"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 it’s 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.

The simple form of these notes led to instances in which forgeries were reported. Soon afterwards, the government decided to change the design substantially, incorporating better security features such as a green underprint denoting the denomination for the promise text, use of guilloche designs and alterations in the quality of the paper and the watermark. The watermark now incorporated a code which denoted the date of manufacture of the paper. The system of issue through circles and sub-circles was not changed. In fact, many more sub-circles were established. They were:            
                     Circle             Sub-Circle
                     Bombay         Akola, Karachi
                     Calcutta         Lahore, Allahabad, Cawnpur
                     Madras         Vizagapatam, Coconada, Trichinopoly
                     Rangoon
These revised notes are known in denominations of 5, 10, 20, 50, 100, 500, 1000 & 10000.

In the early 20th century, it was realised that paper currency was getting more and more popular. It was therefore desired that the rigidity afforded to the issue of notes be minimised. As a measure towards this end, notes were "universalised", i.e. the restriction on their encashment at the original circle of issue was removed. This was done in a gradual manner; the low denominations were universalised first, whereas the higher denominations of 100 and upwards were universalised much later. However, the names of the issuing circles was retained in these notes, in full or as initials. In about 1903, a new design with a red underprint was employed for the notes of 5, 10 and 50 Rupees.