British pound value and trends, 1965-2000

¶ … 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:

Coin

Firstissued

Used until Weight (grams diameter (mm)

Metal

One Pound £1

Current nickel-brass

Two Pound £2

Current cupro-nickel + nickel-brass

Crown £5

Current cupro-nickel

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.

Decimalization

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 to have become quite widely accepted amongst the people. Even though it complies of the same diameter, it is thinner and lighter, weighing only 12.0 grams, and this appears to have contributed to its popularity. It now seems set to become a common sight in our change after only just over half a century!

Near the end of he twentieth century rumor was being shifted around about a two pound coin with the queen wearing a necklet which was valued at £15. However, this remains just that, a rumor, lacking in truth. There is no truth in this rumour. It is the sort of story which appears to start for no particular reason, and then self-perpetuates in a form a "Chinese whispers," so that it becomes a source of misinformation to all those who over hear it.

This rumour is in connection with the 1997 new bi-metallic two pounds coin. The nearest anyone can come to solving the "mystery of the queen's necklet" is that a listener phoned a Red Rose Radio / Rock FM phone-in show, and said that he had heard, from where or whom, no one knows, that a two pound coin showing the queen wearing a necklet was worth £15. That afternoon about four telephone calls were received. Each of the callers were asking the same questions; was this rumor true? They were able to quickly ascertain that there was no known rarity or error. All two-pound coins from 1986 to 1997 bear the queen's third portrait in which she is shown wearing what appears to be a pearl necklet, from 1998 the obverse (head side) design changed to a more mature fourth portrait. In this portrait, Her Majesty is shown truncated at the neck rather than the shoulder. She therefore appears without a necklet. Originally it was perceived that within a few weeks of the radio programme, this particular rumour would die a natural death, but unfortunately it appears to have started to replicate itself, and numerous telephone calls and e-mails are still being received about it. As the time passes on with this rumor, the "value" jumps around, and although £15 is the commonest figure we hear, sometimes it changes to £5, £17, and other figures.

A few weeks after the programme, a visitor appeared and asked about the story, and he was told of the facts, he was better able to inform others of the untruthfulness in the rumor. He claimed to know somebody who had sold one for £15 plus the £2 face value. Therein, a deal was made to find hundreds of them, and that if he could point the buyer out, the profits would be split between the two. Apparently it was someone he was talking to in a pub who had sold it to a dealer in Birkenhead. So far he has not been back to claim his share of the potential profits.

Different Designs

So far all of the base metal two-pound coins have featured a different design in each year of issue, sometimes two different designs in the same year. Here are a few the designs so far:-

Nickel brass issue-86-95

Reverse of 1996 2 pound

1999 bi-metallic base metal (reverse)

Due to the fact that so far every issue has carried a different design, and ten different designs in eight different years, all the above coins have been struck in special collectors editions, in addition to the ordinary base metal circulation issue. These special editions include uncirculated specimens in folder, 50% silver, base metal proofs, silver proofs, gold proofs and piedfort silver proofs. For coin collectors, this arouses amusement, and may add to their fun, however, it can easily get confusing.

The pound Sterling has a very different history from continental currencies. Other European countries have more experience with currency unions, e.g. The Latin Monetary Union of 1861-1920, the Scandinavian Monetary Union, which lasted until 1924, and the Zollverein of 1834, which led to political union between the German states. Furthermore the history of the pound sterling goes back 1,300 years whereas most European currencies date back only to the end of the Second World War since that conflict led to the destruction and reform of their previous currencies. Consequently a change of currency would arouse more suspicion in Britain than on the Continent

The Long History of the Pound Sterling

Although France had a single national currency for a short period of time during the reigns of Pepin and Charlemagne, England has enjoyed a relatively stable single national currency with an unbroken history of over 900 years, and the origins of the pound Sterling go back even further still.

The need to pay Danegeld, or to pay for defence, and the Viking invasions caused an enormous increase in the production of coins in England. Athelstan had no fewer than 30 mints in operation and in order to keep control of them all the Statute of Greatley was passed in 928, initializing that there was to be only one single type of money or currency in England, and ever since there has been just one. This was many centuries before the history of the currencies now used in other major European countries started.

England became the first of the major countries of Europe to attain a single national currency in post-Roman times. However the renewed incursions of the Danes postponed the uninterrupted establishment of this principle until 1066. Even so the achievement of a uniform national currency in England preceded that of France by more than 600 years, and of Germany and Italy by nearly 900 years: a factor perhaps in Britain's instinctive reluctance to embrace a single European currency today." (Davies, Glyn. A history of money)

The author also explains on page 444:

Most European countries, large or small, have repeatedly had to carry out changes which have drastically altered their internal currencies... However, the pound as a unit of account has never had to be replaced by a 'new pound' or any other designation in 1,300 years, in contrast to the French franc or the various German currencies such as the Reichsmark, Rentenmark, Ostmark and Deutschemark, to mention merely some of the more modern changes."