Money and Decimalisation

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The pound was originally based on the value of a Troy pound weight of high purity silver. Prior to decimalisation the money used was in pounds, shillings and pence or "Lsd" for short.

The £ sign or "L" stands for the Latin word "Libra" meaning pound. The "s" stands for the Latin word "solidus", a solidus mark or a scilling mark was a mark or notch made in a length of metal wire to enable it to be divided into convenient regular sized pieces. The "d" stands for the Latin word "denarius", the most common coin in circulation in the early Roman currency system.

Before 1971 there were twenty (20) shillings per pound, the shilling was subdivided into twelve (12) pennies. There were therefore two hundred and forty (240) pennies per pound. The penny was further sub-divided into two halfpennies or four farthings (quarter pennies).

Amounts of money could be written in several different ways:-

One pound, ten shillings, and six pence could be written £1/10/6, £1/10/6d, normally if the "£" symbol was used, then the "d" symbol would be omitted.

Seventeen shillings and six pence would be written 17/6, or 17/6d the "d" being added here to clarify that money was being referred to.

Decimalisation

A committee of Inquiry on Decimal Currency, chaired by Lord Halsbury, was set up in 1961 to examine various proposals for a new decimal system. The Government announced on 1 March 1966 that the system recommended by the Halsbury Committee would be introduced in February 1971. A Decimal Currency Board was set up in December 1966 and legislation was approved July 1967 confirming the coin units. D-Day Decimalisation day was 15th February 1971 and banks closed 4 days prior to D-Day to convert accounts, machinery, and clear £. s. d. cheques.

The changes:-

£1, £5 and £10 notes -  no change.

10 shilling note replaced with 50p coin of the same value.

Half crown (2/6d) withdrawn.

Florin (2/-) replaced with 10p coin of same value.

Shilling (1/-) replaced with 5p coin of same value.

Sixpence remained in use until 1980 with a value of 2½p.

The smaller denomination coins, the three pence (3d) and the penny (1d) were withdrawn.

New coins that were introduced were:-

Two pence (2p) with a value of 4.8d

Penny (1p) value 2.4d

Half Penny (½p) value 1.2d

Decimalisation was blamed for the inflation in the 1970's, an increase of a penny on the price of an item after 1971 was almost 2½ times an increase of penny prior to 1971.

The Guinea

Named after Guinea on the African Gold Coast from where the gold was obtained to make coins. The price of gold fluctuates and hence the value of the gold sovereign (one pound coin) fluctuated, at one point to 1½ times its value (30 shillings or £1.50p). In 1717 the value of the Guinea was fixed at 21 shillings or £1.05p. After the issue of the sovereign in 1817 the guinea was retained as 'money of account' until very recent times. In other words the term was used without a coin being in circulation, principally in Auction Rooms and in Horse Racing.

History of Bank Notes

The Bank of England has been issuing bank notes since 1694. Early bank notes were not what we see today but were hand written. In 1725 the bank started issuing partly printed notes with the £ sign and first digit printed, the other numbers and the payee were added by the cashier before signing the note. By 1745 notes were being part printed in denominations from £20 to £1000.

In 1759, gold shortages caused by the Seven Years War, forced the bank to issue a £10 note for the first time. The first five pound notes followed in 1793 at the start of the war against Revolutionary France.

In 1797 a series of runs on the Bank, caused by the uncertainty of the war, drained the bullion reserves and forced the Bank to issue £1 and £2 notes. The Restriction Period, as it was known, lasted until 1821 after which gold sovereigns replaced the £1 and £2 notes.

The first fully printed notes were issued in 1855, an event that brought delight to the team of cashiers, who no longer had to sign each note individually.

The First World War saw the link with gold broken once again, the Government needed to preserve its stock of bullion and in 1914 the Treasury printed 10 shilling and £1 notes.

During the Second World War, German counterfeits posed a major threat, the German Government’s intention being to destabilise Sterling. By 1943 the German Government were producing 500,000 counterfeit “British” notes a month. To counter the problem the Bank introduced a metal thread for the first time and withdrew notes of all denominations above £5.

White fiver

The “white fiver” above is a counterfeit issued by the German Government.

The 1928 10 shilling and £1 notes were the first to be coloured and the first to be printed on both sides. The “white fiver” unchanged for 100 years was replaced in 1957 by a blue £5 note.

The £10, £20 and £50 denominations were reintroduced in 1964, 1970 and 1981 respectively.

It was not until 1960 that the portrait of the reigning monarch became a feature on the bank note; the £1 note was the first in the so called portrait series which by 1964 had extended from the 10 shilling to the £10 note.

British historical figures have been depicted on the back of notes since 1970 with the pictorial series which was completed in 1981.

Decimal Coins
Early Notes
Notes
Portrait Notes
PreDecimal Coins

References

David Haworth.

Bank of England

Chards - https://www.chards.co.uk/blog/common-names-of-british-coin-denominations/304