Everything Everywhere Daily: History, Science, Geography & More - British Currency Decimalization

Episode Date: November 5, 2022

On February 15, 1971, the United Kingdom had a landmark day in its history.  On that day, the country’s currency was changed after centuries of a currency system with very little change. It was a day that was years in the making. It wasn’t the currency that changed, however. Rather it was how the currency was divided. It was the change that changed.  Learn more about Decimal Day and British Currency Decimalization on this episode of Everything Everywhere Daily. Subscribe to the podcast!  https://link.chtbl.com/EverythingEverywhere?sid=ShowNotes -------------------------------- Executive Producer: Darcy Adams Associate Producers: Peter Bennett & Thor Thomsen   Become a supporter on Patreon: https://www.patreon.com/everythingeverywhere Update your podcast app at newpodcastapps.com Discord Server: https://discord.gg/UkRUJFh Instagram: https://www.instagram.com/everythingeverywhere/ Facebook Page: https://www.facebook.com/EverythingEverywhere Facebook Group: https://www.facebook.com/groups/everythingeverywheredaily Twitter: https://twitter.com/everywheretrip Website: https://everything-everywhere.com/everything-everywhere-daily-podcast/ Everything Everywhere is an Airwave Media podcast. Please contact [e-mail] to advertise on Everything Everywhere. Learn more about your ad choices. Visit megaphone.fm/adchoices

On February 15th, 1971, the United Kingdom had a landmark day in its history. On that day, the country's currency was changed after centuries of stability. It was a day that was the result of years of planning. But it wasn't the currency that changed, however. Rather, it was how the currency was divided. It was the change that changed. Learn more about Decimal Day and British Currency Decimalization on this episode of Everything Everywhere Daily.

What if your perceptions about the past were wrong? throughline is a podcast that takes you back in time to uncover the parts of the story that may have gone unnoticed. It effectively turned day into night. And how it shaped the world now. Time travel with us every week on the Thurline podcast from NPR. If you remember back to my episode on the origin of the U.S. dollar, it was one of the first currencies in the world to decimalize. A decimalized currency just means that the units below the base unit would be divided up into subunits on something base 10. This will usually mean smaller coins, which are one-tenth and

one-one-hundredth of whatever the base unit is. This was actually not the norm as late as the 18th century. Russia was actually the first country to establish a quasi-decimalized currency in 1704, when Peter the Great established the ruble as being worth 100 Kopex. Most countries had a collection of odd fractional coins worth an eighth, a 12th, or even one-two-hundred-and-forty of the base unit. Most countries eventually changed over to a decimalized currency. It was much easier to count, easier for making prices, and much easier for conversions if everyone is using the same numeric base. But one of the last countries to decimalize their currency was the United Kingdom. For centuries, Britain used what was known as the LSD system, which stands for pounds, shillings,

and penny. And if you're curious how pounds, shillings, and pennies make for an acronym such as LSD, that's because it actually dates back to Roman times, and the original words were Libram, Solidus, and Denarius. The Roman system was changed to a silver-based system of pounds, shilling, and pennies by Pepin the short, who was the father of the Emperor Charlemagne. It was also known as the Carolingian monetary system. This was the system that was used in England and later in all of the United Kingdom for centuries. Before I get too far into the weeds about how the transition occurred,

I should explain just how the coined-ed system in Britain worked, so you can appreciate just how confusing it was and why it was changed. The base unit was, and still is, the sterling. The pound and the penny were units of sterling. Many people assume that the unit of British currency is called the pound, and that's usually what it goes by and what I'll use for this episode. The abbreviation in foreign exchange is GVP, which stands for Great Britain pound. So one pound sterling is the equivalent of saying one U.S. dollar. One and pound are the units in this case. There are several different theories about the origin of the term sterling. It could have come from the word star, or it may have come from a silver coin used by the Hanseatic League called an E-sterling.

A pound of sterlings was just a weight applied to the coins known as sterlings. A pound sterling was worth a lot of money centuries ago. A common worker or farmer may have never used an actual pound in their daily life. The primary unit that most people dealt with was some multiple or fraction of a penny. A pre-decimalization penny was worth one, two hundred and fortyth of a pound. A penny is singular, and the plural is pence. When prices were listed in pence, they would often have the number followed by the letter D, and the Darkens back to the LSD system. Below the penny was the halfpenny, which was known as the hay penny, and a farthing, which was worth a quarter. penny. Two pence were known as tuppence, and three pennies were known as three pence or threepence.

Four pence was known as a groat, and likewise two pence was sometimes known as a half-grote. Sixpence was simply known as sixpence, or sometimes as a tanner. Twelvepence was the amount of the second basic unit of currency, the shilling. A shilling was also one-twentieth of a pound, and the nickname of the shilling was a bob. Prices would usually be listed as one number with a slash followed by another number, So 2-4, or 2S4D would be quoted as 2-shilling 4 pence. There were yet more coins beyond the shilling. A two-chilling coin was known as a florin.

A crown was a 60 pence or 3-shilling coin, and a half crown is worth 30 pence. A gold pound coin was known as a sovereign that was minted from 1817 to 1914. It consisted of exactly 0.23-4 ounces of gold. But there was another gold coin called a guinea. A guinea was also a gold coin with a quarter ounce of gold, which was minted between 1663 and 1814. The guinea had just a little bit more gold than a sovereign. So while the pound was valued at 20 shillings, the guinea was valued at 21 shillings. So you can probably see how all the various coins and fractions of a pound could be confusing,

especially in a world where almost every other country had decimalized already. On top of the confusion, there was also the issue of inflation. The quarterpenny farthing coin, worth one 960th of a pound, was still minted in 1956, even though the coin was pretty much worthless by this time. The halfpenny was still being minted up to 1967. Efforts to decimalize the pound went back quite a bit. The first attempt was actually made in 1824 in response to the creation of the French franc. Nothing happened, but then the decimal association was formed in 1841,

which had the dual purpose of decimalizing both British currency and their measurement. system. In 1851, the Great Exhibition once again increased interest in decimalization, but nothing happened. In 1857, a Royal Commission was established to explore decimalization, and again, nothing happened. In 1862, there was a parliamentary commission on the subject, and again, nothing happened. The Royal Commission on Decimal Coinage was inaugurated in 1918, which recommended dividing the pound into 1,000 units, which would be called a mill. And nothing happened. Real decimalization change. didn't start to happen until the 1960s. South Africa had recently undergone decimalization,

and more people in the UK realized that it was something that could and now should be done. In 1961, the Committee of the Inquiry on Decimal Currency was established. Now everything was on the table, including replacing the pound itself. Ideas for a new currency included new names such as the New Pound, the Royal, and the Noble. According to legend, the decision was made during a 22nd conversation between the Chancellor of the Exchequer Jim Callahan and Prime Minister Harold Wilson. The plan was announced in Parliament in 1966. Because the pound was used as a global reserve currency, the decision was made to keep the pound and to just change to a new penny. The new penny, which is commonly called Pence, even though technically Pence is the plural of penny,

would be worth one one hundredth of a pound. Because the pound wasn't changing, it was possible to introduce the new coins, over a period of time. The old penny was denoted by the old D symbol. The new pence was denoted by the P symbol. To this day, if something cost 50 pence, it'll often be said to cost 50 p. In April 1968, the 5 and 10 P coins were introduced. These were purposely the same size, shape, and material as the old 1 and 2 shilling coins. The 1 and 2 shilling coins ceased being minted and were taken out of circulation as they came into banks. In October 1969, the 50-P coin was, was introduced, and the 10-shilling note was withdrawn. The half-penning was withdrawn in July of

1969, and the half-crown was withdrawn in December. High-denomination stamps worth 10, 20, and 50p were issued in 1970. With the 5-10-50-p coins in circulation, it would pave the way for the big day, D-day, which was set to be Monday, February 15th, 1971. The date was selected because it was the slowest time of year for the financial system. There was a huge publicity. campaign to get everyone ready for the big day. There were songs written about decimalization, and there were shows on the BBC and ITV, which ran explaining decimalization prices. On the afternoon of Wednesday, February 10th, all the banks in the country were closed and remained closed for the next four days. The bank holiday was used to stock all the banks with the new

coins, as well as to make sure that all checks that were deposited under the old system could be cleared before decimalization started. And finally, all of the bank accounts had to be converted to decimals. Changing all of the account balances was actually time-consuming because few banks were computerized at that time. The extensive bank weekend was also used for shops to change their prices. Many establishments had already been posting both LSD prices alongside decimal prices, with the old prices listed first. These were now switched so that decimal prices were now listed first. When the big day arrived, it went rather smoothly.

Three new coins were released, the new half-penny, the new penny, and the new two-pence. Old coins were accepted, but new coins would always be given as chains so they could retire older coins as quickly as possible. The old coins were technically legal tender for years after decimalization day. The six-pence coin wasn't removed totally until 1980. One and two shilling coins were still legal until the 1990s. It's of note that after the Republic of Ireland became independent, they created the Irish pound, which used similar coinage to the British. And they also had their own decimilization day on February 15th, 19th, 19th. decimalization doesn't seem like it would be that big of a deal, but it actually was a really

big deal for the British economy. They were by far the largest economy in the world to undergo this process when they did it in 1971. Today, after 50 years of a decimal currency, all but a few older British people could probably navigate the old prices anymore. Decimalized currencies are now the norm in every country in the world, except for Madagascar and Mauritania. So the next time you watch a movie or read a book that talks about shillings and farthings and crowns, you'll have a better idea of what they were, and also why they got rid of them. Everything Everywhere Daily is an Airwave Media podcast. The executive producer is Darcy Adams.

The associate producers are Thor Thompson and Peter Bennett. Today's review comes from listener Dave from Texas, 64, at Apple Podcasts in the United States. They write, Fantastic Podcast. I found this podcast last summer and became a completionist member within about eight weeks. When I'm recommending this to my friends, I say, one other podcast covers ancient Rome, uranium and the Louvre all in one week. Gary is full of great information and covers it all in about 10 minutes. I like how Gary will point out his corrections. He already mentioned his Bill Buckner brain fart, and in the same episode he said a statue of William Pitt was on top

of the Philadelphia City Hall when we know it was William Penn. However, today's error was unforced. If you know that Nixon appointed Ford to be vice president, how could you miss that Ford appointed Rockefeller once he took over after the Nixon resignation. Keep it up, it's a great podcast. Thanks, Dave. You are correct. I totally forgot about Nelson Rockefeller. And my excuse is that everyone has forgotten about Nelson Rockefeller. As for other podcasts that cover ancient Rome uranium and the Louvre, I would highly recommend the radioactive Roman art podcast. Well, at least the early episodes. It's been decaying at a steady rate ever since it was launched. Remember, if you leave a review or send me a boostogram. You too can have it read on the show.