Australian pound

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Australian pound
10/- (£½) 6d
10/- (£½) 6d
User(s) Australia
Pegged with British pound at par, and then A£1 = GB 16/- (£0.8)
Pegged by New Guinea pound at par
Subunit
1/20 shilling
1/240 penny
Symbol £
shilling s
penny d
Plural  
penny pence
Coins ½d, 1d, 3d, 6d, 1/-, 2/-
Banknotes 10/-, £1, £5, £10, £20,£50, £100, £1000
Central bank Reserve Bank of Australia
This infobox shows the latest status before this currency was rendered obsolete.

The pound was the currency of Australia until 1966. It was subdivided into 20 shillings, each of 12 pence.

Contents

[edit] History

The history of currency in Australia could be said to begin in 1800, when Governor King issued a proclamation setting the value of a variety of foreign coins in New South Wales. However, because of the shortage of any sort of money, the real currency during the first twenty-five years of settlement was rum, leading to terms such as the "Rum Corps" and the "Rum Rebellion".

Australia's first coinage was issued in 1813 by the colony of New South Wales by punching the middle out of Spanish dollars. This process created two parts: a small coin, which was called the dump in Australia, and a ring, which was called a Holey dollar. One holey dollar was worth 5 shillings (one quarter of a pound sterling), and one dump was worth 1 shilling and three pence (or one quarter of a Holey dollar). This was done in order to keep the coins in New South Wales, as they would be valueless elsewhere.

From 1817, when the first bank, the Bank of New South Wales, was established, private banks issued paper money denominated in pounds. In 1852, the Government Assay Office in Adelaide issued gold pound coins. These weighed slightly more than sovereigns. From 1855, the Sydney mint issued half sovereigns and sovereigns, with the Melbourne mint beginning production in 1872. It should be noted that many of the sovereigns minted in Australia were for use in India.

Thus, in the lead-up to Federation, the currency used in the Australian colonies consisted of British silver and copper coins, Australian minted gold sovereigns (worth 1 pound) and half sovereigns, locally minted copper trade tokens (suppressed in 1881, some state earlier (Pitt 2000, pp.10-11)) and private bank notes.

After Federation in 1901, the Australian government assumed the power to issue currency and began overprinting the private issues that were in circulation, in preparation for the issue of a domestic currency. In 1910 the federal government passed the "Australian Notes Act" which prohibited the circulation of State notes. Also passed in that year was the "Bank Notes Tax Act" which imposed a 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". Both these acts remain on the statute books and perpetuate the prohibition of private currencies in Australia.

Also in 1910 a national currency was introduced by the Labor Government of Prime Minister Andrew Fisher. The new national currency was called the Australian pound, consisting of 20 shillings, each consisting of 12 pence. Monetary policy ensured that the Australian pound was fixed in value to the pound sterling. As such Australia was on the gold standard so long as Britain was.

In 1914, the pound sterling was removed from the gold standard. When it was returned to the gold standard in 1926, 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 set a rate of 1 Australian pound = 16 shillings sterling (1 pound 5 shillings Australian = 1 pound sterling).

In 1949, when the United Kingdom devalued the pound 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$2.8, one Australian pound went from US$3.224 to US$2.24[1].

[edit] Replacement by the dollar

On February 14, 1966, a decimal currency, the dollar, was introduced after years of planning. February 2, 1963 had been initially planned as the date the new currency would be introduced but this date passed with no fanfare as no progress on developing the new currency had been made at that time. The exchange rate was 1 pound = 2 dollars. Thus, 10 shillings became 1 dollar and 1 shilling became 10 cents. Amounts less than a shilling were converted thus:

Pence Accurate conversion Actual conversion   Pence Accurate conversion Actual conversion
½d 5⁄12¢ 1¢   6½d 55⁄12¢ 5¢
1d 5⁄6¢ 1¢   7d 55⁄6¢ 6¢
1½d 11⁄4¢ 1¢   7½d 61⁄4¢ 6¢
2d 12⁄3¢ 2¢   8d 62⁄3¢ 7¢
2½d 21⁄12¢ 2¢   8½d 71⁄12¢ 7¢
3d 21⁄2¢ 2¢   9d 71⁄2¢ 8¢
3½d 211⁄12¢ 3¢   9½d 711⁄12¢ 8¢
4d 31⁄3¢ 3¢   10d 81⁄3¢ 8¢
4½d 33⁄4¢ 4¢   10½d 83⁄4¢ 9¢
5d 41⁄6¢ 4¢   11d 91⁄6¢ 9¢
5½d 47⁄12¢ 5¢   11½d 97⁄12¢ 9¢
6d 5¢ 5¢   12d 1 s = 10¢ 1 s = 10¢

In 1967 the Australian dollar effectively left the sterling area for the first time. When sterling devalued in 1967 against the US dollar, the new Australian dollar did not follow. It maintained its peg to the US dollar at the same rate.

[edit] Coins

Main article: Coins of the Australian pound

In 1855, gold ½ and 1 sovereigns were first minted by the Sydney mint. These coins were the only denominations issued by the Australian mints until after Federation.

In 1910, .925 fineness sterling silver coins in denominations of 3 and 6 pence, 1 and 2 shillings (florin). Unlike in the United Kingdom, no half crowns were issued. Bronze ½ and 1 penny coins followed in 1911. Production of ½ sovereigns ceased in 1916, followed by that of sovereigns in 1931. In 1937 a five shilling piece was issued to commemorate the coronation of King George VI. This coin proved unpopular and was discontinued shortly after being reissued in 1938.

In 1946, the fineness of the silver coins was reduced to .500 but, unlike New Zealand and the United Kingdom, silver coins continued to be issued until after decimalization.

[edit] Banknotes

Numerous private banks issued paper money in Australia, starting with the issues of 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 and New South Wales governments also issued notes. The Queensland treasury notes were legal tender in Queensland.

The first national issue of paper money comprised of overprinted notes from fifteen private banks and the Queensland government, issued between 1910-1914 in denominations of 1, 5, 10, 20, 50 and 100 pounds. They were overprinted with the words "Australian note".

In 1913 the first national banknotes were introduced in denominations of 10 shillings, 1, 5, and 10 pounds. 1914 saw the introduction of 20, 50, 100, and 1000 pound notes. The 1000 pound note only saw limited circulation and was later confined to inter-bank use. There are no uncancelled examples of this note known to exist in private hands. There was also a never-issued 5 shilling note around this time frame.[1]

In the mid-1920s a modified 10 shilling (worded as "Half Sovereign"), and reduced-size 1, 5 and 10 pound notes were issued with the side profile of King George V on the face. These notes still referred to the currency's convertibility to gold on demand. A newer 1000 pound note with the profile of George V was also prepared but never issued. An unissued printer's trial of this note was discovered in London in 1996 and subsequently sold for a sum in excess of 200,000 Australian dollars. Nonetheless, this note is not recognised as a legitimate Australian banknote issue.

During the Great Depression Australian currency ceased to be redeemable for gold at the previously maintained rate of one gold sovereign for one pound currency. Subsequently a new series of Legal Tender notes were designed, once again bearing the portrait of King George V, in denominations of 10 shillings and 1, 5 and 10 pounds. These denominations and designs were maintained and modified to accommodate the portrait of King George VI in 1938.

The never-circulated fifty-pound note
The never-circulated fifty-pound note

The coronation of Queen Elizabeth II in 1953 saw the issue of a new portrait series of prominent persons in Australia's history.

Unissued notes that were printed but never issued for circulation include 2 different 5 shillings, a 1916 with stock destroyed in 1936, and a 1946, stock destroyed in 1953. Both were printed with the reigning king's portrait. Two fifty pound notes were designed, one from 1939 with King George VI and a 1951 as stated above. Both stocks of the £50 note were destroyed in 1958. A 1939 £100 also exist with a brown, green and pink colouration, with stock destroyed in 1958 as well. The last unissued note was a £1,000, with specimens arriving in 1923 and kept till 1928 after a decision not to use the denomination any further. The reserve bank holds specimens of all the stated banknote denominations.[2]

[edit] See also

[edit] References

  1. ^ Historical rates derived from Tables of modern monetary history: Australia, Tables of modern monetary history: Asia (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.
  2. ^ (2000) in Ian W. Pitt: Renniks Australian Coin and Banknote Values, 19th ed., Chippendale, N.S.W.: Renniks Publications. ISBN 0-9585574-4-6. 

[edit] External links

Preceded by:
Pound sterling
Ratio: at par		 Currency of Australia
– 1966		 Succeeded by:
Australian dollar
Reason: decimalisation
Ratio: 2 dollars = 1 pound
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Australian currency
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