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In My Opinion: The Enigma of the 1939 India One Rupee Coin


India 1939(B) Rupee SW-9.13 Reeded Edge, PCGS AU58. Courtesy of PCGS. Click image to enlarge.

There are many stories surrounding the 1939 India One Rupee coin, considered a rarity by collectors. Yet, nobody knows what data to believe, including myself. 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 highly coveted coin, which is highly sought after by collectors of British India coinage. I believed many of these “facts” and “stories” because it's all I could find with web searches. But slowly these so-called “facts” didn't make sense to me as they were presented. A majority of the following data has been available since 1975, when Major Fred Pridmore scattered much information, like a puzzle, throughout his book, The Coins from the British Commonwealth of Nations, Part 4, Volume 2, Imperial Period 1858-1947.

Here are some fallacies I want to dispel:

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

Fallacy: The 1939 One Rupee coins were minted in 1939 throughout the entire year.
Argument: How is this possible if the 1938 One Rupee coins were the first to be struck in late 1939 or starting January 1940?
Fact: The rupee coin was approved for standard circulation beginning in January 1940 by the British government. The 1938 One Rupee coins were the first to be struck in 1940, and the 1939 One Rupee coins were struck thereafter.

Fallacy: India's silver shortage of 1939 (September prices spiked by 15%) was the cause of the recall or withdrawal of the 1939 One Rupee coin(s).
Argument: How is this possible if the 1939 One Rupee coins were minted in 1940 or after the 1938 One Rupee coins, and again the 1938 One Rupee coins were minted before the 1939 One Rupee coins in 1940 sometime?
Fact: The 1939 Rupee was struck in 1940.

Fallacy: There were 2.2 to 2.5 million 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 common practice for many years.

Fallacy: The British government went to people's homes to collect the 1939 One Rupee coins in 1939.
Argument: Again. How is this possible if these coins were minted sometime in 1940?
Fact: 1938 One Rupee coins were not “officially” released for standard circulation until January 1940.

India 1922(B) Rupee SW-8.57, PCGS MS63. Courtesy of PCGS. Click image to enlarge.

The British government stopped minting the 1922 One Rupee in 1923 according to mint records, and never authorized another one rupee coin for circulation until more than 15 years later as an order issued by the British government. This meant that the British Government had not resumed production until late 1939 or January 1940, when the 1938 One Rupee coins were minted and 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 coins were minted in the end of 1939,” as noted by Pridmore. It was not possible to strike the 1938 One Rupee with the Type II obverse any sooner than late 1939. I believe the 1938 One Rupee mintage was issued in its entirety, but that’s not true for the 1939 One Rupee.

India 1938(C) Rupee SW-9.7, PCGS PR64 Restrike. Courtesy of PCGS. Click image to enlarge.

Consider some of the following data, 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 1938 / 1939 One Rupee coin(s), and these dies were never used for the circulation 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 1938 / 1939 One Rupee circulation strikes. Work commenced for the new dies in August 1939, and the Type II obverse dies were not delivered to India until late 1939 from England because they had to be reworked. Possibly some of the 1938 One Rupee mintage was struck after these dies were delivered late in 1939 to be released in January 1940.

The British government had not minted a circulating one rupee coin for almost 17 years (1922), and the 1938 One Rupee coin was the latest. I speculate the entire mintage was minted for the 1938 One Rupee, and the Bombay Mint transitioned into the 1939 One Rupee coin briefly. This 1938 One Rupee was also a first-year type issue, and there was probably some novelty associated with keeping one or two coins as a memento. Many of these coins landed in the hands of hoarders, choksi(s) – assayers of gold and silver, neighboring countries, and some of them never made it back to the Reserve Bank of India. A majority of the 1938 One Rupee coins were probably melted or withdrawn from circulation before the official news announcement was made at the end of 1940, reducing the fineness for the one rupee silver coinage to .500 fineness.

India 1940(B) Quarter Rupee SW-9.84 Short Trefoils, PCGS MS64. Courtesy of PCGS TrueView. Click image to enlarge.

The Reserve Bank of India planned to go “off” the .917 silver fineness standard, and shifted to a “quaternary alloy” (.500 silver fineness) with the 1940 Quarter Rupee as its first to use the new composition.

British India quaternary alloy composition: 50% silver, 40% copper, 5% nickel, and 5% zinc.

Here are the “official” or “planned” silver-fineness reduction dates:

March 11, 1940 – Quarter rupee fineness reduction
July 24, 1940 – Half rupee fineness reduction
December 20, 1940 – One rupee fineness reduction

People had little faith in “paper,” and it was just paper in the minds of the standard citizen. The average Indian citizen wanted tangible silver in hand, and the government acted in late June of 1940 to combat hoarding as written by Dickson H. Leavens: “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 judgment of the Reserve Bank or its duly appointed agents as to what constitutes the reasonable requirements of one individual should be conclusive.”

India 1938(B) Rupee SW-9.9, PCGS MS65. Courtesy of PCGS. Click image to enlarge.

Soon following was an ordinance passed in July 1940 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 one rupee coins. Between the dates of March 31, 1940, (close of the financial year) and July 26, 1940, the Reserve bank's statement showed an increase of 90 million rupee coins. But more than likely these were one rupee notes dated 1940,” as Leavens noted in his work titled Rupee Circulation in India. Also these 1940 one rupee paper notes were possibly injected into circulation well before the "official" ordinance was passed in July, as listed above.

At some point during July 1940, the entire 1938 One Rupee coin mintage was completed, and the Bombay Mint started striking the 1939 One Rupee. This was a very short-lived minting 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 24, 1940, and the injection of one rupee paper notes dated 1940 to fight the practice of hoarding. Keep in mind there was an official rule issued at the end of June 1940 by the British government to combat hoarding coins by the citizens of India, as mentioned above. With respect to World War I, Indian citizens never forgot what happened in 1918 when there was a threat of a massive silver shortage. The United States sold and shipped to India (the British government) more than 200 million ounces of silver at approximately $1 per ounce, as mandated by federal law known as the Pittman Act.

India 1940(B) 1/2 Rupee SW-9.52, PCGS MS64. Courtesy of PCGS. Click image to enlarge.

The United States sold this silver to India because citizens were trading in paper currency to the Reserve Bank of India for hard assets (predominantly silver) at an alarming rate. The silver on hand was not enough to quell the demand, the Reverse Bank of India would have run out of silver in a few months' time because of demand driven by fear from World War I. Nowadays, U.S. collectors who cannot fill holes within their silver dollar collections can blame previous citizens of India or the British Indian government for the more than 270 million silver dollars that disappeared from circulation via implementation of the Pittman Act. Be thankful it was only 270 million silver dollars and not the ceiling of 350 million set by Senator Key Pittman of Nevada.

The Bombay Mint had probably struck a very small quantity of 1939 One Rupee coins that were more than likely mixed in with the 1938 One Rupee coins entering circulation. I believe that the minting of the 1938 One Rupee coins was finished sometime in July 1940. As the Bombay Mint started producing the 1939 One Rupee coins, the paper currency injection came to fruition. There was also the “official” order to reduce the fineness of the half rupee to .500-fine silver and the one rupee coin was to be reduced as well. So, lots of changes were simultaneously being made in July 1940 at the Bombay Mint. At the same time, I believe the decision came to stop the .917 fineness for the 1939 One Rupees going forward well before the official date, and the Bombay Mint suspended minting the 1939 One Rupee coins altogether. We are at a crucial transitory period going from .917 silver fineness to .500 silver fineness.

We know that four 1939 Security Edge One Rupee coins survived from the supposed specimen mintage of five coins, as noted by Pridmore, and these were "trial” pieces struck by the Bombay Mint in the "new” quaternary alloy. The Bombay Mint may have actually tinkered with the idea of producing the 1939 One Rupee coin for standard circulation with a security edge, but then abandoned the idea. The Bombay Mint was seven months into the year of 1940, and striking 1939 One Rupees in the new alloy with the security edge would only further delay the arduous task of producing the planned mintage of over 150 million 1940 One Rupees. Maybe this is why they never struck the 1939 Security Edge Rupee for circulation. The 1940 One Rupee represented the largest planned mintages for a one rupee coin since 1920.

The Bombay Mint liked to work with planned mintages and in order for the mint to produce more than 150 million of the 1940 One Rupee coins, it would possibly need about 12 to 13 months for production; some of these coins needed to be ready before the official order was released on December 20, 1940, for the silver-fineness reduction that was being enacted. Whatever 1938 and 1939 One Rupees had been minted were probably withdrawn from circulation over time, up until the withdrawal order dated December 20, 1940, and thereafter as well. We know that the British Indian government could melt down 1,000 of the .917-fine silver rupees, produce 1,834 of the .500-fine silver rupees, and still maintain the same value. Currency devaluation was in full effect. I speculate the 1939 One Rupee was struck for one or two days at most. However, I can never prove this unless I have 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 1939 issues were struck then I ask, “Where are they?” “Are they hoarded?”

It was easy to identify what was .917-fine and what was not. Most examples we see of the 1939 One Rupee coin are of the “reeded edge” variety, which is generally found in XF to AU or lower grades. Anything with a reeded edge was .917 fine, and anything with a security edge was .500 fine. There was a 1939 Security Edge One Rupee that surfaced in VF, another one recently in AU Details, and they may have survived years of wear before somebody pulled them from circulation presumably many years ago. The sole reason the coins may have survived the many recalls and melts of the .917-fine coinage may have been because of the “security edge” itself. 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 and maybe recoined.

India 1941(B) Rupee SW-9.18, PCGS MS63. Courtesy of PCGS TrueView. Click image to enlarge.

The 1939 reverse die was poorly engraved or poorly prepared to provide full strikes suggesting a number of possibilities. The die(s) still had to be polished and prepared to produce a better proof-like surface on the reverse than the obverse during the first few hundred strikes. Some of the cleaned examples will display these qualities because the reverse die may have been prepared with more care than the obverse die, and the obverse die may have been the exact same die from the 1938 One Rupee.

There is less “smoothness” on the reverse, with the high points closer together, almost proportionate in height, and tighter in detail. These characteristics would somewhat shield the smooth surfaces as these coins are more prone to contact marks, scratches, and nicks. The reverse could sustain much more wear because of the intricacy of the design, and the high points were curved or rounded. The obverse design was frozen for four dates: 1938, 1939, 1940, and 1941. Many collectors will recognize for the previous dates that the obverse for this one rupee coin series is always struck with more detail than the reverse with the exception of 1941 being a reworked reverse.

Furthermore, one will find a majority of the 1939 One Rupee with a slight tilt die axis on the reverse about five to seven degrees to the left. Also, I have seen some 1938 One Rupee coins as well with this almost-identical die axis. Check to see if any of your 1938 One Rupee coins have a die axis. Is this die axis a pure coincidence or was "a" die (or multiple dies) switched out in the same position during the end of the 1938.

India 1939(B) Rupee SW-9.13 PCGS MS63 Reeded Edge, Courtesy of PCGS TrueView. Click image to enlarge.

One Rupee coin striking, which probably transitioned into striking of the 1939 One Rupee? I speculate that the actual number of coins struck for the 1939 One Rupee was between 7,500 to 10,000 coins, and the survival rate is 1% to 2%.

Most of the Mint State examples we have seen were sold via auction in the last few years. I believe someone in the Bombay Mint may have saved some examples and those are the better examples we see nowadays. Not many but a few uncirculated examples made it to the U.S. coin market over the last few decades. This coin has not shown up very often in auction from my past experience, and that will slowly change, I suspect, going forward. Perhaps a hoard will be found, which would spell disaster for those who have taken on the risk, so to speak, of buying these pieces. The next few years may show us how many 1939 One Rupee coins are out there. The question is who is going to show us the demand curve first, and sell? We'll just have to wait and see. Meanwhile, good luck finding a 1939 One Rupee!

History Asian