ABSTRACT
Since the 1870s silver had been steadily declining, ultimately forcing the Indian Government to close the mints to the free coinage of silver. Once the rupee touched 1s.4d. it seemed to be safely above the price of silver; however, in 1907 it fell sharply and almost breached the silver value of the coin. There was the danger of coins going to the melting pot. After much hesitation, sale of reverse council bills came to rescue and the danger passed. Thereafter it seemed as if the Gold Exchange Standard had just about settled when a catastrophic disruption descended on the world in 1914: the Great War. The Indian monetary system had again to undergo a major test when silver began to appreciate steeply even as gold prices remained flat. Once again the danger of the rupee being melted down and disappearing from circulation arose. This time the search for stability in the rupee-sterling exchange rate proved even more challenging.
