Decimal Day
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On February 15, 1971, variously known as Decimal Day, Decimalisation Day and D-Day, the United Kingdom and the Republic of Ireland decimalised their historical currencies. Although they were separate currencies — Irish Pounds and British Pounds — 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), or 20 shillings (denoted by the symbol s). Under the new system, the shilling was formally eliminated, and the pound was divided into 100 "new pence", denoted by the symbol p. New, different coinage was issued alongside the old coins, many of which still remained legal tender at their old value, although the penny (1d) and threepenny (3d) coins were removed from circulation immediately and could only be exchanged at banks. To ease the transition, the 1s and 2s coins were replaced by 5p and 10p coins (i.e. the same value) with the same size and composition. The old coins still in circulation remained valid currency (as 5p and 10p coins) for many years afterwards. The old sixpence (6d) which was worth 2.5p, and the old half-crown (2s 6d) which was worth 12.5p also remained in circulation for some time. Also, a decimal halfpenny (1/2p) was introduced so for several years things could be priced as low as 1/200 of a pound.
For details of the currency before decimalisation, see Pre-decimal British coinage and Irish pre-decimal system.
Interestingly, in the special case of Maundy money the face value of these coins was maintained, effectively increasing all Maundy coins' value by a factor of 2.4, as the coins continued to be legal tender as new pence.
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. A public information campaign which 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.
The 1s and 2s coins remained in circulation alongside their 5p and 10p twins for many years afterward, until smaller 5p and 10p coins replaced the old in the 1990s and, although seldom used, the sixpence coin also remained legal tender as 2½p until the withdrawal of the half penny in 1980. Over the same time the crown as 25p, and half-crown (to 1980) as 12½p, remained legal tender but were seldom used.
Background
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.
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.
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) [3].
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.
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.
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