Decimalisation: Difference between revisions
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==== France ==== |
==== France ==== |
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In France, decimalisation of the coinage was accompanied by [[metrication]] of other measures, introducing the [[franc]] in 1795 to replace the [[Livre tournois]], abolished during the [[French Revolution|Revolution]]. |
In France, decimalisation of the coinage was accompanied by [[metrication]] of other measures, introducing the [[franc]] in 1795 to replace the [[Livre tournois]]<ref>Gadoury, V. "Monnaies Françaises" p.48 (1999)</ref>, abolished during the [[French Revolution|Revolution]]. |
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France introduced decimalisation in a number of countries that it occupied during the [[Napoleon I of France|Napoleonic period]]. |
France introduced decimalisation in a number of countries that it occupied during the [[Napoleon I of France|Napoleonic period]]. |
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Revision as of 17:57, 6 July 2009
In the management of currencies, decimalisation is the process of converting from traditional denominations to a "decimal" system, usually with two units differing by a factor of one hundred.
The logical appeal of decimalisation in general has generally been much more popular in currency than in physical measurements, and few countries have coupled the two processes.
All countries that had non-decimal currencies have decimalised, at least in practice.
Decimal currency
Decimal currency is the term used to describe any currency for which the ratio between the basic unit of currency and its sub-unit is a power of 10.
In practice this usually means that 100 sub-units make up 1 of the basic units, but currencies divided into 1000 sub-units also exist, especially in Arab countries.
For example:
Today, the only currencies which are not decimal are those that have no sub-units at all, except for:
- the Mauritanian ouguiya, 1 ouguiya = 5 khoum, and
- the ariary of Madagascar: 1 ariary = 5 iraimbilaja.
Historically, non-decimal currencies were much more common, such as the British pound Sterling before decimalisation in 1971. Until 1971, the pound Sterling worked on a system of pence (12 to a shilling) and shillings (20 to a pound), plus other combinations (ha'pence, guinea, and crown); and in addition, until 1960 the penny was divided into 4 farthings. A pound could be subdivided in 19 different ways into integral numbers of pence (for example, 1/4, 1/5, 1/6, 1/8 and 1/10 of a pound were respectively 60, 48, 40, 30, and 24 pence exactly) and in 8 additional ways into integral numbers of farthings (for example, 1/64 pound was 3 pence 3 farthings, written 3¾d).
Formal decimalisations
Russia
Russia was the first country to convert to a decimal currency. In 1710, Peter the Great set the ruble equal to 100 kopecks in a series of reforms to modernise Russia.
The United States
The United States introduced decimal currency with the dollar in 1792 (adopting only the currency aspects of a more comprehensive decimal system of measurement proposed by Thomas Jefferson).
France
In France, decimalisation of the coinage was accompanied by metrication of other measures, introducing the franc in 1795 to replace the Livre tournois[1], abolished during the Revolution.
France introduced decimalisation in a number of countries that it occupied during the Napoleonic period.
Sweden
Decimalization in Sweden took place in 1855. The currency riksdaler was divided into 100 öre. Earlier on it was divied into 128 skilling, and other systems. Riksdaler was renamed into krona in 1873.
Canada
Decimalization in Canada was complicated by the different jurisdictions before Confederation in 1867. In 1841, the united Province of Canada's Governor General, Lord Syndenham, argued for establishment of a bank that would issue dollar currency. Francis Hincks, who would become the Province of Canada's Prime Minister in 1851, favoured the plan. Ultimately the provinicial assembly rejected the proposal.[2] In June of 1851, the Canadian legislature revisited the issue, and passed legislation that required the provincial accounts to be kept in decimalised format; dollars and cents. The establishment of a central bank was not touched upon in the 1851 legislation. The British government delayed the implementation of the currency change on a technicality, wishing to distinguish the Canadian currency from the United States currency by referencing the units as "Royals" not "Dollars".[3] The British delay was overcome by the Currency Act of 1 August 1854. In 1858 coins denominated in cents and imprinted with "Canada" were issued for the first time.
Decimalisation occurred in:[4]
| Date | |
|---|---|
| Province of Canada | 1 August 1854 |
| Nova Scotia | 1 July 1860 (Ordered its first coinage in 1860, but they weren't shipped by the Royal Mint until 1862) |
| New Brunswick | 1 November 1860 (Like Nova Scotia, the coins were received in 1862) |
| Newfoundland | 1863 (Took effect in early 1865 and had different coinage from 1865 to 1947) |
| Vancouver Island | 1863 |
| British Columbia | 1865 |
| Manitoba | 1870 |
| Prince Edward Island | 1871 |
The colonial elite, the main advocates of decimalization, based their case on two main arguments:[5] The first was for facilitation of trade and economic ties with the United States; the colony’s largest trading partner; the second was to simplify calculations and reduce accounting errors.[6]
Sri Lanka
Sri Lanka (known in the West as Ceylon at that time) decimalised in 1869.
Cyprus
Cyprus decimalised the Cypriot pound in 1955 by dividing it into 1000 mils, later replaced by 100 cents.
India & Pakistan
India changed from the rupee, anna, pie system to decimal currency on 1 April 1957. Pakistan followed in 1961.
South Africa
South Africa decimalised in 1961, introducing the rand as the new unit of currency at half a South African pound (ten shillings).
Australia
Australia decimalised on 14 February 1966, with the new Australian dollar equivalent to ten shillings or half an Australian pound in the previous currency. Since a shilling became equal to ten cents, the Australian cent was equal to 1.2 Australian pence, although they were usually exchanged on a 1:1 basis during the brief period when both were circulating.[citation needed]
New Zealand
A similar strategy was followed in New Zealand on 10 July 1967, with the introduction of the New Zealand dollar to replace the New Zealand pound.
Bermuda
Bermuda decimalised in 1970, the Bermudian dollar was equal to 8 shillings 4 pence(=100 pence).
UK and Ireland
On Decimal Day, 15 February 1971, the United Kingdom decimalised the pound sterling and the Republic of Ireland the Irish pound.
Malta
Malta decimalised its currency the Maltese Lira in 1972.
Non Currency Cases
In the special context of stating the prices of stocks, traded almost always in blocks of one hundred or more shares and usually in blocks of many thousands, stock exchanges in the U.S. used eighths or sixteenths of dollars, until converting to decimals between 2000 and 2001.
£sd conversion
In places where £sd was used, the decimalisation process either defines one new penny = 1⁄100 pound, where the main unit (the pound) is not changed; or a new main unit (such as the dollar), is introduced as a half pound, and one cent = 1⁄100 dollar.
The following table shows the conversion of common denominations of coins of the £sd system.
| Common name | Amount | New £p | New $c |
|---|---|---|---|
| Halfpenny | 1⁄2d. | 5⁄24p ≈ 0.208p | 5⁄12c |
| Penny | 1d. | 5⁄12p ≈ 0.417p | 5⁄6c |
| Threepence | 3d. | 1+1⁄4p | 2+1⁄2c |
| Sixpence | 6d. | 2+1⁄2p | 5¢ |
| Shilling | 1/- | 5p | 10¢ |
| Florin | 2/- | 10p | 20¢ |
| Half crown | 2/6 | 12+1⁄2p | 25¢ |
| Crown | 5/- | 25p | 50¢ |
| Half sovereign | 10/- | 50p | $1 |
| Sovereign | £1 | £1 | $2 |
Rupee-anna-paisa-pie conversion
In India, Pakistan, and other places where a system of 1 rupee = 16 annas = 64 paise = 192 pies was used, the decimalisation process defines 1 new paisa = 1⁄100 rupee. The following table shows the conversion of common denominations of coins issued in modern India and Pakistan. Bold denotes the actual denomination written on the coins
| Rupee | Anna | Paisa | Pie | New paisa |
|---|---|---|---|---|
| 1⁄192 | 1⁄12 | 1⁄3 | 1 | 25⁄48 ≈ 0.5208 |
| 1⁄128 | 1⁄8 | 1⁄2 | 1+1⁄2 | 25⁄32 = 0.78125 |
| 1⁄64 | 1⁄4 | 1 | 3 | 1+9⁄16 = 1.5625 |
| 1⁄32 | 1⁄2 | 2 | 6 | 3+1⁄8 = 3.125 |
| 1⁄16 | 1 | 4 | 12 | 6+1⁄4 = 6.25 |
| 1⁄8 | 2 | 8 | 24 | 12+1⁄2 = 12.5 |
| 1⁄4 | 4 | 16 | 48 | 25 |
| 1⁄2 | 8 | 32 | 96 | 50 |
| 1 | 16 | 64 | 192 | 100 |
De facto decimalisation
Mauritania and Madagascar theoretically retain currencies with units whose values are in the ratio five to one: the Mauritanian ouguiya (MRO) is equivalent to five khoums, and the Malagasy ariary (MGA) to five iriambilanja.
In practice, however, the value of each of these five units is quite small: as of 2005, the MRO is traded against the euro at about 330 to one, and the MGA at about 2300 to one. In each of these countries, the smaller denomination is no longer used.
Decimalisation experience and introduction of the euro
Before the introduction of physical euro notes and coins on 1 January 2002, the plans and experiences of various decimalisations, particularly decimalisation in the United Kingdom in 1971, were studied by the European Central Bank because many of the lessons could be learnt and applied to the introduction of the euro. For example, on how to educate the public (particularly the elderly), how long the transition was likely to take, the likely speed of uptake of the new currency, the likely effects on inflation for those currencies where one cent was greater in value than the smallest coin in circulation before the transition and the likely criminal activities which might be attempted during the transition period.
See also
References
- ^ Gadoury, V. "Monnaies Françaises" p.48 (1999)
- ^ McCulloch, A. B. “Currency Conversion in British North America, 1760 – 1900.” Archivaria 16, (Summer 1983): 83-94.
- ^ Canadian Mint. “Currency Reforms, 1841 – 71.” A History of the Canadian Dollar. Ottawa: Canadian Mint, 2003.
- ^ Canadian Mint. “Currency Reforms, 1841 – 71.” A History of the Canadian Dollar. Ottawa: Canadian Mint, 2003.
- ^ Mushin, Jerry. “Twentieth Century Currency Reforms: A Comment.” Kyklos 50 (1997): 247 – 249.
- ^ W.T. Easterbrook and Hugh G.J. Aitken, Canadian Economic History (Toronto: University of Toronto Press, 1988), 381.
External links
- Plan for establishing uniformity in the Coinage, Weights, and Measures of the United States: text of a report to the U.S. House of Representatives by Thomas Jefferson.