Story: Coins and banknotes

Page 2. A national currency, 1930s to 1960s

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New Zealand currency

New Zealand was the last British dominion to issue a national currency, in the early 1930s.

Old money

Under the pre-decimal system, there were 12 pence in a shilling and 20 shillings in a pound. Coins included the half crown, which was worth 2 shillings and sixpence, and the florin, worth 2 shillings. There was also a shilling coin, sixpence, threepence, penny and halfpenny. Pence was abbreviated as d – from denarius, which was a common small silver Roman coin.

Two factors led to the issuing of a New Zealand currency. In the 1920s there was a move throughout the world towards the establishment of central banks to, among other things, issue a single national currency. In 1930 the New Zealand government decided to establish a central bank, and the Reserve Bank of New Zealand opened in 1934.

In January 1933, during the economic depression, the government depreciated the New Zealand currency to improve export returns. One consequence was a rise in coin smuggling – after depreciation, British coins were worth more in Britain than in New Zealand. The solution to this, and to a continuing shortage of lower-denomination coins, was to issue New Zealand coins.

The Reserve Bank had responsibility for new banknotes and the Treasury for new coins. The currency remained pounds, shillings and pence.

New-look coins

The change to a New Zealand currency presented an opportunity to design uniquely New Zealand coins. New Zealand was one of the first British dominions to depart from using heraldic motifs on coins.

Pragmatism

In mid-1933, before the New Zealand coins arrived from Britain, the government was forced to import £50,000 worth of Australian silver coins because smuggling had created such a shortage of coin. The coins were not made legal tender and people could refuse to accept them if they wished. Once New Zealand coins entered circulation the Australian ones were progressively withdrawn, along with British coins. Some Australian and British coins remained in circulation though and were still received as change until the currency was decimalised in 1967.

The half crown (two shillings and sixpence), florin (two shillings), shilling, sixpence and threepence first issued in 1933 were designed by British artist George Kruger Gray. The penny and halfpenny, first issued in 1939, were designed by New Zealander Leonard Cornwall Mitchell, who was also a stamp designer.

Apart from the half crown, which contained the New Zealand coat of arms, each new coin contained either a native bird or Māori iconography and images on the reverse (‘tails’) side. The obverse (‘heads’) side was reserved for the British monarch. This was traditional, signalled New Zealand’s ongoing links with Britain and emphasised that the Crown has a monopoly on coinage. These designs were used on coins until 1967, when New Zealand adopted a decimal currency.

British coins were no longer legal tender from 1 February 1935.

Banknote designs

The first series of New Zealand banknotes, issued in 1934, built on the designs and motifs used in the existing Bank of New Zealand notes, and contained identifiably New Zealand elements.

A question of value

After the Second World War the cost of silver rose, which from 1947 resulted in coins being minted in cupro-nickel (a combination of copper and nickel) instead of half-silver. The face value of the coins had been about the same as the value of the metal, but once the ‘silver’ coins were made of cupro-nickel their face value was maintained by public acceptance rather than metallic value.

The 10-shilling, £1, £5 and £50 notes featured the same design, with different borders and in different colours. They featured a kiwi, the New Zealand coat of arms and King Tāwhiao (the second Māori king) on the front, and Mitre Peak in Fiordland on the reverse. The watermark was the text ‘The Reserve Bank of New Zealand’ in capitals.

The British monarch did not feature on these banknotes and was not on any notes until 1967. The New Zealand government had asked the British government about this, but an appropriate engraving of the King was not available within the timeframe for the notes’ production.

Second series

The first series of banknotes was temporary. A second series (including a new £10 note) was issued in 1940. The designs were more varied and included a separate watermark panel. King Tāwhiao was replaced by British navigator James Cook on the front of the notes, but survived as the watermark.

The 10-shilling, £1 and £5 notes featured the same design on the front (the watermark panel, the coat of arms and Cook). The £10 and £50 notes depicted the coat of arms beside a ship (the foresail of which was the watermark panel), a waka and Cook. The reverse of each note featured a different landscape, with the 10-shilling note depicting the signing of the Treaty of Waitangi. Māori iconography made up the borders of the 10-shilling, £1 and £5 notes.

This series was in circulation until 1967, when New Zealand adopted a decimal currency.

How to cite this page:

Kerryn Pollock, 'Coins and banknotes - A national currency, 1930s to 1960s', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/coins-and-banknotes/page-2 (accessed 22 October 2017)

Story by Kerryn Pollock, published 20 Jun 2012