The economy in early Lanka has been wholly or mainly a self-supporting economy, where there was little use of money and the medium of exchange was confined to the barter system. With the arrival of traders, gradually a monetary system was introduced, that too, was limited to the trading centers viz. the coastal regions. The forms of money used in Lanka at that time are typical of that of India and particularly of South India. North India has had a varied monetary system which has been of immense interest to modern numismatists, while the South has been less attractive and hence there is less research and study. However, it has been satisfactorily established by means of ancient literary works that there is a definite link between the early monetary units of Lanka and that of South India. Further, these ancient chronicles and inscriptions make reference that the monetary system in ancient Lanka has been in existence from the time of King Vijaya and that money was often referred to by numbers or amounts and had a relationship to weights. It is believed that some of the monetary units first used in India and thereafter in early Lanka originated before the Gautama Buddha. The exact date is not known but nevertheless, records do indicate that the monetary units used. in India were current in early Lanka during the second half of the 3rd Century B.C.
The earliest forms of money used in Lanka are called 'Kahapanas' or 'Puranas' and they were of Indian origin. The 'Pujawaliya' and the 'Saddharma Rathanavaliya', two ancient literary works refer to 'kahavanu', 'masu' and 'ran' as forms of money in medieval Lanka. The 'Mahavansa' another ancient chronicle, mentions 'kahapanas' which was another form of money.
King Dutugamunu (161 - 137 B.C.) is said to have paid 800,000 gold 'hirannas' as wages for the construction of the 'Brazen Palace'. Each hiranna is reckoned as equal to eight kahapanas'. It has been concluded that the term 'kahapana' has been applied to more than one coin that had been in use in early Lanka. Many other coins have been in use and some of them are referred to as:
i. Elephant and Svastika coins ii. Lion coins iii. Lakshmi plaques or coins iv. Jaffna coins v. Kotte coins
The 'puranas' or 'kahapanas' are rectangular or circular in shape, cut from hammered silver sheets and not of correct weight. The original weight of a 'kahapana' is said to be equal to 57.6 grains or 32 gunjas or ratis or ratikas weighing 1.8 grains each. It is believed that the puranas' found in Lanka had the same value and had a weight ranging from 28 grains to 39 grains. On this basis it could be inferred that with irregular weights and equal value the puranas could be regarded as tokens and did not circulate extensively early Lanka at its intrinsic value. 'Puranas and Roman coins are said to been in circulation during the first two centuries of the Christian era.
Some rock inscriptions refer to a relationship between money and weights. The famous 'Vessagiri' inscription refers to an instance where King Dappula V(l0th Century A.D.) paid or agreed to pay by means of 'kalan' and 'aka' for the construction of a dagoba. The following table of weights as given in the `Abhidhanappadipika', a book written in the 12th Century A.D. may be considered as relevant.
4 Paddy seeds = 1 Gunja 2 Gunjas = 1 Mashaka 2 1/2 Mashakas = 1 Aka 8 Aka = 1 Dharana 5 Dharanas = 1 Suvanna 5 Suvannas = 1 Nikha 2 Suvannas = 1 Pala 100 Palas = 1 Thula 20 Thulas = 1 Bhara
Another table of weights is indicated in an ancient book named `Yogarnavaya' written in the 13th Century A.D. It is given below.
3 Gingerly seeds = 1 Amu seed 3 Amu seeds = 1 Paddy seed 8 Paddy seeds = 1 Madatiya seed 20 Madatiya seeds = 1 Kalan 3 Kalans = 1 Huna 4 Hunas = 1 Palam
The `Saddharmarathanavaliya' another book of the 13th Century A.D. presents the following table of measure:
3 Amu seeds = 1 Paddy seed 20 Paddy seeds = 1 Aka 8 Akas = 1 Kalan or Masu
It has been classified that the coins used during the 6th Century and 8th Century A.D. were:
1. Kahapanas or purana coins 2. Elephant and Svastika coins 3. Lion coins 4. Lakshmi plaques or coins 5. Roman coins
Reference has been made that in the 9th Century A.D. the coins in use were composed of:
1. Gold kahavanu coins 2. Half kahavanu coins 3. Lion Masu coins 4. Chola - Pandyan coins 5. Fanam coins 6. Jaffna coins 7. Larins or fish hook coins
Though there has been a relationship between these coins and a system of weights of measure, it has not been possible to ascertain the exact relationship. However, there is an indication that:
1 Pada = 1 Quarter 5 Masakas = 1 Pada or Quarter 20 Masakas = 1 Kahapana
It has been recorded that in all probability by the 5th century A.D. Kahapanas may have been coined out of gold, silver and copper and that though the weight of the coin may have differed it would have remained as 'a standard coin of the day.
Masaka like the kahapana had ceased to be the name of one particular coin, though may be not as a measure of weight as it had been considered that the gold masaka is the gold kahapana. It is clear that by the 5th Century A.D. Masaka had been signified as a `coin' or as a term used for 'money1. The following table has some historic validity:
20 pieces of ran(gold) = 1 Kahapana 5 Masakas = 1 Pada 20 Masakas = 1 Kahapana 1 Pada = 40 Paddy seeds 1 Kahapana = 160 Paddy seeds
Kalanda and paddy seeds(viyatas) are still resorted to as a measure of weights in modern Sri Lanka. This is most prevalent in the weighing of medicinal herbs.
A study of the weight of a kalanda and a paddy seed individually in comparison with the monetary system of that time could be as indicated below.
TABLE - 1 1/2 of 125 kahapanas = 62 Kalandas + 4 akas 1/2 of 62 kalandas + 4 Akas = 31 Kalandas + 2 akas 1/2 of 31 Kalandas + 2 Akas = 15 Kalandas + 5 akas Therefore 1 Kalanda = 8 Akas TABLE - 2 1/2 of 8 kalandas + 1 aka = 4 Kalandas + 10 paddy seeds 1 Aka = 20 paddy seeds 1/2 of 2 1/2 Paddy seeds = 1 Paddy seed + 2 1/2 Amu seeds Therefore 1 Paddy seed = 3 Amu seeds
The history of currency during the occupation of the Portuguese in Cilao (Lanka) is as obscure as during the period of the Sinhala Kings. The main mint of the Portuguese empire was located at their headquarters in Goa. Their currency policy was therefore based on the currency requirements of Goa. When Vasco da Gama arrived on the Malabar Coast in 1498 the main coin in circulation in Southern India was the 'fand' or the `fanam' of base gold, while in the rest of India the principal coin was called the 'pagoda' and its half the 'pratapa' both of inferior gold. After the conquest of Goa by the Muslims in 1510 the coins used were 'cruzados' in gold, 'esperas in silver and 'leals'(singular leal) in copper as equivalents respectively of pagodas, barganins and bazarucos. These coins were not well received in India and changes had to be made. The only coin that remained was the leal. The coins of the higher metals consisted mainly of 'pardaos d'ouro' or pagodas, 'xerafims' of gold and silver 'larins1 or 'tangas de prata' also called fish hook money, hook money or kokku kasi. The monetary system of India during that time was based on a mixed denomination of pagodas, tangas and leaes. Meanwhile the monetary system in Portugal comprised of gold crusado and the copper real (prual reaes, reis).
The Portuguese arrived in Lanka in 1505 and in 1597 the king of Portugal and Spain was proclaimed sovereign of Cilao. When the Portuguese arrived in Lanka the coins in use were gold pagodas gold fanams, locally minted silver fanams and the larin. In addition to the above other monetary units had been in use to a lesser extent An idea of the many units of currency that were in use during this period may be obtained from. the 'Inventano do Thesouro do Rei de Ceylao' which besides other items mentions the following collection of coins:
King's Treasure at Kotte
5444 new Xerafims of Hormuz each of 300 reis 6005 cruzados and venetians each Cf 7 tangas 556 Portugueses d1our each of 15 pardaos 122,330 new fanams at 30 to the xerafim 120 tangas de prata(larins) at 5 to the pardao d'ouro 5 pardaos d'buro each of 6 tangas
Temple Treasure at Sitawaka
142 new xerafims of Hormuz 2 Portuguese d'ouro 2 madrafaxoes of 21 tangas each 10 1/2 pardaos d'our 8 pardaos 2 tangas in larins 1 dobra d'ouro 9 1/2 ounces of fanoes chcroes
It is clear that the Portuguese had either failed to improve. the monetary system of the island or did not make a serious attempt in this direction which may be due to its previous unsuccessful venture in Goa. The gold S.Thome as an equivalent to the pagoda was struck around 1548-49 and in 1550 the silver S.Thome was struck. This was followed.by the silver xerafimin 1579. The coins were progressively debased and due to the lack of money of the higher denominations, the silver S.Thome reappeared in 1595. The pagoda which had been current and free of debasement subsequently became a coin of varied weight and fineness. In the meantime there came the American silver in the form of patacas or the Spanish piece of eight. There is evidence that these coins were used in Jaffna and that they had been found at Sitawaka, By 1640 these coins had been the chief medium of exchange in the island.
The multiplicity of coin types in circulation during the Portuguese period created a great deal of confusion, This was further aggravated by constant changes in the weight and fineness of coins. The Portuguese solution to the prevailing confusion was the introduction of the real, by which they kept their accounts as a common unit of valuation of all coins. They also created moneys of accounts with fixed values in reis. There arose two distinct methods of monetary accounting, one in terms of money of account or the standard of value and the other in terms of the actual coin which was the medium of exchange, both bearing the same denomination. This situation sometimes created an anomalous position as the former remained stationary while the latter fluctuated, resulting at times with an imaginary position of money of account without a coin to represent it. The table of valuation which was in force from 1614 onwards of the more common denominations is indicated here.
Fanam of silver(fanco de prata) = 5 reis or 6 bazaracos Tanga = 60 reis Larin = 100 reis Xerafim = 300 reis Patacao = 400 reis
The reis of Goa and the reis of Cilao differed in its valuation by the middle of the 17th Century from the table given above.
Unlike the Portuguese, the Dutch had from the very start the question of currency in mind. Clause 14 of the Treaty concluded in 1638 by Adam Westerwold, the Dutch Commander with King Rajasinghe of Kandy provided that "no one ...... except when appointed thereto by the King and by the Dutch shall have power to coin, make or circulate money, much less to make base coin."
During the early period of the Dutch occupation the currency consisted of the Spanish pieces of eight, cruzados, S.Thomes, tangas and other silver coins of the Portuguese, gold and silver fanams and larins. To this collection the Dutch added silver coins called schellings, dubbeltjes (double stuivers) and stuivers. In a community of small income even a stuiver represented large value, therefore the Dutch in 1644 with the approval of the Batavian Government issued copper half and quarter stuivers for use In their settlements. The half stuiver became better known in Lanka as the `Thambakaseya' in bazaar transactions during the Dutch and early British rule.
Since the Portuguese had been completely driven out of the island; falsification of coins increased and the Portuguese dumped debased coins in large numbers. This led the Dutch in 1661 to counter-stamp the United Fast India Company's monogram on all good foreign coins. As a result of this action, soon Portuguese coins ceased to circulate in Cilao. However, according to Wouter Schouten's writings during the period 1661-62, the principal coinage in Lanka at that period was the silver larin, silver and gold fanam as well as pagodas or Moorish Ducats.
During the 3rd Anglo - Dutch war(1672-74), the Dutch Government in Ceylan experienced an economic crisis and were forced to import coins from the Fatherland. The imported coins instead of improving the situation made it worse as they viz. stuivers and surat rupees were not of full weight but were damaged and worn out coins. In fact they were the worst Coins currently available in the Fatherland. Therefore, its acceptance with reluctance was effected at a depreciated value of:
a Rupee was current for 4 schellings instead of 5 schellings a Schelling was current for 4 stuivers instead of 6 stuivers and a Double stuiver was current for 1 stuiver instead of 2 stuivers
The Batavian Plakkaat (Proclamation) of 15th October 1707 published in Ceylan rebuked:the 2 imported coins but decreed that all surat rupees, if not clipped should be current for five schellings, or 30 heavy stuivers and that the schellings and dubbeltjes as long as the impression on one or both sides could be distinguished, however defective they may be otherwise, should pass for 6 and 2 stuivers respectively. The above was the bold policy of the then Dutch Governor Hendrick Becker (1706 - 1716) who was able to thus stamp out corruption and minimize Government expenditure. His policies helped to show a budget surplus and stop further chanelling of worthless currency into the country.
However, revenue surpluses had to be placed at the disposal of the Madura trade and the grave shortage of silver and copper did not help improve the situation. A new coinage was minted in the Fatherland in 1727 for circulation in its eastern possessions viz. the introduction of copper duits on August 8th, 1731 by Plakkaat. The duits were followed by single stuivers and ducatoons rated at 79 stuivers in 1729. As before, this exercise did not prevent or reduce clipping of coins even though Proclamations were issued against clipping of coins. As good coins were driven out of circulation, as an extreme measure in seeking a solution a higher valuation was given to the good coins. Here, too, no appreciable results were shown. The duits were the only coins of quality which were acceptable but the lack of sufficient quantities paralyzed trade. In May 1747, the Dutch issued a coin out of an alloy of half tin and half-lead termed 'boezeroeken' which too was not well received by the people and the Company's subjects would only accept them under compulsion. The hardships the country was undergoing was further aggravated by the smallpox epidemic of 1754 - 55 and the effects of a great cyclone in May 1755 which devastated the plantations of the Colombo and Galle districts.
With a view to stop the clipping of coins the Dutch introduced milled coins in January 1763 in the form of a milled ducatoon which was struck in the Netherlands since 1753. They were declared legal tender in Ceylan for 80 stuivers and the new schellings and dubbeltjes at 7 1/2 and 2 1/2 stuivers respectively. In 1768 the policy of drift was done away with, by the introduction of a 'new rating' system. This was a landmark in the currency history of Ceylan under the Dutch. The new rating valued all gold and silver coins at their intrinsic value with the new milled ducatoon of 66 Holland stuivers or 80 Indian stuivers as the basis of reckoning for silver coins and the Netherlands ducat of 105 Holland stuivers for gold coins. The confusion that had arisen with regard to the 'light', 'heavy' and Holland stuivers was at last done away with. The new rating system necessitated the ducatoon which was supposed to be the standard coin being given a higher rating in terms of 'payments' while the Netherlands ducat had deteriorated with clipping though it remained in Holland at 63 stuivers throughout. The difference in values of the stuiver current in the Settlements and in the Netherlands led to the former being referred to as the 'Indian stuiver'. The Indian stuiver was called the 'light stuiver' if it was clipped or if not clipped as 'heavy stuiver'. The latter distinction gradually lost significance as the heavy stuiver became scarce. The Spanish dollar valued at 60 light stuivers in 1658 was rated in 1748 as equal to 60 heavy stuivers. The new rating introduced in 1768 accepted the Indian stuiver as the standard stuiver of the Island ana remained in force till the end of the Dutch rule. The new ratings were:
Holland Indian stuivers stuivers Milled ducatoon 66 80 Old ducatoon 63 78 New Nagapatam and Tuticorin Pagoda 83 100 20/33 Surat rupee 24 30
Though peace had been restored by the Peace of Paris Treaty of 1784 and Trincomalee had been given back to the Dutch, annual expenses had constantly exceeded revenue. The Treasury was exhausted by the maintenance of additional troops since 1780. Governor van de Graaff in 1785 for the first time in Ceylan issued paper currency to overcome these financial difficulties. They consisted of treasury notes termed 'kredit brieven' and were made payable to bearer on presentation in Ceylan copper coin at the rate of 48 stuivers for each rix-dollar. The lowest denomination was 5 rix-dollars and were freely convertible at the Treasury on demand. These notes were not meant to replace copper coins and in the same year half larins in the shape of copper bars valued at 4 3/4 Indian stuivers, and boezeroeken of an alloy of 2/3 tin and1/3 lead valued at one duit were struck. By 1786 depreciation set in and gold and silver were exchanged at a premium of 10% and by March 1791, the rupee was worth a rix-dollar i.e. copper depreciated by 38%. The monetary units prevalent during this period were:
4 duits = 1 thuttuwa 4 thuttuwas = 1 fanam 12 fanams = 5 ridi or 1 rix-dollar
By 1796 England declared war and took over a depleted Treasury.
When the British arrived in Lanka the monetary circulation comprised of depreciated paper currency of two varieties viz. kredit brieven, the lowest denomination of Which was five rix-dollars and the kas-nooten, where the denominations ranged from one to five rix-dollars. Silver and copper coins were scarce as they were at a premium. It had been decided that the new rulers will honor the out-standing kredit brieven and kas-nooten notes. These notes were gradually withdrawn from circulation and as the British did not have at that time an alternate monetary system to replace immediately, the Dutch currency, they by Proclamation dated June 8th, 1796 fixed rates of exchange between Ceylon and Indian money. The rates were:
Pagodas = 45 Ceylon fanams or 180 stuivers or 3 3/4 rix-dollars Arcot rupee = 1 rix-dollar Pice 1/48 rupee = 1 stuiver 1/2 Pice = 1/2 stuiver
In April 1801 the British minted locally, copper coins in the denominations of fanams, half fanams and stuivers. The Royal Mint in England minted in 1802 whole, half and quarter stuivers of lower intrinsic value. As copper coins alone could not satisfy the economy, Governor Frederick North issued in March 1800, currency notes to the value of Rix-dollars 30,000, convertible into copper on demand at the Treasury in the denominations of rix-dollars 25 and upwards. Subsequently, other issues of currency notes were made. With a view to satisfy transactions of less than 25 rix-dollars and also to reduce the cumbersome copper transactions, silver coins in the denominations of double, single and half rix-dollar's were issued in 1803. Copper was again minted in Colombo and Jaffna by private contract in 1805. With the intention of preventing the export of silver from the Island rix-dollars with a reduced silver fineness of ten-twelfths were introduced in 1808 and 1809. Nevertheless, silver continued to be exported and by 1811 there was hardly any silver coins in circulation. Copper too was scarce and the currency was mainly confined to paper money. Lack of sufficient stocks of copper coins were causing much concern and this led to Regulation No. 5 of 1811 where export of copper was forbidden in quantities exceeding 50 fanams.
In September 1815, the British Government decided to issue silver fanam tokens, 16 of which were intrinsically worth a rix-dollar to Pass current at 12 to the rix-dollar; Since the tokens supplied a real want they remained in circulation. These tokens were receivable at the Treasury and at all Kachcheries. The introduction of tokens also helped to curb the export of coins and the return of private hoards of coins back into circulation. The Government also in 1815 minted at the Royal Mint double, single and half stuivers to supplement the coins in circulation.
By 1817 the relationship between British and Dutch currency and the monetary units in common usage for transactions could be ascertained from the following tables.
British Dutch coins coins (a) 1 thuttuwa or 1 pice 4 3 1 fanam 16 12 1 ridi 64 48 1 rix-dollar 192 144 (b) 4 thuttus = 1 fanams 4 fanams = 1 ridi 3 ridi = 1 rix-dollar
Insufficient silver in circulation resulted in the Treasury ordering from the Royal Mint in 1822 a consignment of rix-dollars. On August 1823 the one rix-dollar notes were withdrawn from circulation and in the same year the new Madras' quarter rupee and the one rupee coins were counter-marked with a crown and made lawful currency of the Island by Proclamation at 4 fanams or 1/3 rix-dollar and 1 1/3 rix-dollar respectively
The Imperial Government Treasury issued a Minute dated February 11th, 1825 recommending the issue of British subsidiary silver coins as the standard coins for its Colonies. This Minute led to an Order in Council dated March 23rd, 1825 and was enforced in Ceylon by Regulation 8 of July 4th 1825. The Ceylon Gazette of July 5th 1825 contained the following provisions among others:
i. All Government accounts and transactions were required to be kept in British denominations of pounds, shillings, pence and farthings.
ii. British silver coins to be unlimited legal tender currency and copper coins legal tender up to 12 pence.
iii. Silver rix-dollar issued by the Royal Mint in 1821 and paper rix-dollar be received and taken at 1s. 6d., the copper fanam at 1 1/2d, the 'half fanam at 3/4d., pice at 3/8d., and the Dutch challie at 1/8d.
iv. Copper coins to be legal tender up to 8 fanams or 12d. The objectives envisage by the above Minute failed due to various factors and instead of the desired effect the country experienced severe deflation. This situation led the Governor Sir Robert Horton to introduce a minute in 1836 raising the rating of the rupee' to 2 shillings. This Minute helped the Government to reduce the importation' of rupees but did not arrest the export of coins to India.
The rupee became the sole standard measure of property and its sub-divisions the chief metallic currency of the Colony. The position of the rupee was left undisturbed by the declaration of English and Australian sovereign as unlimited legal tender by Orders in Council of 1852 and 1856 respectively. The Order in Council of 1852 Repealed the previous Order in Council of 1825 And Regulation 8 of the same year, where British silver coinage was declared unlimited legal tender. Although the rupee and its sub-divisions were 'the main currency, books of accounts of the, Government and the mercantile sector were maintained in pounds, shillings and pence. The public preferred to keep their accounts in rix-dollars, fanams and challies or in the Indian denominations of rupees, annas and pices. Bazaar dealings were conducted in pounds and shillings, while contracts were discharged in rupee currency, a rupee being rated at 2 shillings and ten rupees at one pound. Pounds and shillings did not represent British currency though these terms were used.
The Indian rupee and its sub-divisions were not legal tender though it was widely used as the standard currency' of the day. The only authority it had was the Minute of the Governor of 1836 and as there was no Order in Council or a Local Ordinance approved by the Crown, the question raised doubts on its validity. None of the legal tender currency was 'in active circulation, the British silver had been exported and the paper rix-dollars had been cancelled along with Treasury notes. Gold coins had never 'formed an appreciable part of the currency in circulation. This anomalous position induced the Secretary of State for the' Colonies to appoint a Committee in June 1847 to report on the financial position and prospects of Ceylon. The Committee recommended the establishment of the Indian currency in place of the British for Ceylon. As the home Government did not take action on this recommendation, attention was drawn in 1866 by Governor Sir Hercules Robinson wherein he cited the case of a discharged officer. demanding for payment a large amount in sovereigns instead of in rupees. After three years of correspondence the recommendations of the Governor were partially embodied in an Order in Council and a Proclamation dated June 18th, 1869. However, the Governor held enforcement of the Order in Council in abeyance until all his proposals were accepted. The Governor's proposals were finally accepted by an Order in Council of 1869 and they were brought into force with effect from January 1st 1872. The old British coins were demonetised by Proclamation dated March 17th 1874 and the 1/8th rupee in 1891. The following year the 1/2 rupee and the 1/4 rupee were made subsidiary coins with a legal tender limit of Rs.5/- by an Order in Council. Small dealings fractional to the rupee were often expressed in shillings, fanams and challies. The value in cents of these denominations were:
1 shilling = -/50 cts 5 fanams = -/25 cts 1 fanam = -/06 cts 1 challie = -/01/2 cts
Likewise fees of advocates and physicians were paid and received in 'guineas' a guinea representing Rs.10/59. The Order in Council and Proclamation of 1869 embodied the proposal of decimal coins and the denominations in which public. accounts were to be maintained. The equivalents of the monetary units that prevailed in terms of the fanam are indicated below:
1 penny = Re. 1/24 or 2/3 fanam 1/2 penny = Re. 1/48 or 1/3 fanam 1 farthing = Re. 1/96 or 1/6 fanam 1 Ceylon fanam. = Re. 1/16 or 1 fanam 1 thuttuwa or pice = Re. 1/64 or 1/4 fanam 1 Dutch duit = Re. 1/192 or 1/12 fanam.
In 1884 with the failure of the Oriental Bank Corp6ration, the Government of India closed its mint to the public due to adverse effects of a depreciating rupee. A Commission headed by Sir Alexander Swettenham was appointed in 1893 to inquire into the effects on Ceylon and to suggest a suitable course of action. The Commission recommended that Ceylon currency be kept in step with the Indian currency and the latter was being steered towards the gold standard, During the period 1893 to 1899 both countries considered the rupee at the par rate of 16d. By Order in Council dated September 26, 1901, the full sovereign was declared unlimited legal tender currency at Rs. l5/- per sovereign which was the same rate as in India. To enable the above to take effect the Paper Currency Ordinance of 1884 was amended in 1901 and it provided the exchange of notes for sovereigns on demand but vice versa was to be at the option of the Commissioners of Currency. The rise in price of silver caused severe embarrassment to the Government in 1918 and the fineness of the silver coinage was reduced from 800 to 550 by Order in Council dated May 8th, 1919. The new coins were introduced into circulation on September 1st 1919. Due to the change in policy in India the gold sovereign was demonetised in Ceylon with effect from August 7th, 1920 by an Order in Council.
Paper currency first issued by the Dutch dated May 10th, 1785 was termed kredit brieven and was expressed in rix-dollars in the denominations of 50, 100, 500 and 1000 rix-dollars. This issue was chiefly necessitated by budgetary difficulties and partly due to the scarcity of gold and silver coins. Further, copper coins, the chief media of circulation, was cumbersome for large payments and was found inconvenient and unsafe. The kredit brieven notes taken over by the British in 1796 bore interest at 3% and were well accepted. They were subsequently issued in the denominations of 20, 10 and 5 rix-dollars. In 1795 the war led to the issue of notes called kas-briefjes or kas-nooten in the denominations of 1,2,3,4 & 5 rix-dollars and were redeemable 'in the same manner as kredit brievens but were not required to be endorsed while passing in exchange.
The British first issued paper currency in March l800 in the denominations of 25, 50 and 100 rix-dollars. Like the kas-nooten notes these notes bore no interest and were exchangeable for copper on demand at the Treasury at the rate of 48. stivers to a rix-dollar. By 1823 the Secretary of State directed the Governor to withdraw all rix-dollar notes and introduce instead British subsidiary silver coins and sterling notes of not less than &1/- in denomination. By Ordinance No. 23 of 1844 private banks if they so desire could enjoy the privilege of notes issue upon the payment of an annual fee of &20/-. The Bank of Ceylon founded in 1841 and the Western Bank of India were amongst the first to make use of this facility. The Oriental Bank Corporation and the Chartered Mercantile Bank founded in 1851 and 1858 respectively also issued currency notes. With the issue of notes by private banks the Government saw no reason to continue its own issue of notes and by a Minute of the Governor dated December 28th, 1855 all government notes were made receivable at kachcheries. The Oriental Bank Corporation failed in 1884 thoroughly shaking the economy and causing near food riots and almost the failure of the Chartered Mercantile Bank. As a preventive temporary measure, the Government guaranteed the notes issued by the bankrupt Oriental Bank Corporation The final result was the introduction of the Paper Currency Ordinance of 1884 whereby a Board of Commissioners called the Commissioners of Currency was appointed comprising of the Colonial Secretary, the Treasurer and the Auditor General, who were entrusted with the issue and management of currency in Ceylon.
The Commissioners of Currency issued currency notes in the denominations of Rs. 5/-, 10/-, 50/-, 100/-, 500/- and 1000/- which were of unlimited legal tender value and these notes were redeemable at their offices in Colombo on demand in silver rupees of India. The Government guaranteed notes of the Oriental Bank Corporation were required to be exchanged for notes issued by the Board of Commissioners of Currency on or before March 31st 1885. By amendment to the Currency Ordinance in 1914 the Commissioners of Currency were empowered to issue one and two rupee notes.
During the British rule, the monetary units that were current, their Sinhala terms terms and their values are denoted below.
Monetary Unit Sinhala Legal Value used in Term Value Transactions Cts. Cts. 1/2 Dutch duit(salliya) - Alukkala 25/96 1/4 1 Dutch duit/ 1/3 stiver (salliya) - Thambasalliya 25/48 1/2 1 British salliya 1/4 stiver - Salliya 25/64 1/2 1 Thuttuwa or pice or stiver - Thuttuwa 1 9/16 1 1/2 6 Thuttuwas - Saththaliya 9 6/16 9 1 Fanam - Panama 6 1/4 6 6 pice or 4 fanams - Panamhatara 25 25 1 shilling or 8 fanams - Silima 50 50 I rix-dollar - Pathagaya or ridipaha 75 75 1 pound - Pavuma Rs.10/- Rs.10/
Source: 1. Ceylon Currency and Banking - B.R.Shenoy 2. Society in Mediaeval Ceylon - Dr.M.B.Ariyapala 3. Ceylon Currency - Leelananda Caldera 4. Ceylon Currency British Period - B.W.Fernando
Currency Museum Circular No 7,
Central Bank of Ceylon.
15th March, 1984