Currency: The Indian dollar
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Currency: Indian dollar
How dollar was almost issued by India once
There are many reasons why the dollar is distinct, it has enduring value. A specimen from 1863, issued in the middle of the American Civil War, would be better off in a collection, but it would be technically useable, which is hardly the case with other countries which have changed currencies for reasons like inflation, integration (the European Union), independence and decimalisation.
That last reason was historically another reason why the US dollar stood out among major currencies for being decimal, right from the start. When parts of the British Empire like Canada, Australia and New Zealand abandoned British pounds sterling for a more rational decimal currency, they all ended up choosing to call their currency the dollar.
It could have happened in India as well. Decimalisation was always planned after Independence and before it finally came, in 1957, the government did consider, not an Indian dollar, but a rupee divided into 100 cents. Even before this, there actually were fairly advanced plans for an Indian dollar, though this was not in the context of decimalisation, but the coin shortage during WWII.
"The Government proposed to issue an Indian 'Dollar', worth two rupees eight annas, as a measure to economise on the production of metallic one rupee and eight annas coins," explains Shailendra Bhandare, assistant keeper (South Asian Numismatics) at the Ashmolean Museum in Oxford.
Bhandare, who is one of the foremost experts on Indian coins, says the dollar plans were at quite an advanced stage when, inexplicably, they were dropped. The few Indian dollars actually struck, with an Urdu inscription reading 'Dhai Rupiya', were never formally issued, but are still among the rarest specimens for collectors of Indian coins. Malcolm Todywalla, of Todywalla Auction House, specialist coin auctioneers, says that the last time any came up for sale was around 10 years back.
"Today one of those Indian dollars would easily fetch around Rs 15 lakh," he says. This was not the only time Bombay Mint struck dollars. Much earlier, from the end of the 19th century, the British had struck what were known as 'trade dollars', to be used solely in the Far Eastern trade. Silver dollars were struck in the Bombay and Calcutta Mints right up to 1935. These trade dollars are, in a sense, the precursors of the dollars of Singapore, Hong Kong and Brunei.
The more surprising story though, and one which takes us back to the origins of the dollar, is of the Maria Theresa dollars struck in Bombay. The Maria Theresa dollar is one of the world's most famous coins, mostly because of its strange after-life.
The story starts in 1519, when a European nobleman, the Count of Schlick, started making coins from a silver mine he owned in a place called St Joachimsthal, now called Jachymov, in the Czech Republic. St Joachimsthal coins, which stood out for their large size and good quality, were called Joachimsthalers, shortened to thalers or dollars. They became so popular that others started making similar coins.
The India connection with thalers started when the Habsburg Empress Maria-Theresa, who ruled from 1740-80 and was the only female Habsburg ruler, decided to mint the best possible coins, partly because when she came to the throne it was almost bankrupt. In 1753 Maria-Theresa signed one of the first European treaties to deal with coinage, precisely defining the purity of the thaler and its exchange rates. The coins were also elaborately designed, showing the well developed profile of the Empress.
It is one of the jokes about the Maria Theresa thaler (MTT in the coin trade) that one reason it became so popular in Arabia and Africa was because of her ample bust. More prosaically, the abundant details made it more recognisable, but the real reason for its use was its quality and availability. MTTs poured into Arabia and North Africa for trade in coffee and other commodities like incense and horses, and they recirculated from there.
Austrians, realising that the value of the MTT lay in its recognisability, continued to mint it unchanged even after Maria Theresa's death in 1780. The MTT was no longer currency now, but a form of bullion. So, anyone could issue them as long as they stuck to exactly the same design and standards.
Bhandare says that one person who realised this was Antonin Besse, a colourful French entrepreneur who had amassed a vast fortune in Aden, (one of the many young Indians employed by him was a certain Dhirubhai Ambani). "Besse persuaded the Royal Mint to undertake striking and exporting the coins," says Bhandare. "Between 1936 and 1941, over 14 million were struck at the Royal Mint."
Other mints, in Paris, Brussels and Utrecht, also got in on the MTT trade. But all this trade ran into difficulties when the start of WW II made transport of such valuable cargo increasingly difficult. So the British turned to Bombay, since it seemed to be the safest mint, furthest from both the Western and Eastern theatres of the War.
"Between 1940 and 1942, the Bombay Mint struck 19 million MT Thalers!" says Bhandare.
Quite a few came into India where, not surprisingly, Maria Theresa was mistaken for Queen Victoria, much as that might have shocked that far more prudish queen. And even though production ceased after the WW II the MTT posed a policy problem well in the 1960s.
That was when Bahrain launched its own currency, going off the Indian rupee which it had used till then. The government of Bahrain had deposited foreign currency reserves with the RBI against the use of the rupee and now wanted this money back. "Bahrain chose to specify the amount in MT Thalers rather than any other 'hard currency'," says Bhandare.
It is not clear if the RBI actually supplied the MTTs, but since the mint presumably kept the dies it probably could have made more. Which leads to an interesting thought: the story of the MTT shows how a currency can, if needed, be used far beyond the boundaries of the country that first produced it.
Just like the US dollar. It's the currency used in the US, but it's the global trade currency, fairly independent of its US use. This second factor is probably why it will continue to be in demand, no matter what US politicians might do to it. But if by chance things become so bad that the US dollar really does lose its demand, perhaps the Mumbai Mint could dust off its dies and start striking Maria Theresa dollars once again!