Author Topic: 1939 India One Rupee Coin- write up by Sanjay C. Gandhi  (Read 3094 times)

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Offline Harry

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1939 India One Rupee Coin- write up by Sanjay C. Gandhi
« on: April 27, 2012, 06:14:37 AM »
I came across this very interesting write up on ebay. This was part of the description of a 1939 Rupee MS62 that is on sale on ebay US.  I got permission from the seller/author, Sanjay C. Gandhi (cranko),  to share his write up on WOC. So here it is. Its very long but it is packed with information, facts, assumptions and Sanjay’s personal opinion.  Interesting...

-1939 India One Rupee Coin- By Sanjay C. Gandhi (ebay id: cranko)

 There are many stories surrounding the 1939 India One Rupee coin, and nobody knows what to believe including myself. Some stories have been made up with a mixture of slight truths, and half truths. I have gathered facts, fallacies, supporting data, and my own arguments to provide a clearer picture of what probably is closer to the truth for this dated coin. I believed many of these "facts/stories" at some point in time because it's all I could find. But slowly these so called "facts" didn't make sense to me. Nobody took the time to do a comprehensive work for this specific date, and the same false/innocent ignorant stories have been circulating for many years. Maybe some have known these facts, but never shared their thoughts with anyone but a few. Maybe free range chickens prefer a 401k plan, dental plan, full hour lunch break, and health benefits before they become a Burrito at Chipotle Mexican Grill. Who knows? A majority of the following data has been available since 1975 which Pridmore scattered like a puzzle in his works for an individual to draw on his/her own conclusions. 

Here are some fallacies I want to dispel immediately, but read on to get a clearer picture-

Fallacy : The 1938 dated Rupee coins were minted in 1938-

Argument : How is this possible if the finished Type II (Large Head or Low Relief) Obverse dies were not delivered to India from Great Britain until late 1939?

Fact : The 1938 Rupee coins were struck in 1940, and a small quantity of them may of been struck at the end of 1939. 

Fallacy : The 1939 dated Rupee coins were minted in 1939 throughout the entire year- 

Argument : How is this possible if the 1938 Rupee dated coins were the first to be struck in late 1939 or starting January 1940?   

Fact : The Rupee coin was approved for standard circulation beginning January 1940 by the British Government. The 1938 dated Rupee coins were the first to be struck in 1940, and the 1939 Rupee dated coins were struck thereafter.   

Fallacy : The silver shortage in September of 1939 which caused the price of silver to spike by 15% which was the cause or the recall for withdrawal of the 1939 One Rupee dated coin.

Argument : How is this possible if the 1939 dated Rupee coins were minted in 1940 or thereafter, and again the 1938 dated coins were minted before the 1939 dated coins in 1940? 

Fallacy : There were 2.2-2.5 million dated 1939 One Rupee coins struck for circulation-

Argument : If the above is true then where are all the coins today? Hoarded?

Fact : The mintage was a "planned" or "proposed" mintage by the Bombay Mint which was was common practice for many years.

Fallacy : The British government went to peoples homes to collect the 1939 Rupee dated coins in 1939-

Argument : Again. How is this possible if these coins were minted sometime in 1940?

 The British Government stopped minting the 1922 One Rupee dated coin in 1923 according to the mint records, and never authorized another one rupee coin for circulation until until 16-17 years later as an order issued by the British Government. Meaning that the British Government had not resumed production until January 1940 or late 1939 when the 1938 One Rupee dated coins were minted/released. The only reason new coinage resumed in 1939 was because of the increase in commerce in India from World War II. The majority of the 1938 One Rupee issue was minted in the year 1940, and "a small quantity 1938 dated coins were minted in the end of 1939" as noted by Pridmore. It was not possible to strike the 1938 rupee coin with the Type II obverse any sooner than late 1939 at the earliest date. I believe the 1938 One Rupee mintage was issued in it's entirety, but not true for the 1939 One Rupee dated coins. Consider some of the following data as well which may be above as well:


*Type I = First Head or High Relief obverse*

Type I obverse dies were only used for Specimen/Proof/Restrike/Presentation issues for the Rupee coin, and these dies were never used for the circulation Rupee strikes. These dies were sent to India in July 1939 by mistake, and had poor striking capabilities. 

*Type II = Second Head or Low Relief obverse*

Only Type II Obverse dies are used for the one rupee circulation coin, work commenced for the new dies in August 1939, and The Type II obverse dies were never delivered to India until late 1939 from England because they had to reworked. Possibly some of the 1938 rupee mintage was struck after these dies were delivered late in 1939.


Earlier I mentioned "planned" or "proposed" mintages. Let's look at the following mintages:

1938 Calcutta 1/2 Pice     11,161,000
1911 Bombay One Rupee  4,300,000
1911 Calcutta One Rupee  5,143,000

 The 1938 1/2 Pice was never minted for circulation, and they are found in proof/restrike issues only. Meaning the mintage was "planned" or "proposed". Why wasn't the 1938 1/2 Pice struck for circulation? Answer : Nobody knows. We do know that everyone that was alive in 1911 who had first hand knowledge about the 1911 Rupee is dead. Anyways, it's purported that 700,000 pieces were released, the remainder sitting in treasuries melted, and withdrawn. The minting for the 1911 One Rupee coins started in July, and were delivered to both Calcutta and Bombay banks in the meantime for distribution before December 12th 1911 for public release. My point is that in a period of 5 months they minted 700,000 pieces, the rate minted per month we don't know, and this was work by two mints working in conjunction with one and other.

 Both mints started production 5 months ahead of the official public circulation/release. Now this implies that 1911 coins were going to be continued be minted well into 1912, and the mintages were known well in advance. Hence the above mintages would be "planned" or "proposed" for both 1911 B and 1911 C coin equaling roughly 9.4 million. January 23rd 1912 the 1911 Rupee dated coins were officially withdrawn from circulation as ordered by the British Government because of a merchant mutiny against the newly minted coins, and rumors that were spread by the merchants themselves. But, that's another story for another time, and 1911 Rupee coins are somewhat readily available in present day. People probably did save these coins as souvenirs because this was the first year of a new design supposedly controversial, and they may of started hoarding what was being withdrawn. It's easier to want something more when someone wants to take it away from you. "Proposed" or "planned" mintages were common practice in the past, and for many years to come. Could this have changed in any year? Absolutely.

 January 1940 is when the 1938 One Rupee dated coins were officially released into circulation by the Bombay Mint. I believe the entire mintage was minted for the 1938 Rupee, and the Bombay Mint transitioned into the 1939 One Rupee dated coin briefly. The British government had not minted a circulation One Rupee coin for almost 17 years. A majority of the 1938 One Rupee dated coins probably were melted/withdrawn from circulation before the official news announcement was made almost at the end of 1940 reducing the fineness of silver coinage to .500 Remember what the people in 1911 did? : They hoarded the Rupee coin, and they probably did the same thing with the 1938 One Rupee dated coin. Which does sort of explain why so many of them are available today, and even the window of opportunity to hoard the 1938 One Rupee dated coin was greater than the 1911 One Rupee dated coins. Many of them landed into the hands of hoarders, and some of them never made it back to the Reserve Bank of India.

 Citizens of India preferred hard assets as opposed to paper money hence the hoarding. The people wanted something tangible in hand. To combat hoarding the government issued the following rule in late June of 1940:  "A rule was made by the British Government under the Defense of India act making it an offense for any person to acquire coins in excess of his personal or business requirements and providing that in cases of doubt the judgement of the Reserve Bank or it's duly appointed agents as to what constitutes the reasonable requirements of on individual should be conclusive." There was an ordinance passed one month later to "issue and put into circulation 1-rupee notes. The law provided that these should be treated by the Reserve Bank in its account exactly as if they were rupee coins." as written by Dick H. Leavens. Between the dates of March 31st 1940 (close of the financial year) and July 26th 1940 the Reserve bank's statement showed an increase of 90,000,000 "rupee coin". But more than likely these were One Rupee notes dated 1940 introduced to combat this hoarding practice but people had little faith in paper, and it was just paper in the minds of the average citizen. The government was also going off of the .917 silver fineness standard slowly but surely, and was moving to a .500 silver fineness (Quaternary alloy) for the 1/4 Rupee as it's first step. If the government knew they were going to a .500 fineness standard for silver coinage, and made the first announcement in March of 1940. Why wouldn't they do it for the rest of the denominations that contained .917 silver? They did so with the following proposed dates:

March 11th 1940 1/4 Rupee fineness reduction
July 24 th 1940 1/2  Rupee fineness reduction 
December 20th 1940 One Rupee fineness reduction

 At some point in time during the month of July 1940 the entire 1938 One Rupee dated coin mintage was completed, and the Bombay mint started striking the 1939 One Rupee coins. This was a very short lived striking in July that was abruptly halted possibly by the order sent by the Royal Mint to reduce the fineness for the half rupee on July 24th 1940, and the injection of One Rupee paper currency notes dated 1940. Keep in mind there was the rule issued at the end of June 1940 by the British Government to combat hoarding coins by the citizens of India as mentioned above. Indians never forgot what happen in 1918 when there was a threat of a massive silver shortage, and the United States sold/shipped India 200,000,000+ ounces of silver via the Pittman Act. The United States sold this silver to India because citizens were trading in paper currency to the Reserve Bank of India for hard assets (specifically silver). The silver on hand was not enough to quell the demand, and The Reverse Bank of India would of run out of silver in a few months time because of demand. Nowadays USA collectors that cannot fulfill holes within their silver dollar collections can blame India or the British Government for the 260,000,000 Morgan Dollars that disappeared from circulation via the Pittman Act.

Damn Brits, and Damn Hindustani Hoarding Indians. What? I try to be politically correct. Sometimes-

 The Bombay mint had probably minted a very small quantity of 1939 One Rupee dated coins that were more than likely mixed in with the 1938 One Rupee dated coins entering circulation. I believe that the 1938 One Rupee dated coins were finished being minted sometime in July of 1940, the mint started minting the 1939 One Rupee dated coins, the paper currency injection came to frution, and the order came to reduce the fineness for the half rupee to .500 silver for the rupee going forward was soon to come officially. At the same time I think the decision came to stop the .917 fineness for the One Rupee 1939 dated coins going forward before the official date, and suspended minting the 1939 One Rupee dated coins. We know that one 1939 Security Edge Rupee survived from the supposed specimen mintage of 5 coins as noted by Pridmore, and these were "trial" pieces struck by the Bombay Mint.

 The 1939 Security Edge One Rupee coin found was in VF condition, and it had survived many years of wear before somebody pulled it from circulation. The mint was seven months into the year 1940, and making One Rupee coins dated 1939 in the new alloy with the security edge would further delay the arduous task of producing the planned mintage of 150,000,000+ 1940 One Rupee dated coins. Which by the way was the most massive planned mintages for a One Rupee coin since 1920. So the Bombay Mint may of actually tinkered with the idea of producing the 1939 One Rupee dated coin for standard circulation with a security edge, and then abandoned the idea. Man Alive there is a lot of stuff going on in July 1940 at the Bombay Mint! Most examples we see of the 1939 One Rupee coin is the "Reeded Edge" coin which is generally found in XF/AU (American standard grading) or poorer quality. The order to reduce the 1/2 Rupee silver fineness came so why wouldn't come for the one Rupee coin?  We are at a crucial transitory period going from .917 fineness to .500 fineness. If the planned mintage was 150,000,000+ for the 1940 One Rupee dated coins then the Bombay Mint had to get off it's laurels to mint it's proposed mintage.

 The Bombay mint liked to work with planned mintages as evidence shows from the past. In order for the mint to produce 150,000,000+ million One Rupee coins dated 1940 would arguably take some time to say the least. They would have a good 12-13 months for production, and some of these coins needed to be ready before the official order was released on December 20th 1940 for fineness reduction. Whatever 1938 and 1939 One Rupee dated coins had been minted were probably withdrawn from circulation over time up until the withdrawal order dated December 20th 1940, and thereafter as well.

 I think the 1939 One Rupee dated coin was struck for one or two days at the most. I can never prove unless I have some concrete mint records or I use Marty McFly's DeLorean from the movie Back to the Future to go back in time. But, if more were struck then I ask : Where are they? Are they hoarded? Still? They could be hoarded. They did circulate, and circulated for many years until slowly the coins migrated to the Reserve Bank of India's treasuries where they were withdrawn from circulation with all the other .917 silver fineness coins. It was easy to identify what was .917, and what was not. Anything with a reeded edge was .917, and anything with a security edge was .500 This may be the only reason a 1939 Security Edge Rupee survived the silver melts. Those coins that had the security edge were easier to identify to keep them circulating through the Reserve Bank of India's monetary system, and whatever didn't have a security edge was melted/recoined.

continued on the next post....
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Offline Harry

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Re: 1939 India One Rupee Coin- write up by Sanjay C. Gandhi
« Reply #1 on: April 27, 2012, 06:16:10 AM »

part 2. continued from previous post ....


 I have seen a few examples myself of the 1939 One Rupee dated coins, most of the coins from my experience were Almost Uncirculated (including cleaned examples) or UNC condition. I always wondered why the reverse was noticeably shinier than the obverse or exhibited a semi proof like finish. Why didn't the obverse compliment the reverse? This does not mean that all 1939 dated coins will exhibit these qualities in AU grades, and I have seen business strikes as well without the shiny reverse. I've also seen a coin or two in my hands that have noticeable tight polished lines or "die lines" on the reverse, they were very fine and fairly vertically uniform, and not so raised. Is this a characteristic of a newly prepared die? I'm not sure. But, if we do see these characteristics on Au or better 1939 One Rupee dated coins it could point to a very limited striking. Maybe even less than I propose below.

 The reverse die was poorly engraved or poorly prepared to provide full strikes suggesting a number of possibilities, but they still had to be polished/prepared producing a better proof like surface on the reverse than the obverse during the first few hundred strikings. Even some of the cleaned examples will show these qualities because the reverse didn't need to be cleaned! The reverse could sustain much more wear than the obverse because of the finish, and the obverse was frozen for four dated years : 1938, 1939, 1940, and 1941. Many collectors will recognize for the previous dates that the obverse for this One Rupee series is always struck with more detail than the reverse with the exception of 1941 being a reworked reverse.

 I've also noticed a tiny raised diamond test mark on the reverse of the 1939 One Rupee located between the "N" and "D" within the word "I N D I A". The Bombay Mint used these marks that were incused into the die to test the hardness of the die from 1936, and onward sporadically. They also used them on some restrikes in different positions, and places. I found the diamond mark on the 1939 dated One Rupee coins in three different positions: one dead in the center between the "N" and "D", one nearing the "D" close to the top, and the last one like the last one but further away from the "D". Confused by that last bit of the sentence? I was, and then I read it again. These test marks suggest that there were at least three working reverse dies from only what I have seen or experienced. Sooner or later the test mark would disappear as more blanks passed through the die unless it was "freshly" etched. It's hard to locate the mark with the naked eye unless the pictures are really big, and even then it could be difficult to locate. If somebody could determine the rate at which the diamond would disappear from the die it would shed some additional light on the actual mintage. But, we would still need to determine somehow how many working dies were being used to get an even clearer picture.

The diamond test mark would be near this position as noted with the asterisk without the aesthetic interruptions:

.ONE.
.RUPEE.
 .I * N D I A.
~1939~

The diamond test mark would look something like this sized about a third of a grain of iodized salt :


   

 British India Coins of India were always struck in the following manner : The reverse die is stationary, and the obverse die which is the moving part comes down on the planchette with many metric tonnes of pressure. From my experience the reverse is generally more defined than the obverse for the British India series. But that will not be true always, and especially for the 1938, 1939, 1940 One Rupee dated coins. The same design obverse dies that were used for 1938 One Rupee dated coins were used for 1939 One Rupee dated coins as well. I've found some 1938 One Rupee dated coins with a sharp diamond test mark located somewhere between the first "R" in the word "EMPEROR", and the back of King George's head nearing the center of his hair. The diamond mark can be in a number of positions within the "fields" or smooth surface of the coin, but are generally located within the area as described above. The 1939 One Rupee dated coins I have seen have had this test mark on every coin, in different positions, and they are all "mushy". Suggesting that it would have been very easy to leave the 1938 obverse die in it's place, replace 1938 One Rupee reverse die with the 1939 One Rupee reverse die, and resume production without a hitch. More than likely the same obverse dies that struck the 1938 One Rupee dated coins were used to strike the 1939 One Rupee dated coins as well. Shouldn't we see both diamond test marks having the same "newness" if the obverse/reverse were both newly prepared dies on a 1939 One Rupee dated specimen? I don't see any evidence on the pictured coin pointing to any polishing or re-polishing of the obverse die.

 I speculate that the actual number of coins struck for the 1939 One Rupee dated coin was between 7,500-10,000 coins, and the survival rate is 1%-2% What has survived today? 200 coins or less-


Here is what's graded by NGC so far up until 4/23/2012:

XF45  AU50  AU55  AU58  MS61  MS62  MS63
1       1        1         2         1         1        1

Here is what's graded by PCGS so far up until 4/23/2012:

  XF 45                       MS 64
 1                                1
 
In the last three years I have seen the population reports with numerical value/grades increase from NGC by 2 coins. There is an MS 64 graded by PCGS, and three coins graded by ANACS. In slabs there are around 14 that I know of total. This coin is a tough coin to get in general, and in the last 6 years there have been only 5 coins that were in AU+/UNC condition from 2006-2012 purveyed mainly by one auction house. Most of the UNC examples we have seen have been sold via auction in the last few years. I believe some Englishmen may have saved some examples as novelty, and those are the better examples we see nowadays. Not many but a few UNC examples made it to the USA coin market over the last few decades from across the pond. I know of at least three that have been in slabs: 61, 62, and 63 at NGC which have been in the population report for the last 5+ years. My point is that in the past six years I know of only 7-8 examples that are UNC coins. A few auction houses in India have sold an additional six examples which were in poor condition over the past 2-3 years. If you compare the poor quality examples sold in India to those examples sold abroad. The examples sold abroad were selling at incredible bargain prices because of the superior quality. There are only 14 public records for this coin in the last 6 years from the date this was written in April 2012. I don't know of how many have traded in private hands, but my point is that this coin does not show up very often. Because there are not "thousands" of them out there claimed by an auction house in India many years ago.

 If there are thousands of these out there in the marketplace, then why have we only seen 4-5 UNC examples publicly trade in the past 6 years? It sure as hell isn't because the price is low or there is no demand for the coin. The auction houses in India have been selling poor quality examples for many years now, and consumers have been buying them when available. That will change in due time since the collector/investor/hobbyist in India will demand better quality going forward. It always happens in a market that is growing, and maturing at the same time. The next few years may show us how many 1939 One Rupee dated coins are out there in the marketplace. Everybody wants to make money, and selling one of these coins would make you money. Depending on when you made your purchase, and if you want to sell. The question is who is going to sell first, and show us the demand curve? We'll just have to wait and see. In the meantime happy hunting a 1939 One Rupee coin, and if you don't own one. Feel free to "buy it now"!

Regards-   


*This information was cited from a number of sources:

Fred Pridmore: The Coins of the British Commonwealth of Nations, Dick H. Leavens (Rupee Circulation in India, The American Economic Review, Vol. 31, No. 1 (Mar., 1941) pages 87-90), Krause, Vikram Deshmukh, NGC, PCGS, silver-investor.com, Wikipedia, and Google.
   

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Offline brokencompass

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Re: 1939 India One Rupee Coin- write up by Sanjay C. Gandhi
« Reply #2 on: April 27, 2012, 06:00:57 PM »
This is a very detailed piece of research. Thanks for taking time to talk to Cranko to share it with us, Harry!
My goal for 2012 is to finish at the top of the NGC registry in the British India 1/4 anna and 1/12 anna categories. Any help with BU 1/4 annas and 1/12 annas is highly appreciated.
https://coins.www.collectors-society.com/registry/coins/MySets_Listing.aspx?PeopleSetID=130880

Offline Harry

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Re: 1939 India One Rupee Coin- write up by Sanjay C. Gandhi
« Reply #3 on: April 27, 2012, 09:01:08 PM »
This is a very detailed piece of research. Thanks for taking time to talk to Cranko to share it with us, Harry!

No problem.  I have  read this write up twice because there is so much Cranko gets into as he talks about a lot more than just the 1939 Rupee.  For example, I've always wondered why on earth was almost 250 million .917 silver Rupees produced around 1918/1919 - the highest ever production of Rupees within a span of 2 years, when at this very time there was a shift from silver to copper-nickel coins (8, 4 and 2 Annas).  Reading this write up seems to answer that question - there was a run on silver and banks couldn't keep up with the public's demand. To full fill the demand the British were forced to produce a very large amount of silver rupees which they did, and the silver came from the US via the Pittman Act.  I did not know this and found it quite interesting. See this short wiki on the Pitman Act http://en.wikipedia.org/wiki/Pittman_Act.  It even shows the amount that the US sold to Britain and at what price!

I also found the use of the security edge to detect .917 silver coin quite interesting. I guess when the Rupee coins were stacked up against each other bankers could very easily pick out the .917 coins from the stack by looking at the edges of the coin.
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Offline silverdollar

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Re: 1939 India One Rupee Coin- write up by Sanjay C. Gandhi
« Reply #4 on: April 28, 2012, 10:03:53 AM »
Nice and useful info harry... U spilled the beans of 1939 one rupee.

Offline villa66

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Re: 1939 India One Rupee Coin- write up by Sanjay C. Gandhi
« Reply #5 on: April 28, 2012, 02:52:39 PM »
...For example, I've always wondered why on earth was almost 250 million .917 silver Rupees produced around 1918/1919 - the highest ever production of Rupees within a span of 2 years....

Note also that the sharp rise in silver rupee production begins with the 1916 coinages, that is, when the war really gets rolling and coinage needs accelerate because of a quickening economy--or when the war really gets worrisome from a British point of view, and hard money seems more important than before. Seems like there's plenty of room for both assumptions.

Many thanks for the good information!

 ;) v.