The Evolution of Currency in the Madras Presidency

It was almost a year after I started collecting coins that I asked myself a basic question: Since there were hundreds of different currencies circulating in India in the 1800s, how would a person from Travancore buy materials in the Madras Presidency? How did all these currencies work together as a single system?

This article is based on prompting Gemini, supplemented by some personal reading. Please treat these as facts at your own risk! To understand how things evolved, it is best to look at the history chronologically.

1640: Adopting the Vijayanagara Pagoda System

In 1640, the East India Company (EIC) obtained minting rights in Fort St. George (Madras) from the local Nayak of Chandragiri, a vestigial offshoot of the Vijayanagara Empire. The prevailing currency in South India was the gold Pagoda system, which the EIC simply adopted.

They began issuing gold Pagodas containing 3.4 grams of gold, equivalent to 36 silver Fanams (European pronunciation of panam). One Fanam contained roughly 0.3 grams of silver and was worth 80 copper Kasu. Each Kasu weighed approximately 0.6–0.7 grams. Effectively, these minting rights meant the local ruler trusted the EIC not to cheat on the gold content. Any merchant or traveler could bring bullion to these official mints and receive Pagoda coins in return.

Our traveler from Travancore would have carried coins issued under a slightly different system, including copper Kasu, silver Chakrams, and gold Fanams of varying weights. Upon arriving in Madras, they would simply trade these coins based on their weight and intrinsic precious metal value.

1742: Co-opting the Arcot Rupee

While Madras used the Pagoda, the rest of India—including the Bombay and Bengal Presidencies—used the Mughal Rupee system. This was a silver-denominated system where one Rupee was approximately 11.5 grams of silver. Merchants in North India generally would not accept Pagodas or Fanams; they wanted Rupees.

Since the Nawab of Arcot was a representative of the Mughals, he had the power to issue Rupees. The Madras Presidency used these "Arcot Rupees" to transact with other presidencies and North India. Once the Nawab became a puppet of the British, the EIC took over the minting rights and began producing Arcot Rupees themselves.

1818: The Death of the Pagoda

The period between 1742 and 1818 must have been a confusing time in Fort St. George. The market was flooded with EIC Gold Pagodas, EIC Silver Fanams, Silver Arcot Rupees, copper Kasu issued by local Nayaks, and Copper Cash issued by the EIC. If there was a new gold mine discovered in Brazil, it would impact the exchange rate between the Arcot Rupee and the Gold Pagoda. 

In 1818, the Madras Presidency decided to demonetize the Pagoda and Fanam. This meant the EIC would no longer accept them as payment or use them for disbursements. From this point on, they would only use Silver Rupees and copper Cash coins.

1835: The Uniform Coinage Act

With this act, the Madras Presidency lost its numismatic individuality. Coins issued by any of the presidencies became identical and standardized, issued in the name of the EIC. The currency system was: 1 Rupee = 16 Annas = 64 Paisa = 192 Pie

After the 1857 Uprising, the British Government took over India from the EIC, and coins were subsequently issued in the name of the reigning British monarch. Even then, the coins maintained intrinsic value; anyone with silver could go to a mint and walk out with the equivalent value in Rupees.

This system finally changed in 1893 with the end of Free Coinage. This was the beginning of fiat money. The value of a coin became "One Rupee" because the British government decreed it so, not necessarily because of its silver weight. Consequently, subsequent issues of Rupees contained progressively less silver. Under this new legal framework, one could no longer simply melt down an older Rupee to manufacture newer ones; the government held a strict monopoly on the creation of value.

Comments

Post a Comment

Popular posts from this blog

About our coin collection

Our collection focuses on coins issued and circulated during 1600–1947. The coins are organized into 4 primary categories:  1. European Trading Companies: Coins issued by French, Dutch, Danes and Portugese that circulated in India  2. British India Presidencies: Coins issues by the British East India Company prior to 1835 and the Uniform Coinage Act.  3. British India: Coins issued after 1835  4. Indian Kingdoms: Coins issued by kingdoms that were vassals of British India or eventually annexed by them Finally, a bit about us.  It all started when my son, Dhruvan, showed interest in collecting coins; I ended up running with it. This website has been a collaborative effort between Claude, Dhruvan, and me. Dhruvan has actively contributed by shipping different features to this website. All the write-ups are original (not AI-generated) and synthesized from books on the subject and the excellent Empire podcast!
Read more

Modern Cholas: Part 1

[Draft was edited by Gemini for clarity] Everything I know about the Cholas comes from Anirudh Kanisetti's excellent book,  Lords of the Deccan  (and his work on the Chola Empire). This article is my understanding of that book. Who were the "Modern" Cholas?  To understand who they were, we must first understand who they were not : No Sangam Connection: They had no direct link to the ancient Sangam-era Cholas. They essentially co-opted the "Chola" brand name for legitimacy. A Lost Identity: They have not been a permanent fixture of Tamil consciousness for the last 1,000 years. Even as recently as 1940, the Cholas were rarely discussed; the common view was that the Thanjavur temple had been built by the Pallavas. They only rose in popularity with the rise of the Dravidian movement and the modern revival of Tamil identity. So, why are they special now? Bullying the Deccan: They are the only known dynasty from Tamil Nadu that successfully bullied and harassed the...
Read more

How did a joint-stock limited company occupy the richest country in the world?

The ideas in the book are largely from William Darlymple's Anarchy. In fact, one can think of this as a summary of his primary thesis written by me.  This amazing talk also covers the same ground. 1750 to 1850 was a fascinating period in Indian history. A European company directly annexed large parts of India and indirectly administered the rest through puppet rulers. This was done with an army that was made up of 90% Indians funded by Indian bankers. How did this happen? These companies were not new to the neighborhood; since the 1500s, they had profitably imported spices and textiles from India. However, they were non-entities in the political landscape. So, what changed in the latter half of the 18th century?  Chance set the stage, but the profit motive wrote the script for India's future. Even the very presence of these companies in India is a tale of capitalism. For centuries prior, Europe had imported silks and textiles from India through the Silk Road. This meant pr...
Read more