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Coins and banknotes

by Kerryn Pollock

New Zealand first issued its own national currency in the early 1930s – before then, New Zealanders used British and Australian coins and a range of banknotes produced by trading banks. The country moved to decimal currency in 1967, and from 1992 redesigned banknotes featured a range of prominent New Zealanders, including suffragist Kate Sheppard and Māori politician Āpirana Ngata.


Varied coins and banknotes, 1840s to 1930s

A varied currency

In the early 19th century a range of foreign coins circulated in New Zealand. In 1847 new exchange rates were fixed. From that year British coins dominated circulation as the exchange rate was unfavourable for other foreign coinage. British coin became legal tender (currency that has to be accepted to immediately clear a debt) in New Zealand in 1858. Gold coins minted in Australia by branches of the Royal Mint were also legal tender. From 1897 British coin minted by the Royal Mint in London was the only legal-tender coin.

The first New Zealand coins were issued in 1933.

Trans-Tasman coins

Australia’s first official mint (an institution where money is coined) opened in Sydney in 1855. It issued gold coins. Australia adopted its own currency in 1910. Although they were not legal tender in New Zealand, Australian silver coins circulated until New Zealand issued a national currency in 1933. Around 30% of silver coins in circulation in New Zealand at the time were Australian. Australian coins were repatriated by the New Zealand government once the national currency was issued. However, before New Zealand’s coins were made smaller in 2006, the Australian 20-cent piece could still be found in New Zealand, as it was a similar size to the New Zealand coin.

Except between 1850 and 1856, when the government-owned Colonial Bank of Issue had a monopoly over banknotes, trading banks issued their own notes. They did not have to accept each others’ notes, though most did so. This came to an end in 1934, when the central Reserve Bank was established and became the sole supplier of banknotes. Apart from the war years, 1914 to 1919, and for brief periods after this, banknotes were not legal tender until the first Reserve Bank notes were issued on 1 August 1934.

Tokens

There were many more coins than banknotes in circulation in the 19th century because most transactions were of a lower value than banknotes, and metal coins lasted longer than paper notes.

However, even coins were in short supply. Between 1857 and 1881 traders issued their own low-value banknotes and, more commonly, bronze and copper tokens in place of smaller coin denominations, to be used as small change. Tokens were not official currency, but the government recognised their utility and did not stop them circulating. Before their advent, shoppers often had to accept change in the form of goods such as matches or stamps. The tokens, which could only be redeemed for goods at the issuing trader’s store, were of varied design and served as a form of advertising for the trader.

Army tokens

During the Second World War, the Army Department issued tokens to Japanese prisoners of war, who were interned in a camp in Featherston. Most of the tokens were melted down after the war, so they are very rare, and valued by collectors.

In 1874 the government estimated that tokens formed half the copper currency in New Zealand. After the British government announced that it was able to supply New Zealand with sufficient coins in 1881, tokens were no longer issued.

Currency designs

There were no New Zealand versions of the British coins used in New Zealand until 1933. An 1879 penny bearing the legend ‘New Zealand’ was struck, but the circumstances of its creation are unclear. It did not become an official coin and is perhaps more accurately described as a token. A very small number were issued. It is the rarest New Zealand coin.

The design of mid-19th century banknotes was simple and the reverse side was blank. They typically contained the bank’s coat of arms or women sitting or reclining before a rural landscape, the name of the bank and the value of the note, with plenty of blank space.

In the later 19th century banknote design was more ornate and complicated, and almost covered the note. The reverse side was illustrated. From the early 1870s Māori featured on the Bank of New Zealand’s notes, giving the notes a distinctive New Zealand character. In contrast, some of the Commercial Bank of Australia’s New Zealand banknotes depicted a kangaroo.

Perhaps the most obviously ‘New Zealand’ banknotes were those printed (but not issued) by Te Peeke o Aotearoa, the bank established by the Māori King Tāwhiao in 1886. Though much of the iconography was not Māori, the text was Māori and a simple flax bush was depicted in the bottom left quarter. The bank’s cheques were embellished with Māori figures and native plants and birds.

In 1924 trading banks agreed on a uniform size for banknotes – prior to this, the different banks’ notes varied in size.


A national currency, 1930s to 1960s

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.


Decimal currency, 1960s to 2000s

A long time coming

Changing New Zealand’s currency to a decimal system was suggested as early as 1908. A government-appointed currency committee considered decimalisation in 1933, but decided against it because of costs associated with the change, and the depressed economic conditions.

The power of 10

Decimal currency is a money system in which the units are parts or powers of 10. There are 100 cents to every dollar, which makes monetary calculations simple.

Decimalisation gained traction in the 1950s, when Labour MP Rex Mason submitted a series of private member’s bills to Parliament while in opposition. A committee set up by the National government in 1957 recommended decimalisation. By the 1960 general election the Labour and National parties both supported it.

In 1963 the National government announced that New Zealand would switch to decimal currency on 10 July 1967. The process was overseen by the under-secretary for finance (from early 1964) and future prime minister Robert Muldoon.

Fern, tūī, zeal, Muldoon

In his 1974 autobiography, The rise and fall of a young Turk, Robert Muldoon recorded some of the different name suggestions for the new currency – crown, dollar (which the government favoured), double crown, doubloon, fern, royal, tūī, zeal and zealer. According to him, ‘Muldoon’ was even suggested. Australia had chosen ‘dollar’ for its new decimal currency in 1963 and this was the most popular option in a New Zealand newspaper poll. The government decided on dollars and cents.

Third series banknotes

The new $1, $2, $5, $10, $20 and $100 banknotes were designed by a New Zealand committee in consultation with banknote printers Thomas De La Rue and Company of London. They all featured the same design on the front, a portrait of Queen Elizabeth II and a watermark panel depicting Captain James Cook. Each denomination had a different design of native birds and plants on the reverse, and was distinguished by colour. They were embellished with complicated geometric patterns, including Māori iconography, to make them less vulnerable to counterfeiting.

New coins

The new coins were in denominations of 1, 2, 5, 10, 20 and 50 cents. Unlike the banknote designs, which were produced in private and uncontroversial when released, the coin design process was highly public and contentious.

View of an artist

Paul Beadle, a professor at Elam School of Art at Auckland University, wrote to Prime Minister Keith Holyoake complaining about the open design competition. He believed artists should have been invited to submit designs from the beginning, commenting that ‘the introduction of an entirely new coinage … is a rare moment in history … and it is the occasion for New Zealand to stimulate the imagination and recognise the ability of her own specialists. Any denial of them makes a mockery of the University Schools in which they study.’1 Beadle was invited to submit designs but they were not favoured, possibly because of his ongoing and critical outspokenness on the issue.

The Treasury wanted the new coins to be ‘distinguished and worthy symbols of New Zealand’.2 The government ran an open design competition in 1964. This was for the reverse (‘tails’) side – the obverse (‘heads’) side was to contain, by tradition, a portrait of the British monarch. 156 people submitted 624 designs.

A Coinage Design Advisory Committee (CDAC) was established by the government to manage the design process. The members were unimpressed with the general calibre of the submissions and instead invited 14 artists to present designs.

In 1965 shortlisted designs were sent to the Royal Mint in England for comment. The artists were Milner Gray (Britain), Eric Fraser (Britain), A. H. McLintock (New Zealand, and also a member of the CDAC) and Francis Shurrock (New Zealand).

The Royal Mint was highly critical and dismissed most of the designs. As a result five more artists were invited to submit designs. Drawings of those sent to the Royal Mint were leaked to newspapers, and public response was very unfavourable. The government then published all the artists’ designs, and allowed the public to vote on them.

Dollar coin or note?

James Berry was commissioned to design a $1 coin in the lead-up to the decimal currency change in 1967. The main design featured a kiwi and a taiaha (Māori spear) crossed with a black rod (a staff symbolising a parliamentary office) on the reverse side. However, the idea was abandoned and the new $1 was a banknote instead.

London-born New Zealander James Berry emerged the public favourite, but the CDAC submitted a larger list of various designers’ work to the government. In 1966 the government, following the public mood, chose Berry for all six new coins. The designs were a fern (1 cent), kōwhai flower (2 cents), tuatara (5 cents), koruru or Māori carving of a head (10 cents), kiwi and fern (20 cents) and James Cook’s ship the Endeavour (50 cents).

Later developments

In 1981 the banknote printer was changed and the Queen’s portrait was updated. A $50 note was first issued in 1983.

One- and two-cent coins were withdrawn from circulation in 1990 and a new 20-cent piece featured a reproduction of a carving of the 18th-century Te Arawa chief Pūkākī. The following year $1 and $2 coins replaced notes. The $1 coin featured the kiwi from the old 20-cent piece, and the $2 a kōtuku (white heron).

In 1992 the Reserve Bank issued a completely redesigned series of banknotes. Queen Elizabeth was replaced on all banknotes except the $20 by prominent New Zealanders: mountaineer Edmund Hillary ($5), suffragist Kate Sheppard ($10), Māori politician Āpirana Ngata ($50) and scientist Ernest Rutherford ($100). Each banknote had a different set of native birds and plants on the back. Māori tukutuku designs were part of the security patterns.

From 1999 banknotes were made of polymer (plastic) instead of paper. In 2006 the 5-cent coin was withdrawn and the 10, 20 and 50-cent coins were made smaller and lighter.

Further banknote security enhancements, including a 'puzzle number' and raised ink, were introduced in a new series of brighter $5, $10, $20, $50, and $100 notes released in 2015 and 2016.

New Zealand currency overseas

The New Zealand dollar is the official currency of the Cook Islands, Tokelau, Niue and the Pitcairn Islands.

Footnotes
    • Quoted in Mark Stocker, ‘Muldoon’s money: the 1967 New Zealand decimal coinage designs.’ History Now 7, no. 2 (2001), p. 6. Back
    • Quoted in ‘Muldoon’s money’, p. 5. Back

Commemorative currency and collecting

Commemorative currency

Commemorative coins, and occasionally banknotes, are issued by the state-owned Reserve Bank and New Zealand Post to mark special occasions or to honour individuals. They are legal tender, but are mainly purchased by collectors.

New Zealand Post has been the only issuer of legal-tender commemorative coins since 2002. The private company New Zealand Mint also produces commemorative coins, though its New Zealand-themed coins are not legal tender.

Cook’s medals

British explorer James Cook presented Māori chiefs with medals in 1773, during his second Pacific voyage. Featuring King George III on one side and Cook’s ships the Resolution and Adventure on the other, they were struck by Matthew Boulton of Birmingham for Sir Joseph Banks, who was supposed to have accompanied Cook on the voyage, but did not after a disagreement. The medals were produced to commemorate the journey and to distribute to locals as proof of discovery, in an age where European countries were competing to find ‘new’ lands. The medals were distributed in the South Island and the known surviving ones were later found far from where they had been handed out. It is possible that they were traded by Māori as a form of currency.

Coins

The Waitangi crown, which was issued in 1935, is not strictly a commemorative coin, but because of the circumstances of its issue it functions like one. The issue was limited and the government charged more for each coin than its face value (five shillings), so the coins were purchased as souvenirs and did not circulate. They show Ngāpuhi chief Tāmati Wāka Nene and the first governor of New Zealand, William Hobson, shaking hands above the word ‘Waitangi’. The design was created by New Zealander James Berry and adapted by Englishman Percy Metcalfe.

The first true commemorative coin issued in New Zealand was the centennial half-crown of 1940, which was designed by Leonard Cornwall Mitchell. On the reverse side it featured a Māori woman standing in front of a traditional Māori village, and tall modern buildings surmounted by a shining sun. This was an unusual design for a coin, though it was representative of the modernist design of the period.

Other coins have commemorated occasions such as royal visits, major sporting events, national anniversaries as well as notable New Zealanders and endangered native wildlife.

Banknotes

A commemorative $10 banknote was issued in 1990 to mark the 150th anniversary of the signing of the Treaty of Waitangi. A $10 millennium banknote was issued for circulation in 2000 to mark the start of the 21st century. A commemorative version with more design features was also issued. In 2004 a limited-edition set of banknotes commemorated the first banknotes to feature the signature of Alan Bollard, Reserve Bank governor from 2002.

Too expensive to circulate

The truly commemorative banknotes issued in the 2000s could be used to buy goods and services, but because they were produced for souvenir purposes and cost more to buy than their face value, this did not happen. For example, the 2004 commemorative banknote set, of which 1,000 were issued, cost $295 to buy from New Zealand Post, but the notes’ face value was only $185.

Collecting and numismatics

People collect coins for a variety of reasons, including their artistic and historical qualities, and investment value. Banknotes are less commonly collected.

Coin collecting as a hobby came to New Zealand with European settlers in the 19th century, a time when it was rising in popularity in European and other countries. Collecting in New Zealand became more common after the first New Zealand coins were issued in 1933 and was even more popular after the change to decimal currency in 1967.

Numismatics is the study of currency – coins, banknotes, tokens and any other related items. The Royal Numismatic Society of New Zealand was founded in 1931. Professional coin dealers are represented by the New Zealand Numismatics Dealers Association.


External links and sources

More suggestions and sources

More links and websites


How to cite this page: Kerryn Pollock, 'Coins and banknotes', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/coins-and-banknotes/print (accessed 20 October 2017)

Story by Kerryn Pollock, published 20 Jun 2012