A History of Indian Paper Money
Government of India" Notes
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The idea of issuing paper currency by the Government was promulgated by Sir James Wilson, the Finance Member in the Executive Council of the Viceroy, in 1859. It was adopted by his successor Samuel Laving in 1861, with substantial changes which ultimately made the issue of currency notes quite rigid in its structure. Accordingly, an act was passed in 1861, empowering the Government of India to issue currency notes. It also provided for establishing the necessary bureaucratic setup for effective functioning of the issue, circulation and encashment of the notes.
By the provisions of this act, certain "circles" were established for the issue of notes. These circles had sub-circles under them. The post of Circle- Commissioner was created to supervise the issue of notes within the circle; and the Supreme Commissioner of Issue, reporting to the Finance Member, was to be responsible for the issue of notes in general. The number of these circles varied over the successive years. Initially, the notes issued in a particular circle were not circulated in another circle, and their encashment was possible only at that circle or a sub-circle office under it.
The first notes issued under the act of 1861 bear the portrait of Queen Victoria in the top left corner. The notes were printed in England on a watermarked paper. The watermark incorporated signatures of Lord Canning, The Viceroy and Samuel Laving, the Finance Member. The known notes are issued by the circle of Calcutta (with sub-circles at Allahabad, Lahore and Nagpur), Bombay and Madras. These notes are extremely rare. Their denominations range as 10 Rupees, 20 Rupees, 50 Rupees, 100 Rupees, 500 Rupees and 1,000 Rupees. They bear the signature of the Commissioner of issue. The notes issued at a sub-circle also have an endorsement by the subordinate commissioner.