2 Fanons – Puducherry

In 1770, the currency situation in Puducherry was a complex reflection of its status as a French colonial enclave within the Indian subcontinent. The French East India Company administered the settlement, and its monetary system operated in tension with the surrounding indigenous economies. Officially, the French livre was the unit of account, but in practice, a multitude of physical coins circulated. These included French-issued silver écus and copper sous, various Spanish and Spanish-American silver dollars (pieces of eight), and a plethora of South Indian gold pagodas and silver rupees from neighbouring powers like the Nawab of Arcot and the British in Madras.

This multiplicity created chronic problems of exchange-rate fluctuation and valuation confusion. Merchants and the administration had to constantly refer to published "tarifs" or bulletins that fixed the relative value of these coins against the livre, rates which shifted with the weight, purity, and market demand for each coin type. The intrinsic value of the silver in a Spanish dollar, for instance, often differed from its official notational value in livres, leading to arbitrage and instability. Furthermore, the scarcity of official French specie meant that much daily commerce relied on the very foreign coins the administration sought to regulate, embedding economic vulnerability within the colony's financial fabric.

The situation was exacerbated by the global context of the late 18th century. France was facing severe fiscal strain in the lead-up to the Revolution, impacting its ability to support its overseas possessions. In Puducherry, this likely contributed to shortages of official currency and increased reliance on often-debased local coinages. This unstable monetary environment complicated trade, tax collection, and administration, making Puducherry's economy perpetually susceptible to wider regional bullion flows and the monetary policies of its British rivals, who were increasingly asserting their dominance over South India.