656 INDIA.
On July 16, 1861, an Act was passed by the Government of India, providing for the issue of a paper currency by a Government department of Public Issue, by means of promissory notes for sums of not less than ten rupees, or 11. in value. Circles of issue were established from time to time, as found necessary, and the notes were made legal tender within the circle in which they were issued, and rendered payable at the place of issue, and also at the capital city of the Presidency within which that place was situated. Afurther Act was passed in 1862, authorising the banks of Bengal, Madras, and Bombay, 1o enter into arrangements with the Government for managing the issue, payment, and exchange of the currency notes, and such of the business previously transacted by the Government treasuries as it might be desirable to transfer to them ; and on February 28 of the same year an Act was passed, repealing the power previously held by the bank of Bengal to issue its own promissory notes, placing the affairs of the bank on a new footing, with power to enlarge its capital very considerably, and transferring to it the management of a large part of the treasury business of the Government, and also that connected with the paper currency. Similar Acts were passed with reference to the banks of Madras and Bombay.
An arrangement was more recently concluded with the bank of Bengal for carrying out the details of this measure. In the first instance, the issue of notes was entrusted to the bank, but it being, in the opinion of the Secretary of State in Council, necessary that the functions of banking and currency should not be united in one establishment, the management of the issue was shortly afterwards placed in the hands of a commissioner, whose office is at the Mint.
Ten currency circles have been established, the head-quarters of which are at Calcutta, Allahabad, Lahore, and Nagpore, Madras, Calicut, Trichinopoly, and Vizagapatam, Bombay, and Kurrachee, and instructions have been issued for receiving the notes of branch circles at any Government treasury in payment of taxes, and for converting them at any place of issue where the officer in charge anticipates no risk in doing so. The total amount of notes now in circulation is in value a little above 7,000,000/.
Army.
The Act of Parliament which transferred the Government of India to the Crown, in 1858, directed that the military forces of the East India Company should be deemed to be Indian Military Forces of Her Majesty, and should be ' entitled to the like pay, pensions, allowances, and privileges, and the like advantages as regards pro- motion and otherwise, as if they had continued in the service of the said Company.' It was at the same time provided, that the Secretary
