Has the Rupee Ever Been Worth More Than a Dollar?

Adam Fergusson, 'When Money Dies: The Nightmare of the Weimar Collapse', 1975:

"Just before the First World War in 1913, the German mark, the British shilling, the French franc, and the Italian lira were all worth about the same, and four or five of any were worth about a dollar. At the end of 1923, it would have been possible to exchange a shilling, a franc or a lira for up to 1,000,000,000,000 marks, although in practice by then no one was willing to take marks in return for anything. The mark was dead, one million-millionth of its former self. It had taken almost ten years to die."
 
'Arthur Jensen' in 'Network' 1976:

"There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU... WILL... ATONE!"

Naomi Klein, "The Shock Doctrine: The Rise of Disaster Capitalism", 2007:

(disaster capitalism is)  "An economic system that requires constant growth, while bucking almost all serious attempts at environmental regulation, generates a steady stream of disasters all on its own, whether military, ecological or financial. The appetite for easy, short-term profits offered by purely speculative investment has turned the stock, currency and real estate markets into crisis-creation machines, as the Asian financial crisis, the Mexican peso crisis and the dotcom collapse all demonstrate." 

Paul Krugman, The New York Times, August 22 2013:

"In short, the main lesson of this age of bubbles — a lesson that India, Brazil, and others are learning once again — is that when the financial industry is set loose to do its thing, it lurches from crisis to crisis."

From time to time, I see proceedings of Lok Sabha and Rajya Sabha on TV. They are often very interesting. At any rate, they are much better than the shrill, largely uninformed 'debates' on (Marathi, Hindi, English) news TV channels.

On August 14 2013, Mr. D. RAJA of Communist Party of India said in Rajya Sabha: 

"...In 1947, when we got independence, the rupee value was equal to the dollar value. One rupee was equal to one dollar. That was the situation in 1947. Now, one dollar is equal to Rs.61. When our economy is growing, as per the Government statement, at five per cent, and the economy of the U.S. is growing at two per cent, then, why is our rupee falling in value? What is the secret? The American dollar value has not fallen, but the Indian rupee value has been falling..."

India's finance minister did not challenge the claim that in 1947 the rupee value was equal to the dollar value. Instead this is what he said:

"...Yes, people have said that one rupee is equal to one dollar. Of course, it was in 1947 that one rupee was indeed equal to one dollar. Ten grams of gold costed Rs.88.62 in 1947. Today, ten grams of gold is about Rs.29,000. The rupee has depreciated. Do you not like the rupee? Don't take the rupee. I will give you 88 dollars. Please go and buy ten grams of gold today. We will give you 88 dollars if you don't like it. Please go
and buy ten grams of gold today. If the rupee has depreciated against the dollar, the dollar has depreciated against gold. Why?..."

Business Standard on August 19 2013 says:

"...For the record, the rupee was never equal to the dollar, except perhaps in the hoary past. At the time of independence, India's currency was pegged to pound sterling, and the exchange rate was a shilling and six pence for a rupee - which worked out to Rs 13.33 to the pound. The dollar-pound exchange rate then was $4.03 to the pound, which in effect gave a rupee-dollar rate in 1947 of around Rs 3.30. The pound was devalued in 1949, changing its dollar parity from 4.03 to 2.80. India was then a part of the sterling area, and the rupee was devalued on the same day by the same percentage, so that the new dollar exchange rate in 1949 became Rs 4.76 - which is where it stayed till the rupee devaluation of 1966 made it Rs 7.50 to the dollar and the pound moved to Rs 21."
 
I am stunned that even India's parliament does gets its such vital data correct.


Artist: Dana Fradon, The New Yorker, January 13 1973

I can't resist the temptation of quoting another extract from Mr. Fergusson's book that is quoted at the top:

"The agony of inflation, however prolonged, is perhaps somewhat similar to acute pain — totally absorbing, demanding complete attention while it lasts; forgotten or ignorable when it has gone, whatever mental or physical scars it may leave behind. Some such explanation may apply to the strange way in which the remarkable episode of the Weimar inflation has been divorced — and vice versa — from so much contemporary incident. And yet, one would have thought, considering how persistent, extended and terrible that inflation was, and how baleful its consequences, no study of the period could be complete without continual reference to the one obsessive circumstance of the time.

The converse is also true: except at the narrowest level of economic treatise or personal reminiscence, how can a fair account of the German inflation be given outside the context of political subversion by Nationalists and by Communists, or the turmoil in the Army, or the quarrel with France, or the problem of war reparations, or the parallel hyperinflations in Austria and Hungary? How can one gauge the political significance of inflation, or judge the circumstances in which inflation in an industrialised democracy takes root and becomes uncontrollable, unless its course is charted side by side with the political events of the moment?"