Decimal Day

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Image:Decimalisationdday.jpg On February 15, 1971, variously known as Decimal Day, Decimalisation Day and D-Day, the United Kingdom and the Republic of Ireland decimalised their currencies.

1 The old system
2 Background to the UK changeover
3 Preparation for the UK changeover
4 After Decimalisation Day in the UK
5 The fate of the old coins in the UK
6 In Ireland
7 See also
8 External links

[edit] The old system

The United Kingdom and Ireland had separate currencies — Pound sterling and Irish pound (also know as Irish punt) respectively — but they were at the time tied to each other at a fixed 1:1 exchange rate. Under the old currency of pounds, shillings, and pence, the pound was made up of 240 "old pence" (denoted by the symbol d), with twelve old pence in a shilling and 20 shillings (denoted by the symbol s) in a pound. However, the number of pence in a shilling and shillings in a pound made monetary calculations complicated. Foreign tourists were also confused by coins such as the 'half-crown' (worth 2/6, or one eighth of a pound).

For further details of the currency before decimalisation, see British pre-decimal system and Irish pre-decimal system.

[edit] Background to the UK changeover

Following the rejection by parliament of Lord Wrottesley's proposals to decimalise Sterling in 1824 (which were prompted by the introduction in 1795 of the decimal French Franc), little practical progress towards decimalisation was made for over a century, with the exception of the two-shilling silver florin (worth 1/10 of a pound) first issued in 1849. A double florin or four shilling piece was a further step in that direction, but failed to gain acceptance.

The Decimal Association was founded in 1841 to promote decimalisation and metrication, causes that were both boosted by a realisation of the importance of international trade following the 1851 Great Exhibition. It was as a result of the growing interest in decimalisation that the florin was issued.

In their preliminary report, the Royal Commission on Decimal Coinage (1856–1857) considered the benefits and problems of decimalisation, but did not draw any conclusion about the adoption of any such scheme [1]. A final report in 1859 from the two remaining commissioners, Lord Overstone and Governor of the Bank of England John Hubbard came out against the idea, claiming it had "few merits" [2].

In 1862, the Select Committee on Weights and Measures favoured the introduction of decimalisation to accompany the introduction of metric weights and measures [3].

The decimalisation movement even entered fiction. In Anthony Trollope's Palliser novels (and more so in the television series based on them), Plantagenet Palliser is a passionate advocate of decimalisation, a cause the other characters seem to find intensely boring. Palliser's scheme would have divided the shilling into ten (presumably revalued) pennies. This would have changed the threepence into 2.5 new pence, the sixpence into fivepence, and the half crown into a two shilling, five pence piece. It would also have required the withdrawal and reissuance of the existing copper coinage. It is never made clear if Palliser is able to implement this scheme.

The Royal Commission on Decimal Coinage (1918–1920), chaired by Lord Emmott, reported in 1920 that the only feasible scheme was to divide the pound into 1000 mills (the pound and mill system), first proposed in 1824, but that this would be too inconvenient. A minority of four members disagreed, saying that the disruption would be worthwhile. A further three members recommended that the Pound should be replaced by the Royal, consisting of 100 halfpennies (i.e. there would be 4.8 Royals to the former Pound) [4].

Finally, in 1960, a report prepared jointly by the British Association for the Advancement of Science and the Association of British Chambers of Commerce, followed by the success of decimalisation in South Africa, prompted the Government to set up the Committee of the Inquiry on Decimal Currency (Halsbury Committee) in 1961, which reported in 1963. The adoption of the changes suggested in the report was announced on March 1, 1966. The Decimal Currency Board (DCB) was created to manage the transition, although the plans were not approved by Parliament until the Decimal Currency Act in July 1967. Former Greater London Council leader Bill Fiske was named as the Chairman of the Decimal Currency Board.

Consideration was given to having a new "decimal pound" worth ten shillings in the old currency which would have resulted in the "decimal penny" being worth only slightly more than the old penny (this approach was adopted, for example, when Australia and New Zealand decimalised in the 1960s, adopting respectively the Australian dollar and New Zealand dollar equal in value to 10s). In the event, it was decided by Halsbury that the pound sterling's importance as a reserve currency meant that the pound should remain unchanged.

[edit] Preparation for the UK changeover

Under the new system, the pound was retained but was now divided into 100 "new pence", denoted by the symbol p. New, different coinage was issued alongside the old coins. The 5p and 10p coins were first introduced in April 1968, and were the same size, composition and value as the shillings and florins circulating alongside them. In October 1969 the 50p coin was introduced and the old ten-shilling note was withdrawn. This reduced the number of new coins that had to be introduced on the day and meant that the public was already familiar with three of the six new coins.

The old halfpenny and half-crown (2s 6d) were withdrawn from circulation in 1969 to ease the transition. (The farthing (quarter penny) had been last minted in 1956 and ceased to be legal tender in 1960.)

A massive publicity campaign was run in the weeks before decimalisation day, including a song by Max Bygraves called "Decimalisation". The banks were closed from 3:30pm on Wednesday, 10 February 1971 until 10:00am on Monday 15 February, enabling them to stock up with the new coins. February had been chosen for D-Day because it was the quietest time of the year for the banks, shops and transport organisations. Shops priced goods in both currencies.

[edit] After Decimalisation Day in the UK

The three new coins (1/2p, 1p and 2p) were introduced on 15 February 1971. After that day the old coins remained legal tender at their old value, but the penny (1d) and threepenny (3d) coins were quickly removed from circulation and could only be exchanged at banks.

The government hoped that in speech the new units would be called "new pence", but many decided that it was clearer and quicker to call the new coins "pee". The words 'penny' and 'pence' are now less common in spoken English.

Image:Decimal adder.jpg

The changeover was expected to take several months, but shopkeepers found that they could not accommodate both the old and new coins in their tills. Instead they quickly withdrew most of the old coins from circulation, and lodged them in the bank, so the new system was largely effective within a matter of weeks. The public information campaign that had run over the preceding two years, and the willingness of a young population to embrace the change, also helped. In general, elderly people had more difficulty adapting and the phrase 'How much is that in old money?' became associated with those who could not make the change to other new systems, for example the metric system of weights, which was partly adopted later.

Around the time of Decimal Day, "Decimal Adders" and other converters were available to help people convert between the old and new coins.

[edit] The fate of the old coins in the UK

Shillings (and same sized 5p coins) and florins (and 10p coins) remained in circulation as valid currency, in theory including coins dating back to 1816 but in practice back to 1947 when they stopped containing silver, until smaller 5p and 10p coins were introduced in 1990 and 1992 respectively. The old sixpence (6d) which was worth 2.5p remained in circulation until 1980. All pre-decimal coins (other than coins such as sovereigns which anyway did not circulate due to precious metal content) are now invalid.

The decimal halfpenny (1/2p) had been introduced in 1971 to reduce the fear that prices would be increased by excessive rounding up, since the new penny was 4.8 times larger than the smallest pre-decimal coin, the old ha'penny. It remained in circulation until 1984, by which time its value had been greatly reduced by inflation.

The 50p piece was also reduced in size, in 1997.

In the special case of Maundy money the face value of these coins was maintained, effectively increasing all Maundy coins' face value by a factor of 2.4, as the coins continued to be legal tender as new pence.

[edit] In Ireland

In the Republic of Ireland all pre-decimal coins, except the 1s and 2s coins, were called in during the initial process between 1969 to 1972; except the ten shilling coin, due to probable legal oversight. The 1s and 2s were called in 1993 and 1994 respectively. Pre-decimal Irish coins may still be redeemed at their face value equivalent in euros at the central bank in Dublin every weekday morning.