- ments would be duly fulfilled if paid in rupees at

two to the dollar, and that rupees could not be

depended upon to co-circulate with British money if rated at less than 2., which was frequently the actual cost of introducing them. The Treasury, however, held, as already stated, that 4s, of British money was the standard of the dollar, which they were bound to maintain, and that the intrinsic value of the rupee being, only a fraction over 18. 10d. upon the average relative value of gold and silver, this coin could not he properly assigned any higher

rate.

It was

The discussion of these opposite views between the Treasury and the Colonists began before the Order in Council of 1843 was framed. renewed as soon as that Order was published, and it went on till near the time of the resumption of cash payments in the following year, when the leading merchants and planters, seeing that there was no prospect of the Home Government being persuaded to modify the Order in Council, made

in arrangements to import a large sum, rupees, to circulate by agreement amongst themselves on the terms to which the Treasury had declined to accede. These arrangements were confirmed in September 1844, by a numerous and important public meeting, which pledged itself by resolution to pass the rupec as equivalent to half a dollar of Thus was account, or 28. Government currency.

established what has since been called the conven- tional value of the rupee, in contradistinction to the official value of Is. 10d., fixed by the Order in Council.

The Banks proceeded to the redemption of their · notes in specie about the same time, and the issues not being continued, the circulation soon became almost exclusively metallic. It was composed partly of British silver imported by the Banks to assist in the process of redemption, or by Government and the Commissariat, but mainly of rupees brought into circulation at the conventional rate.

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The effect of the difference between the official and conventional values of the rupee was that two distinct currencies were established in the colony, one used only in Government transactions, the other used only by the public amongst themselves. The Government kept its accounts in £ s. d., and re- ceived and paid nothing but British money;

the rupee being excluded from Government use because its value in the market was rarely so low as 1s. 10d.,

at which rate, and no other, Government was obliged to receive and pay it. The public kept their ac- counts in dollars, and received and paid nothing but rupees; British money being excluded from public use because its value in the market was rarely so low as the conventional rate of 2s. to the rupee. The British silver, when issued by Government in payment of services, was bought up by brokers, who gave rupees in return at the rate of the day, what ever this might be, and re-issued it in exchange for rupees to parties having payments to make to Government. The usual mode of quoting the market value of the two descriptions of coin was to say that British silver was at such and such a pre- mium, i. e., premium on the conventional rate of 2s. This premium varied greatly. Between 1844 and 1849, the average was about 4 per cent. It was on one or two occasions as high as 8 and 9 per cent.,

in which case it was of course an dear to pay British silver into the Local Treasury as rupees at 18. 10d; and actual payments of rupees were ac- cordingly made into the Treasury on these excep- tional occasions. 1

This state of things being in full force in 1849, the effect of the issue of rupee notes, payabla in specie at the Government, maintain, of course, only

the same..as if much British{money;had been added to the circulation. worg@meld. ;

of them broken

mined of to Land Grey, by the

shuk lowness of the

Hemely of the

served in 1542,