The Rupee of the British Empire - a regional currency
by Marc Van Daele In a world in which it is necessary to change currency from one country to
another, one can imagine the importance that the Indian rupee had over a very
large area.
In the 19th century, the British had succeeded in controlling
not only all of India, but also its borders and neighboring countries like
Balouchistan and Burma (1852), as well as a good part of countries along the
Indian Ocean.
In 1835, The East India Company in London printed rupees commemorating King William IV. This rupee weighed 11.66 grams and in 917/1000 silver. The rupee was divided into 16 annas. The anna into 4 pice and the pice into 3 pies. The inauguration of the new rupee of 11.66 was prepared in Bombay in copper pieces of a quarter anna at the end of 1830 and a half anna at the end of 1832. The twelfth anna or pie would be made for circulation at the end of 1831. The process was completed and the system was quickly adopted in the entire empire, as well as the several princely states keeping a proper monetary system. Among the 6 princely states that passed the monetary conversions with the British imperial authorities, only Alwar (between 1877 and 1882) and Bikanir ( in 1892 and 1897) would issue silver 11.66 rupees externally, similar but upon which the weight and title was different (Mewar, Baroda in 1891 and 1892, Hyderabad 11.178 grams and 818/1000).
In fact, the Indian rupee was create for the purpose of obtaining a quasi
parity of 2 English shillings to the rupee. This parity was officially fixed in
1872, but the strong fluctuations between 1872 and 1898 brought the rupee to one
shilling per rupee.
The problem was as follows: silver was abundant, it lost
its worth on international markets.
The system was advantageous for Great
Britain: its important commercial credits in India were paid in gold.
On the
other hand, the Indian population sought out and stored pieces of silver. Gold
was brought to the bank in order to obtain silver. The attraction of silver led
to certain measures. On June 23, 1893, the making of the silver rupee was
suspended, but not for long. In 1899, the parity of the Indian rupee was set at
1 shilling 4 pence. This new parity was kept until 1927, if one excludes an
attempt in 1919 to once again lift the rupee to 2 shillings. The real value of
the rupee was therefore tied to the Pound Sterling. This was not stable after
the Great War.
In relation to its pre-war value, the Pound lost only 2% in
1918 as opposed to 22% in 1919 and 34% in February 1920, to then move back up
only 6% in 1923, but 12% in 1924.
In April 1925, the Pound was redefined on
the basis of the gold parity of 1816, 7.32 grams of fine gold. On September 20,
1931 Great Britain abandoned the gold standard and the Pound lost 30% of its
worth in 1931 and almost 40% in 1934!
Meanwhile, the Indian Ocean served as a thoroughfare for the penetration to
this silver currency of which the usage was eased. From 1869, Ceylon adopted the
silver rupee, which came to the island with the half and quarter rupee, but was
divided into 100 cents. Circumstances were similar in Mauritius at the end of
1876 and also in the Seychelles after its administration became independent from
Mauritius in 1903: the rupee, the half rupee and the quarter rupee were the
same, but the local rupee was divided into 100 cents.
The Arab Peninsula
also strongly appreciated the Indian rupee. It was used in Aden and in British
Somaliland until 1951, in Iraq from 1917 to 1931, in Kuwait until 1961, in
Bahrain until 1966, in Qatar and the Trucial Coast until 1967 and in the
Sultanate of Muscat and Oman until 1966.
Inside Oman during the seventies,
one could again note that changes were brought about daily, outside of Maria
Theresa Thalers and silver Indian rupees. It is no longer the case at present.
Certain rupees were reprinted at the end of the preceding century in Obock and
in the Sultanate of Shihr and Mukalla for example. The Portuguese trading posts
of India issued from 1881 to 1912 silver rupees in 11.66 grams and 917/1000. The
English rupees were distributed in Zanzibar.
The Arabs of Muscat and
Zanzibar controlled commerce with Eastern Africa. They actively engaged in the
introduction of the silver rupee on the East Africa coast. Zanzibar had coastal
rights from Northern Mozambique to what comprised Benadir, that is to say the
Somali coast.
Deutsch Ost Afrika at the end of 1890 and Somalia Italiana from 1910 to 1921
produced rupees of 11.6638 and 917/1000, which therefore imitated the Indian
rupee, the unavoidable regional currency. In Somalia, the rupee was divided into
100 besas, just as in Deutsch Ost Afrika, where it was divided from 1890 to 1904
into 64 pesas and from 1904 until World War I into 100 hellers.
From 1888 to
1895, the Imperial British East Africa Company not only used the Indian rupee,
but also produced its own rupees, half rupees and quarter rupees -- the rupee
having a weight of 11.66 and 917/1000. It served as the rupee of Mombasa. Uganda
became a British protectorate in 1894. In 1895, the British East Africa
Protectorate replaced the company, but the Indian currency remained until 1906
when the region passed the administration of the Foreign Office to that of the
Colonial Office. The rupee continued from 1906 to 1920, but was divided into 100
cents. Zanzibar which officially adopted the Indian rupee in 1906 (divided into
100 cents), kept it until January 1, 1936.
In international currency of the Indian Ocean, the Indian rupee was still used from Burma to Balouchistan, from Nepal to Ceylon, from Iraq to Zanzibar and from the Maldives to Mauritius. Its instability, because of its ties to silver and the Pound Sterling, was compensated by the stability of a certain weight of silver. The rupee was quite valued by the populations of these regions. Confronted with the currency problems already described, the silver rupee was not produced from 1923 and 1939. In 1940, there was a desire to recommence the production of the rupee. The rupees were produced in 1938 and 1939 in the former manner, but at the end of 1940, if the weights are the same, the rupees stands at 500/1000 of silver. The production in 1947 was in nickel! The production from half rupees and quarter rupees was not interrupted. In 1940 their title of silver stayed at 500/1000 and in 1946 these coins were in nickel. Mauritius did not have silver rupees from 1934 to 1938. These rupees weighed 11.66 but with the title of 916/1000 instead of 917/1000. The Seychelles transfered to producing a silver rupee in 1938 with a weight of 11.66 grams but a title of 500/1000. In India one rupee notes were circulated.
The independence of Ceylon, Pakistan, and Burma ended this veritable regional currency. From 1947 to 1966, the parity of the rupee of the Indian Union was set at 1 shilling six pence per rupee. In 1951, Aden and British Somaliland fastened themselves to the East African Shilling. The Indian rupee was decimalized in1957 and the Pakistan rupee in 1961.\
If the parity of the Indian rupee was set at 1 shilling six pence, we should
mention that the Pound Sterling was set at 3.58 grams of fine gold in 1946 to
fall to 2.49 grams of fine gold in 1949. The "external" rupee which was created
for the emirates of the Gulf and the Sultanate of Muscat and Oman and was
convertible tight control with this event. Bahrain, Qatar/Dubai and Oman quickly
formed their own currency.
The Ceylon rupee also removed itself from the
Indian rupee in June 1966.
The monetary period of the Indian silver rupee
was decidedly over. Its expansion was tightly bound to British colonialism, but
it was sharply hampered by its division into annas, pices and pies. Quickly
decimalization was applied in Africa and throughout the region around the Indian
Ocean. It should lastly be noted that India was very attached to its monetary
system and to the symbol of the silver rupee.
April 1994
Go back to the list of articles