HISTORY. Subject : History (For under graduate student) Topic No. & Title : Topic 4 Trade, Commerce and the Monetary System

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1 History of India Page 1 of 11 HISTORY Subject : History (For under graduate student) Paper No. : Paper III History of India Topic No. & Title : Topic 4 Trade, Commerce and the Monetary System Lecture No. & Title : Lecture 3 Mughal Monetary System Introduction After the end of the Sultanate era the Indian coin system fell into disarray. Sher Shah tried to revitalize it; Babur and Humayun also tried to introduce some reforms. However the reign of Akbar ushered in a new era. Akbar not only introduced new coins made of gold, silver and copper but also set up new mints; brought in uniformity and introduced an appropriate monetary policy. So it can be said that the Mughal coin system including its spread ad quality was no accident but a result of long term planning and meticulous execution.

2 History of India Page 2 of 11 A particular feature of the Mughal coinage was that it was of very uniform standard and of very high quality. The Mughals had introduced certain new coins but they did not leave behind absolutely the coins of the predecessors. The Mughal coinage system had evolved through a large number of experiments running over long years. The Mughal coinage system has been acclaimed as one of the best in the world during the Medieval Period. So it is necessary to understand a little of the experiments made by the Mughals and how this uniformity and high quality were maintained by the Mughals and the results of the increased issue if the coins during the end of the 17 th and early 18 th century. Sher Shah s Coin Before Sher Shah s reign the principal coinage of the Delhi Sultanate was Sikandari. Initially it was made of unalloyed silver but gradually it became highly debased with copper and bronze. At the time of Sher Shah, the principal coin had become one. It was mainly of copper although earlier it was the silver rupee or tanka but it had come down with alloy of copper and bronze so much that it practically became a copper coin. This

3 History of India Page 3 of 11 was called the Sikandari. The earlier one, the silver tanka of the Sultanate, just before Sher Shah, was called Dehliwala. Sher Shah suppressed Dehliwala because practically it was of no use and the Sikandari continued but Sher Shah started a new coin called the Rupee or the Rupaiya. At the same time he reorganized the copper coin and it was called Paisa. So the rupee/ rupaiya was the silver coin and paisa was the copper coin. The coinage of Sher Shah therefore constituted of two metals and it continued during his successors. In 1526 Babur introduced coinage compatible with Asian standards. The silver coin he introduced was called Shahrukhi. It was bigger in size than the coins then in vogue but thinner at the same time. Babur had seen such coins while he was in Kabul. It was in vogue till Humayun s exile was in After coming back in 1555, Humayun found that there were several kinds of coins prevalent in India. The one called Shahrukhi was already there prevalent in Punjab and Kabul region. There was the rupee/ rupaiya which was in Delhi or northern India and there was also the copper coin (paisa). The Lodhis (before the Surs had come) only had one mint at Delhi. Sher Shah had established mints at various places

4 History of India Page 4 of 11 two in Bihar, five in Bengal and several in northern India. So he had a large number of mints and historians had often wondered why there was a sudden increase in the number of mints between the Lodhis and the Surs. Akbar s Coin With Akbar s accession to the throne he continued with the system of coinage introduced by his predecessors. During his reign there were coins made of silver known as rupaiya and those made of copper called paisa. Akbar later modified the system introduced by Sher Shah. Akbar made a slight modification of the policy of Sher Shah. Sher Shah had increased the number of mints; with mints there was increase in the number of coins. But there was no particular policy behind the increase of the number of mints. But Akbar now had a particular policy. His policy was that every province should have one mint, every big city should have one mint and every administrative centre should have a mint. So Akbar s policy in short was increase the number of mint as much as possible. At the end of the reign of Aurangzeb the number of mints of the Mughal Empire had increased to new heights which could not be reached by the successors of Aurangzeb.

5 History of India Page 5 of 11 Akbar s coin, the rupee, was a round one. It weighs one 178 grains of troy, which was the standard. There was an alloy mixture of 4% of bronze or copper. Aurangzeb increased it to 180 grains of troy but the mixture continued. Jahangir started two new silver coins which were far heavier but these silver coins did not last long and they had to be abandoned. During the time of Aurangzeb not only the number of coins increased but also the number of mints had increased. So there is an evolution of the Mughal coinage system from Babur to Aurangzeb from Shahrukhi to Rupaiya. No gold coin has been found dating beyond 1530 the year of Timur s attack. Sher Shah is known to have minted some gold coins. However they were not for circulation but mainly for commemorative and ceremonial purposes as also for hording and luxurious spending by the aristocrats. Akbar later introduced gold coins and established 4 mints to produce them. Akbar s Copper Coin Akbar continued that policy. In 1577, he started minting gold coins not necessarily for commemorative and ceremonial purposes but wanted them to continue. Four mints were

6 History of India Page 6 of 11 established in the Mughal Empire and they produced gold coins. But the gold coins were mainly used by the aristocracy and nobility for hoarding underground or for their own personal luxurious spending. Therefore in 1577, for the first time (if we take the circulation of gold coins as valid) the Mughal coinage system is based on three metals gold silver and copper. Silver was the most predominant of all the coins. But for a time copper held the field, particularly during the time of Akbar. During the whole of Akbar s reign the principal coins were made of copper called Dams. These were rather heavy coins weighing 330 grains of troy. These were not inscribed with religious symbols or a ruler s name. The Persian inscription mentioned only the year of issue and the name of the mint. Dam was the principal medium of transaction used even for the purpose of revenue collection, payment of salary and settling other imperial transactions. Abul Fazl in his Ain-i-Akbari had given a list of Mansabdars getting salary or other officials getting salaries. They were all paid in copper coins- Dam. Even the revenue figures that Abul Fazl had given were given in copper coins. There is no mention of rupee. The reference of the rupee for the first time

7 History of India Page 7 of 11 is seen in in the Mughal document. It was only a passing reference. One may presume that at least till 1600 (Akbar died in 1605) the copper coin i.e. the Dam was used as money of account as well as the money of payment. Coin System in Bengal In Bengal it was a little different. In Bengal there was the tanka or the silver coin (rupee) and then there were the sea shells called kauris. The reason is that in Bengal the prices were far lower than northern India. Therefore for the ordinary people for marketing it was much better to pay in kauri. One kauri is practically nothing if we compare it because 2500 kauris made one silver tanka. One can understand the price prevailing in Bengal in those days. From the time of Shah Jahan, copper mixed with silver called Ana started in Bengal which was 1/16 th of a rupee. It became quite popular by the end of Shah Jahan s reign and continued ever since. But in Gujarat there was another kind of coin called Mahoumudi. After 1600 this Mahoumudi was replaced by Rupee. After the conquest of Golkonda and Bijapur by Aurangzeb, their coinage was suppressed and

8 History of India Page 8 of 11 Rupee replaced them. The coinage of Golkonda and Bijapur was called Hun. Therefore the Mughal coinage spread quite slowly throughout India but very fast if we look at the Mughal Empire itself. The particular feature remained that it was of very high standard and quality and totally uniform. Inscriptions on the Coins The coins introduced by Akbar differed in some respects from those introduced by Sher Shah. While Sher Shah s coins had Arabic and Devnagiri inscriptions Akbar s coins had inscriptions in Arabic only. Akbar s coins (the silver and the gold) have in the obverse i.e. in the front Arabic scripts the name of the Khalima and the names of the four companions of the Khalifa. On the reverse there was the name of the king, the name of the mint and the year of the issue. In case of the copper coins the name of the king is not mentioned. But this is a departure from the days of Sher Shah. In Sher Shah s rupee/ rupaiya, there were two scripts simultaneously used in the same coin Arabic and Devnagiri. But Akbar did not use Devangiri. In certain coins in the mint of Joanpur which had a very good influence of the

9 History of India Page 9 of 11 Safavid Dynasty of Persia, he has used Persian. In copper coins Persian was used because this was considered to be the coin of the ordinary people who do not know much Arabic. The coinage system during Akbar s reign evolved over a period of time through trial and error. If one wants to ascertain the reason behind the large quantity and the high quality of these coins, one will have to understand the structure of European coinage of the 16 th and 17 th centuries. Import of precious Metals In the 15 th and the 16 th century the Spanish people had gone to South America Peru, Mexico, Brazil, and had taken away lots of bullion of gold, silver and copper from their mines to Europe. This amount of precious metals imported to Europe caused change in price in Europe itself which has been termed by historians as Price Revolution. The Spaniards used to put gold, silver and copper in the Port of Cadige and the merchants used to buy these gold, silver and copper and take them to Asia and India to buy commodities and goods. From the 17 th century the East India Company also followed this practice. So there were several ways of gold, silver and copper of South America coming to India via Europe. In the

10 History of India Page 10 of 11 Middle East there was a port called Mocha where the Indian merchants used to go, sell their cloth and other products in exchange of gold, silver and copper coins or even bullions. This is why the Port of Mocha is called the Treasury of the Great Moghuls. Foreigners accounts and also domestic sources maintain that India began importing large volumes of gold and silver from the later half of the 17 th century. These were used in the Mughal mints for producing high quality coins. But the exact volume of import of precious metal and bullion or production of coins remain debatable. One foreign traveler stated that by the end of the 17 th century the foreign and precious metals in the shape of coinage, bullion had come to the amount of one hundred crore pound which is quite fantastic. There are two articles on this - one by Nazaf Hyder of Delhi University and the other by Shireen Moosvi of Aligarh Muslim University. Nazaf Hyder and Shireen did not have much difference so far as the import of the precious metal is concerned. They stated that the importation was something like 30.6 metric tones per year. But the issue of the Mughal coinage had a difference. Nazaf Hyder did not give less than 80.6 which is different from Shireen Moosvi. So

11 History of India Page 11 of 11 the controversy has not yet been settled. But it shows the importation of precious metals went largely to constitute the basic element of the coinage of the Mughals during the 17 th century. The promissory note In this coinage there are certain other associated elements. There was the paper credit called Hundi or in Persian Surfa. This was a kind of a promissory note given to a person promising to pay a certain sum of money at a certain time at a certain rate with a small discount. There was also the banking system. The Mahajans used to accept a deposit of money and gave interest. They also gave loans on interest. There was also the insurance in which money was used to a great extent. So in case of the history of the monetary system of Mughal India, the inflation did not become particularly heavy due to increase in trade and commerce, urbanization and due to the increased production and demand for goods. But it did help the Mughals to establish themselves on a solid basis.