Viceroy: Lord Chelmsford

The Age Of Stars

Two wars, a central bank, and the sterling balances.

Vol. XLIVThe edition of 1918 · War and Depression24 records
Viceroy
Lord Chelmsford
Secretary of State
Edwin Montagu
Finance Member
Sir William Meyer

Bank of Bengal rate

5.54%

−0.49 pts on 1917

Bank of Bombay rate

5.54%

−0.52 pts on 1917

Bank of Madras rate

6.85%

−0.47 pts on 1917

run · 1 March 1918

Bombay Currency Office faces a run

40000000

Unfavourable war news in March and April 1918 caused a run on the Bombay Currency Office for the encashment of notes, followed by similar difficulties elsewhere, notably Lahore. Inconvertibility appeared inevitable and was averted only by the timely announcement of the acquisition of the Pittman silver; by the first week in June the rupee balance had fallen to little more than Rs 4 crores

VerifiedOfficial record. Source: BS1920 para 29

Banking

7 items

failed · 1 January 1918

16 joint-stock banks fail

16 banks

Failures in calendar 1918

ReportedPeer-reviewed. Source: JB1945

Provincial governments / post offices · 1 January 1918

Provincial governments / post offices: Cash certificates sold through post offices during the 1917 War Loan: Rs 7,10,93,935 by 23 August 1918, plus…

71093935

Cash certificates sold through post offices during the 1917 War Loan: Rs 7,10,93,935 by 23 August 1918, plus Rs 3,21,99,550 through the Post Office by 29 August

ReportedPeer-reviewed. Source: SHAH1921 ch. XCVI

Government of India · 1 January 1918

Government of India: The greater part of the 1917 War Loan, "nearly 30 crores out of 50", was in short-term bonds "chiefly taken by…

300000000

The greater part of the 1917 War Loan, "nearly 30 crores out of 50", was in short-term bonds "chiefly taken by Banks and Joint Stock Companies"

ReportedPeer-reviewed. Source: SHAH1921 ch. XCVI

exchange rate

Raising of the exchange rate (2)

Minimum rate for immediate telegraphic transfers raised to 1s 6d, following the agreement with the United States for the purchase of silver from the dollar reserve at 101½ cents per fine ounce

VerifiedOfficial record. Source: BS1920 para 22

silver supply / Indian coinage

Pittman Act (United States)

Authorised the US Treasury to melt and sell not more than 350 million standard silver dollars; of 270 million fine ounces melted, India's share was 200 million fine ounces. Shirras calls it "undoubtedly the most important piece of currency legislation since 1893"

VerifiedPeer-reviewed. Source: SHIRRAS1920 pp.62-63; BS1920 para 23

silver and gold movements

Prohibition of export and melting of silver

Export and melting of silver prohibited (import of silver had already been prohibited); restrictions on the movement of gold removed only in September 1919

VerifiedOfficial record. Source: BS1920 paras 24, 31 and footnote to para 31

note convertibility

Restrictions on encashment of notes

From 1918 facilities for encashing notes at district treasuries were largely withdrawn; conveyance of specie by rail and river steamer prohibited and an embargo placed on transmission by post; in January 1919 daily issues of rupees to a single tenderer were limited. The result was a large substitution of notes for rupees as the common circulating medium

VerifiedOfficial record. Source: BS1920 para 29

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