The Hindu Business Line : A `Dollar' coin in India!

The fascinating history of Indian coinage since the early 18th century had several puzzling denominations. Whether it was coins or currency notes, the oddities happened at regular intervals. The intriguing denominations in the annals of coinage were 2-1/2 cash or dhuddu, 1/48 to rupee, 1/96 to rupee of the Madras Presidency. Mostly, the denominations in the three presidencies of Bengal, Bombay and Madras were two rupees, one, half, quarter and 1/8th rupees in silver.

The copper denominations were known as half anna, quarter anna, pice and cash. Though exact explanation was not found, Governor William Bentinck proposed the introduction of 20 cash, 10 cash and 5 cash, and the first was issued in 1803. The redesigned set issued again in 1807 included a new higher denomination viz. 40 cash. In the history of decimal system, this can be attributed as the beginning, though it did not have any relation to the calculation of one rupee.

Fancy banknotes

The history of banknotes also had many fancy denominations. Bengal issues had 4 and 16 sicca rupees, one gold mohur; Madras presidency had denominations issued in 15, 25, 250 and 3,000 rupees, and star pagoda and 5 pagoda. These were other than the normal fractions such as 5, 10, 20, 50, 100, 500 and 1,000. In 1899, Rs 10,000 was introduced, while 5,000 value was issued in 1954.

The funniest denomination of all the banknotes is the two rupees and eight annas currency note issued for the first time on January 2, 1918. This was equivalent to one dollar. It continued to be in circulation till January 1, 1926. As far as the mention of value `dollar' was concerned, in fact, as early as in 1863, a suggestion to establish a dollar coin within the Indian monetary system having the value of double rupee, was made by the Bombay Government. This was soon after (1862) the takeover of the East India Company, replacing the company's monetary system and also the private banks' currency.

The `dollar' patterns were prepared by A.P. Spencer, Chief Engraver, His Majesty's Mint, Calcutta, who engraved the coins of King George VI in 1938 and 1947. These patterns carry the portrait of the King on the obverse side and value in English and Persian, 1 dollar/2 rupees 8 annas, India and year 1941. The first type depicts 1 in the centre, while the second shows it on the right side, sporting an entirely different look. The reason for such a preparation was totally different. Till 1941, the Indian economy was not seriously affected by World War II. However, more demand to produce coins of other nations and the pressure on the minting capacity and machine power increased.

First gold standard

The East India Company first tried to put India on the gold standard by fixing a legal ratio between gold and silver in Bengal, in 1766. However, this attempt ceased in 1803 as per Regulation 45 of 1803. Each of the three presidencies — Bengal, Bombay and Madras — called the value of rupee differently.

In Bengal, it was known as sicca rupee, the Bombay presidency called it a Bombay rupee, while in the South it was known as Arcot rupee. The weight of Madras rupee (10,6918g, 180 grains) was made the standard for India, in 1818. This was called the Company Rupee.

New coinage Act

A Resolution passed by the Supreme Council of India on May 27, 1835, gave way to the new coinage Act XVII 1835, introduced by Governor General William Bentinck, standardised all forms of coins and put into circulation for all-India use. This permanently replaced different coinages prevalent in the presidencies of Bengal, Bombay and Madras.

India was on a Silver Standard, using the Rupee. Since the market value of silver varied against gold, upon which the Pound Sterling was based, this complicated the exchange rate. That especially became a problem in the 1880s.

The Rupee was pegged at 1s 6-1/2d from 1889 to 1890, at 1s 6d from 1890 to 1891, 1s 4-3/4d from1891 to 1892, and 1s 3d in 1892.

Viceroy Lord Landsdowne put India on the Gold Standard, in 1893, by pegging the Rupee at 1s 4d, so that 15 rupees, the traditional Mohur, became equal to exactly one pound sterling. This value of the Rupee survived all the way until 1966, when India revalued its currency independent of the Pound Sterling. However, five years later this was discontinued in preference to pound sterling exchange rate.