The Demise of Gold Coins in India: A Historical Perspective

The Silver Standard in British India (Before 1945)

India, or more precisely British India, operated on a silver standard prior to 1945. The majority of coins in circulation during the British era were predominantly made of silver. Notably, 1 rupee, 1/2 rupee, 1/4 rupee, and 2 anna coins were all minted in silver. During this time, gold coins such as the 2 mohurs, 1 mohur, and 15 rupee were only minted in small quantities for ceremonial purposes. Due to the rarity and value of these coins, they were not widely used in regular transactions.

Introduction of Uniform Coinage in 1835

The British introduced uniform coinage in India in 1835. This marked a significant shift in the Indian monetary system, as previously, most of the coins in circulation were made of silver, and the silver standard was strictly followed. With the introduction of uniform coinage, it is likely that the use of gold coins gradually ceased.

Why Gold Coins Were Rare in Everyday Transactions

Gold coins were scarce and valuable, which made them unsuitable for everyday transactions. The bullion value of a British era silver rupee today is approximately Rs 700, a figure that is relatively easy to handle and spend. In contrast, a gold mohur would be worth around Rs 50,000 today, making it nearly impossible to use for regular commerce. This disparity in value meant that gold was not widely circulated as a form of currency in India.

Princely States and Local Coinage

Many Indian princely states continued to mint their own coinage during the British era. Examples include the states of Hyderabad, Kutch, Udaipur, and Baroda. These states often had their own unique coinage systems, with most of their everyday transactions being made in silver. This further underscored the limited use of gold in the Indian monetary system.

Conclusion

The demise of gold coins in India can be attributed to the shift towards a uniform coinage system introduced by the British in 1835, the inherent value and rarity of gold coins, and the adoption of silver as the primary metal for circulating coins. Today, these gold coins from the British era are considered rare collectibles, often valued in the tens of thousands of rupees.

References and Further Reading

For those interested in learning more about the history of Indian currency and the demonetization of gold coins, the following resources may be helpful: tHistorical Currency Research tIndian Monetary History tCoin Collecting Websites