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Australian pound

The Australian pound (£) was the official currency of the Commonwealth of Australia from 1910 until its replacement by the Australian dollar on 14 February 1966.^[1]^[2] It was subdivided into 20 shillings, with each shilling consisting of 12 pence, following the imperial £sd system inherited from British colonial currency.^[1]^[2] Initially introduced at parity with the British pound sterling, coins were first issued in 1910 by the Royal Mint in London, with later production at branches in Sydney, Melbourne, and Perth,^[3]^[4] while the first federal banknotes—beginning with 10-shilling denominations—were issued by the Commonwealth Treasury in 1913.^[5] Following Australia's federation in 1901, the Australian pound unified the disparate colonial currencies that had previously circulated, including British sterling coins and notes issued by private banks and the Queensland Treasury.^[1]^[5] The currency maintained parity with the pound sterling until January 1931, when economic pressures during the Great Depression prompted a devaluation to approximately 30% below sterling, after which it remained pegged to the British currency until the post-World War II era.^[6]^[7] This peg reflected Australia's strong economic ties to the United Kingdom, with the Australian pound serving as legal tender alongside British coins until full nationalization.^[7] The decision to decimalize the currency stemmed from long-standing inefficiencies in the £sd system, which complicated arithmetic for trade and everyday transactions; in 1963, under Prime Minister Robert Menzies, the Decimal Currency Act established the Australian dollar (equal to 10 shillings or half a pound) and 100 cents, with a public education campaign featuring the mascot "Dollar Bill" to ease the transition.^[1]^[2] The changeover on "C-Day" (14 February 1966) marked the end of pre-decimal circulation, though some pound notes remained legal tender until 1969; the reform was projected to save over £11 million annually in accounting costs, offsetting the £30 million implementation expense.^[1]^[2] Today, pre-decimal coins and notes are collectible artifacts, preserved in institutions like the Reserve Bank of Australia Museum, symbolizing a pivotal shift in Australia's economic independence.^[8]

Overview

Description and adoption

The Australian pound, symbolized by £, served as the official currency of Australia from 1910 until its replacement by the Australian dollar on 14 February 1966. It was divided into 20 shillings, with each shilling further subdivided into 12 pence, resulting in 240 pence per pound, mirroring the structure of the British pound sterling. This imperial-based system was introduced to establish a unified national monetary framework following the federation of the Australian colonies in 1901, replacing the disparate colonial currencies that had previously circulated, including British coins and private banknotes issued by colonial banks.^[9]^[10] The legal foundation for the Australian pound was laid by the Coinage Act 1909, which authorized the Commonwealth government to mint and issue its own coins, distinct from British colonial minting arrangements, and defined the standard denominations and compositions for Australian coinage. Complementing this, the Australian Notes Act 1910, enacted under Prime Minister Andrew Fisher's Labor government, transferred the authority to issue banknotes from state governments and private banks to the Commonwealth Treasury, imposing a 10% tax on private notes to phase them out and promote national uniformity. These acts marked the Commonwealth's assertion of sovereign control over currency, aiming to consolidate economic policy across the federation and eliminate the fragmentation caused by multiple colonial note-issuing entities.^[11]^[12]^[13] Coins denominated in the Australian pound were first issued in 1910, with silver coins struck by the Royal Mint in London and Melbourne to replace circulating British silver coins. Banknote issuance began in 1913, starting with ten-shilling notes on 1 May, followed by higher denominations up to £1,000 through 1915; interim measures included overprinting existing private banknotes as "Australian Notes" from 1911 to 1913 to facilitate a smooth transition. Upon introduction, the Australian pound was pegged at parity (1:1) with the British pound sterling, reflecting Australia's economic ties to the United Kingdom and adherence to the gold standard, which ensured convertibility and stability in international trade.^[10]^[14]^[9]

Structure and denominations

The Australian pound followed the imperial £sd system, where 1 pound (£) was equivalent to 20 shillings (s or /- ) and 1 shilling was equivalent to 12 pence (d), yielding 240 pence per pound. This hierarchical structure, known as the pounds, shillings, and pence or LSD system (from the Latin librae, solidi, denarii), originated from British currency practices and was adopted to standardize transactions across the Commonwealth.^[1]^[15] Minor units included the halfpenny (½d), minted in bronze from 1911, and the farthing (¼d), a quarter-penny value that circulated primarily as British imports due to its low denomination. Standard coin denominations comprised bronze pieces for low values—the halfpenny and penny (1d)—and sterling silver coins for higher values, including the threepence (3d), sixpence (6d), shilling (1s), florin (2s), and crown (5s). Gold coins tied to imperial standards featured the sovereign (£1), containing 0.2354 troy ounces of fine gold (22-carat), and the half-sovereign (10s), which held half that gold content, ensuring the pound's redeemability in gold.^[16]^[17] Banknotes complemented the coinage with higher denominations of £1, £5, £10, £20, £50, and £100, issued by the Commonwealth from 1913 onward to facilitate larger payments while maintaining alignment with the imperial monetary framework.^[5]

Historical development

Establishment of the currency

Following the Federation of Australia in 1901, the Constitution granted the federal Parliament authority over currency matters, leading to efforts to unify the disparate colonial monetary systems that had relied on British sterling, local tokens, and private banknotes. The Coinage Act 1909 empowered the Commonwealth to issue its own coins, while the Australian Notes Act 1910 established a national paper currency under the Treasury, prohibiting private and state-issued notes as legal tender after a transition period and imposing a 10% tax on private issuances to discourage them. By 1911, the Australian pound had effectively replaced colonial currencies such as the New South Wales pound, with the federal government overprinting existing private banknotes as "Australian Notes" (known as superscribed notes) to facilitate immediate circulation and unification.^[18]^[5] Coinage production commenced in 1910 with the striking of the first silver denominations—florins, shillings, sixpences, and threepences—at the Royal Mint in London, featuring a portrait of King Edward VII on the obverse and Australian emblems on the reverse. Bronze coins, including pennies and halfpennies, followed in 1911, also produced in London initially, with designs transitioning to depict King George V from that year onward as he ascended the throne. The Sydney branch of the Royal Mint, operational since 1855 for sovereign production, began contributing to Commonwealth silver coinage by 1916, supporting the rollout of the new currency across the nation. These coins were valued at par with British equivalents, ensuring seamless integration into existing trade.^[3]^[19] Paper currency transitioned from the interim superscribed notes to purpose-printed federal issues starting in 1913, when the Commonwealth Treasury released the first series under the Australian Notes Act, comprising denominations of 10 shillings, £1, £5, £10, £20, £50, and £100. Printed by the Perth-based Note Printing Branch (initially under contractor Thomas Harrison), these notes featured the Australian coat of arms on the front and pictorial vignettes of national landscapes and industries on the back, such as the Goulburn Weir for the 10-shilling note. The designs aimed to symbolize unity and progress, with production ramping up to meet demand amid growing public acceptance.^[5]^[14] Early implementation faced logistical hurdles, including a period of dual circulation where pre-federation British and colonial coins remained legal tender alongside new Australian issues until the 1920s, allowing gradual withdrawal without economic disruption. The demonetization of outdated colonial tokens and notes was managed through redemption programs, though challenges like public skepticism toward paper money—stemming from prior private bank failures—and supply shortages during World War I delayed full adoption. By the mid-1920s, the Australian pound had achieved widespread dominance, solidifying the nation's monetary independence.^[3]^[5]

Adherence to the gold standard

The Australian pound, introduced in 1910 following federation, was initially pegged to gold through its parity with the British pound sterling, maintaining the convertibility established under the colonial gold standard since the mid-1850s. This adherence operated primarily as a sterling exchange standard, where stability relied on London's financial markets rather than direct gold flows, supporting Australia's export-driven economy in commodities like wool and wheat. The fixed exchange rate facilitated predictable trade with Britain, Australia's primary market, by ensuring the Australian pound's value aligned with international gold parity.^[20] World War I prompted a suspension of gold convertibility on 14 July 1915, when the Commonwealth Government prohibited gold exports under the Customs Act to preserve reserves amid wartime demands; this measure was renewed in February 1922. During the suspension, the Australian pound floated relative to gold but remained closely tied to sterling through managed exchange controls, allowing the government to finance war efforts without depleting gold stocks. Post-war reconstruction efforts prioritized restoration, with the embargo lifted on 29 April 1925, resuming the gold standard at pre-war parity as export booms—particularly in wool, with prices rising 30% in 1924—strengthened reserves, enabling £10.5 million in gold imports between February and May 1925. The Commonwealth Bank played a central role in this resumption, advocating for tight monetary policy, including note issuance controls via the Australian Notes Board (established 1920 and abolished 1924), to curb inflation and achieve deflation necessary for parity.^[20] The interwar period saw mounting pressures on the gold standard, culminating in its effective collapse amid the Great Depression. As global commodity prices plummeted from 1929, Australia's fixed parity exacerbated export declines, with wool and wheat values halving between 1929 and 1930 due to oversupply and reduced demand. In response, authorities initiated a gradual devaluation starting in early 1930, with the Australian pound depreciating by approximately 30% against sterling by January 1931, when it stabilized around £1 sterling equaling £1.30 Australian. This shift, managed by the Commonwealth Bank through exchange controls and reserve adjustments, abandoned gold convertibility in favor of a sterling peg, reflecting the economic rationale to boost competitiveness and stimulate exports during deflationary pressures—unemployment had risen to 23% by late 1930. The devaluation aided recovery in key sectors, as a weaker pound made Australian wool and wheat more affordable internationally, contributing to a trade surplus rebound by 1932, though it initially strained imports and heightened domestic inflationary risks.^[21]^[22]

Impacts of World War II

With the outbreak of World War II, Australia imposed strict exchange controls on 28 August 1939 to safeguard foreign reserves and manage international payments amid wartime uncertainties.^[23] These measures, administered by the Commonwealth Bank, restricted capital outflows, limited imports, and rationed foreign currency availability, effectively isolating the Australian pound from volatile global markets while prioritizing essential war-related transactions.^[24] To finance the escalating war effort, note production surged, with the government issuing increased supplies of Australian pound banknotes to support domestic borrowing and expenditure, though physical rationing of goods indirectly curbed currency hoarding by redirecting economic activity toward national security needs.^[25] The Japanese occupation of Australian territories, particularly Papua New Guinea from early 1942, introduced disruptive parallel currencies that challenged the Australian pound's dominance. Japanese forces issued invasion money, known as "banana notes" due to motifs on higher denominations, denominated in Australian pounds at nominal parity to facilitate administration and trade in occupied areas like Rabaul and Port Moresby.^[26] These notes, printed by the Japanese Government between 1942 and 1944, circulated alongside or supplanted legitimate Australian currency, but their value eroded rapidly due to hyperinflation and coercion, leading to widespread rejection by locals. Following Allied liberation in 1945, the notes were fully demonetized, restoring the Australian pound as the sole legal tender and requiring extensive reissuance efforts to rebuild trust in occupied regions.^[26] Domestically, wartime exigencies solidified the Commonwealth Bank's role as Australia's de facto central bank starting in 1942, when National Security Regulations granted it sweeping powers over monetary policy, including the ability to direct private banks and prevent hoarding through mandatory deposits and liquidity controls.^[27] This centralization, intensified after the Pearl Harbor attack in December 1941, shifted economic orientations toward U.S. dollar transactions, as Australia aligned more closely with American supply lines and reduced reliance on sterling area financing.^[28] Measures like special accounts for trading banks and anti-hoarding campaigns ensured currency circulation supported war production without fueling inflation, marking a pivotal evolution in the pound's managed framework.^[27] The arrival of Allied forces, including nearly one million U.S. troops by mid-1942, exerted significant pressure on Australia's reserves through heightened demand for local goods and services, while the Lend-Lease program provided critical relief by delivering approximately $2 billion in U.S. aid, equivalent to 26 percent of wartime gross expenditure.^[29] This influx strained dollar reserves initially due to reciprocal obligations under reverse Lend-Lease, where Australia supplied food, bases, and logistics valued at over $550 million by 1944, but it also facilitated a temporary buildup of sterling balances with the United Kingdom as export earnings accumulated under controlled trade.^[30]^[29] These dynamics underscored the Australian pound's vulnerability to geopolitical shifts, with U.S. troop expenditures injecting dollars into the economy and prompting tighter exchange oversight to mitigate inflationary risks.^[31]

Post-war devaluation and economic policies

Following World War II, Australia's economy faced significant challenges in maintaining external balance, culminating in the 1949 devaluation of the Australian pound. In September 1949, the currency was devalued by 30.5% against the US dollar, from US$4.03 to US$2.80 per pound, in alignment with the British pound sterling to preserve trade competitiveness within the sterling area.^[32] This measure addressed a balance-of-payments crisis exacerbated by postwar reconstruction demands, high import needs, and declining export earnings, aiming to enhance the price competitiveness of Australian goods on global markets and stimulate export volumes.^[33] Under the Chifley Labor government (1945–1949), economic policies emphasized full employment as a cornerstone of postwar recovery, as outlined in the 1945 White Paper on Full Employment, which advocated Keynesian demand management to achieve sustained low unemployment through public investment and welfare expansions.^[34] The subsequent Menzies Liberal government (1949–1966) built on this framework, prioritizing economic stabilization and private enterprise growth while maintaining full employment objectives, supported by immigration-driven labor supply and arbitration system wage controls to mitigate inflationary pressures.^[35] A key institutional reform was the establishment of the Reserve Bank of Australia in 1960 via the Reserve Bank Act 1959, which separated central banking functions—focused on monetary policy and currency stability—from the commercial operations of the former Commonwealth Bank.^[24] Australia's membership in the sterling area post-war necessitated import restrictions and quantitative controls, introduced in the late 1930s and intensified in the 1950s to conserve foreign exchange amid dollar shortages and protect domestic industries.^[36] These measures discriminated against non-sterling imports, channeling trade toward the UK, which accounted for nearly 45% of Australia's imports in 1954–55.^[36] Gradual liberalization began in the mid-1950s, with most quantitative restrictions lifted by 1960, shifting to tariff-based protections and broader trade agreements, such as the 1957 Australia-Japan Commerce Agreement, to diversify markets.^[36] By the 1950s, persistent inflation—peaking at 23.9% in 1951 due to the Korean War boom and wool price surges—combined with the arithmetic complexities of the pounds-shillings-pence (LSD) system, where one pound equaled 20 shillings or 240 pence, fueled discussions on currency reform.^[37] The LSD structure complicated everyday transactions and bookkeeping, reducing productivity by an estimated £11 million annually, while alignment with global decimal currencies became economically imperative amid postwar diversification from British ties.^[1] These pressures prompted initial reform deliberations in the early 1950s, setting the stage for eventual decimalization.^[1]

Decimalisation

The decision to decimalise the Australian pound was influenced by long-standing discussions on currency reform, culminating in the appointment of the Decimal Currency Committee in February 1959 by Treasurer Harold Holt, chaired by Walter Scott. The committee's 1960 report recommended adopting a decimal system with a base unit equivalent to ten shillings, named the "dollar," subdivided into 100 cents, citing benefits for economic efficiency and alignment with international trends observed in countries like South Africa.^[38] In response, the government introduced the Currency Act 1963, which received assent on 30 October 1963 and legislated the conversion date as 14 February 1966, establishing the exchange rate at one pound equaling two dollars to maintain monetary value equivalence. The Decimal Currency Board was formed to oversee planning, including the production of new coins and the adaptation of vending machines, cash registers, and accounting systems, with an estimated transition cost offset by long-term savings exceeding £11 million annually in administrative efficiencies.^[38]^[1] On conversion day, known as "C-Day," new decimal coins were introduced, with the 10-cent piece equivalent to one shilling, the 20-cent piece to two shillings, and the 50-cent piece to five shillings, alongside smaller denominations of 1 cent, 2 cents, and 5 cents to replace pence. To facilitate public adoption, the Decimal Currency Campaign was launched in 1963, utilizing television, radio, print media, and educational materials featuring the cartoon character Dollar Bill to teach conversions and reduce confusion, reaching schools, businesses, and households nationwide.^[38]^[1] A transitional period followed, during which both pre-decimal pounds, shillings, and pence and the new dollars and cents circulated as legal tender to allow for gradual adjustment, lasting approximately 18 to 24 months until mid-1968 when most businesses had converted their equipment. Old pre-decimal coins were progressively withdrawn from circulation and melted down by the Royal Mint, with significant refining completed by June 1968, while pre-decimal banknotes remained exchangeable at banks until their full replacement in the early 1970s.^[38]^[39] The economic rationale centered on simplifying arithmetic for trade, bookkeeping, and retail transactions, eliminating the complexities of the duodecimal shilling and pence system that hindered calculations in an increasingly mechanized economy. The transition was executed without significant disruption, under budget and ahead of schedule, with price rounding resulting in negligible inflation of less than 1 percent overall.^[40]^[38]

Physical forms

Coins

The Australian pound's coins were produced in various denominations using specific materials that adhered to British imperial standards, with adaptations for local production. Pennies and halfpennies were struck in bronze, composed of 95% copper, 4% tin, and 1% zinc, providing durability for low-value circulation.^[41] Silver denominations, including threepences, sixpences, shillings, and florins, were initially made from 92.5% sterling silver (with 7.5% copper) from 1910 to 1945, after which the composition shifted to 50% silver (with 40% copper, 5% nickel, and 5% zinc) from 1946 to 1963 to conserve resources amid rising metal costs.^[16] Gold sovereigns maintained the traditional British specification of 91.67% gold (22 carat, with the balance copper) throughout their production, ensuring compatibility with international trade.^[42] Coin designs emphasized British monarchy on the obverse and distinctive Australian elements on the reverse, reflecting national identity. The obverse featured portraits of reigning monarchs: George V (1910–1936) by Bertram Mackennal, a rare unissued Edward VIII pattern in 1936, George VI (1937–1952) by Thomas H. Paget, and Elizabeth II (1953–1966) by Mary Gillick.^[43] Reverse designs incorporated native motifs, such as the bounding kangaroo on pennies (by W. H. J. Blakemore, 1911–1936; later George Kruger Gray, 1938–1964), wheat stalks on threepences (by George Kruger Gray), and the Australian coat of arms on florins and shillings.^[16]^[44]^[45] These motifs, often by Australian artists like George Kruger Gray, symbolized agricultural and faunal heritage. Minting occurred primarily at the Royal Mint branches in Sydney (established 1855), Melbourne (1872), and Perth (1899), with some early production in London and occasional overseas assistance during wartime.^[46] Annual outputs varied by denomination and year; for example, the 1910 florin had a mintage of 1,259,000 pieces, struck in London as the inaugural issue.^[47] Varieties arose from mint marks (S for Sydney, M for Melbourne, P for Perth) and die differences, with notable rarities including the 1922/21 overdate threepence, of which only about 900 were struck at the Melbourne Mint.^[48] Pre-decimal coins retained full legal tender status indefinitely under Australian law, as confirmed by the Reserve Bank of Australia and Royal Australian Mint, though they ceased active circulation after decimalisation in 1966.^[49] Many pre-1946 high-silver coins were withdrawn and melted down in the post-war period due to their intrinsic metal value exceeding face value; for instance, coins valued at $6 million were melted in 1956 for export as part of international debt repayment.^[50] This process significantly reduced surviving populations of sterling silver issues, while lower-silver post-1946 coins and bronze pieces remained more common in circulation until gradually phased out.

Banknotes

The issuance of Australian pound banknotes began in 1913 under the Commonwealth Treasury, which produced the initial federal notes following the Australian Notes Act 1910 to centralize currency and phase out private bank issues through a 10% tax on competing notes.^[5] These early notes were printed by Thomas S. Harrison in Melbourne, marking the start of a unified national paper currency. By 1920, responsibility for note issuance transferred to the Commonwealth Bank of Australia via amendments to the Commonwealth Bank Act, with administration handled by a dedicated Notes Issue Department under a Notes Board.^[5] The Commonwealth Bank became the sole legal issuer in 1945 under the Commonwealth Bank Act, maintaining this role until 1960 when the Reserve Bank of Australia assumed control through the Reserve Bank Act 1959, continuing production until decimalization in 1966.^[5] Several distinct series of pound banknotes were released between 1913 and 1966, reflecting technological and design advancements. The inaugural 1913 series consisted of black-and-white notes in denominations from 10 shillings to £1,000, featuring simple engravings and printed on watermarked paper for basic authentication.^[5] The 1923 series introduced color to the £1 note—dark green on the front and pale green on the back—while reducing its size for efficiency, with subsequent denominations like the £5 (1924) and £10 (1925) following suit in colored formats.^[51] From 1933 to 1952, portrait-oriented series dominated, including the 1933–1934 "Ash" series signed by E. T. Riddle and H. J. Sheehan, among others, which incorporated economic vignettes, and the 1938–1940 update under George VI; these were followed by wartime issues in the 1940s that prioritized durability amid shortages.^[51] The final pre-decimal series, issued from 1953 to 1966, featured Queen Elizabeth II and historical Australian figures, with the Reserve Bank overseeing the later printings.^[51] Designs evolved from allegorical and symbolic motifs in early series to more nationalistic and portrait-based themes in later ones. The 1913 £1 note, for instance, depicted an allegorical figure representing "Discovery" on the reverse, alongside maritime elements symbolizing exploration, while fronts bore British monarch profiles or Treasury officials' signatures.^[5] By the 1923 colored series, designs incorporated pastoral scenes and industrial symbols, such as sheep farming on the £1 reverse, to evoke Australia's economy.^[51] The 1933–1952 portrait series shifted to monarch images—King George V in the 1930s and George VI in the 1940s—paired with vignettes of wool production, agriculture, manufacturing, and commerce, sculpted by artists like Paul Montford.^[51] The 1953–1966 series standardized sizes at 130 mm × 76 mm for the £1 note and introduced Australian explorers like Matthew Flinders and native flora, reducing economic motifs in favor of historical narratives.^[51] Queen Elizabeth II's portrait, based on a 1953 effigy, appeared on all denominations from this series onward, signifying the monarchy's enduring role.^[52] Security features progressed to combat counterfeiting, starting with basic watermarks and evolving into sophisticated printing techniques. Early 1913 notes used simple paper watermarks and intaglio printing for raised ink textures, while the 1923 series added colored inks to distinguish genuine notes.^[5] The 1933–1934 series introduced a medallion watermark of Edward, Prince of Wales, alongside intaglio for portraits and letterpress for text, enhancing tactile verification.^[51] Post-World War II redesigns in 1952–1954 replaced these with a Captain James Cook watermark across all notes, retained through 1966, and emphasized intaglio for intricate details like shields and boomerangs to deter forgery.^[51] These measures, including serialized numbering and official seals, were printed at the Note Printing Branch in Melbourne, ensuring robustness during economic strains.^[5] Production volumes varied by series and denomination, with the £1 note being the most circulated, exceeding 100 million units across multiple print runs to meet everyday demand.^[51] The 1953–1966 series alone produced over 1 billion £1 notes under Commonwealth Bank and Reserve Bank oversight, reflecting high circulation before decimal transition.^[5] Rarity defines certain early specimens; notably, a 1913 £1 note with serial number P000001—presented to Prime Minister Andrew Fisher—was rediscovered in 2015 within the National Library of Australia's archives after being lost for nearly 80 years, highlighting the scarcity of pristine first-series examples.^[53]

Economic and international context

Exchange rates and pegging

The Australian pound was established in 1910 at parity with the British pound sterling, maintaining a fixed exchange rate of AUD£1 = GBP£1 until 1931. This peg provided stability for trade within the British Empire and indirectly linked the Australian currency to gold through sterling's adherence to the gold standard. The arrangement supported Australia's export-oriented economy, heavily reliant on commodities like wool, which accounted for a significant portion of exports in the early 20th century.^[54]^[55] In response to the Great Depression and pressures on the balance of payments, Australia devalued the pound in December 1931 by 20 percent against sterling, setting the rate at AUD£1 = 16 shillings sterling (or 0.8 GBP). This adjustment followed the UK's abandonment of the gold standard earlier that year and positioned Australia within the emerging sterling area, where member currencies were managed in relation to sterling to facilitate multilateral clearing and conserve foreign reserves. The devaluation aimed to boost export competitiveness, particularly for wool and emerging mineral exports, amid falling global prices that had halved the value of Australia's primary commodity shipments between 1929 and 1930. Prior to the 1931 change, the Australian pound traded at approximately US$4.85–4.86, reflecting parity with sterling's gold-backed value; post-devaluation, it stabilized around US$3.89 against the US dollar until 1949.^[32]^[56]^[57] The 1949 devaluation of sterling by 30.5 percent against the US dollar—from US$4.03 to US$2.80—prompted Australia to follow suit, adjusting the Australian pound from US$3.224 to US$2.24 while preserving the 16-shilling peg to sterling. This move addressed persistent balance-of-payments deficits exacerbated by post-World War II reconstruction demands and volatile commodity prices, with wool and minerals remaining key earners but vulnerable to international fluctuations. Minor adjustments occurred in the 1950s and early 1960s to manage these pressures, but the peg remained at 16 shillings sterling until the currency's decimalisation in 1966. Throughout this period, the basic parity formula remained straightforward: AUD£1 equivalent to GBP£1 prior to devaluations, shifting to a managed multiple post-1931 without complex derivations, as the focus was on sterling alignment rather than independent floating.^[58]^[59]

Use in external territories

The Australian pound served as the official currency in the Territory of Papua and New Guinea, administered by Australia since the 1910s for Papua and from 1921 for the League of Nations mandate over New Guinea, maintaining full parity with the metropolitan currency and without significant local overprints or adaptations.^[60] This unified monetary system facilitated trade and administration across the territory, where the pound circulated freely alongside the Australian mainland economy.^[60] In other external territories, the Australian pound was similarly adopted as legal tender. Nauru, under joint Anglo-Australian-New Zealand administration from 1919 until its independence in 1968, used the Australian pound until the 1966 decimalisation transition to the Australian dollar.^[61] Norfolk Island, as an Australian external territory, followed the same pre-decimal system, with the pound in circulation until 1966.^[62] Australian Antarctic bases, operated under the Australian Antarctic Territory claim since 1933, relied on the Australian pound for personnel transactions during expeditions, reflecting the territory's alignment with national currency practices. In some post-World War I Pacific mandates, such as Nauru, dual circulation occasionally occurred with residual local or colonial pounds, but these were phased out in favor of the Australian pound at full parity.^[61] Wartime disruptions posed significant challenges, particularly in New Guinea, where Japanese occupation forces from 1942 to 1945 introduced invasion money denominated in pounds and shillings to supplant the Australian currency and undermine Allied economic control.^[26] These "Japanese Imperial Government" notes, printed to mimic the Australian pound's structure, circulated in occupied areas, causing inflation and black market issues until Allied forces recaptured the territory. Post-war stabilization efforts reinstated Australian-issued pounds, restoring economic order through direct supply from the Commonwealth and integration into broader reconstruction programs.^[26] The Australian pound's use in these territories ended with the national decimalisation on 14 February 1966, when it was replaced by the Australian dollar at a rate of £1 = A$2, applying uniformly across all external administrations.^[61] In Papua New Guinea, the Australian dollar then served until its phased withdrawal by 31 December 1975, coinciding with independence, when the local kina was introduced on 19 April 1975 at parity (K1 = A$1) and became sole legal tender.^[63]^[64] Other territories, including Nauru, [Norfolk Island](/page/Norfolk Island), and Antarctic bases, continued with the Australian dollar without further local transitions.^[61]

Legacy

Collectibility

The collectibility of Australian pound coins and banknotes has grown significantly since decimalisation in 1966, driven by their historical significance as the first unified federal currency and the limited survival rates of high-quality specimens. Collectors prize pre-decimal issues for their silver and bronze compositions, intricate designs, and low survival in superior grades, with the market supported by active auctions and grading services. Rarity is often determined by original mintages, wartime hoarding, and post-circulation attrition, making certain dates highly sought after.^[65] Key rarities among coins include the 1910 proof set, struck in limited numbers at the Royal Mint in London to commemorate the introduction of Australian coinage, with surviving examples in original presentation cases commanding prices around AUD$95,000 due to their pristine condition and historical provenance. The 1925 florin, with a mintage of approximately 2.96 million, is considered scarcer in higher grades owing to heavy circulation wear, where uncirculated pieces can exceed AUD$1,000, reflecting demand for well-preserved George V era silver coins. For banknotes, uncirculated 1913 £1 issues from the Collins/Allen series are exceptionally rare, with values surpassing AUD$100,000, as fewer than a handful remain in top condition from the initial print run of just 1.25 million notes.^[66]^[67]^[68] Professional grading by services like PCGS for coins and PMG for banknotes plays a crucial role in establishing market value, using a 1-70 scale to assess condition, with premiums applied for exceptional paper quality (EPQ) or premium quality (PQ) designations on pre-decimal items. Auction records underscore this, such as a Proof 1930 penny, one of Australia's most iconic rarities with an original mintage of about 1.45 million but many destroyed during the Great Depression, selling for AUD$1.15 million in 2019, highlighting the premium for proof strikes. Circulated examples of the same date have also set benchmarks, with a VF-35 graded specimen fetching AUD$24,400 in 2021.^[69]^[70]^[71] Value is further influenced by condition, provenance from notable collections, and minting errors; for instance, the 1946 florin exhibits varieties like partial collar errors that disrupt the rim, elevating fine examples to AUD$500 or more due to their scarcity among the 5.7 million minted. The 2015 discovery of the first Commonwealth £1 banknote (serial P000001) at the National Library of Australia, previously thought lost, estimated at AUD$1.5 million, sparked renewed collector interest in early superscribed notes, potentially stabilizing or increasing prices for similar high-grade survivors by underscoring their numismatic importance.^[72]^[53] Preservation efforts are led by the Royal Australian Mint's National Coin Collection, which archives representative specimens of all Australian pound-era coins to safeguard numismatic heritage, including rarities like early proofs and low-mintage dates. Museums such as the National Museum of Australia also hold key examples, ensuring public access while preventing deterioration through controlled storage, which indirectly supports collector values by maintaining verified pedigrees.^[73]

Cultural and historical significance

The Australian pound, introduced in 1910 following the federation of the colonies in 1901, served as a potent symbol of emerging national sovereignty while retaining strong ties to British imperial heritage. As the first unified currency across the new Commonwealth, it represented a step toward economic independence, with designs incorporating distinctly Australian elements such as native fauna on coins—like the kangaroo featured on the florin (two-shilling piece)—to embed symbols of the continent's unique wildlife and identity into everyday transactions.^[1]^[74] This imagery not only distinguished the Australian pound from its British counterpart but also reinforced a sense of federation-era unity and pride in local distinctiveness, minted initially by branches of the British Royal Mint to bridge colonial past and national future.^[75] Economically, the pound underpinned Australia's post-federation expansion, supporting wool and gold export booms that drove growth in the early 20th century by providing a stable, pegged medium of exchange aligned with global trade. However, its £sd structure—pounds, shillings, and pence—introduced arithmetic complexities that hindered modernization, fueling advocacy for decimalization as a means to streamline commerce and education in a maturing economy. The pound's role in these booms highlighted its foundational contribution to national prosperity, yet its intricacies ultimately propelled the shift to a more efficient system, marking a broader economic maturation.^[1]^[76] In cultural depictions, the Australian pound permeated Australian literature and media, evoking the rugged bush life in works edited by Banjo Paterson, such as Old Bush Songs, where references to "pound notes" captured the era's frontier wealth and lawlessness amid tales of gold-shod horses and bushrangers. The 1966 decimal changeover, known as "C-Day," became a landmark national event on February 14, celebrated through extensive public campaigns featuring the cartoon character Dollar Bill in television ads, newspapers, and educational materials to ease the transition from pounds to dollars. This spectacle, costing around £30 million but yielding long-term savings, underscored the pound's embedded place in collective memory as a rite of modern nation-building.^[77]^[78]^[1] Today, the Australian pound evokes nostalgia in museums like the Reserve Bank of Australia Museum, where exhibitions revisit its designs and the 1966 shift, influencing decimal currency choices such as retaining familiar values (e.g., £1 equating to $2) and Australian-themed motifs to maintain cultural continuity. In 2025 perspectives, historical inflation comparisons via tools like the RBA's pre-decimal calculator reveal how the pound-era purchasing power—adjusted for cumulative inflation—offers insights into economic resilience, with £1 from 1910 equivalent to over $100 today, prompting reflections on pre-decimal stability amid contemporary debates on currency evolution.^[75]^[2]^[1]

References

[1]
Decimal currency | National Museum of Australia
Sep 18, 2024 · Australian pound. It wasn't until 1910, nine years after Federation, that Australia again created its own currency – the Australian pound.
[2]
Pre-Decimal Inflation Calculator - RBA
The Australian currency was decimalised on 14 February 1966. Prior to decimalisation, currency was in the form of pounds, shillings and pence. One pound was ...
[3]
Coin history | Royal Australian Mint
In 1825, the British government made the English Pound the only form of legal currency in Australian colonies. ... Australian coin history gold currency.
[4]
History of Banknotes - Reserve Bank of Australia Banknotes
Since 1913 when the first Australian banknotes were printed, there have been seven complete series issued spanning changes from non-decimal to decimal currency ...
[5]
Building Country-trust and Currency-trust: Lessons from Australia
Indeed it was the private banks who imposed parity of the Australian pound with sterling up to 1931, believing it was fundamental to a sound banking system.
[6]
Understanding Exchange Rates and Why They Are Important | Bulletin
Dec 13, 2018 · In 1931, Australia pegged its currency to the British pound sterling (Graph A1). This reflected the role of sterling as the primary currency ...
[7]
Timeline - Reserve Bank of Australia Museum
Explore one century of evolution of Australia's banknotes, driven by economic and social changes.
[8]
The Road to Australian Dollar Funding | Bulletin – March 2020 | RBA
Mar 19, 2020 · The Australian pound was introduced in 1910 and pegged to the UK pound (under the gold standard). The Australian dollar was introduced in 1966.
[9]
Currency | National Museum of Australia
The Australian Notes Act of 1910 transferred the authority to print paper money to the Australian Government, which, from 1911 to 1913, circulated the old ...Missing: unification | Show results with:unification
[10]
Coinage Act 1909 (NO. 6, 1909) - classic austlii
Commonwealth of Australia Numbered Acts. [Index] [Search] [Noteup] [Download] [Help]. Coinage Act 1909 (NO. 6, 1909). alt : ca19096190995.pdf ...Missing: text | Show results with:text
[11]
[PDF] AUSTRALIAN NOTES. - AustLII
1. This Act may be cited as the Australian Notes Act 1910. 2. This Act shall commence on a day to be fixed by llroclamation ...Missing: adoption 1909
[12]
Political Preparations | Pocket Guide to Australian Banknotes
Australia's first national banknotes were printed between 1913 and 1914. This event was preceded by political changes that had created the framework for their ...Missing: pound adoption 1909
[13]
First Series | 1913–1914 | Pocket Guide to Australian Banknotes
The first banknotes were signed by the Secretary and the Assistant Secretary of the Commonwealth Treasury, and the bottom centre was imprinted 'T.S.Harrison ...
[14]
Decimal currency - Royal Australian Mint
Pre-decimal Currency. From 1910 until 1966, Australia's currency was based on the imperial British money system. It had 12 pennies in a shilling and 20 ...
[15]
Pre-Decimal Australian Coins: Types & Historical Significance
### Summary of Pre-Decimal Australian Coins
[16]
Australian Gold Sovereign Coin (Varied) l JM Bullion™
Contains .2354 Troy oz of actual gold content. Sovereigns have a value of 1 Pound sterling (GBP). Obverse features the portrait of the reigning English monarch ...
[17]
[PDF] Part 3 - Treasury.gov.au
In August 1910, the Fisher Government legislated to establish an Australian paper currency with notes issued by the Federal Treasurer. The notes issued by ...
[18]
Specimen Coin - 1 Shilling, Australia, 1910
1910 was the first year that an Australian Commonwealth coinage was issued. The four silver denominations were all struck in London. The shilling was the first ...
[19]
[PDF] Monetary Policy in Australia 1920-1925
Even so, while the gold standard was to all intents and purposes suspended for the duration of the war, the aim of the authorities was to retain parity with ...
[20]
Keynes and the Depression in Australia | RDP 2000-04
In January 1931, the Australian pound depreciated, and the Commonwealth Arbitration Court cut the basic wage by 10 per cent.
[21]
1301.0 - Year Book Australia, 1966 - Australian Bureau of Statistics
There was a gradual depreciation of the Australian pound in terms of sterling from the beginning of 1930 until 3 December 1931 when it was stabilized at the ...
[22]
Record - Bank of England
Arrangements for the establishment of exchange control in Australia, where controls were introduced on 28 August 1939, prior to the outbreak of war.Missing: pound | Show results with:pound
[23]
A Brief History
### Summary of Australian Currency During World War II
[24]
Make your Money Fight! | Reserve Bank of Australia - Museum
During WWII, Australia used rationing, austerity, and diverted spending power to reduce inflation. The government also promoted loans to raise funds for the ...Missing: currency | Show results with:currency
[25]
Japanese invasion currency : one pound note
The JIM pound was issued utilising the Australian pound as the basic monetary unit, hence the rise in rumours that their production indicated Japan's intention ...
[26]
The Economy - John Curtin Prime Ministerial Library
National Security Regulations gave the Commonwealth Bank the ability to provide a centralized and controlled banking system for Australia and 1945 legislation ...<|separator|>
[27]
Joseph Benedict Chifley - Anzac Portal - DVA
Jul 1, 2025 · It empowered the Commonwealth Bank to act as a central bank. At the end of 1942, Chifley added responsibilities for postwar reconstruction. His ...Wartime Treasurer 1941 To... · Wartime Prime Minister 1945 · Looking After Veterans
[28]
Cutting the Gordian Knot: Reassessing Australia's Lend‐Lease ...
May 21, 2023 · This paper examines the economic, military, and geopolitical factors that shaped Australia's Lend-Lease Settlement Agreement of June 1946.
[29]
Australia's WWII Lend Lease program - War History Online
Sep 16, 2015 · As of June 30 1944, Australia had spent approximately US$550 million on reciprocal lend lease. In all, the United States received from Australia ...
[30]
Yanks down under - 'Over-sexed, over-paid and over here'
Feb 1, 2019 · Almost 1 million American service personnel, including about 100,000 African-Americans, passed through Australia during World War II.
[31]
Research Guide: Float of the Australian Dollar - Unreserved
In September 1949, both sterling and the Australian pound were devalued by 30.5 per cent against the United States dollar, with the new value for the Australian ...
[32]
25 Sep 1949 - MINISTER ON DEVALUATION EFFECT Australia Has ...
CANBERRA, Saturday.—The Minister for Commerce and Agriculture, Mr. R. T. Pollard, said to-day the general effect of the devaluation of the Australian pound ...
[33]
[PDF] Ben Chifley: the true believer - Treasury.gov.au
Mar 7, 2019 · The stability of the currency of Australia. •. The maintenance of full employment. •. The economic prosperity and welfare of the people. Welfare.
[34]
Wealth of the Nation - Menzies Research Centre
Jul 24, 2020 · The post-war Menzies governments presided over creation of a modern Aus- tralian economy, one firmly based on private enterprise, not the ...
[35]
DFAT – Trade Through Time
Welcome to Australia's Trade through Time - a comprehensive snapshot of Australia's trading history from the Department of Foreign Affairs and Trade.
[36]
70 Years of Inflation in Australia - Australian Bureau of Statistics
Oct 31, 2018 · Figure 2 provides a summary of consumer price inflation by decade over the period from 1950 to 2017. This article discusses the key inflationary ...<|control11|><|separator|>
[37]
'Decimal Currency' | Reserve Bank of Australia - Museum
New decimal coins of one, two, five, 10, 20 and 50 cent denominations will be used. A statement by the Treasurer last December gave precise weights and ...
[38]
What Happened To All The Pre-Decimal Coins When Australia ...
Dec 6, 2015 · It was the job of the Reserve Bank to withdraw pre-decimal coins ... As of June 30th 1968 the Perth branch of the Royal Mint had refined $5 ...
[39]
10. Australia's determined transition to decimal currency, 1966
In 1959 Treasurer Harold Holt established the Decimal Currency Committee (DCC), with Walter Scott as Chairman and Neil Davey as Secretary. The combination of ...Missing: Spender | Show results with:Spender
[40]
[PDF] Australian Bronze Pre-Decimal Towards a New Understanding
A normal copper- alloy cent of this period is 95% copper, with the remaining 5% tin and zinc. How- ever, the attractive UNC example imaged by PCGS on the left ...
[41]
Australia Sovereign KM 29 Prices & Values - NGC
Specifications. Composition: Gold. Fineness: 0.9170. Weight: 7.9881g. AGW: 0.2355oz. Melt Value: $943.61 (11/7/2025). Diameter: 21mm.
[42]
https://www.ngccoin.com/price-guide/world/australia-sovereign-km-29-1911-1928-cuid-40165-duid-116052
[43]
Australia Florin KM 40 Prices & Values - NGC
Obverse: Head left ; Obverse Designer: T. H. Paget ; Reverse: Arms ; Reverse Designer: George Kruger Gray ; Edge Description: Reeded.
[44]
Australia Threepence KM 37 Prices & Values - NGC
Obverse: Head left ; Obverse Designer: T. H. Paget ; Reverse: Three wheat stalks divide date ; Reverse Designer: George Kruger Gray.
[45]
[PDF] Australian coins – a fascinating history
Pre 1770. The First Australians did not use money as we know it; they used a barter system, trading goods from one end of Australia to the other.Missing: demonetization 1912 dual
[46]
1910 Australian florin - All Coin Values
Mintage, approx. 1,259,000. Scarcity, considered scarce for period. Obverse, George W. De Saulles. Reverse, W.H.J. Blakemore. 1910 Australian. florin ...
[47]
Australia's rarest circulation coin, the 1922/21 Threepence - Coinworks
The 1922/21 Threepence is Australia's rarest, with only 900 believed minted, and a unique 'pimple' on the kangaroo's legs. It is the smallest Australian ...
[48]
FAQs General about coins | Royal Australian Mint
The Holey Dollar and Dump are the only Australian coins which have had their 'legal tender' status removed, or been 'demonetised'. Some coins which are no ...Missing: 1912 dual
[49]
Lost Forever - Where Did They Go? - Articles on Australian coins
Earlier purges helped to start the ball rolling. Pre-1946 coins worth $6million were melted down in 1956 and shipped to the U.S.A. The coins were repayment of ...
[50]
[PDF] Change and Stability - Australian Banknotes from the 1930s to 1950s
John Ash succeeded. Thomas Harrison as the Australian. Note Printer in 1927 and oversaw the printing of a new series of banknotes, known as the Ash Series.<|control11|><|separator|>
[51]
Queen Elizabeth II - Reserve Bank of Australia Museum
Queen Elizabeth II portraits has been represented in every Australian banknote series since her coronation, reflecting Australia's constitutional monarchy.
[52]
National Library finds Australia's first pound note, thought to be lost ...
May 4, 2015 · The National Library has found Australia's first pound note, thought to be lost to history for nearly 80 years, in its very own archives.
[53]
Australian Compare - Measuring Worth
With Federation in 1901, the Australian government became responsible for the currency and in 1910 introduced the Australian pound (consisting of 20 shillings ...
[54]
Great Depression | National Museum of Australia
The Australian pound was valued in relation to the pound sterling and so Australian exports were also affected by this change. Wool prices dropped steadily ...
[55]
The Sterling Area – EH.net - Economic History Association
In September 1939, at the start of the Second World War, the British government introduced exchange controls. However, there were no restrictions on payments ...Missing: post- | Show results with:post-<|separator|>
[56]
[PDF] Original Sin and the Great Depression
Apr 22, 2020 · Australia, a commodity exporter, had already devalued relative to gold parity. (and sterling) from October 1930 by 8.5%. In January, 1931, the ...
[57]
246 SUBMISSION NO. 548, MCMAHON TO CABINET
One Australian pound was devalued from US$2.80 to US$2.24.
[58]
From the Archives: The London Letters | Bulletin – March 2021 | RBA
Mar 18, 2021 · The London Letters provide insights into the development of Australia's central bank, along with its role and experiences during some of the most significant ...<|separator|>
[59]
[PDF] Edward Kelvin Fisk by John D Conroy - Devpolicy Blog
banks at the time and the Australian pound (the only legal tender in Papua New. Guinea) circulated freely between the colony and the Metropole. Page 148. 124 he ...
[60]
Nauru - Monetary History and Language of Money
In preparation of self-determination, the first Nauruan currency ordinance was passed end December 1965, adopting the Australian Dollar instead of a separate ...
[61]
History of Australian-Norfolk Stamp Issues - LibGuides
Oct 14, 2022 · Like Australia, Norfolk Island adopted decimal currency on 14 February 1966. The new stamps which had been prepared for the occasion were of the ...
[62]
PGK (Papua New Guinea Kina): What It Is, How It Works, Example
The kina (PGK) is the national currency of Papua New Guinea. · The PGK was introduced in 1975, when it replaced the Australian dollar (AUD) as the country's ...
[63]
More than a medium of exchange | The National
Sep 20, 2024 · The Australian Dollar was phased out as an operating currency in Papua New Guinea on Dec 31, 1975, a few months after the attainment of our ...
[64]
Australian coins price guide and values - Pre-decimal coins
The value of a pre-decimal australian coin depends on several factors such as quality and wear, supply and demand, rarity, finish and more.Decimal circulating coins · Penny 1911 to 1936 · Half Penny 1911 to 1936Missing: affecting | Show results with:affecting
[65]
1910/1911 Set of six specimen coins - Coinworks
1910/1911 set of six specimen coins especially struck at the Royal Mint London and housed in an elegant presentation case · Price $95,000.
[66]
Florin 1925 - Australian coins price guide and values
Aug 7, 2025 · The value of a Florin 1925 australian coin depends on several factors such as quality and wear, supply and demand, rarity, finish and more.
[67]
https://www.coinsandaustralia.com/coins-prices-value.php?coin=florin-1925&years=florin-1910-1936&cat=
[68]
PMG Grading Scale - Paper Money Guaranty
PMG uses a 70-point scale, with 70 being the highest grade, derived from the Sheldon scale. 70 has no handling visible at 5x magnification.Missing: PCGS Australian pre- decimal
[69]
PCGS Banknote Grading Standards
PCGS uses a 70-point scale, with 65+ requiring Premium Paper Quality (PPQ). Grades 70 are "Supreme Gem Uncirculated" and 69 are "Superb Gem Uncirculated".Missing: Australian pre- decimal
[70]
The 'King' of Australian coin rarities – the Proof 1930 Penny.
The most valuable Australian penny is the Proof 1930 Penny selling for $1.15 million in 2019. The coin was struck in bronze at the Melbourne Mint during the ...
[71]
Australia 1946 Florin Partial Collar Error about Extremely Fine
Australia 1946 Florin Partial Collar Error about Extremely Fine ; Year: 1946 ; Mint: Melbourne ; Metal: Silver (50%), Copper (40%), Zinc (5%) and Nickel (5%).Missing: wavy baseline<|separator|>
[72]
National Coin Collection - Royal Australian Mint
The National Coin Collection is the archive of Australia's coinage, preserving the history and craftsmanship of our nation's currency.Circulating coins · Commemorative coins · Investment coinsMissing: pound standards
[73]
We all have kangaroos hopping around our coin purse
Jul 1, 2025 · It turns out that the first representation of a kangaroo on money was not in Australia, but actually in England in 1795.
[74]
https://theconversation.com/we-all-have-kangaroos-hopping-around-our-coin-purse-and-theyve-been-on-money-since-1795-258814
[75]
A New Currency | Reserve Bank of Australia - Museum
A distinctively Australian set of banknotes was issued in 1966, the first decimal series captured the emerging diversity of Australia.
[76]
https://museum.rba.gov.au/exhibitions/the-decimal-revolution/a-new-currency/
[77]
Dollar Bill Turns 50 Years Old | Reserve Bank of Australia - Museum
Explaining decimal currency during the period of its introduction to Australia. The change in currency began on 14 February 1966. Filmography: