The Government of India issued notes for the first time in 1861, these notes were unifaced, simple, unsophisticated and forgery prone. The design of this issue remained unchanged for more than fifty years. Later on, a proposition was put forth to change the design and to make it more convenient to handle. However, the outbreak of World War I put a halt on this notion, to reduce the expense of silver metal, two small denomination banknotes bearing the portrait of King George V was introduced in 1917. The most fascinating and important amongst them was the one rupee note which was issued for the first time as a promissory note!
The first issue of one rupee note was issued in a packet of 25 notes. This packet was unstapled and often contained an irregular quantity of notes - generally more or less than 25 notes. This packet looked like a miniature chequebook which began to be stapled and stitched from 1919. The one Rupee notes were made of white hand-made moulded paper.
In 1918, a ship called SS Shirlala carrying a consignment of one rupee note from England to India was sunk by German torpedoes. These sunken notes were the second issue of One rupee series. The unique thing about this second series of note was they were pre-signed and was already an approved legal tender before arriving in India. These series contain prefixes like ‘A’, ‘K’, ‘L’, ‘M’ & ‘R’.
This denomination consists of two varieties of watermarks, a star enclosed in a rectangle and rayed star. This banknote was discontinued after 1st January 1926.
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Interesting fact :
The Prefix ‘O’ was used only in the 1st one rupee of King George V in Indian Paper money. After that, the prefix ‘O’ was not used due to its resemblance to the numeral ‘zero’.
This one rupee also contained an error in the Gujarati language printed on the reverse in language panel. However, the issues with prefixes ‘D’ and ‘H’ were the only ones to have this error.
Information Courtesy: The Revised Standard Reference Guide of Indian paper Money by Kishor Jhunjunwala and Rezwan Razack and Todyawalla Auctions.