Australian pound
The Australian pound was Australia's currency from 1910 to 1966.
History
In the early years of the Australian Federation, the British pound sterling was used as the national unit of account. Sterling circulated in conjunction with banknotes and bills of credit issued by private banks. Acceptance of Private Bank notes was not made compulsory by legal tender laws, but they were widely used and accepted. Queensland treasury notes were also in circulation and these were legal tender in Queensland.
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 1919, 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 nominated gold price) unleashed crushing deflationary pressures. Both the initial 1919 inflation and the subsequent 1926 deflation had far-reaching economic effects throughout the remnants of the British Empire, Australia and the world.
In January 1931, the Labor Government of Prime Minister James Scullin devalued the Australian pound by 25% against pound sterling as an emergency measure during the Great Depression. £1 sterling became worth £1 5s. Australian (A$2.50). While this devaluation no doubt removed some of the deflationary pressures introduced five years earlier it would still have been disruptive.
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].
Issuance
In the lead-up to Federation, the currency used in the Australian colonies was the pound sterling, divided into 20 shillings, each of which was divided into 12 pence. English silver and copper coins circulated alongside Australian minted gold sovereigns (worth one pound) and half sovereigns, as well as locally minted copper trade tokens. Banknotes were issued by private banks as well as certain colonial governments such as that of Queensland. Paper denominations ranged from 1 to 100 pounds.
After Federation in 1901, the Australian government assumed the power to issue currency and began superscribing the private issues that were in circulation, in preparation for the issue of a domestic currency.
Coins
In 1910 the first truly national Australian silver coinage was introduced in denominations of threepence, sixpence, one shilling, and two shillings (one florin). Copper pennies and halfpennies followed in 1911. 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.
Another coin highly sought after by collectors is the penny dated 1930. Its rarity is so well-known amongst Australians, that demand for what is akin to a blue chip investment has pushed prices to approximately 35,000 Australian dollars for an average standard example. A proof example of the same coin recently changed hands for over 620,000 Australian dollars, making it the most expensive copper coin in the world.
Banknotes
In 1913 the first national banknotes were introduced in denominations of 10 shillings, and 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.
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 coronation of Queen Elizabeth II in 1953 saw the issue of a new portrait series of prominent persons in Australia's history.
- 10s – Matthew Flinders
- £1 – Queen Elizabeth II
- £5 – John Franklin
- £10 – Arthur Phillip
- £50 - Henry Parkes (This note was never issued. A few specimens exist in private hands and are worth a great deal to collectors.)
On to Australian dollar
On February 14, 1966, a decimal currency known as the Australian 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.) £1 became $2, ten shillings became $1, and one shilling became ten cents. Amounts less than a shilling were converted thus:
| Pence | Accurate conversion | Actual conversion | Pence | Accurate conversion | Actual conversion | |
|---|---|---|---|---|---|---|
| ½d. | 5⁄12¢ | 1¢ | 6½d. | 55⁄12¢ | 5¢ | |
| 1d. | 5⁄6¢ | 1¢ | 7d. | 55⁄6¢ | 6¢ | |
| 1½d. | 11⁄4¢ | 1¢ | 7½d. | 61⁄4¢ | 6¢ | |
| 2d. | 12⁄3¢ | 2¢ | 8d. | 62⁄3¢ | 7¢ | |
| 2½d. | 21⁄12¢ | 2¢ | 8½d. | 71⁄12¢ | 7¢ | |
| 3d. | 21⁄2¢ | 2¢ | 9d. | 71⁄2¢ | 8¢ | |
| 3½d. | 211⁄12¢ | 3¢ | 9½d. | 711⁄12¢ | 8¢ | |
| 4d. | 31⁄3¢ | 3¢ | 10d. | 81⁄3¢ | 8¢ | |
| 4½d. | 33⁄4¢ | 4¢ | 10½d. | 83⁄4¢ | 9¢ | |
| 5d. | 41⁄6¢ | 4¢ | 11d. | 91⁄6¢ | 9¢ | |
| 5½d. | 47⁄12¢ | 5¢ | 11½d. | 97⁄12¢ | 9¢ | |
| 6d. | 5¢ | 5¢ | 12d. | 1 s. = 10¢ | 1 s. = 10¢ |
In 1967 the Australian dollar effectively left the sterling area for the first time. When sterling devalued in 1967 against the US dollar, the new Australian dollar did not follow. It maintained its peg to the US dollar at the same rate.
See also
References
- ^ Historical rates derived from Tables of modern monetary history: Australia, Tables of modern monetary history: Asia (India's section), and Foreign Currency Units per 1 U.S. dollar, 1948-2005, PACIFIC Exchange Rate Service. Each source may contradict one another. The rates above is the "most plausible fact" derived from these web pages.
A$