| Book Review | The American Historical Review, 109.1

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| Book Review | The American Historical Review, 109.1 | The History Cooperative

Book Review

Asia

Amiya Kumar Bagchi, editor. Money and Credit in Indian History: From Early Medieval Times. New Delhi: Tulika Books. 2002. Pp. xli, 228. Rs. 450.00.
The eleven essays in this volume were contributed to a panel of the Indian History Congress of 2001. They cover a wide spectrum of themes from finance in early medieval times to the portrayal of a twentieth-century Bengali banker. In his introduction to the volume Amiya Kumar Bagchi stresses the contrast between relationship banking, which predominated in India, and the system of public credit as it first developed in the Italian city-states and then in England and the Netherlands. Discussing the Indian money market, he mentions its segmentation but also points out that the segments were linked from the joint-stock banks at the top to the village moneylender at the bottom. He explains the phenomena of discrimination and credit rationing inherent in the Indian system. These account for divergences in interest rates as the "discriminating" creditor, while contracting credit by means of high rates for some, may still be willing to lend at favorable rates to other reliable clients.	1
The first essay, by K. S. Shrimali, defends the Marxist idea of the correlation between limited money circulation and feudalism against those authors John Deyell, André Wink) who have tried to prove a greater circulation in medieval times. Subsequent essays by Om Prakash, Najaf Haider, and Shireen Moosvi are devoted to the credit system of Mughal India. They portray a rather sophisticated system in which deposit banking and the wide circulation of bills of exchange (hundis) prevailed. In such a system, banking money could be generated that—theoretically—could have solved liquidity problems when the flow of specie dwindled. But the evidence provided here indicates that such banking money tended to increase liquidity when specie was also available. If specie was scarce, banking money was also reduced. Interest rates reflected regional disparities in India but also changes in the global supply of precious metals.	. . .

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