Question

Good morning my friends
Why ' token ' currency ot Muhammad Tughlug failed .
Explain.

Answer 1

Token currency is actually the introduction of bronze tankas in place of silver tankas which was primarily introduced by Muhammad-bin Tughlaq. But, ultimately, this policy was failed because in the market, there was a huge circulation of fake coins and hence, huge chaos was created.


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Answer 2

Muhammad bin Tughluq needed more money on account of various reasons. He wanted to raise a huge army as he is said to have thought of conquering the whole world. He had also distributed a lot of money among nobles to please them when he ascended the throne after the death of his father which had occurred on account of his participation in a conspiracy. Muhammad Tughlaq issued token currency because there was a shortage of gold coins and the Sultan on the other hand needed money. He tried to follow the footsteps of the Emperor of China who had issued paper currency in China in the 13th century.

Mistakes made by the Sultan:

The Sultan issued copper coins and kept their value at par with the gold and silver coins. The Sultan did not exercise a strict check to ensure that the people did not make their own coins which we call ‘jali’ or fake. The citizens began to melt coins in their homes and paid their taxes in fake coins. People also began to hoard silver and gold coins in their houses. The token currency remained in circulation for about three years.

The Sultan realized the failure of the scheme and withdrew the entire new currency. People were asked to return the token coins and in exchange were paid back gold and silver coins by royal treasury. This put a heavy loss to the treasury. The people who minted fake coins were not punished.

Now-a-days all governments in the world use token currency that has a face value only and not any real value. The currency notes we use have a value printed on them but by themselves they are worth nothing (We understood this recently by the experimentation of de-monetization). Similarly is the case with the coins that we use.

During the days of Muhammad Tughlaq only gold coins were used and they had the face value almost equal to the real value. Use of token coins can be successful when the government alone makes them and takes people into confidence. At the same time strict checks are exercised to ensure that fake coins are not circulated by private parties. Mughammad Tughlaq failed to do so.

The token currency had an adverse effect on the foreign trade also. The foreign merchants stopped bringing their merchandise in India.