ABSTRACT
Although not commonly recognized, the period c.1860 to 1893 is one of critical importance in Indian monetary history, perhaps even internationally. The country was undergoing a qualitative shift from a medieval-feudal system to a modern-market based one, gradually transforming itself from a kind to a cash economy. This obviously meant that money began playing a more prominent role in the everyday lives of people. Furthermore, under British colonial rule, India’s integration into the world economy as a supplier of important industrial raw materials was gaining momentum. Economic disturbances were no longer of mere local importance; disruptions in production of commodities would affect not just the lifestyles of a few wealthy Englishmen but could throw industrial manufacture half way across the world completely out of gear. And, as history had already shown, one of the most important causes for such disruptions in production could be small perturbations in money and credit markets. The early decades of the nineteenth century had already introduced India to the dangers of commercial distress; with monetary linkages rapidly extending to larger sections of the population, the effects of a crisis could now quickly percolate down to the masses and destabilize the economy.
