III.-1869-1892. FROM THE ORDER IN COUNCIL OF 1869 TO THE ORDER IN COUNCIL OF 1892. THE RUPEE OF BRITISH INDIA CONSTITUTED AS THE STANDARD COIN OF CEYLON WITH A SUBSIDIARY DECIMAL COINAGE.
14. Disappearance of Paper currency, Rixdollars, English and Australian coins except British Copper. Legalization of the "Company's Rupee."
The sterling notes issued under the authority of Regulation 8 of 1827 had been cancelled periodically as they were received at the local Treasuries and only about £1,000 worth of them were outstanding in 1865. These were treated as "not in existence". British silver coins and rixdollars had long since disappeared and sovereigns, both English and Australian, were not in circulation. Although the rupee had for many years been the universally recognized measure of value the fact that it was not current under "legal" authority, though not generally known, was a disturbing factor. In order to remove permanently this legal uncertainty, Order in Council and Proclamation dated June 18, 1869 (brought into operation on January 1, 1872, by Proclamation of August 23, 1871), were issued (Appendices C and D).
Order in Council of June 18, 1869, revoked Order in Council dated March 23, 1825, and so much of the Orders in Council of October 16, 1852, and October 22, 1856, as had effect in the Island, and repealed Regulations 8 of 1825 and 8 of 1827.
It was declared that the British and local copper or bronze coins then in circulation and such other copper or bronze tokens as may from time to time be specified by the Governor by Proclamation shall be legal tender for any sum not exceeding half a rupee-a penny to be current at ⅔ anna, ½ penny at ⅓ anna, farthing at ⅙ anna, Ceylon fanam at 1 anna, stuiver or pice at ¼ anna, and challie at 1/12 anna.
It was further ordained and declared that the Company's silver rupee of 180 grains, 11/12 fine, and its silver subdivisions ½, ¼, and ⅛ rupee) shall be the only legal tender in Ceylon and its Dependencies. 1
It was also declared that whenever the denomination of British Currency shall have been specified in any Regulation, Ordinance, Minute, &c., or Contract in force at the date of the Proclamation of the Order in Council in Ceylon, such sums, whether as payments to be made to or by the local Government, shall continue to be received at and paid from the local Treasuries in rupees and the legal subordinate currency of the Island at 2 shillings to the rupee.
15. A decimal coinage proposed.
In September, 1869 after the publication of the Order in Council making the "Company's" rupee and its. silver subdivisions the only legal tender in the Island, the then Director. of Public Works (Mr. Guilford L. Molesworth) submitted a report advocating the introduction of a subsidiary decimal coinage of the rupee. He proposed that the rupee, half-rupee, and quarter rupee should remain in circulation, that the rupee should be subdivided into 100 units, termed cents, and that the following subsidiary coins be introduced, viz., silver ten cents, and copper five, two, one, and half cents. There was also a proposal that Government Accounts should be kept on a rupee instead of a sterling basis.
16. A triangular contest: Chamber of Commerce supports £. s. d. Commission recommend Rupees, Annas, Pies. The Public favour Rupees and Cents.
The proposed changes in the currency system, especially the proposal to keep public accounts in rupees, were vehemently opposed by the Chamber of Commerce, Colombo, who contended that the contemplated change was inexpedient, and if carried into effect would cause serious inconvenience to the mercantile, agricultural, and trading communities and great dissatisfaction to the public. A Commission was immediately appointed by the Governor with Hon. Mr. George Lawson, Puisne Judge, . as Chairman, to consider and report whether any change would become either necessary or desirable in the denomination of the Public Accounts in view of the Order in Council declaring the rupee the legal tender of payment. The Commission recommended, by a majority, the adoption of the Indian System of rupees, annas, and pies.
A minority of the Commission, however, led by Sir Richard Morgan, Queen's Advocate, Mr. Molesworth, Director of Public Works, and Mr. T. Berwick, District Judge, strongly urged the adoption of a decimal coinage. This was followed by the formation of "A Decimal Association" and by further representations in support of the decimal system, one hundred and eleven petitions being presented to the Governor. A cogent reason urged in its favour was that the decimal coinage was not new to the Sinhalese. After a protracted correspondence for over 18 months between the Colonial Office and the Lords Commissioners of the Treasury, Sir Hercules Robinson received the assent of the Secretary of State in June, 1871, to the adoption of a decimal subdivision of the rupee and the introduction of the copper five, one, and half cent pieces according to the design submitted by the Governor in January, 1870 the arrangement to take effect from January 1, 1872. From this date the Accounts of the Colony have been kept in rupees and cents.
18. Rating of Copper. Introduction of quarter cent piece. Demonetization of the Fanam, Stuiver, and Challie.
Pending the introduction of the decimal tokens the following coins were rated as below by Proclamation dated August 23, 1871 (Appendix D) :--
| The Penny at the rate of | ⅔rds of an Anna, or | 8 Pie. |
| The Half-penny | ⅓rd of an Anna, or | 4 Pie. |
| The Farthing | ⅙th of an Anna, or | 2 Pie. |
| The Ceylon Fanam | 1 Anna. or | 12 Pie. |
| The Ceylon Stiver or Pice | ¼th of an Anna, or | 3 Pie. |
| The Ceylon Challie | 1/12th of an Anna, or | 1 Pie. |
Quarter cent pieces were introduced on September 14, 1872 2. Proclamation of March 17, 1874, demonetized the fanam, stuiver, and challie.
19. He-establishment of State Note Issue.
The Sterling Notes issued by ,Government in 1827 were withdrawn as from 1856, the Kachcheries being permitted to accept notes issued by the Oriental Bank Corporation in payment of Government dues. This bank failed on May 3, 1884, due mostly to speculation, and the Secretary of State rather reluctantly gave his approval to the re-establishment of a Government Note Issue expressed in rupees. The present issue is regulated by Ordinance No. 32 of 1884 ,(Appendix L.)
20. Introduction of a local subsidiary silver coinage. Proposal to demonetize Indian Small Silver.
On December 19, 1889, the Legislative Council adopted a resolution as follows :- "That the Government do take steps to remedy the inconvenience and loss sustained by the public, especially the poorer classes, by the anomalous position in the currency of the Indian 2 anna piece".
In view of the fact that the Government of India would not mint its own ;small coins for export without limit, and the anomaly of having for a decimal coinage coins of 25 and 12½ cents, and the condemnation by the Legislative Council unanimously of the silver 2 anna piece the Executive Council recommended the demonetization of the Indian silver pieces of 2, 4, and 8 annas and the introduction of a complete subsidiary silver coinage.
21. Legal tender limit and fineness of the proposed coinage.
As regards the limit of tender and the fineness, the Auditor-General and the Treasurer observed that the reason for preferring a low touch to a high one was that ,coins of a low touch stood the ordinary wear and tear better; and further, the lower the touch the larger would be the profit to Government; but on the other hand the lower the intrinsic value of a coinage the greater would be the temptation for fraud by counterfeiting. In view of the fact that the limit of legal tender would depend on the fineness of the coins they did not consider any limit necessary if the fineness was, like the Indian small silver, the same as in the rupee (i.e., 916.6). But if the lower fineness of four-fifths was to be adopted as in the case of the Straits Settlements and Mauritius, they suggested a five rupee limit. In these circumstances, it was decided to propose a 4/5th fineness and a legal tender limit of five rupees for the Ceylon subsidiary silver coinage.
The Financial Advisers to the Government were of opinion that these changes could be effected by a local enactment, and they further proposed that the rupee of Portuguese India should also be legalized as it was legal tender at Tuticorin. The Secretary of State, however, pointed out that as these proposals would affect the Order in Council of June 18, 1869, an instrument assented to by the Queen was necessary, and he agreed to take the necessary steps to give effect to the proposals. The Government of India whilst having no objection to the changes proposed stated that the Indian half-rupee was not a subsidiary coin but full legal tender for any amount, and that it was willing to mint the required silver coins at Calcutta provided they were of the rupee standard of 11/12th fineness and not of a lower touch. The proposal to demonetize all the Indian small silver coins was therefore modified, as it was felt to be inadvisable to dispense with the Indian half rupee, a coin which was full legal tender. It was also urged that the demonetization of the silver 4 and 8 anna pieces would seriously inconvenience the holders of these coins in Ceylon, especially the poor and illiterate villagers, and cause hardship to the Indian immigrants proceeding to Ceylon. As regards the silver 2 anna piece, however, in view of the unanimous vote in the Legislative Council condemning it, it was decided to withdraw it, and issue in its place a silver coin of the value of 10 cents; also to retain the Indian ¼ and ½ rupees concurrently with the proposed new 25 and 50 cent pieces, leaving the local coins of lower touch to oust the Indian coinage of higher fineness. The silver 2 anna piece was accordingly abandoned in 1891.
22. Order in Council issued. The Lords Commissioners of the Treasury approved these proposals and an Order in Council dated February 6, 1892 (Appendix E), was issued rescinding the Order in Council and Proclamation dated June 18, 1869, and repealing "all such Colonial laws and all such proclamations whether issued by Her Majesty or by the Governor, as regulate legal tender in the Colony other than the Paper Currency Ordinance, 1884", and declaring inter alia that
(i.) The silver rupee of British India of the standard weight of 180 grains (11.664 grammes) and millesimal fineness of 916.6, the least current weight being 176.4 grains (11.431 grammes),shall be the standard coin of Ceylon and its dependencies; and that the silver rupee of Portuguese India having the same weight and fineness shall be treated as equal to the standard Coin 3.
(ii.) (a) Subsidiary coins may be from time to time coined for the Colony under the direction of the Master of the Royal Mint or at one of Her Majesty's Mints in British India of the denominations, weights, and fineness specified below, each coin to be a legal tender for the amount of its denomination :--
| Coin. | Metal Millesimal Fineness. | Standard Weight. | Remedy Allowances. | ||
| Grains | Weight per piece | Millesimal Fineness. | |||
| Grains | |||||
| 50 | Silver 800 | 90 | 0.630 | 3 | |
| 25 | 45 | 0.315 | 3 | ||
| 10 | 18 | 0.18 | 3 | ||
| 54. | Copper or Mixed Metal | 291.6 | 7.29 | None | |
| 1 | 72.916 | 1.82 | |||
| ½ | 36.458 | 0.91 | |||
| ¼ | 18.229 | 0.46 | |||
(b) Each of the following Indian silver coins to be legal tender as shown below :
| Coin. | Metal Millesimal Fineness. | Standard Weight. | Least Current Weight. |
| Grains | Grains | ||
| ½ Rupee or Eight anna | Silver 916.6 | 90 | 88.2 |
| ¼ Rupee or Four anna | 45 | 44.1 |
½ rupee and ¼ rupee to be legal tender for cents 50 and 25 respectively.
(iii.) Provided that the coins have not been illegally dealt with, and provided that, in the case of silver coins, such coins have not become ,diminished in weight by wear or otherwise so as to be of less weight than the weight (if any) specified as the least current weight, they shall be a legal tender :
(a) in the case of rupees, for the payment of any amount;
(iv.) If the Governor from time to time requests any new coins of less -value than the rupee, whether of silver, copper, or mixed metal to be coined and the Commissioners of the Treasury approve, these new coins may be coined at one of the Mints mentioned above, and such new coin may be of the same denomination as any existing coin, or of a different denomination ; and, if of silver shall be of the same fineness as the existing silver coins, and of a weight bearing the same proportion to the weights {)f the existing silver coins as the denomination of the new coin bears to the denominations of the existing coins.
(v.) A coin shall be deemed to have been illegally dealt with where the coin has been impaired, diminished, or lightened otherwise than by fair wear and tear, or has been defaced by having any name, word, or device, or number stamped thereon, whether the coin has or has not been thereby diminished or lightened. 5.
(vi.) This Order shall come into operation on the 1st day of July, 1892, and may be cited as "The Coinage (Ceylon) Order, 1892".
The Order in Council was proclaimed on June 23, 1892, to take effect from and after July 1, 1892, but the delay in the arrival of the new coins, viz., silver 10, 25, and 50 cents, necessitated the date for its operation to be altered to October I, 1892, by an Amending Order in Council dated June 28, 1892, published in Ceylon on July 21, 1892.
23. English Copper too disappear.
With the proclamation of "The Coinage (Ceylon) Order, 1892", the English copper which had been current in the Island since the beginning of British rule also ceased to be legal tender.
During the period 1870-1892, 41,014,143 one cent pieces and
32,328,000 half cent pieces were obtained from the Royal Mint. All the
coins supplied on indents from 1870 to 1889 appear to have been dated
1870.
Ceylon Currency British Period 1796-1936 By B. W. Fernando, Chapter III.
1939, Ceylon Government Press p.8-13
Contents Next Chapter IV