British Pound 1965-2000 Term Paper
- Length: 8 pages
- Subject: Economics
- Type: Term Paper
- Paper: #71658407
Excerpt from Term Paper :
British Pound from 1965-2000
Around the world, the different countries have adopted different currencies for its uses. For instance, America uses the dollar, France uses the franc, Pakistan uses the rupee; and so forth. The type of currency situates each country according to its value. The sterling pound is another type of currency, which is used in many countries of the world. However, it is most used in Britain, and has been in use for many years.
The terms pound, shilling and pence abbreviated as L, s. And d. are derived from Latin words. The initial L. comes from the Latin word librius which means pound or in this case a pound of silver. The initial s. comes from the Latin word solidus which was a roman gold coin and d. comes from the Latin word denarius which was a roman silver coin Before 1975, England stopped using a thousand-year tradition of coinage and adopted a decimal-based coinage system. Before the seventies, the British pound was divided into 20 shillings with each shilling, which were then divided into twelve pence.
Just before the year of 1965, the following denominations were in common circulation. They were the half penny, penny, three pence or thruppence, six pence, shilling featuring reverses for both England and Scotland, two shillings or florin and the two shilling six pence sometimes written as 2/6 or half crown. In the mid-sixties, a five shilling coin also called a crown was issued on the death of Winston Churchill, which was issued as a collector's coin, but did see some circulation.
In 1961 a committee was formed to explore ways to convert to a decimal-based system. Over the course of the next three to five years four main options were considered and debated. One possibility was to keep the shilling at its original value and make a new pound consisting of ten shillings of ten pence each. Based on a current exchange rate of $2.80 to the pound this would devalue the pound to $1.40. Another possibility was to keep the penny at the same value and make the new pound equal to 100 pence. This would reduce the pound to 8/4 or $1.17. A third possibility was to keep the pound the same and divide it into 1000 units called mils. A single mil would have had the value of.24 d. roughly the value of a farthing a coin that had not been minted since 1956 and was demonetized in 1960. Finally they decided on a system that would keep the pound the same but divide it into 100 new pence. In this system the new pence would be worth 2.4 old pence
In the late sixties, the first decimal coins were issued. The reason for this was so that the people would gradually become accustomed to using the new coins before the changeover in 1971. The five denominations first issued were half-new pence, one new pence, two new pence, five new pence and ten new pence. Only the five and ten new pence which were dated 1968 could be used immediately this is because they were equal in value to the shilling and florin. The half, one and two new pence were predated 1971 and could not be used until that year when decimalization became official. In 1969 the fifty pence coin, the worlds first 7 sided coin was issued to replace the ten-shilling note. The note was soon withdrawn and demonetized. Also in 1969 in preparation for decimalization both the halfpenny and half crown were demonetized on July 31.
On February 15, 1971,or rather known as Decimalization day, the decimal system became official and the previously issued half, one and two new pence became legal tender and later that year on Aug 31 both the old penny and thruppence were demonetized. This is also referred to as D-Day. Over a short period of time, the pound underwent changes that had links to the royal family. From 1972 to 1981 four crown size commemoratives were issued for important events concerning the royal family. In 1972 the Queens 25th wedding anniversary to Prince Phillip was honored. In 1977 one was issued for the Queens Silver Jubilee.
In 1980 one was issued on the occasion of the Queen Mothers 80th birthday. And finally, in 1981 to commemorate the wedding of Prince Charles to Diana Spencer, who has since passed away. The mint felt since the new systemin 1982 was now over a decade old, that it was time to drop the word new from the reverse of the coins. Now instead of the numeral 5 and new pence the reverse now has the numeral 5 and the words five pence.
The same type of wording was added to all other coins depending on its value. In the early eighties, a new denomination was added, a twenty pence coin. This was introduced to bridge the gap between the ten and fifty pence coin making it easier for merchants to give change. It was also a seven sided coin and helped making give and take easier in trade.
Another new denomination was added in the early eighties as well. This time it was a one pound coin, also known as a round pound. This coin was issued with several different reverses for each country in the United Kingdom. There is also an English reverse along with Scottish, Welch and Irish reverses along with some generic reverses. The coins are struck with a reeded edge and incuse lettering on the edge. In 1984 the first casualty of decimalization occurred when due to lack of buying power and cost to produce the half new penny was demonetized. In 1986 the two-pound coin was introduced. Upon its introduction, it was intended to be a vehicle for commemoratives today it is a bimetallic coin intended for everyday use.
In the early 1990'sseveral coins were reduced in size in order to save production costs. In 1990 the five pence was reduced in size from 24 mm to 18 mm or roughly the size of a quarter to a dime in the American currency. During this process, all of the old shillings still in circulation were taken out of circulation and demonetized. In 1992 the ten pence was reduced in size from 28.5 mm to 24.5 mm or the size of a large cent to a quarter. Just like the shilling all remaining florins still in circulation were withdrawn and demonetized. Finally in 1997 the fifty pence coin was reduced in size from 30 mm to 27 mm or roughly the size of a half dollar the size of a sacagawea dollar.
Below is a chart which shows the different types of coins and their properties:
Used until Weight (grams diameter (mm)
One Pound £1
Two Pound £2
Current cupro-nickel + nickel-brass
The early nineteen hundreds was marked by the issue of proof coins sets, some of which included a gold two pounds. Even though pattern coinage was prepared for Edward VIII, no British coins were issued bearing his portrait, even for those in need for collector's items.
For the coronation of George VI, proof coin sets were issued just before the mid fifties, including a two pounds. For the coronation of Elizabeth II, proof sets were issued, but contained denominations from the crown down to farthing. Gold coin specimens were produced, but none were issued, even for collectors.
In 1971, with the advancement of decimalization, a department was created at the Royal Mint to produce, package and market coins for collectors. The two pound gold coins, which had been taken out of circulation, were once again brought back into use. This production has continued in most years since, but only in proof versions. Gold two pounds are a worthwhile and interesting addition to any collection of British coins.
Modern Times - New Nickel Brass £2 Coins
In order to fully understand the coming of the gold two pound piece, the "new" base metal £2 coins must be mentioned as well. A new two-pound coin was introduced in 1986, which we believe was intended for circulation, or at least to test public's reaction. It was struck in nickel-brass, measured 28.4 mm, and weighed 15.98 grams, exactly the same weight as the previous £2 gold coin. It also continued to be produced until 1996. Because of it's thickness and heaviness, it took favor and limited popularity as a circulating coin, at a time when most other coin denominations were being reduced in size.
The Royal Mint Trials of 1994
The Royal Mint made a variety of trial batches of bi-colored two-pound coinsin 1994, and in the late nineties, 1998 to be specific, some of these were made available to collectors in an attractive and informative package. This brought on definite eagerness from coin collectors.
The bi-metal coin in Circulation - At Last
Ever since 1997, a new bi-metal two-pound coin has been brought into circulation, which seems…