The Sultanate of Delhi, 711–1526 A.D. c20.s2.t7: The introduction of token currency, 1329-30
The Sultanate of Delhi, 711–1526 A.D. c20.s2.t7
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The introduction of token currency, 1329-30
c20.s2.t7.1
The reign of Muhammad Tughluq is an important landmark in the history of Indian coinage. He has been called 'a prince of moneyers'. He reformed the entire system of coinage, fixed the relative values of the precious metals and issued various types of coins. Most of these coins were noted for their artistic design and execution. His most notable experiment in the field was the introduction of token currency. There were several reasons for introducing brass and copper coinage. Firstly, there was the want of precious money in the treasury which had been drained by wars and rebellions and also by costly experiments in the field of administration. Secondly, owing to famine and harsh taxation policy in the Doab, there was a considerable fall in the Sultan's revenue. Thirdly, he was anxious to augment his revenues in order to undertake the conquest of the distant provinces of India and of some foreign countries. Fourthly, Muhammad was fond of experimentation and, therefore, wanted to open a new chapter in the history of coinage in India. Fifthly, he was encouraged by the examples of Chinese and Persian rulers before him who had introduced token currency in their countries in the thirteenth century.
c20.s2.t7.2
With the above objects in view, Muhammad promulgated an order making copper coins the legal tender and putting these coins on par (in value) with gold and silver coins. He ordered that the people should use these coins in all transactions just like gold and silver coins; but he took no steps to make the mint the monopoly of the State. Those days, in make and design and in execution and finish, the coins turned out by the royal mint were not such that they could not be easily imitated by private persons. And as the Sultan made no arrangement for preventing the circulation of counterfeit coins, private persons began to manufacture copper coins. Barani says in right orthodox Muslim fashion that the house of every Hindu became a mint. There is no reason to believe that Musalmans resisted the temptation to which, according to Barani, the Hindus succumbed. People hoarded gold and silver coins and paid their revenues in the new ones. Foreign merchants purchased Indian commodities with the token currency in the country, but refused to accept the latter while selling foreign products. Trade came to a standstill. Business was very much hampered, and gold and silver became scarce. The result was a great confusion and the Sultan was bewildered to see his scheme crumbling down before his very eyes. He was compelled to withdraw the token currency and to order the people to take from the royal treasury gold and silver pieces in exchange for brass and copper coins. The State was, thus, defrauded, while private people made huge profits at its expense.
c20.s2.t7.3
The failure of the scheme was due not so much to the backwardness of the people and their prejudice and ignorance (though they failed to appreciate it) as to the failure on the part of the Sultan to prevent the manufacture of counterfeit coins by private individuals and their circulation in the market. It was a mistake on the part of Muhammad to have failed to appreciate the limitation and circumstances of the age. He must be, therefore, primarily held responsible for the failure of the scheme.