Counting up, counting down…
Although Martins sadly does not survive to oversee the conversion of its accounts to the new decimal currency, we are very much at the forefront of the planning and decision making that will give us the 100p Pound we still have today. This is because Ron Hindle, Manager of our Organisation Research and Development Department is chair of the committee charged with sorting the whole thing out. Ron is already the brain behind Martins’ groundbreaking computer development, and leaves much of the system we still use for clearing cheques as his legacy. In 1967, as Chair of the British Banks Decimalisation Study Group he travels to Australia and New Zealand to find out how these countries have coped with the adoption of a decimal currency, and, more importantly HOW we in Britain should do the same.
Ron Hindle (Right) and his fellow Group members pose for the Wellington Evening Post in July 1967. Image © Wellington Evening Post / Ron Hindle estate
© Wanganui Herald, Wellington Evening Post and The West Australian 1967 and Ron Hindle Estate						The Group’s visit down-under attracts a considerable amount of interest from the press, for once able to bask in the knowledge that they are ahead of the UK in decimalisation by a number of Years. In Britain, decimalisation has already been on the cards since the early 1960s. Following successful decimalisation schemes in other countries, the British Government sets up the Committee of the Inquiry on Decimal Currency (Halsbury Committee) in 1961, which reports in 1963. There follows much discussion about how to achieve a decimalisation, including halving the value of the pound, before the system we know today is finally adopted. Martins is in the final throes of takeover by Barclays when in October 1969 the ten shilling note is replaced by the 50 pence coin.
The British Pound remains intact after decimalisation, unlike in Australia and New Zealand, where the value is halved to create the Dollar. Between 1928 and 1957, long before decimalisation, Martins Bank issues its own £1 notes on the Isle of Man. Altogether nine non-Manx banks are permitted to issue £1 notes on the island between 1882 and 1961. Tynwald then decides that ALL banknotes can only be issued by the Isle of Man Government.
x Ten-Bob Notes – still missed today					x Martins Manx Pound
Images: Martins Bank Archive
After touring New Zealand and Australia in July 1967, Ron writes the following article in the staff magazine in which he looks at the merits of having a decimal currency, and how this has already taken place on the other side of the world. He also speculates on the size and shape of Britain’s new coins, noting wryly that a coin with edges will surely wreak havoc in a cloth pocket! Little does he know how right he will be…
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With his colleagues on the Decimalisation Study Group from the British banks Mr Hindle was in New Zealand on 10 July when that country went over to decimal currency. The Group had previously visited Australia to see how their system, introduced in February 1966, had settled down. Here he outlines some of the situations which have arisen, the most alarming, for any banker, being that the books don't balance! the decision has been taken and decimalisation will be upon us in 1971. We shall have the benefit of the experiences of others, which is a good thing always and in this case particularly so because success depends on a multitude of small factors rather than a few basic principles. Theory is of little avail if the public will not apply it. There was a good theoretical case for the issue of a 50 cent com in Australia, so the coins were minted and one is included in every commemorative set: if it were not, a visitor could be excused for not knowing that it existed, for the people just will not use it. If a member of the public receives one he gets rid of it as soon as possible: if a shopkeeper receives one he puts it aside to pay into his bank. Whatever savings were anticipated are lost as a result. In New Zealand a coin of similar value was issued and in the first few days it seemed to be acceptable. Will this be so a year from now? The reason given in Australia is that the 50c coin is too easily mistaken for a 20c coin or older 2s. piece. Though different in size, in the metal used and in design, the public does not want it. New Zealand gave their 50c coin a distinctive feature—the milling round the edge is broken by four smooth segments. Is this the secret of success ? We need to know, if Britain is to make a success of a 50 new penny coin (10s. in the present money). How about a different shape? Imagine the havoc that a square coin (even with rounded corners) will cause in a cloth pocket.
		Australian Decimalisation 1966. The one and two cent coins are dropped in 1990, being of little more than nuisance value. www.oldcoin.com.au/austcoinsets.htm						“Tabloid education is fashionable today - people learn through the medium of comic strips. There has to be a cartoon character. So 'Dollar Bill' was born” www.wilsonsalmanac.com
‘Tender high’ The Australians expounded an interesting theory - that men pick out coins from their pocket largely by the sense of touch while women take them from their purses mainly by appearance. The coins of smallest value both in Australia and New Zealand are worth 1 cent and 2 cents. They avoided 4 cents by opting for a major unit equal to 10s. in the old currency. Quite rightly they preferred coins smaller than the clumsy penny. In New Zealand no secret was made of the fact that the operation of decimalisation was being covered by savings arising from the reduced metallic content of the low value coins. But are these coins too small? In practice the banks find that the variations in weight of coins of the same value are such that checking values of bags by weight is a much more risky procedure than it was with pennies - and that is so now, when all the coins are new! It seems that tolerance in weight is not in proportion to the stated weights of the coin but it increases proportionately with larger coins. Tabloid education is fashionable today - people learn through the medium of comic strips. There has to be a cartoon character. So 'Dollar Bill' was born. There had to be songs and rhymes too. What about nursery rhymes ? Could 'Sing a song of sixpence' become 'Sing a song of five cents' ? 'Tender high' was the refrain on D.C. (decimal changeover) Day. What did it mean? An official conversion table had been published and appeared on the sides of pens and pencils, inside purses and on every gimmick that could be devised. But it was seemingly only for bankers and such elite. You must tender high - as high as the next multiple of 5 cents (6d.) above what you want to pay. Then you will get cents in change. Imagine how this went on. A man gets on a bus and asks for a 7-cent ticket. His pencil tells him that this is equivalent to 8d. which he offers to the driver (one-man buses always). No, says the driver, a shilling please and I will give you 3 cents change. The newsvendor sells papers previously 4d. and now priced at 4 cents. But 4 cents equals 5d., the pencil says. The passer-by offers 4d. - just trying it on, or maybe forgetting the changeover. No, says the newsvendor. Remembering the pencil the buyer offers 5d. No, says the newsvendor, I want 6d. so that I can give you 1 cent change. The argument starts. The paper was only 4d. last week - and why should I not get it now for 5d. ? The newsvendor gives in and takes the 5d. - and makes an additional 1 cent!
	New Zealand old AND new… Interestingly the first New Zealand decimal $1 coin displays its value in both decimal AND pre-decimal denominations to demonstrate that one new dollar is equal to ten old shillings. Image Copyright Reserve Bank of New Zealand http://www.rbnz.govt.nz/
Progressive changeover A statistical discovery was that whereas bank notes come and go in the banking system coins stay put. A branch tends to hold a basic reserve stock of coins which is rarely touched. This helped in the withdrawal of the old coins after the changeover. On the changeover day all stocks of the old coin held by the branches were 'frozen', not to be issued except in case of emergency, and were withdrawn later without the complication of sorting new coin from old. If the new coins are to be issued in advance of changeover in this country, as is now suggested, it will not be possible to carry out such a clean withdrawal of old currency after conversion. Conversion cannot be done overnight. In Australia, for instance, the operation of dual currency lasted for 18 months, a progressive changeover, zone by zone, taking place, largely determined by the question of machine conversion. During this time shops were advised to work in the currency that their machinery was made for. Thus the 'tender high' philosophy had to operate for some time. This was not fully recognised by some New Zealand bank managers who omitted to keep some £.s.d. currency for issue to those of their customers who were still dealing in £.s.d. This sort of thing complicates the task of the cashier. During the dual currency period small items (groceries and the like) are commonly marked in both currencies. Imagine the fun in this country if we persist in calling the minor unit a penny (or even a new penny), the new penny being worth 2.4 old pennies. The actual price tickets should be clear enough as a different letter will be used for the two pennies ('d' for old and 'p' for new). In conversation, however, it will not be so easy. Imagine the grocer saying 'Mrs Smith, sugar is fourpence a pound today'. 'That's cheap' says Mrs Smith, 'I'll take 10 Ib. before it goes up. Here is 3s. 4d.' 'Oh no, Mrs Smith that comes to 40 pence. If you want to pay in the old currency it will be 8s.' Imagine, too, the tricks that the unscrupulous trader might be up to.
Goodbye, £ s d…							… hello drab and clinical
				In 1967 Martins Issues a coin set that affectionately says goodbye to shillings and pence, as from 1968 only decimal coins will be issued in preparation for ‘D-Day’, 15^th Feb 1971.							By contrast, in 1968 The Royal Mint issues this distinctly lacklustre set of new coins. The new 50p coin is not included as it is already in circulation.
Ups and downs Britain, basing its new currency on the £, will be spared the problems that arise at the top end of the scale due to a change in major unit. The Australian and New Zealand new dollar is equivalent to 10s. Houses there sound cheaper if still advertised in £'s. But the best racket arises with motor cars. These are still often advertised in £'s, but your trade-in is quoted in dollars. 'Yes sir, you can have this magnificent car for £1,000 and we will give you an allowance of 400 dollars for your old model.' The customers pays up 1,600 dollars and then realises that his trade-in allowance was only £200! Banks generally reckon to balance their books but currency conversion beats them. Perhaps for the first time they have to instruct their branches not to balance —or at least they have to tell them what to do with inevitable differences. This arises from the fact that old pence cannot be converted exactly into new pence; some figures are rounded up and some are rounded down, and only by an arithmetic freak will the 'ups' balance the 'downs'. The more the amounts the less will be the difference, always assuming that the nimble-fingered machinist makes no mistakes and anyway, by then, every branch will be 'computerised' so maybe they won't care much. Some shocks may well be coming to managers. Quite likely the bank's books will be closed to customers for a while to permit cheques in the pipeline to find their way into the accounts. Then for the first time managers will really know how far a customer is overdrawing on his account! These are the sort of practical things that arise in decimalising the currency. The basic principle is simple enough, but there will be a multitude of little situations to deal with and it will not only call for training and knowledge on the part of the bank staffs who will bear the brunt, but for quite a bit of tact and understanding. x
© gut informiert 2007 to date

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