It was actually a counterfeiting in the reverse.
When the intrinsic value of metal within a coin became more valuable than the established denomination itself, people started hoarding coins in Madras as elsewhere in the country. No wonder for there was a world war going on and feud usually was a Glutton for metals. Copper was used in for wiring every piece of rolling, floating or flying equipment that went to war. The radio used to communicate literally spoke on copper wiring. Small arm shell casings were made of brass, and bullets had a “jacket” of copper on them to keep them from fouling the gun barrel when they were fired.
On the other side, mining operations and transporting ores was hit due to the war and the black market price of metals shot through the roof. And when people realized the coins would be worth more when molten and with rupee notes never ever used except for big budget events, there ensued a scarcity of coins.
Coins of copper, silver and nickel were prevalent in Madras Presidency and their hoarding in the hope of releasing them later at a profit, caused serious inconvenience in retail trade. Hotels started asking customers at the entrance if they had the exact change for what they planned to eat. Some stores were giving customers postage stamps instead of small change.
The government insisted that a fallacious impression had been fostered by interested parties. They kept insisting in circulars that black market value of the nickel brass subsidiary coin was far below the face value. Even the much valued bronze coins, the government insisted that black market prices were inflated.
But everybody accepted that there was only one way for the metal prices to go and that was spiraling upwards.
The government decided to have change dispensing depots. But then the authorities also invoked the defense rules and repeatedly reiterated that selling coins above their face value was an offence under rule 90(1). The government even asked informers to tell upon hoarders. Substantial rewards were promised to all persons on whose information convictions for hoarders was secured
Well publicized and simultaneous raids on hotels and shops were conducted under new regulations. Hoarders were to be tried before courts of summary jurisdiction in order to secure speedy punishment.
Eataries in Madras seen as places where change was being hoarded were hence raided by the police. Proprietors were arrested if they were found possessing more coins than what they supposedly needed.
The list of seizures (duly announced on a daily basis to the newspapers) in Mount road restaurants read like
Durbar restaurant 160 Rs,
Udipi restaurant 65 Rs
Karachi restaurant 160 Rs,
National Irani restaurant 250 Rs,
Bharath café 500 Rs
In one case G Ramakrishna Rao, the assistant cashier of the Mysore café in China Bazar road was arrested under the stringent defense rules. The hotel was searched. 470 quarter Annas, 427 half Annas, 2553 one Annas, 1056 two Anna coins 500 four Anna coins 250 eight Anna coins and 7 rupee coins were seized. He was granted bail after a couple of days.
Shaken by the raids and with their livelihoods at stake, the Hotel keepers Association Deputation led by Ramanatha Iyer met OL Burrell the Deputy Commissioner of Police and represented their difficulties. They pleaded that coins storage was a part of their business which was conducted almost wholly by small change. They also requested him to stop raiding hotels. They seem to have succeeded because the police returned the coins seized in all but a few hotels where suspicion lingered.
The hotels were also sympathetically seen by the courts which struck down the raids. In many cases the Chief Presidency magistrate observed the police had given no indication of the amount of change required by hotel or even their daily sales.
Finally the government issued new Pice which weighed only 30 grains as against the old weight of 75 grains – the weight being substantially reduced by a hole in the middle. The new thinner coins were issued from February 1943.
Metal prices dropped after the war putting an end to the speculations.
– Venkatesh Ramakrishnan
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