A varied currency
In the early 19th century a range of foreign coins circulated in New Zealand. In 1847 new exchange rates were fixed. From that year British coins dominated circulation as the exchange rate was unfavourable for other foreign coinage. British coin became legal tender (currency that has to be accepted to immediately clear a debt) in New Zealand in 1858. Gold coins minted in Australia by branches of the Royal Mint were also legal tender. From 1897 British coin minted by the Royal Mint in London was the only legal-tender coin.
The first New Zealand coins were issued in 1933.
Australia’s first official mint (an institution where money is coined) opened in Sydney in 1855. It issued gold coins. Australia adopted its own currency in 1910. Although they were not legal tender in New Zealand, Australian silver coins circulated until New Zealand issued a national currency in 1933. Around 30% of silver coins in circulation in New Zealand at the time were Australian. Australian coins were repatriated by the New Zealand government once the national currency was issued. However, before New Zealand’s coins were made smaller in 2006, the Australian 20-cent piece could still be found in New Zealand, as it was a similar size to the New Zealand coin.
Except between 1850 and 1856, when the government-owned Colonial Bank of Issue had a monopoly over banknotes, trading banks issued their own notes. They did not have to accept each others’ notes, though most did so. This came to an end in 1934, when the central Reserve Bank was established and became the sole supplier of banknotes. Apart from the war years, 1914 to 1919, and for brief periods after this, banknotes were not legal tender until the first Reserve Bank notes were issued on 1 August 1934.
There were many more coins than banknotes in circulation in the 19th century because most transactions were of a lower value than banknotes, and metal coins lasted longer than paper notes.
However, even coins were in short supply. Between 1857 and 1881 traders issued their own low-value banknotes and, more commonly, bronze and copper tokens in place of smaller coin denominations, to be used as small change. Tokens were not official currency, but the government recognised their utility and did not stop them circulating. Before their advent, shoppers often had to accept change in the form of goods such as matches or stamps. The tokens, which could only be redeemed for goods at the issuing trader’s store, were of varied design and served as a form of advertising for the trader.
During the Second World War, the Army Department issued tokens to Japanese prisoners of war, who were interned in a camp in Featherston. Most of the tokens were melted down after the war, so they are very rare, and valued by collectors.
In 1874 the government estimated that tokens formed half the copper currency in New Zealand. After the British government announced that it was able to supply New Zealand with sufficient coins in 1881, tokens were no longer issued.
There were no New Zealand versions of the British coins used in New Zealand until 1933. An 1879 penny bearing the legend ‘New Zealand’ was struck, but the circumstances of its creation are unclear. It did not become an official coin and is perhaps more accurately described as a token. A very small number were issued. It is the rarest New Zealand coin.
The design of mid-19th century banknotes was simple and the reverse side was blank. They typically contained the bank’s coat of arms or women sitting or reclining before a rural landscape, the name of the bank and the value of the note, with plenty of blank space.
In the later 19th century banknote design was more ornate and complicated, and almost covered the note. The reverse side was illustrated. From the early 1870s Māori featured on the Bank of New Zealand’s notes, giving the notes a distinctive New Zealand character. In contrast, some of the Commercial Bank of Australia’s New Zealand banknotes depicted a kangaroo.
Perhaps the most obviously ‘New Zealand’ banknotes were those printed (but not issued) by Te Peeke o Aotearoa, the bank established by the Māori King Tāwhiao in 1886. Though much of the iconography was not Māori, the text was Māori and a simple flax bush was depicted in the bottom left quarter. The bank’s cheques were embellished with Māori figures and native plants and birds.
In 1924 trading banks agreed on a uniform size for banknotes – prior to this, the different banks’ notes varied in size.