Home > Current Issue (Fall 2001) > 'Sikka' and the Crown
  Introduction & Part I | Part II | Table of Mints & Part III | Parts IV & V | Appendix | References  

Part II

While change in the superinscription on the coins of the Native States was regarded as "a matter of no great importance" by the Government of India, it was, at the same time, well aware of the economic role of the coinage as a currency. The British had realized the advantages of having a uniform currency for facilitating trade and administration. Thus, after successful assimilation of the several coinages of the East India Company’s three presidencies - Bengal, Madras and Bombay - into one uniform currency in 1835, the great disadvantages suffered by the subjects of the Native States in regard to money matters received attention.

Indian Native States numbered no less than 562 and covered an area of total 712,508 square miles. These States included some big ones like Hyderabad (as large as Italy ) with a population of 14 millions and an annual revenue of 8.5 crores of rupees and tiny states like Bilbari with a population of 27 persons and an annual income ofRs. 80/- only. It has been estimated that 202 states had each an area of less than 10 square miles, 139 less than 5 square miles each while 70 states had each an area not exceeding 1 square mile. 7

According to P.L.Gupta, "...more than a hundred Native States existed through the country which claimed the right of striking their own money, when English Crown assumed the power in 1858 A.D." 8 The claim of these Native rulers to the right to coinage resulted in the mushrooming of a large number of Native mints throughout India. These mints often operated without observing strict control that was followed in the mints of the British Government. As a result, large quantities of debased, and at times badly struck and rudely fashioned coins of different weights and differing values came into circulation. Since there was no provision in these States to recall the defective or light-weight coins, the coins accumulated for over a century circulated in the market. The worsening of the situation was accelerated due to the role played by the shroffs or the money-changers. They charged varying rates of discount ( batta ) on different species of coins in the market which resulted in continually fluctuating exchange-rate between British and the Native currencies. Another factor which directly affected the British coinage was that in many States, the mints where indulged in the practice of melting down British coins to provide bullion for their own adulterated issues. Thus, to remove the evils of the Native currency, the Government of India was keen to introduce a uniform currency in these States.

Even before the assumption of paramountcy by the Crown, the Governor General Lord Hardinge had noted in 1845 that the abolition of Native mints was "the most effectual mode of introducing uniform currency." 9 The Court of Directors of the East India Company too, in the dispatch dated 21 October 1846, had endorsed the stand taken by the Indian Government by emphasizing upon the necessity of "diminishing (when it can justly be effected) rather than increasing the number of Native Mints." 10 However the intelligence reports received from the British Political Agents and Residents at various Native Courts, showed the importance attached by the various Native Rulers to the right of coinage and the difficulties in decreasing the number of Native Mints. Though no attempts were immediately made by the Government of India to attain that objective, it instructed its political officers that "....in all future negotiations with Native States possessing mints it may be borne in mind that abolition of these mints is to be held as an object of Paramount political importance."

The suppression of Native Mints was comparatively easier in the territories that came directly under British administration through annexation or cession. Thus a number of mints were closed in the annexed territories of Punjab, Nagpur and Awadh. Besides, the British authoritatively shut down many mints belonging to petty Chiefs and minor States in Central India. Similarly, the mint of Sawantwadi was abolished in 1845. It is quite likely that the British would have gone ahead with their calculated move to authoritatively abolish the Native Mints but for the outbreak of the Great Rebellion of 1857.

After the dust of the Great Rebellion settled down, the question of having a uniform currency for India re-surfaced. In 1859, Sir Charles Wood, the Secretary of State for India, exhorted the Indian Government "to obtain as far as that object is attainable, a currency ofuniform value throughout India and the withdrawal from circulation many spurious and debased coinages which now exist." 11 However, the Indian Government again chose to tread very cautiously, as would be clear from the contents of a Resolution passed in the Financial Department in October 1859. It held that, "... this is not the time to press any restrictive measures on the Native States." It was, therefore, decided that the Government should not "interfere with the existing arrangements whatever they may be." 12 The general policy of the Government regarding operation of mints in Native States was also laid down in the following words :

" If the mints have in any case already been suppressed under orders of Government, the President-in-Council would not re-open them; if they have not been suppressed he would not now suppress them." 13

While the Government of India refrained from any authoritative intervention in the right to coinage enjoyed by big Native States, it was keen to terminate the same with regard to feudatory Chiefs, a large number of whom had enjoyed this privilege. An opportunity was provided to the Government of India in 1868, to abolish the minting prerogatives of the Raja of Khetri in Rajputana and to lay down a general policy regarding the coinage by the feudatory Chiefs. It was noticed that the Raja’s mint at Chirawa, which he had leased out to the contractors to strike "the "charshaie" or Jeypore coin," was engaged in manufacturing counterfeit coins. 14 After the usual deliberations the policy of the Government of India with regard to the coining rights of the Native States was redefined with the following provisions :

i)that mints must be established and worked on at the capitals of those rulers who have a right to exercise this attribute sovereign power ;

ii)that they must be worked under their control and supervision ;

iii)that mints in the territories ofsubordinate and feudatory Chiefs and Nobles should henceforth be abolished ; and

iv)that compensation should be given by their suzerains to those thakoors and others who have long usurped or exercised the power of coining, and whose revenues would else be impaired. 15

Besides, it was also resolved that each Native States should manufacture merely its own coins, and in no case the coins of other States or of extinct dynasties. 16

In 1869, the Governmentcollected samples of gold and silver coins issued by various Native States and sent them to the Calcutta mint for assay with the view to determining the correct intrinsic values. Dr. J. F. Shekleton, Assay Master carried out assay of these coins and submitted a set of assay-tables to the Financial Department. While perusing these tables, the Financial Department recorded its observations in following words :

"Considerable inconvenience is experienced in the monetary transactions of the British Governmentin the jurisdiction of Native Chiefs in consequence of the existence of Native Coinage differing value from its own." 17

The Financial Department, therefore, asked the Foreign Department to prepare a comprehensive statement "... of the mints now existing in the territories of our Native Chiefs, and of the title, character, amount and value of the coinage of each, with some account of the condition under which the coin is manufactured and charges made for the conversion of bullion into coin."18

The Foreign Department was further requested to consider "whether any measure could be adopted to induce several Native Chiefs, or any of them to forego the privilege of issuing coins and to close their mint, or, if that appear impossible, to assimilate the coin of the mint in every respect, except device, to that of the Government of India as legal currency in their territories, on the condition that the coin of their mint be in like manner allowed currency as legal tender in British territories."19

As could be seen from the above extracts as a part of the general policy to introduce a uniform currency throughout India, the Government of India was keen to restrict the privilege of issuing coin within the narrowest possible limits by "inducing" the Native States to "forego the privilege of issuing coins and close their mint." But as the British were quite aware of the difficulties in adopting this measure, they now proposed to assimilate the Native Coinage into the currency system of British India. Under this proposal the circulation of the coinof the Government of India was to be extended into the territories of Native States, and at the same time coins of these Native States were to be declared as "legal tender" in British India. However, as the assay of the Native coins had revealed their debasement pattern, the Governmentobserved that :

"It would be a needful condition of such an arrangement that the management of these foreign (Native) mints be subject to such conditions as might be imposed by the Government of India, with a viewof ensuring the standard, purity and weight of the coins."20

Acting upon the request of the Financial Department, the Foreign Department on 20 July 1869 sent a circular to local Governments and Administrations to send their reports on the working of mints in the Native States under their jurisdiction.21 The point of reference prescribed for inclusion in these reports were as follows :

I.Political conditions of the State.

II.The Nature, title and character of the coinage.

III.The Annual out turn of the establishment, and the value of the coinage as compared with that of the British Government.

IV.The process of manufacture and any particulars as to the artificers employed.

V.The arrangements for receiving bullion, and the charges (if any) levied for its conversion into coins ;

VIGeneral Area of Currency.22

These Reports submitted to the Government of India contained very interesting information regarding minting activities in the Indian Native States circa 1869-70.23

  Introduction & Part I | Part II | Table of Mints & Part III | Parts IV & V | Appendix | References  
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