Which among the following measures was introduced by Muhammad bin Tughlaq to address the shortage of silver?
- AOption (a)
Garrison towns
- BOption (b)
Land revenue reforms
- COption (c)
Prohibition of wine
- DOption (d)
Token currency
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Correct answer
Token currency
Why this answer is correct
The correct answer is Token currency.
Key Points
- In 1329-1330 AD, Muhammad bin Tughlaq introduced a Token Currency system to manage the severe global shortage of silver bullion during the 14th century.
- The Sultan issued coins made of base metals, specifically brass and copper, and decreed that they should be accepted at the same value as the silver Tanka.
- The primary objective was to preserve the state's silver reserves while maintaining a high level of liquidity for his ambitious military projects and administrative expenses.
- The idea was modeled after the successful use of paper currency (Chao) in China under Kublai Khan and similar experiments in Persia (Gaykhatu Khan).
- However, the experiment failed because the government could not prevent forgery; households reportedly began minting their own copper coins, leading to massive inflation and a total collapse of the credit system.
- To restore order, the Sultan had to withdraw the token coins and exchange them for genuine silver and gold coins from the royal treasury, resulting in a massive financial loss.
Additional Information
- Muhammad bin Tughlaq:
- He is often referred to by historians as the Prince of Moneyers because of the high quality and variety of coins he produced during his reign.
- His other controversial projects included the transfer of the capital from Delhi to Devagiri (renamed Daulatabad) in 1327 AD.
- Land Revenue Reforms:
- While he did introduce heavy taxation in the Doab region to increase state revenue, this was aimed at funding his large standing army rather than directly addressing the bullion shortage.
- Garrison Towns:
- These were fortified settlements with soldiers, a concept more associated with the military control strategies of earlier Sultans like Ghiyasuddin Balban and Alauddin Khalji to defend against Mongol invasions.