15 February marks the 50th anniversary of the day when, after 150 years of proposals, debate and Royal Commissions, Britain finally adopted a decimal currency. The old system of 12 pennies to the shilling and 20 shillings to the pound was replaced by a simple 100 “new pence” to the same old pound. Only a few nostalgic diehards disapproved.
It was widely thought that decimalisation was a precondition of Britain joining what was then called the European Economic Community (EEC) two years later. In fact, decimalisation had been progressing around the world since it was first adopted by the newly formed United States in 1786 and France in 1795. Canada adopted the dollar (a word derived from the central European thaler) upon self-government in 1867.
In 1957, India replaced a rupee divided into 16 annas, each sub-divided into 12 pies, with 100 new pies to the rupee. South Africa followed in 1961 when it adopted the rand, Australia in 1966, New Zealand in 1967 and British colonies when they achieved independence. By 1971, only the UK and Ireland were left. Ireland’s currency was de-facto tied to sterling 50 years after independence – perhaps a lesson for the Scottish nationalists today.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
A Roman legacy
The old currency wasn’t quite as British as it seemed. The abbreviations £, s and d were respectively short for the Latin libra, sestercii and denarii, the coinage of Rome. The lira was the currency of Italy and Turkey, the schilling that of Austria and the pfennig was the German parallel to the penny. The two-shilling coin was known as a florin, the currency of the Netherlands, and the 2s6d or 2/6 coin was “half a crown,” the crown being the unit of currency in Scandinavia. There was no crown coin except for commemorative issues.
The slang word for the sixpence was “a tanner” and for a shilling “a bob”, a word that barely survives in the saying “as bent as a nine bob note”. The “guinea”, or 21 shillings, had been withdrawn in the early 19th century but private doctors, lawyers and auctioneers continued to charge in guineas, probably to squeeze an extra 5% from clients. It survives in the Newmarket races, known as the “1000 guineas” and the “2000 guineas”. The groat, 4d, had disappeared in Victorian times, being unnecessary alongside the 3d coin or “thruppence”. The farthing, remembered in the penny-farthing bicycle, was withdrawn in 1960 and the ha’penny in 1967.
Old coins remained in circulation, as did coins from countries formerly in the sterling area. Late and even mid-Victorian pennies continued to appear in change right up until decimalisation. “Silver” coinage only dated back to the interwar period, when the silver content of the coins was first reduced as the silver content came to be worth more than the denomination, and then replaced by cupro-nickel. The silver thruppence was replaced by a new brass coin, similar in size and shape to the new pound coins, in the late 1930s. The penny, thruppence and half-a-crown were withdrawn at decimalisation, as was the ten-shilling note, to be replaced by ½p, 1p, 2p and 50p coins, but other pre-decimalisation coins remained in circulation. The sixpence disappeared in 1980 but the shilling and florin coins, the same size and of the same value as the new 5p and 10p coins, continued in circulation until 1990. The shilling remains the unit of currency in East Africa.
Stuck in transition
If adoption of a decimal currency was a slow process, full metrification has been even slower, though it has been taught in school maths and science since the early 1970s. The 1985 Weights & Measures Act implemented EEC directives on metrification, but the timetable for full changeover has been repeatedly delayed. So we still use miles and acres rather than kilometres and hectares and many still refer to their height in feet and inches and their weight in stones and pounds. Food and fuel is sold in kilogrammes and litres, but Celsius and Fahrenheit co-exist for temperature. There is little pressure for full metrification, though few people are capable of converting between metric and imperial systems.
The UK is not the only country stuck in transition. The US, the first country to adopt a decimal currency, still uses the imperial system for weights and measures. Recipes use cups and tea/tablespoons as measures, long abandoned even in the UK. Not even in America, though, are microscopic distances referred to as nano or pico-inches. That illustrates a deeper truth: decimalisation and metrification were not pushed through by the EU, politics or modernising social pressures, but by electronic technology. Metric is the only system that pocket calculators, introduced in the early 1970s, or computers understand.
-
Rail fares could spike by 5.8% next year – how to save on train travelJuly’s RPI inflation reading tends to determine rail fare hikes in the following year. We look at how much your train tickets could cost, and how to save money
-
'Governments are launching an assault on the independence of central banks'Opinion Say goodbye to the era of central bank orthodoxy and hello to the new era of central bank dependency, says Jeremy McKeown
-
'Governments are launching an assault on the independence of central banks'
Opinion Say goodbye to the era of central bank orthodoxy and hello to the new era of central bank dependency, says Jeremy McKeown
-
Why investors can no longer trust traditional statistical indicatorsOpinion The statistical indicators and data investors have relied on for decades are no longer fit for purpose. It's time to move on, says Helen Thomas
-
The most likely outcome of the AI boom is a big fallOpinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
The rise of Robin Zeng: China’s billionaire battery kingRobin Zeng, a pioneer in EV batteries, is vying with Li Ka-shing for the title of Hong Kong’s richest person. He is typical of a new kind of tycoon in China
-
How retail investors can gain exposure to Lloyd’s of LondonIt’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The goal of business is not profit, but virtueOpinion Serve your customers well, and the profits will follow, according to a new book. It rarely works the other way around, says Stuart Watkins
-
Earnings estimates are a rigged game – especially in the USThe number of US stocks beating earnings estimates tells us only that guidance has deliberately been set too low
-
Why is Britain's industrial base crumbling?Opinion More and more factories in the UK are closing, and the government doesn’t seem to care. What’s going on?
