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a currency decreasing in value by sudden changes. The Sultan has boon v0rr
anxious to remedy the ovil, and lias dicussed the question several times with
Major Cox, who proposed to him to introduce tho Indian currency. The
question was reform! in Septcmbor 1903 by Major Cox to Government through
Colonel ICemball (Major Cox’s No. 199, dated 9th Ootobor 1903). 8
613. The views of tho Government of India were expressed in their
letter No. 733-E.A., dated <lth March 1901, which should ho quoted in full
to undorslaud the bearings of tho dolicato question:—
I am directed to noknowledirc tho receipt of your letter No. 190, dated tho 9th October
1903, regarding the currency of Maskat.
2. In reply 1 ain to say that tho Government of India aro disposed to think that tho
introduction of an Indian rupee currency in the territories of the Sultau of Maskat mi«»ht
stimulate trudo with India and lie advantageous from a political point of view, but tho ques­
tion is, as you remark, not unattended with difficulty, and caution is required in handling
it, particularly as possible objection on the part of others may bavo to bo borno in mind. The
host plan will be for you to nonsuit tho Sultan privately as to his wishes in tho matter. If
ho appears to be anxious to reform his currency, tho Political Agont might place tho following
considerations bofore him.
3. Tho quickest and most offectivo method of substituting tho rupeo for tho dollar would
be for tho Sultan to import rupees and givo them out freely in exchange for dollars for a named
period, and to notify that after tho expiry of that period tho rupee will be tho sole legal tendor
silver coiu in his territories. The dollars which would aecumulato in tho Sultan's treasury
duriug tho exchange operations should be melted down and sold for rupees.
4. If the Saltan should decide to follow tho above method, the Government of India
might bo prepared to assist him with a small loan on easy terms to fiunnoo the operation, such
loan to bo repayable from the proceeds of tbe sale of the dollars melted down. It is probable,
however, that there would bo some loss on the operation, because, unloss tho Maria Theresa
dollar has no fokon value and passes current only at the value of the motal contained in it, the
•ilver obtaiued from melting down dollars could not be sold for as many rupees as it would
bo necessary to give out in exchange for them. The extent of the loss would dopond on the
divergence betweeu the current aud the bullion value of tbe dollar.
5. Should the Sultan not be in a portion to risk tho loss above indicated, it would be
well not to hold out to him hopes of pecuniary' assistance from the Goverumout of India, and
yon might in that case suggest to him the adoption of the following scheme, which, though
a slower aud less certain process, would probably be succeseful in certain circumstances. The
Sultan should announce that after a certain date all paymonts due to or by his Government
in excess of ten dollars will bo made in rupees. When this regulation bad been in force for
m year, tho limit for dollar payments might be reduced to five rupees, and by further progres­
sive steps dollars might be excluded altogether from transactions with tho Government. The
result would be speedily to oust the currency of tho dollar from all important commercial
transactions, whilst leaving it temporarily free for petty transactions, and gradually to narrow
its useful circulation until the cuin disappeared altogether.
6. The success of the measure described in the last preceding paragraph would depend
mainly on tho facility with which rupoes will How to Maskat in rosponso to the uow demand.
This is a question on which it is impossiblo to pronounce without knowledge of tho local trade
conditions; but it appears to the Government of India that, since tho Sultan’s main source
of revenue is his customs duties, it should be possible to securo large payments in rupees
without muoh difficulty. Moreover, the rupees subsidy paid to him by tbe Government ol
India will provide liim with a stock of rupees to meet claims duo by his Government.
7. The enforcement of rupee payments in tbe interior of Oman will probably present
moro difficulty', but on this point also a knowledgo of the habits and circumstances of the
people is necessary before a final couclusiou cau be formed. It would also be well to ascertain,
if possible, how euch a change of tho currency medium would ba viewed not only by the people
of Oman, but also by tho Arabs of mure distant tracts who have trade relations with Maskat.
8. The Government of India have not sufficient knowledgo of tho local conditions to
predict success with certainty, but they think that the plan sketched aboyo is worth a trial
unless the Political Ageut considers that it would not be workable. If he apprehends serious
difficulty in enforcing tbe paymont in rupees of debts of ten dollars, the initial limit might bo
fixed at twenty dollars, aud subsequently reduced to ten.
9. The subsidiary copper coinage of Maskat should be dealt with on similar lines, but
in this case it would bo necessary to follow tbe former of the two courses described above.
The Sultan should import copper coins of tbe Government of India and givo them out in ex­
change for tho local ooins, which latter should be molted down as they acoumulato and 6old
at oopper.