Forged Salt Bills and Calcutta's Financial Crisis in the late 1820s

This paper is a preliminary survey of the money market in Calcutta during the early nineteenth century, focusing particularly on the role of salt bills. Salt bills, known as chars and rowanas, were issued by the government, from which the holder was able to claim the quantity of salt specified in the bills at government salt warehouses. Since the government, the sole supplier of salt, guaranteed that salt bills were redeemable for salt, salt bills became one of the major negotiable documents in the money market, especially among native bankers and merchants. In the late 1820s, when forged salt bills became a serious problem in the market, the government tried to remove any uncertainty about salt bills. However, the government's assurances did not work well, and the role of salt bills in the money market had declined rapidly by the mid-1830s.