The History Of The British Pound
Chapter Seven
Story Highlights:
Monday 15th February 1971 represented a watershed in the history of the pound so this chapter gives an in-depth explanation about:
- Who decided on decimalisation
- Serious discussion about decimalisation in the 19th century
- Decimalisation under discussion again (1918-20)
- A decision reached about decimalisation (1966)
- Preparations for decimalisation
- In the build-up to Decimal Day
- What happened on Decimal Day
- Reactions to the new decimal coins
- The transition period – Save our sixpence!
- The original decimal new pence
- Subsequent changes in decimal coins
D Day – The decimalisation of the British currency
Decimalisation will be celebrating its half-centenary in 2021 and so many Britons – especially those born after the early 1960s – probably won’t remember when the sterling pound was any different. Let’s look at the history of decimalisation, the reason for the change and how the switch-over to a decimal currency was organised. What preparations were made beforehand and what actually happened on 15th February 1971, also known as Decimal Day (or rather irreverently, in some people’s eyes, D-Day)? Did everything go according to plan and what was the public’s reaction? Finally, we’ll look at the original six decimal coins – what were they like?
Who decided on decimalisation?
The idea behind decimalisation didn’t just happen overnight. As early as the 16th century mathematicians (amongst others) argued that the £sd system of multiples of 12 wasn’t practical. In 1696 the architect Sir Christopher Wren put forward the idea of a currency based on a silver
‘noble’ which would be made up of 10 ‘primes’ and 100 ‘seconds’. But the movement didn’t really gather support until the 19th century. What changed in this period?
Serious discussion about decimalisation in the 19th century
One reason why decimalisation became a subject for debate was that people looked at the number of countries which had adopted a decimal system: the Russian rouble in 1704, the American dollar in 1785 and the French franc in 1795. There was a feeling that Great Britain was somehow being left behind and was less modern and far-thinking. Despite this, Parliament rejected the proposals of Sir John Wrottesley in 1824 for a decimal currency.
The Decimal Association was founded in 1841 and it supported the idea that both the pound sterling and Imperial system of weights and measures needed to be replaced by a decimal system. In a debate in the House of Commons, the MP, Sir John Bowring said:
“every man who looks at his ten fingers saw an argument of its use, and an evidence of its practicability.” (1847)
Despite the introduction of the florin (the first decimal coin worth a 1/10th of a pound) in 1849 and the influence of the Great Exhibition in 1851 (which showed the importance of a decimal system to facilitate international trade), the Royal Commission on Decimal Coinage (1856-7) couldn’t reach a conclusion on the topic of decimalisation. The idea wasn’t adopted partly because of the hostility of Lord Overstone (a banker) and John Hubbard (the Governor of the Bank of England). The other reason why the government of the day was cautious was that they believed it would be impossible to educate the public about a new currency.
Decimalisation under discussion again (1918-20)
The Royal Commission On Decimal Coinage started preparing another report after the end of the 1st World War. It was already understood that the currency would have to undergo massive changes in light of its post-war debts (such as reducing the silver content in coins from 92.5% to 50%) so why not adopt a decimal currency at the same time?
Some members of the Commission put forward the idea of the pound being replaced by a ‘royal’, which would be worth 100 half pennies.
Unlike the previous report of 1857, which concluded a decimal system had “few merits”, this time the disagreement centred on what the £sd should be replaced by. The Chairman Lord Emmott said the only feasible solution would be to have a currency where £1=1,000 ‘mils’. Other members of the Commission disagreed and some put forward the idea of the pound being replaced by a ‘royal’, which would be worth 100 half pennies. And there the matter was left until the 1960s.
Summary:
From the 16th century there had been calls for a decimal currency.
The movement for decimalisation gained momentum in the 19th century because of the adoption of decimal currency in other countries, its usefulness for international trade and the feeling Britain was being left behind.
Bankers were hostile to a decimal currency initially and politicians like Gladstone thought the public couldn’t be educated to understand the changes.
The 1918-20 Commission argued more about how to replace the old £sd system and less about the merits of decimalisation.
A decision reached about decimalisation (1966)
The impetus for re-examining the issue of decimalisation was supplied by the number of Commonwealth countries which adopted decimal currencies (including the South African rand in 1961). Also, there was a joint report by the British Association for the Advancement of Science and the British Chamber of Commerce which put forward the benefits of decimalisation in their fields.
The Committee on the Inquiry on Decimal Currency (or the Halsbury Committee) was set up in 1961 and produced their findings in 1963. Did you know our currency was almost called the new pound, royal or noble? However, Lord Halsbury argued that since the pound was important as a reserve currency, the name should remain the same.
The planned changes to the pound were announced by the Chancellor of the Exchequer, James Callaghan in March 1966 and the Decimal Currency Board (DCB) was set up to oversee the transition. Despite this, the plan for decimalisation didn’t become official until it was approved in Parliament by the Decimal Currency Act of 1969.
Preparations for decimalisation – The Royal Mint
Knowing about the Halsbury Committee and not wanting to be left unprepared, in 1961 the Royal Mint invited artists and designers from the Royal Academy, the Royal Institute of British Architects, the Faculty of the Royal Designers for Industry and the Royal College of Art to nominate artists to submit designs for the new decimal currency.
Christopher Ironside (FSIA FRBS OBE), from a joint Royal Designers for Industry and Royal College of Art team, was chosen by the Mint to work on the coins’ design. He worked in total secrecy for 5 years creating and modifying his designs even going so far as to create 4 different sets of designs ( Royal, Regional, Popular and Avant-garde). Imagine how he felt when he was called to the Mint in 1966, given a stiff drink and informed that James Callaghan had decided to open a new competition and he would have to submit his entry with other competitors.
Choosing the designs of the new sterling coins
The designs for the new decimal coins were displayed anonymously to the Advisory Committee, who made the final choice. Chaired by Prince Philip, this Committee included such eminent figures as Sir Kenneth Clark and Sir John Betjemen. Ironside was eventually chosen but his designs had to be continually modified after consultations with the College of Arms about heraldic designs.
The transfer of the Royal Mint
In order to make sure that enough coins would be minted in time for Decimal Day, it was decided that the Royal Mint’s premises in Tower Hill were too small and there wasn’t enough room for expansion. As a result, the Royal Mint was transferred to a new location in South Wales. Work began on the two buildings in August 1967: one building for the treatment of blanks and the other for striking the coins. In December 1968 Queen Elizabeth II visited the site in Llantrisant and turned on the coining presses.
Would you believe that the output of coins at the new site was over 50 million a week? This was twice as much as the annual output of the Mint a century before.
Pre-release of 3 decimal coins
In order to make the transition to decimal coinage easier, it was decided to release some of the coins earlier than the official Decimal Day.
The 5-pence coin and the 10-pence coin were released in April 1968 and were deliberately made the same size as the existing one- and two-shilling coins. A year later the 50-pence coin, the first seven-sided coin, was put into circulation and its predecessor, the 10-shilling banknote was withdrawn by November 1970 following the earlier withdrawals of the halfpenny and the half-crown (2/6).
Did you know that the 50-pence coin was used for the coin toss of the 1969 FA Cup Final, 6 months before its official release into general circulation? (Manchester City beat Leicester City 1-0).
The main advantage of this pre-release of some decimal coins was that the public were already familiar with 3 of the 6 coins before decimalisation in February 1971.
Summary:
A report by scientific and commercial bodies and the adoption of a decimal system by Commonwealth countries in the early 1960s encouraged the government to look into decimalisation again.
Decimalisation didn’t become official until the 1969 Decimal Currency Act was passed by Parliament.
In preparation for imminent decimalisation, the Royal Mint commissioned coin designs and moved to more spacious premises in Wales.
The 5-pence, 10-pence and 50-pence coins were put into circulation before the official Decimal Day so the public would know 3 of the 6 decimal coins.
In the build-up to decimal day
In the months before the official launch of the decimal coins, there was a media campaign that hadn’t been seen in Britain since the 2nd World War. There were posters and leaflets explaining the new system and comparing the new coins to the more familiar older ones. Also, there were special programmes on the BBC (including one called ‘Decimal Five’) and even a song by Max Bygraves. Free decimal adders-converters were distributed to help people convert prices while they were shopping.
Everything was ready for D Day: 15th February 1971. But why was this date chosen for decimalisation?
February was picked as traditionally it’s the quietest time for both retailers and banks. It was felt there would be fewer problems during the early days of decimalisation if businesses weren’t busy.
Decimal day – 15th February 1971
By Decimal Day, the Royal Mint had struck 2,000 million coins and these had been distributed in advance to banks across the whole of the UK and from the banks they had been given to shops so that they could give change in the new decimal currency.
From 3.30pm on Wednesday 10th February until 10am on Monday 15th February, all banks were closed. This enabled their systems to clear all cheques written in the old system of pounds, shillings and pennies and to convert all bank accounts into the decimal currency. Unlike the similar process when the euro was adopted, you should bear in mind that in an era of very few computers, all these transactions had to be carried out manually.
The only exceptions to the adoption of decimal coins on this date were that British Rail and London Transport accepted decimal coins a day early while the National Bus Company (then a nationalised coach network) didn’t make the change until Sunday 21st February.
To help shoppers, there were conversion tables or converters they could use and all prices were initially given in both decimal (new) pence and shillings/old pennies. In the lead-up to Decimal Day, the price had first been given in shillings but from February 15th the order was switched. Shops accepted payment in the old coins but any change would be given in the new ones.
According to government papers released later, apparently the Decimal Currency Board’s biggest fear had been that the Queen would die before all the billions of decimal coins could enter circulation.
Reactions to the new decimal coins
As far as understanding the decimal system, the fact that half of the coins had been put into circulation beforehand and the blanket nature of the media campaign meant that the switch to decimalisation went without a hitch. Perhaps the older generation found it more difficult to get used to the new coins and when told a price, the phrase “What’s that in real money?” became a joke at the time.
The most general criticism was the way that shops, etc. had handled the conversion from shillings to new pence. The tendency to round up fractions to the nearest pence meant that prices in shops were effectively raised.
There were also some complaints about the small size of the 1-pence coins; for a time they were called ‘tiddlers’ but the nickname never caught on. There were also concerns about having to convert meters and vending machines to the new decimal currency. The leader of the Decimal Currency Board, Lord Fiske, estimated that 5 million vending machines would have to be converted to accept decimal coins while John Welland, the representative of London’s 9,000 hansom cabs, said it would take 15 months to change all the taxi meters.
Summary:
In the weeks leading up to Decimal Day there was a mass media campaign to inform the public of the changes.
On Monday 15th February 1971 the UK officially adopted a decimal currency; banks and shops had been prepared in advance with supplies of coins.
Banks were closed 5 days before D Day to make the transition easier while shops displayed both prices but only gave change in decimal coins.
The transition went smoothly although there were complaints about shops rounding up prices, the small size of the 1p-coin and the conversion of meters and vending machines to accept the new-sized coins.
The transition period – Save our sixpence!
The intended transitional period from shillings to new pence had been 18 months but in the end it finished much faster than anticipated. Although the 1d and 3d coins weren’t officially demonetised until August 1971, the Royal Mint calculated that within 2 weeks of decimalisation, they were effectively out of circulation.
The sixpence was kept as legal tender for another 9 years even though it was worth only 2½ pence.
The sixpence was scheduled to be demonetised not soon afterwards but there was a public outcry about this popular coin. Affectionately referred to as a tanner, bender or joey, it was kept as legal tender for another 9 years even though it was worth only 2½ pence.
The original decimal new pence
All the obverse sides of the new decimal coins featured a portrait of Queen Elizabeth; a traditional sign of the monarch’s approval. For the new coins, it was decided to update the Queen’s portrait. Mary Gillick’s head and shoulders effigy of a young Queen wearing a laurel wreath was replaced by a portrait by Arnold Machin RA of Elizabeth II wearing the ‘Girls of Great Britain & Ireland’ tiara, which had been given to her by Queen Mary.
Round the portrait is the Latin abbreviated inscription: ELIZABETH II D.G. REG. F.D. (Elizabeth II, by the grace of God, Queen & Defender of the Faith) along with the date of the coin’s minting.
Depending on your age, you may picture the new decimal coins to be the same as the ones found in your pocket or purse nowadays but in 1971 there were only 6 decimal coins. Let’s look at which ones they were.
½ Pence coin
Released into circulation: 1971
Composition: Bronze (until 1991)
Appearance: A small round coin with St Edward’s Crown on the reverse.
In reply to complaints about the size of the ½ pence coins, Lord Fiske, the head of the DCB said they had an “important role to play particularly in the price-shading of low-priced goods”. Ironic when you consider the coins only lasted until 1984.
1 Pence coin
Released into circulation: 1971
Composition: Bronze (until 1991)
Appearance: A small round coin with a portcullis with chains on the reverse (the Badge of the Palace of Westminster).
2 Pence coin
Released into circulation: 1971
Composition: Bronze (until 1991)
Appearance: A larger round coin with the Badge of the Prince of Wales on the reverse. This is a coronet with ostrich feathers and the Prince’s motto underneath: ‘ICH DIEN’ (‘I SERVE’).
5 Pence coin
Released into circulation: 1968
Composition: Cupro-nickel (until 2010)
Appearance: A round silver-coloured coin with the crown and thistle on the reverse (the Badge of Scotland).
10 Pence coin
Released into circulation: 1968
Composition: Cupro-nickel (until 2010)
Appearance: A larger round silver-coloured coin with the Crowned Lion of England on the reverse.
50 Pence coin
Released into circulation: 1969
Composition: Cupro-nickel
Appearance: A large seven-sided silver-coloured coin with a seated Britannia and a lion on the reverse.
Because of its early release date, the design of the 50-pence coin proved problematic for the designers. If it were circular, then it could have been confused with the pre-decimal half-crown. Also, coins were organised in ‘tiers’ with a specific weight-to-value ratio so they had to allow for this in their calculations. Putting a hole in the middle of the coin was impossible because by law, coinage had to have the portrait of the monarch while wavy-/flat-edged or square coins couldn’t be inserted into coin-handling machines.
The solution was its seven-sided shape; it’s actually a Reuleaux polygon. This means its diameter is constant across any bisection. It may be familiar to us now but at the time, it was the first coin shaped in this way in the whole world although it was subsequently copied by other countries.
Subsequent changes in decimal coins
Since 1971, we’ve seen many changes in sterling decimal coins. Not only in their composition but also in their size and design. The ½ pence coin is no more but the 20 pence, £1 and £2 coins have since been added to our purses. More then anything higher-denomination coins show the effects of inflation on our currency.
Who knows what other changes will have been made by the time decimalisation celebrates its centenary in 2071.
Summary:
The transition period for old coins lasted about 2 weeks although the sixpence was retained by popular demand.
All 6 new decimal coins featured a new portrait of Queen Elizabeth wearing a tiara on their obverse.
The ‘copper’ coins were released in 1971 although the silver-coloured decimal coins were released earlier in 1968-9.
The most problematic to design was the 7-sided 50-pence coin.
Since 1971, there have been continual changes in the composition, size, design and the denominations of decimal coins.
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