Modern Britain

The UK was one of the last countries to adopt a decimal monetary system, although there had been discussion on and investigations into the subject since the early nineteenth century.

The topic was pursued intermittently for a century and a half, sometimes in conjunction with the adoption of the metric system of weights and measures. It was generally agreed that the changeover was necessary - it would simplify accounting, business and trade by considerable amounts, and would save much schooling in arithmetic. Various official investigations, a number of books and many other publications, and much discussion in various quarters, as well as the formation of the Decimal Society, were involved in the process. There were a variety of decimal coinage systems proposed - some of them as complicated (to modern eyes) as the system they were intended to replace, and several bordered on the incomprehensible or impractical. The use of gold and silver as coinage metals - rather than the present system of coins having a purely nominal value - influenced nineteenth century discussions, as did the relative low value of inflation for much of the period.

Options

In the nineteenth century and early twentieth century a system based on £1 (one pound sterling) being equal to 1000 minor units (with several intermediary coins) was the most popular option and later on, with the effects of inflation, the lesser unit was fixed at a hundred minor units to the pound.

Other options suggested at various points 10s (ten shillings), the crown (five shillings, a quarter of a pound), the florin (two shillings, introduced as a tenth of a pound), and units based variously on a thousand farthings or a hundred pennies. The effectively stable relationship between various different currencies led to suggestions for an international fusion of coins (one proposal from 1838 bears more than a passing resemblance to the euro). There was a preference, in many cases, to retain as many of the existing coins as possible, even when this meant redenominating them, with the potential for confusion that would arise. (Occasionally the metal was worth more than the face value: there were also occasional nineteenth century examples of forged coins using platinum, either as a silver substitute or as a core with a gold 'coating').

The nineteenth century's choice of the pound being equal to 1000 minor coins reflected contemporary prices, and the seemingly easy conversion from the existing 960 farthings to the pound - and the perceived benefits to the poor of fractional prices, who would, it was claimed, be happy to receive more coins for their pennies and sixpences, and the greater flexibility afforded.

As part of the discussion in this period it was pointed out that in several quarters it was the practice to convert all moneys into decimal equivalents, carry out transactions, and then convert the figures back to 'real money'. It was recognised that there would be 'issues' in some areas - for example the penny post and other 'fixed costs' - as there were no direct equivalents between existing coins and the replacements. There was a greater emphasis on establishing the values of the coins and how the two systems would tally than on the longer term impacts (for instance, the costs of conversion, the potential for inflation, and the likelihood of confusion if coins were redenominated); though some of this would have been resolved had there been a move towards implementation.

The move towards implementation

The debate, and official investigations continued into the twentieth century, by which time virtually all major and many minor economies outside the British Empire had adopted decimal systems (and had sometimes gone through a number of different systems of monetary units). The real shift towards the adoption of decimal currency occurred from the 1950s with the rise of international trade, and various members of the British Empire and Commonwealth adopting decimal currency.

The Halsbury Committee, established in 1961, reported on decimalisation in 1963, the majority report being in favour of the pound as the basis. The chief alternative proposal was based on a ten shilling unit (such as had been adopted in several Commonwealth countries), and the proponents of which argued their case. Other suggestions were made, with units from five shillings via a hundred old pence to £5 (five pounds) - the latter to take into account inflation by the time the system was actually adopted, without significant support. There were suggestions that an octal system (Sir Fred Hoyle, arguing that it would be more computer friendly - the counter arguments including the point that computers were made to make life easier for humans, not the reverse), or duodecimal (a society promoting a base-twelve is still active in 2009), but these were not taken up as base-ten was the normal usage for currency elsewhere.

In 1966 the then Chancellor of the Exchequer (and later Prime Minister), James Callaghan, adopted the pound as the main unit, arguing that the claimed benefits of the ten shilling unit were purely temporary and limited, while leading to possible inflation (as the minor unit would go from one old penny to the equivalent of 1.2 old pennies).

Again there was much debate as to the coins to be used and their names - 'cent' was favoured by some for the smaller unit, but 'new penny' (eventually to be shortened to penny) was adopted. The system was made technically non-decimal by the introduction of a half-unit coin, to accommodate values covered by the existing penny. It was suggested (as in previous discussions) that the shilling be made equivalent to ten pennies (down from twelve in Imperial currency), there being no indication on the units of money as to their interrelationships, but this was rejected as likely to lead to hoarding and similar complications.

A Decimal Currency Board was set up (to go alongside several other such bodies, covering inter alia East Africa, West Africa, and the Pacific), under GLC Leader William Fiske (afterwards Lord Fiske), which carried out much work, including educational material and publications. There were also two competitions, one secret and the second open to find a design for the new coins. The shape of the 50p coin was originally circular.

The former Royal Mint in London, dated to 1906

Publicity

As with the 'millennium bug' thirty years later, but in practice more practical, a minor industry arose to cater for the conversion: dual use equipment (which could, of course, be used with existing decimal currencies as well), training provision and publications.

Robert Maxwell, then owner of Pergamon Press and an MP, saw the potential profit in issuing books and other materials on the subject.

The situation in countries decimalising at the time was studied and learnt from. One of the marketing strategies was to point out that those companies in Australia which had decided to leave the acquisition of equipment and training until the last moment had found it difficult to make arrangements - and lost customers to those firms which had already done so and therefore provided a quicker service.

There was much publicity material and educational material provided for the general public and in educational establishments - and it was argued that with increasing travel abroad people were already familiar with decimal currency. There was a certain amount of counter-argument - or claimed problems: it was argued that 'the shopkeeper's supposition' that people would be wandering around with pocketfuls of the new currency but unable to work out how to use it was fallacious. As with the earlier period, differences in culture and attitudes are regularly visible - most notably the situation and attitudes towards women, with remarks made about 'the housewife' that would now be seen as patronising: men were in positions of authority.

The Royal Mint was moved from its existing site at Tower Hill, London, to a new site in Wales, partly because the existing site was too small and also due to the then existing policy of moving industry to the regions (there being relatively high unemployment in the new catchment area).

Coins were struck over several years - although all of them with the intended date of use - and factors such as the premature death of the queen, popular rejection of the new currency, or the Mint being damaged by Welsh nationalists (some of whom at the time adopted less than peaceful methods) were considered. In the event there were some delays - caused by a postal strike early in 1971.

The half-crown (2/6, or two shillings and sixpence) and old half-penny were withdrawn ahead of the transition for convenience, and the first decimal coinage was issued in 1968 - the equivalents of the shilling and florin, and the ten shilling note, 5p, 10p and 50p. The three smaller coins, 2p, 1p and 1/2p, were introduced in February 1971 (this being one of the quieter times of year), the banks having been shut for several working days to allow for essential activities.

Shops were opened as 'old currency' and 'new currency.' It had been expected that the transition would take some two years, but in fact it took a matter of weeks - sufficient for the Decimal Currency Board to be wound up in 1971.

A range of its documents were released by the Public Records Office and the National Archives in 2001 to mark the thirtieth anniversary of the event, and in 2008, to mark the issue of a new design for the existing coins (the 1/2p having been dropped, and three new coins, of the values 20p, £1 and £2 being added) a small exhibition at the British Museum included a section on decimalisation.

Main Sources

The Times - London editions of the newspaper

FindTarget.com - British currency information via their web site

Text copyright © Jackie Speel. An original feature for the History Files.