Q. Consider the following statements regarding the Token Currency which was used during Sultanate Period:
- Token Currency was introduced by Muhammad-bin-Tughlaq.
- Token Currency was made of gold and silver.
Which of the above is / are correct?
Answer:
Only 1
Notes: Muhammad-bin-Tughlaq introduced token currency because there was shortage of silver at that time, so he decided to issue copper coins which would have the same value as that of silver and gold coins. As gold and silver were more valuable, people started illegal minting all token coins which the govt. was unable to control and thus govt. finally decided to take back the token coins and in exchange give silver coins to the people and thus, they suffered a heavy financial loss. But instead of controlling prices, he used a “token” currency, somewhat like present-day paper currency, but made out of cheap metals, not gold and silver. People in the fourteenth century did not trust these coins. They were very smart: they saved their gold and silver coins and paid all their taxes to the state with this token currency. This cheap currency could also be counterfeited easily.