Australian pound

Last updated

Australian pound
AUS-31-Commonwealth Bank of Australia-Five Pounds (1954).jpg Australian 1958 threepence.jpg
Five PoundsThreepence
Unit
Unitpound
Pluralpounds
Symbol £
Denominations
Subunit
120 shilling
1240 penny
Plural
penny pence
Symbol
shilling s, /–
penny d
Banknotes
Freq. used 10/–, £1, £5, £10
Rarely used£20, £50, £100, £1,000
Coins 12d, 1d, 3d, 6d, 1/-, 2/-, 5/- (5/- only used from 1937 to 1938)
Demographics
Date of introduction1910
Date of withdrawal14 February 1966
Replaced by Australian dollar
User(s) Australia
Issuance
Central bank
Valuation
Pegged with initially to sterling at par, then at £A 1 = 16 shillings sterling
Pegged by New Guinea pound at par
This infobox shows the latest status before this currency was rendered obsolete.

The pound (Sign: £, £A [1] for distinction) was the currency of Australia from 1910 until 14 February 1966, when it was replaced by the Australian dollar. Like other £sd currencies, it was subdivided into 20 shillings (denoted by the symbol s or /–), each of 12 pence (denoted by the symbol d).

Contents

History

The establishment of a separate Australian currency was contemplated by section 51(xii) of the Constitution of Australia, which gave Federal Parliament the right to legislate with respect to "currency, coinage, and legal tender". [2]

Establishment

Coinage

The Deakin government's Coinage Act 1909 [3] distinguished between "British coin" and "Australian coin", giving both status as legal tender of equal value. The Act gave the Treasurer the power to issue silver, bronze and nickel coins, with the dimensions, size, denominations, weight and fineness to be determined by proclamation of the Governor-General. The first coins were issued in 1910, produced by the Royal Mint in London. [4]

Paper currency

City Bank of Sydney in Australia cancelled PS20 banknote The City Bank Of Sydney 20 pound note.jpg
City Bank of Sydney in Australia cancelled £20 banknote
Commonwealth of Australia, PS1 (1918) AUS-4d-Commonwealth of Australia-One Pound (1918).jpg
Commonwealth of Australia, £1 (1918)

The Fisher Government's Australian Notes Act 1910 [6] gave the Governor-General the power to authorise the Treasurer to issue "Australian notes" as legal tender, "payable in gold coin on demand at the Commonwealth Treasury". It also prohibited the circulation of state notes and withdrew their status as legal tender. [4] [7] In the same year the Bank Notes Tax Act 1910 was passed imposing a prohibitive tax of 10% per annum on "all bank notes issued or re-issued by any bank in the Commonwealth after the commencement of this Act, and not redeemed", which effectively ended the use of private currency in Australia.

As a transitional measure lasting three years, blank note forms of 16 banks were supplied to the government in 1911 to be overprinted as redeemable in gold and issued as the first Commonwealth notes. Some of these banknotes were overprinted by the Treasury, and circulated as Australian banknotes until new designs were ready for Australia's first federal government-issued banknotes, which commenced in 1913. [7]

In May 2015, the National Library of Australia announced that it had discovered the first £A 1 banknote printed by the Commonwealth of Australia, among a collection of specimen banknotes. This uncirculated Australian pound note, with the serial number (red-ink) P000001, was the first piece of currency to carry the coat of arms of Australia. [8]

Gold standard

A corner grocery store in Sydney in 1934 with prices in shillings (/-) and pence (d). Depression "bread wars", corner store on Riley and Fitzroy Streets, Surry Hills, Sydney, 21 August 1934 - Sam Hood (3705360895).jpg
A corner grocery store in Sydney in 1934 with prices in shillings (/-) and pence (d).

The Australian currency was fixed in value to sterling. As such Australia was on the gold standard so long as Britain was.

In 1914, the British government removed sterling from the gold standard. When it was returned to the gold standard in 1925, the sudden increase in its value (imposed by the nominal gold price) unleashed crushing deflationary pressures. Both the initial 1914 inflation and the subsequent 1926 deflation had far-reaching economic effects throughout the British Empire, Australia and the world. In 1929, as an emergency measure during the Great Depression, Australia left the gold standard, resulting in a devaluation relative to sterling. A variety of pegs to sterling applied until December 1931, when the government devalued the local unit by 20%, making one Australian pound equal to 16 shillings sterling and one pound sterling equal to 25 Australian shillings.

Coins of the Australian pound also circulated freely in New Zealand, although they were never legal tender. By 1931, Australian coins made up approximately 30% of the total circulation in New Zealand. The devaluation of Australian and New Zealand exchange rates relative to the pound sterling led to New Zealand's Coinage Act 1933 and the issuing of the first coinage of the New Zealand pound. [9]

World War II

During World War II, the Empire of Japan produced currency notes denominated in the Australian pound for use in Pacific island countries intended for occupation. Since mainland Australia was never occupied or intended to be occupied, the occupation currency was not used there, but it was used in the captured parts of the then-Australian territories of Papua and New Guinea. [10]

Post-war devaluation

In 1949, when the United Kingdom devalued sterling against the US dollar, Australian Prime Minister and Treasurer Ben Chifley followed suit so the Australian pound would not become over-valued in sterling zone, countries with which Australia did most of its external trade at the time. As one pound sterling went from US$4.03 to US$2.80, the Australian pound went from US$3.224 to US$2.24. [11]

Decimalisation

Decimalisation had been proposed for Australian currency since 1902, when a select committee of the House of Representatives, chaired by George Edwards, had recommended that Australia adopt a decimal currency with the florin (two shillings) as its base. [12]

In February 1959 the Commonwealth Government appointed a Decimal Currency Committee to investigate the advantages and disadvantages of a decimal currency, and, if a decimal currency was favoured, the unit of account and denominations of subsidiary currency most appropriate for Australia, the method of introduction and the cost involved. [13]

The committee presented its report in August 1960. It recommended the introduction of the new system on the second Monday in February 1963. [13] In July 1961 the Commonwealth Government confirmed its support of a decimal currency system, but considered it undesirable to make final decisions on the detailed arrangement that would be necessary to effect the change. [13] On 7 April 1963 the Commonwealth Government announced that a system of decimal currency was to be introduced into Australia at the earliest practicable date, and gave February 1966, as the tentative change-over date. [13] On 14 February 1966, a decimal currency, the dollar of one hundred cents, was introduced. [14]

Under the implementation conversion rate, £A1 was set as the equivalent of $2. Thus, ten shillings became $1 and one shilling became 10¢. As a shilling was equal to twelve pence, a new cent was worth slightly more than a penny.

Coins

In 1855, gold full and half sovereigns (worth, respectively, £1  and 10/– sterling) were first minted by the Sydney Mint. These coins were the only non-Imperial denominations issued by any of the Australian mints until after Federation (the Sydney Mint struck Imperial gold sovereigns and half sovereigns starting in 1871, and the Melbourne Mint starting in 1872).

In 1910, .925 fineness sterling silver coins were minted in denominations of 3d, 6d, 1/– and 2/– (known as a Trey, Zac, Deena, and Florin respectively). Unusually no half crown (worth 2/6) was ever issued. Bronze ½d and 1d coins followed in 1911. Production of half sovereigns ceased in 1916, followed by that of sovereigns in 1931. In 1937 a crown (5/– piece, known as a Dollar) was issued to commemorate the coronation of King George VI. This coin proved unpopular in circulation and was discontinued shortly after being reissued in 1938.

In 1946, the fineness of Australian silver sixpences, shillings, and florins was reduced to .500, a quarter of a century after the same change had been made in Britain. In New Zealand and the United Kingdom, silver was soon abandoned completely in everyday coinage, but Australian .500 silver coins continued to be minted until after decimalisation.

Banknotes

Examples of private issue paper currency in New South Wales, denominated in sterling, exist from 1814 (and may date back to the 1790s). [15] Denominated in sterling (and in some cases Spanish dollars), these private banker and merchant scrip notes were used in Sydney and Hobart through 1829. [16] Private issue banknotes were issued between 1817 and 1910 in denominations ranging from £1 to £100. [17] In 1910, superscribed banknotes were used as the Commonwealth's first national paper currency until the Treasury began issuing Commonwealth banknotes in 1913. The Commonwealth Bank Act of 1920 gave note-issuing authority to the Commonwealth Bank.

See also

Footnotes

  1. The pound (in banknote form) was first issued in Australia in 1910 by a limited number of Australian chartered banks. The first year of issue for the Commonwealth of Australia Treasury Note pound was 1913. The pictured note is from the 1913 second issue (printed in 1918). [5]

Related Research Articles

The Eastern Caribbean dollar is the currency of all seven full members and one associate member of the Organisation of Eastern Caribbean States (OECS). The successor to the British West Indies dollar, it has existed since 1965, and it is normally abbreviated with the dollar sign $ or, alternatively, EC$ to distinguish it from other dollar-denominated currencies. The EC$ is subdivided into 100 cents. It has been pegged to the United States dollar since 7 July 1976, at the exchange rate of US$1 = EC$2.70.

The Australian dollar is the official currency and legal tender of Australia, including all of its external territories, and three independent sovereign Pacific Island states: Kiribati, Nauru, and Tuvalu. As of 2022, it is currently the sixth most-traded currency in the foreign exchange market and also the seventh most-held reserve currency in global reserves.

The New Zealand dollar is the official currency and legal tender of New Zealand, the Cook Islands, Niue, the Ross Dependency, Tokelau, and a British territory, the Pitcairn Islands. Within New Zealand, it is almost always abbreviated with the dollar sign ($). The abbreviations "$NZ" or "NZ$" are sometimes used when necessary to distinguish it from other dollar-denominated currencies.

<span class="mw-page-title-main">Legal tender</span> Medium of payment recognized by law

Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt.

<span class="mw-page-title-main">Pound sterling</span> Official currency of the United Kingdom and other territories

Sterling is the currency of the United Kingdom and nine of its associated territories. The pound is the main unit of sterling, and the word "pound" is also used to refer to the British currency generally, often qualified in international contexts as the British pound or the pound sterling. In British English, its most common nickname is "quid".

<span class="mw-page-title-main">Irish pound</span> Currency of Ireland before 2002

The pound was the currency of the Republic of Ireland until 2002. Its ISO 4217 code was IEP, and the symbol was £ The Irish pound was replaced by the euro on 1 January 1999. Euro currency did not begin circulation until the beginning of 2002.

The British West Indies dollar (BWI$) was the currency of British Guiana and the Eastern Caribbean territories of the British West Indies from 1949 to 1965, when it was largely replaced by the East Caribbean dollar, and was one of the currencies used in Jamaica from 1954 to 1964. The monetary policy of the currency was overseen by the British Caribbean Currency Board (BCCB). It was the official currency used by the West Indies Federation The British West Indies dollar was never used in British Honduras, the Cayman Islands, the Turks and Caicos Islands, the Bahamas, or Bermuda.

The Bermudian dollar is the official currency of the British Overseas Territory of Bermuda. It is subdivided into 100 cents. The Bermudian dollar is not normally traded outside Bermuda, and is pegged to the United States dollar at a one-to-one ratio. Both currencies circulate in Bermuda on an equal basis.

<span class="mw-page-title-main">Jamaican dollar</span> Currency of Jamaica

The Jamaican dollar has been the currency of Jamaica since 1969. It is often abbreviated to J$, the J serving to distinguish it from other dollar-denominated currencies. It is divided into 100 cents, although cent denominations are no longer in use as of 2018. Goods and services may still be priced in cents, but cash transactions are now rounded to the nearest dollar.

<span class="mw-page-title-main">Barbadian dollar</span> Currency of Barbados

The dollar has been the currency of Barbados since 1935. Globally its currency has the ISO 4217 code BBD, however, unofficially in Barbados the International vehicle registration code BDS is also commonly used, a currency code that is otherwise reserved for Bangladesh outside Barbados. As such the present dollar has the ISO 4217 code BBD. The Barbadian dollar is divided into 100 cents.

The pound is the currency of the Isle of Man, at parity with sterling. The Manx pound is divided into 100 pence. Notes and coins, denominated in pounds and pence, are issued by the Isle of Man Government.

<span class="mw-page-title-main">New Zealand pound</span> Currency of New Zealand from 1840 until 1967

The pound was the currency of New Zealand from 1840 until 1967, when it was replaced by the New Zealand dollar. Like the pound sterling, it was subdivided into 20 shillings each of 12 pence.

<span class="mw-page-title-main">South African pound</span>

The pound was the currency of the Union of South Africa from the formation of the country as a British Dominion in 1910. It was replaced by the rand in 1961 when South Africa decimalised.

<span class="mw-page-title-main">Jamaican pound</span> Official currency of Jamaica (1840–1969)

The pound was the official currency of Jamaica between 1840 and 1969. It circulated as a mixture of sterling coinage and locally issued coins and banknotes and was always equal to the pound sterling. The Jamaican pound was also used in the Cayman and Turks and Caicos Islands.

<span class="mw-page-title-main">Newfoundland dollar</span> Currency of Newfoundland before joining Canada

The dollar was the currency of the colony of Newfoundland and, later, the Dominion of Newfoundland, from 1865 until 1949, when Newfoundland became a province of Canada. It was subdivided into 100 cents.

<span class="mw-page-title-main">History of the Canadian dollar</span> History of currency in Canada

Canada has an extensive history with regard to its currencies. Prior to European contact, indigenous peoples in Canada used items such as wampum and furs for trading purposes, which continued when trade with Europeans began. During the period of French colonization, coins were introduced, as well as one of the first examples of paper currency by a western government. During the period of British colonization, additional coinage was introduced, as well as banknotes. The Canadian colonies gradually moved away from the British pound and adopted currencies linked to the United States dollar. With Confederation in 1867, the Canadian dollar was established. By the mid-20th century, the Bank of Canada was the sole issuer of paper currency, and banks ceased to issue banknotes.

<span class="mw-page-title-main">Canadian pound</span> Currency used in Canada (1841–1858)

The pound was the currency of the Canadas until 1858. It was subdivided into 20 shillings (s), each of 12 pence (d). In Lower Canada, the sou was used, worth 12 penny. Although the £sd accounting system had its origins in sterling, the Canadian pound was never at par with sterling's pound.

<span class="mw-page-title-main">Banknotes of the Australian pound</span>

Banknotes of the Australian pound were first issued by numerous private banks in Australia, starting with the Bank of New South Wales in 1817. Acceptance of private bank notes was not made compulsory by legal tender laws but they were widely used and accepted. The Queensland government issued treasury notes (1866–1869) and banknotes (1893–1910), which were legal tender in Queensland. The New South Wales government issued a limited series of Treasury Notes in 1893.

Prior to European colonization, early Aboriginal Australian communities traded using items such as tools, food, ochres, shells, raw materials and stories, although there is no evidence of the use of currencies.

The first coinage of the New Zealand pound was introduced in 1933 in response to large-scale smuggling of prior British imperial coinage after devaluation of Australian and New Zealand exchange rates relative to the pound sterling. It became the last British dominion to introduce independent coinage. The Coinage Act, 1933 outlined the weights and compositions of various denominations, out of which five silver issues entered circulation the following year. The copper penny and halfpenny entered circulation in 1940, corresponding to anniversaries of the New Zealand centennial. An eighth denomination of coin, the five-shilling piece or crown, was produced solely through three commemorative issues. The first issue, the Waitangi crown, was produced in extremely limited quantities and sold to collectors for prices substantially exceeding face value. Later commemorative crown issues in 1949 and 1953 were produced for circulation and could be obtained at face value.

References

  1. "CBCS Pocket Compendium of Australian Statistics, No. 30 - 1944". December 1944.
  2. "COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT - SECT 51 Legislative powers of the Parliament [see Notes 10 and 11]". classic.austlii.edu.au. Retrieved 8 September 2020.
  3. Coinage Act 1909. Federal Register of Legislation. Retrieved 6 April 2020.
  4. 1 2 Tilley, Paul (2019). Changing Fortunes: A History of the Australian Treasury. Melbourne University Publishing. ISBN   978-0522873894.
  5. Cuhaj, George S. (2010). Standard Catalog of World Paper Money General Issues (1368–1960) (13 ed.). Krause Publications. ISBN   978-1-4402-1293-2.
  6. Australian Notes Act 1910. Federal Register of Legislation. Retrieved 6 April 2020.
  7. 1 2 Reserve Bank of Australia, "History of Banknotes"
  8. Jordan Hayne (5 May 2015), "National Library finds Australia's first pound note, thought to be lost for nearly 80 years", ABC News Online
  9. Stocker, Mark (2005). "'A Very Satisfactory Series': The 1933 New Zealand Coinage Designs" (PDF). British Numismatic Journal . 75: 142–160.
  10. "The Commonwealth Bank and the note issue: 1920–1960". Archived from the original on 1 April 2010.
  11. Historical rates derived from "Tables of modern monetary history: Australia", "Tables of modern monetary history: Asia" Archived 19 February 2007 at the Wayback Machine (India's section), and "Foreign Currency Units per 1 U.S. dollar, 1948–2005, PACIFIC Exchange Rate Service". Each source may contradict one another. The rates above are the "most plausible facts" derived from these web pages.
  12. "Report from the Select Committee on Coinage" (PDF). Commonwealth of Australia. 3 April 1902.
  13. 1 2 3 4 Commonwealth of Australia (1963). "Chapter 20. Private finance". Year Book Australia. Retrieved 12 July 2013.
  14. Department of Foreign Affairs and Trade (November 2009). "Our currency". About Australia. Commonwealth of Australia. Archived from the original on 23 May 2012. Retrieved 12 July 2013.
  15. Pitt 2013, p. 158.
  16. Pitt 2013, pp. 158–59.
  17. Pitt 2013, pp. 163–175.

Sources

Preceded by:
Sterling
Ratio: at par
Currency of Australia
1910 1966
Succeeded by:
Australian dollar
Reason: decimalisation
Ratio: 2 dollars = 1 pound