The Indian silver currency 1876 - 1893: a problem in Asian economic history

Abstract

The increase in the production of silver in the late nineteenth century and the subsequent demonetisation of silver in Europe and America gave rise to a great flood of this metal which poured into India where the mints were open to the free coinage of silver rupees. In the years from 1876 to 1893 India absorbed every year about 20 to 40% of the world production of silver. In 1877 India took as much as 84% of the world production of silver. In this way India became the strongest support of the silver market and its seemingly unlimited capacity to absorb silver was a boon to all those who wanted to sell it, i.e. to the American mine owners who produced it and the London bankers who bought and sold Europe's demonetised silver.