Note 175 — Chapter III
Reading edition
As was explained by Mr. Waterfield before the Select Committee on East India (Civil Servants), H.C. Return 327 of 1890, Q. 1905–17, it was first instituted in 1824 and was arrived at as follows: In December of each year a calculation was made at the India Office of the cost of sending a rupee to India, based on the market price of silver in London, and of the cost of bringing a rupee from India, based on the price of bills on London in Calcutta. A mean between the two was struck and taken as the adjusting rate for the coming official year between the India Office and the British Treasury in regard to such transactions or payments undertaken by one Government as the agent of the other. It was fixed anew for each and formed a fair average rate, although it was sometimes above and sometimes below the market rate of exchange.