Explaining Currency: New Zealand's bank notes and coins

ExplainingCurrencyNew Zealand’s bank notes and coins

ContentsIntroduction 3What is money?What is legal tender?Today’s bank notes 4Plastic fantasticThe life-cycle of a bank noteSecurity features to look forSpecial edition millennium $10 noteBank notes: A closer look 8Five dollar noteTen dollar noteTwenty dollar noteFifty dollar noteHundred dollar noteNew Zealand’s coins 13How are our coins made?Coin designCommemorative currencyFive centsTen centsTwenty centsFifty centsOne dollarTwo dollarCurrency timeline 16A brief history of New Zealand’s currency 17Early daysThe Reserve Bank issues bank notesDecimal currencyDefacing bank notesAre damaged notes worth anything?Reproducing or imitating currency2 Explaining Currency: New Zealand’s bank notes and coins

IntroductionWe all use currency - bank notes and coins - but what isit really?This booklet describes what money is, what cash orcurrency is, how New Zealand’s bank notes are designedand made, and the life cycle of a typical bank note. Italso looks at the design and security features of ourbank notes and coins, and the history of currency inNew Zealand.What is money?In ancient times, people had to barter things to trade - forinstance, a cow for six pigs. This, however, was clumsy. Whatif you wanted six pigs but the pig seller didn’t want yourcow, as he or she wanted some sheep instead, which youdidn’t have?That’s where money came in. Money is a token or measurethat stores wealth. With it, in our example above, the tradecould take place. Also with money you can earn now andspend later. Early examples of money were shells and ironnails, as they could easily be counted. In due course, thesewere replaced by coins made of gold, silver, bronze and copperand much later paper money was developed.These days you can buy things using coins, bank notes,cheques, or credit cards, or by making an electronictransaction (EFT-POS etc); all are modern ways of movingmoney around. There’s a lot more money around than justcash. In the New Zealand economy now if you add up all thecash and all the other money, such as in bank deposits, itcomes to about $100 billion. The value of the bank notesand coins in circulation is much less at around $2 billion.However, despite talk about e-commerce, cash remains veryuseful for making relatively small transactions instantly andconveniently.What is legal tender?The virtue of cash – that you can buy or sell somethinginstantly and conveniently – comes from the concept of legaltender. Technically, legal tender means that if I owe youmoney and I present you with cash, then the debt is clearedthen and there. The only exception to this is if we both agreeto a different form of payment beforehand.So, for example, a shop doesn’t have to accept a cheque,and it doesn’t even have to accept cash, but the shop has toclearly indicate to you before you do business with them thatthey do not accept these forms of payment.There is a minor qualification to this, in that the law specifieslimits on using annoying amounts of coins as legal tender forbuying larger items. If I owe you, say, $1000, I can’t presentyou with $1000 worth of 5 cent coins and require you toaccept them as legal tender.Reserve Bank notes and coins are defined in the Reserve BankAct as “legal tender”. The Reserve Bank is the onlyorganisation in New Zealand that can issue bank notes andcoins and determine the denominations and design of thenation’s currency.Explaining Currency: New Zealand’s bank notes and coins 3

Today’s bank notesPlastic fantasticAll New Zealand’s bank notes are now printed on apolypropylene polymer material. Previously they were printedon paper made from cotton.There were two main reasons why the Reserve Bank decidedto change to polymer. First was wear and tear - polymerbank notes are stronger and non-porous. Polymer notes lastat least four times as long as paper notes. They don’t get asdirty and tatty as paper and they are much harder to tear.Secondly, polymer bank notes allow for more sophisticatedsecurity features to deter forgeries. These security featuresare explained in more detail below. In Australia, theintroduction of polymer bank notes in 1992 resulted inreported forgeries falling significantly.Polymer is good for the environment too. Whereas papernotes were shredded and discarded at the end of their lives,old polymer bank notes can be recycled economically intouseful products such as polymer wheelbarrows, compost binsand plumbing fittings.The life-cycle of a bank noteDesignThe planning, printing and production of a new bank notedesign is complex and takes a large team of people up totwo years before the note is issued.First of all, the design elements of the note have to be decided.Rough drawings are prepared of the images to be used(people, birds, plants, flowers, etc.), watermark, text, andcolours.Once these preliminary details are worked out, a group ofartists produces an exact image or sketch of both sides ofthe note in the correct size and colours with the aid of acomputer-based design system. The designers have to thinknot only about the Reserve Bank’s requirements, but alsoabout security features and printing capabilities. Bank notesare printed in a range of sizes to enable partially sighted andblind people to distinguish between notes. The largest inthe series is the $100 note and the smallest is the $5.PrintingNew Zealand’s bank notes are printed by Note PrintingAustralia in Melbourne. To create a bank note, printing plates,polymer substrate and ink are brought together in a hugeprinting hall. The polymer substrate, on which the bank notesare printed, starts out as a large roll of clear plastic film.4 Explaining Currency: New Zealand’s bank notes and coins

Serial numbers are then added to the notes using a letterpressprinting process. In the current note series, each serial numberconsists of a prefix of two letters followed by eight numbers.The first two of these numbers indicate the year the notewas manufactured.During the final print run, the notes are given two coats of aprotective overcoating varnish using an offset printing press.To start with, two layers of ink (usually white) are applied toeach side of the clear film, except for areas which aredeliberately left clear, or areas where the ink is printed onone side of the note only. This stage of the process is calledopacifying.The next stage is sheeting. This is where the opacifiedsubstrate is cut into large sheets ready for feeding into thenote printing presses.“Simultan” printing machines print the background coloursand patterns onto the polymer. As the name suggests, bothsides of the notes are printed at the same time, at up to8000 sheets per hour. Major design elements are printedusing intaglio printing machines during which ink is appliedto the polymer under great pressure. This gives the notestheir raised printing, which is one of the security features ofpolymer notes. Separate print runs are required for eachside of the note.This overcoat makes the notes more durable, as it protectsthe printing, and helps to keep the notes clean.The completed sheets of notes are examined for faults.Imperfect sheets are marked with a machine-readable inkfor removal later in the process. Printed sheets are guillotinedinto individual notes, which are then placed into containersin alpha-numerical order and transported to computercontrolledmachines for final counting and banding. Thefinished notes are then shrink-wrapped, placed on palletsand stored in a strongroom.Finally, the finished bank notes are shipped to the ReserveBank of New Zealand for distribution to banks. From there,the notes are made available to customers from tellers andthrough cash machines, and the notes start their life in generalcirculation. Bank notes usually find their way back into abank and are then sorted in machines that count and checkfor counterfeits and damaged notes. The good notes arebundled back up again and recirculated, while damaged notesare discarded for granulating and recycling.Explaining Currency: New Zealand’s bank notes and coins 5

Security features to look for1. Each polymer note has two transparent windows.One of the transparent windows is oval-shaped andsloping and has the denomination numerals embossedin it. The other clear window is in the shape of acurved fern leaf.2. There is a fern immediately above the clear fernshapedwindow. When you hold the note to the light,the fern should match perfectly with another fern onthe other side.4 Individual serialnumber3. You should easily be able to see a shadow image ofthe Queen when you hold the note to the light.4. Each note has an individual serial number printedhorizontally and vertically.5. Polymer notes have raised printing, which stands upon the surface and can be felt when you run yourfingers over it.6. Tiny micro-printed letters “RBNZ” should be visiblewith a magnifying glass.5 Raised printing7. Under an ultraviolet light, the polymer note appearsdull. Most commercial papers used in forgeries willglow under an ultraviolet light. However, polymernotes contain special inks, which make particularfeatures glow under an ultraviolet light. For example,the front of each genuine note has a fluorescent patchshowing the denomination numerals, which can onlybe seen under an ultraviolet light.Remember, all images on your bank notes shouldappear sharp and well defined - not fuzzy and washedout.2 Fernmatches bothsides3 Shadow image ofQueen Elizabeth II1 Transparent window1 Transparent window6 Explaining Currency: New Zealand’s bank notes and coins6 Micro-printing

The special edition millennium $10 noteIn 1999, the Reserve Bank issued a special $10 bank note tocommemorate the new millennium. This limited edition notedepicts New Zealand’s development into the digital age andsome of the recreational pursuits that make New Zealandspecial. The design features on the note represent NewZealand’s past and its future. The front shows a Maori warcanoe, symbolising New Zealand’s journey. It also shows NewZealand’s future in the digital age. On the back, some of therecreational pursuits enjoyed in New Zealand are portrayed.The $10 millennium bank note has special security featureswhich are world firsts. The most obvious is the two silverferns within the clear window, which reflect rainbow colourswhen the note is tilted to the light. As well, when you foldthe note over and look at the map of New Zealand on theback of the note through the clear window, the letters “Y2K”become visible on the North and South Islands. The letterscan only be seen with the use of the filter incorporated in thenote’s clear window.Explaining Currency: New Zealand’s bank notes and coins 7

Five dollar notecoastline of the South Island. As well as Campbell Island,the hoiho can be found on Stewart and Auckland Islands.FrontSir Edmund Hillary (1919-)Sir Edmund Hillary is New Zealand’s most accomplishedexplorer, gaining world renown in 1953 as the first person toclimb Mt Everest. In 1958 Sir Edmund became the first personto drive overland to the South Pole.Mount Cook or AorangiMount Cook, in New Zealand’s South Island, is New Zealand’shighest mountain. It was the scene of Sir Edmund Hillary’searliest climbing successes, and is still regarded by Hillary asone of his favourite mountains.Massey Ferguson tractorIt was on tractors such as this that Sir Edmund Hillary droveto the South Pole. A stalwart of New Zealand farming life,these tractors proved adaptable to the harsh Antarcticconditions, requiring only minor modifications.BackCampbell Island sceneCampbell Island is the southernmost of New Zealand’soutlying islands – about 600 kilometres southeast of StewartIsland. Campbell Island has an area of 114 square kilometres.Yellow-eyed penguin or hoiho (Megadyptesantipodes)The distinctive thing about the yellow-eyed penguin is itsyellow iris and yellow band of feathers across the back of itshead. One of the world’s rarest penguins, it can be found onsea-facing scrub and forested slopes along the southeasternSubantarctic lily (Bulbinella rossii)The subantarctic lily produces spectacular yellow flower headsin early summer and grows to a height of about one metre.It is unique to the subantarctic.Daisy (Pleurophyllum speciosum)A giant member of the daisy family, this plant has colourfulwhite and violet flowers. On Campbell Island, the plantsgrow close to the ground to help avoid wind chill and havecorrugated leaves to trap the limited solar energy availablethere.Bull kelp (Durvillaea antarctica)Bull kelp can grow up to several metres long and is found onNew Zealand coasts as well as subantarctic islands. It hasvery tough skin and the strands are honeycombed inside forbuoyancy.8 Explaining Currency: New Zealand’s bank notes and coins

Ten dollar noteBlechnum fern or mountain kiokioThis is a very common fern throughout New Zealand, whichgrows best in damp and shady places. In young plants likethe specimen on the note, the fronds are tinged pink.FrontKate Sheppard (1848-1934)Kate Sheppard was the most prominent leader of thecampaign for universal suffrage in New Zealand. She workedtirelessly to organise and promote her cause. A long campaignculminated in 1893 when New Zealand became the firstcountry in the world to extend voting rights to women.White camelliaIn 1893 white camellias were given to Members of Parliamentwho had supported the bill to give New Zealand women thevote. The flower has become a symbol of the fight for thevote by New Zealand women. The flowers on the ten dollarnote are Camellia japonica alba plena.BackBlue duck or whio (Hymenolaimusmalacorhynchos)The rare blue duck is an endangered species which is foundmainly in mountainous areas of New Zealand. It usually livesin pairs or family groups and prefers fast-flowing river habitats.Now totally protected, the whio is making a comeback asthe population is steadily increasing.Parahebe catarractaeThis riverside plant, a close relative of the hebe – the largestplant group unique to New Zealand – can be found in bothNorth and South Islands. It grows in crevices in rocks, besidestreams and sometimes in the spray of waterfalls. It can growup to 60cm high and is notable for its trailing stems andattractive purple flowers.Below: The current series notes are the sixth; here isthe fourth series ten dollar note.Explaining Currency: New Zealand’s bank notes and coins 9

Twenty dollar noteFrontHer Majesty Queen Elizabeth II (1926-)This note features an official portrait of the Queen taken atGovernment House, Wellington, on 26 February 1986 byRonald Woolf. Her Majesty is wearing the Sovereign’s Badgeof the Order of New Zealand. The ribbon is based on a tanikopattern.Parliament Buildings, WellingtonThe $20 note shows two of the three buildings of the NewZealand Parliament, situated in Wellington. The olderbuilding, an imposing structure clad in Takaka marble, housesthe Legislative Chamber. The foundations for this buildingwere laid in 1912, but the First World War delayedconstruction and the building was not completed until 1922.The distinctive Beehive Executive Wing, designed by Sir BasilSpence, was begun in 1969 and completed in 1977.BackNew Zealand falcon or karearea (Falconovaseelandiae)Sometimes called the bush hawk, the New Zealand falcon isthe most fearless of all our nation’s birds. An adaptable hunterand a determined solitary predator, the falcon hunts smallbirds and animals and can attack at speeds of up to 200kph.The falcon is a high-country bird, seldom found north ofRotorua, that favours isolated bush-clad mountain valleys.Marlborough rock daisy (Pachystegia insignis)This is a small spreading shrub unique to Marlborough andNorth Canterbury. The plant is a distinctive feature of thedry inland valleys of Marlborough with its thick leathery leavesand large, spectacular flower heads. It grows in inaccessibleplaces such as cliff sides and the edges of steep scree slopes,and can flourish in areas from sea level to 1200 metres.Flowering red tussock (Chionchloa rubra)There are 13 species of tussock grass in New Zealand, andred tussock, which has a distinct red tinge to its leaves, isfound in both the North and South Islands. Tussock flowersintermittently, is primarily found in alpine areas, and can livefor up to 200 years.Mount Tapuaenuku, Inland KaikourasThe highest peak in the South Island’s Inland Kaikoura range,Mt Tapuaenuku is 2,885 metres high and dominates thesurrounding countryside. The view of the mountain on the$20 note is from the east side of the Inland Kaikouras, lookingup from the Awatere Valley floor.10 Explaining Currency: New Zealand’s bank notes and coins

Fifty dollar noteFrontSir Apirana Ngata (1874-1950)Sir Apirana Ngata played a significant role in the revival ofthe Maori people and culture during the early years of thetwentieth century. He was the first Maori to graduate from aNew Zealand university, was an accomplished leader of theYoung Maori Party and was an elected Member of Parliamentfor 38 years. Ngata was respected by both Maori and Pakehaand provided a focus for a social movement that rejuvenatedMaori culture. He was also a driving force behind the revivalof his own tribe, Ngati Porou.Porourangi meeting houseDesigned by Sir Apirana Ngata himself, the Porourangimeeting house stands at Waiomatatini Marae, near Ruatoriaon the North Island’s east coast, and is a showcase for Maoriart.Tukutuku patternThe tukutuku pattern was designed by Sir Apirana Ngataand is known as “poutama porourangi”. “Poutama” is thestyle of tukutuku pattern meaning “stairway to heaven” and“Porourangi” is the name of the Ngati Porou meeting housewhich features the pattern.BackKokako or blue wattled crow (Callaeascinerea)The kokako is a large native bird with a distinctive steel-greybody and a black face ‘mask’. The variety pictured on thenote is the South Island kokako. Kokako are much largerthan a tui, and prefer to hop up trees to gain enough heightto be able to glide. They seldom fly further than 100 metres.Pureora Forest ParkPureora Forest Park, established in 1978, covers 72,335hectares close to Taupo in the central North Island. The parktakes its name from nearby Mount Pureora (1130 metres). Itis one of the most ecologically significant and beautiful forestsin New Zealand and is home to a large population of kokako.Pureora has a dense interior with a huge variety of trees,shrubs, epiphytes and vines forming an almost impenetrablemass. Emergent podocarps include rimu, miro and matai,some of which may be over 1000 years old.Supplejack or kareao (Ripogonum scandens)Supplejack leaves are eaten by kokako, and the plant formsimpenetrable thickets used by the birds for nesting. It cangrow up to 5 cm a day in summer. Supplejack producesbright red berries once it emerges from the shade of theforest canopy.Sky-blue mushroom (Entoloma hochstetteri)This mushroom, notable for its bright blue colour that fadeswith age, grows throughout New Zealand in decomposingplant remains.Explaining Currency: New Zealand’s bank notes and coins 11

Hundred dollar noteFrontErnest, Lord Rutherford of Nelson (1871-1937)Internationally recognised as the ‘father of the atom’, ErnestRutherford changed the basic understanding of atomicscience on three occasions: he explained the perplexingproblem of naturally occurring radioactivity, determined thestructure of the atom, and changed one element into another.Nobel Prize medal and diagramThe Nobel Prize in Chemistry, which Rutherford received in1908, is represented on the note. Overlaying the medallionis a graph plotting the results from Rutherford’s investigationsinto naturally occurring radioactivity.BackYellowhead or mohua (Mohoua ochrocephala)The yellowhead, sometimes known as the bush canary, is adiminutive and colourful bird. It is found in tracts of nativebush throughout the South Island, preferring the canopiesand sub-canopies of beech forests.Red beech or tawhairaunui (Nothofagus fusca)Beech forests are one of the two main types of forest in NewZealand. Red beeches grow up to 30 metres high and arenamed for the colour of the young tree’s leaves. Favouringwarmer and more fertile sites than do other beeches, theirred wood is considered to be the most durable. Red beech isfound in both North and South Islands and is the favouredhabitat of the yellowheads in the Eglinton Valley.Eglinton ValleyLocated within the Fiordland National Park on the Te Anau-Milford Sound highway, the Eglinton Valley is home to aparticularly fine stand of red beech and a thriving populationof yellowheads.South Island lichen moth (Declana egregia)Found in Fiordland beech forests, this distinctively patternedmoth blends perfectly with the lichens that cling to the trunksof the trees. The caterpillar form is strikingly coloured but isjust as skilled at disguising itself.12 Explaining Currency: New Zealand’s bank notes and coins

New Zealand’s coinsHow are our coins made?Coins are made in two stages. To start with, blank circles arecut from long sheets of metal. These blanks become coinswhen they pass through stamping machines, which applyhuge pressure to impress the distinctive “head” and “tail”features. New Zealand’s coins have recently been made atthe South African Mint, although at various times in the pastthe Royal Mints of Britain, Canada and Australia havemanufactured our coins.Although we usually refer to our coins as silver or gold, theyare actually made from a mixture of different metals andcontain neither silver nor gold. The ‘silver’ coins (50, 20, 10and 5 cent pieces) are a cupro-nickel compound of 75 percentcopper and 25 per cent nickel. The gold-coloured $1 and $2coins are struck in an aluminium-bronze alloy of 92 per centcopper, 6 per cent aluminium and 2 per cent nickel. Coinslast, on average, for about twenty years.Forgery of coins is fairly uncommon, simply because all thework in forging a coin is hardly worth the small reward!Nevertheless, all designs on a real coin should be clearlydefined, and it should have a distinct ring when dropped ona table-top, rather than a ‘thud’.The Reserve Bank accepts for exchange any demonetisedcoins and notes (i.e. currency no longer in circulation) at itsWellington head office. This includes 1 and 2 cent coins,which were phased out in 1989 and demonetised in 1990.In 1997 the Reserve Bank considered taking 5 cent coins outof circulation and changing the size of the 20 and 50 centcoins. After wide consultation with the public, it was decidedto retain the status quo. Many people wanted to keep the 5cent coin and there was some opposition to changing thesize of the 20 cent and 50 cent coins, particularly from thecoin-operated machine industry.DesignsDesigns on the back of New Zealand’s coins (the “tail” side)haven’t changed significantly since decimal currency wasintroduced in 1967. A 20 cent piece featuring a Maori carvingwas released in 1990, because the kiwi motif was moved tothe $1 coin. The 20 cent piece with the kiwi is still verycommon though, so you are likely to see both coins.The “heads” design featuring the Queen’s portrait wasupdated in 1986 and again in 1999. When the $1 and $2notes were taken out of circulation in 1991, they werereplaced by the gold-coloured kiwi $1 coin and the $2 coinfeaturing the kotuku.Commemorative CurrencyTo mark special occasions, or to honour special people,commemorative coins are produced from time to time bythe Reserve Bank. These coins are legal tender (see page 3),but do not circulate.Explaining Currency: New Zealand’s bank notes and coins 13

New Zealand’s coinsFive centsAlloy: Cupro-nickelDiameter: 19.43mmWeight: 2.83gDesign: The last surviving member of an otherwise extinctfamily of reptiles, the tuatara, native only to New Zealand, isshown sitting on a coastal rock.Ten centsAlloy: Cupro-nickelDiameter: 23.62mmWeight: 5.66gDesign: A Maori carved head or koruru.Twenty centsAlloy: Cupro-nickelDiameter: 28.58mmWeight: 11.31gDesign: There are two designs currently in usage. Onefeatures a representation of a well-known Maori carving,taken from the gateway of a pa in the Rotorua region in theearly nineteenth century. The carving belongs to the Arawapeople, who have given their permission to use the imageon the coin. The other coin in common usage features thekiwi.14 Explaining Currency: New Zealand’s bank notes and coins

Fifty centsAlloy: Cupro-nickelDiameter: 31.75mmWeight: 13.61gDesign: The barque Endeavour, commanded by CaptainCook, sailing south, with Mount Taranaki or Egmont in thedistance.One dollarAlloy: Aluminium bronzeDiameter: 23mmWeight: 8.0gDesign: New Zealand’s national bird, the kiwi, brings realityto the colloquial term, ‘Kiwi Dollar’.Two dollarAlloy: Aluminium bronzeDiameter: 26.5mmWeight: 10.0gDesign: The kotuku (white heron) is one of New Zealand’srarest birds and is held in particularly high regard in Maorimythology.Explaining Currency: New Zealand’s bank notes and coins 15

Currency timeline1840Standard gold, silver and bronze British coins, as well as otherforeign coins, circulate freely in New Zealand.1857—1881Coin shortage means that some retailers issue their owntokens.1897British coinage becomes New Zealand’s official currency.1914Gradual withdrawal of gold coin from circulation.1933New Zealand introduces its own coinage.1934Reserve Bank of New Zealand issues first series of bank notes.1935British coinage ceases to be legal tender in New Zealand.1940Second series of bank notes introduced.1940Bronze coins (penny and halfpenny) issued for the first time.1947Cupro-nickel coins first appear in circulation, replacing silvercoins.1967Change to decimal currency. Third series of bank notes issued.1981—1983Fourth series of bank notes issued.1989Stopped issuing 1c and 2c coins. Demonetised in April 1990.1990New Maori carving 20 cent coin issued.1991$1 and $2 coins issued. $1 and $2 notes demonetised inApril 1993.1992—1993Fifth series of bank notes issued, bearing first new designssince 1967.1999—2000Sixth series of bank notes issued in polymer.16 Explaining Currency: New Zealand’s bank notes and coins

A brief history of New Zealand’scurrencyOne of the notes printed by King Tawhiao (1825-1894) forhis Bank of Aotearoa. The notes were never circulated.Tawhiao was commemorated with a portrait on the firstReserve Bank note issue (below).Early daysBefore the first Europeans arrived in New Zealand, Maori didnot use currency. Items of value were traded by barter. WhenEuropeans first settled here, Maori and Pakeha traded in thisway as well, until coins started to appear around the 1830s.European colonists brought with them a variety of coins -mostly British, but some French, Dutch and other currenciesas well - and started using them for buying things. Thereweren’t many bank notes around at that time, generallybecause the notes were of higher value than were neededfor transactions. Early bank notes were issued by individualbanks and payable onlyby those banks. At first,there were few printingfacilities in New Zealand,so the durability of coinswas a real advantage.In 1849, William Hobson,New Zealand’s firstGovernor, proclaimedthat British laws shouldapply to New Zealandand currency became subject to the Imperial Coinage Act of1816. Because of this Act, coins in use became legal tender.Due to a shortage of coins in 1857 and especially coppercoins, 48 traders throughout New Zealand (mostly retailerssuch as merchants, grocers, drapers and milliners) decidedto issue their own penny and halfpenny tokens, some of whichcirculated until 1881. Tokens were profitable for the tradersbecause the cost of producing them was well below theirface value and many were never cashed in because they wereeasy to lose. They were a good source of advertising too, aseach token carried the business’s name.A mixture of foreign coins was used from 1879 up until 1897,when the Imperial Coinage Act made British coins NewZealand’s official currency. At this time, British coinage wasalready one of the two ‘common’ currencies, along withAustralian gold and silver coins.By the late nineteenth century, bank notes were becomingmore common. By then, there were six banks operating inNew Zealand, each issuing its own notes. The problem withthis was that none of the notes being issued by the variousbanks were the same size or design and there was a largevariety of different notes for each of the commonExplaining Currency: New Zealand’s bank notes and coins 17

denominations. It wasn’t until 1924 that banks finally coordinatedthe size and colour of notes. A bank was notobliged to accept another bank’s notes either, although mostusually did.In 1934, the Reserve Bank of New Zealand was establishedas New Zealand’s central bank and was given sole authorityby the government to issue bank notes. This ended circulationof the trading banks’ notes.The Reserve Bank issues banknotesThe first Reserve Bank notes were issued on the day theReserve Bank of New Zealand was established , 1 August1934.These first notes were supposed to be only temporary, asthey had been hastily designed. A committee to prepare thedesigns had been formed just the year before and there hadbeen heated debates over what the notes should look like.The designs that the committee finally came up with includedfeatures from the Bank of New Zealand notes that werecirculating then.The designs included a portrait of the Maori King Tawhiao(who had attempted unsuccessfully to issue his own notes in1885), a kiwi, and the Arms of New Zealand. The notesincluded the signature of the first Governor of the ReserveBank, Leslie Lefeaux. All the notes carried the same design,Above: The second series five pound note.but different colours distinguished denominations. Notes of10/- (ten shillings), £1 (one pound), £5 and £50 were issued,coloured orange, mauve, blue-green and red respectively.The Reserve Bank’s second note issue was in 1940, timed tocoincide with New Zealand’s centennial celebrations. Thesenotes had quite different designs for each denomination, butwere the same colours as before, except for slight changesto avoid confusion between the 10/- and £50 notes. TheReserve Bank’s Chief Cashiers signed this and following noteissues. These notes remained in circulation up until the changeto decimal currency in 1967.Although the Reserve Bank issued bank notes, for many yearsthe New Zealand Treasury was responsible for designing andissuing coins. The first distinctively New Zealand coins wereintroduced in February 1933 as a result of a proclamationissued under the Coinage Act in that year. Minted by theRoyal Mint in London, these coins were the same as theweight, size and denomination of British coins. Silver colouredcoins, made of an alloy of 50% silver and 50% copper, wereissued from 1933, and bronze pennies and halfpennies wereintroduced in 1940. In 1947 the silver coloured coins werechanged to an alloy of copper and nickel when silver becametoo costly.It wasn’t until 1989, when government services wererationalised, that the Reserve Bank gained authority overcoinage. At the same time, one and two cent coins werewithdrawn from circulation and ceased to be legal tender inearly 1990.The changeover to decimalcurrencyThe concept of decimal currency had been discussed for along time in New Zealand. Way back in 1933, a changeoverto decimal coinage had been suggested by the New ZealandNumismatic Society. The attraction of decimal currency wasits simplicity when doing calculations. By contrast, theMr Dollar18 Explaining Currency: New Zealand’s bank notes and coins

‘imperial’ system of currency was complicated and difficultto master. Under the imperial system, pounds were dividedinto twenty shillings, and subdivided further into 240 pence(making twelve pence per shilling). In 1933, decimal currencywas rejected because it would have been too expensive toput in place at that time, especially as New Zealand was inthe midst of the Great Depression.In 1957, a special committee was set up by the Governmentto take another look at the pros and cons of decimal currency.This committee supported the introduction of the decimalsystem and paved the way for New Zealand’s move to decimalcurrency. In August 1963, the Government announced that10 July 1967 would be ‘DC Day’, and a massive publicitycampaign was organised to smooth the shift from the imperialto decimal system.Public discussions were held as to what the new decimal unitmight be called, and suggestions such as the “kiwi” and the“zeal” were debated before the “dollar” was finally settledupon. Many New Zealanders remember “Mr Dollar”, acartoon character that symbolised the changeover. On DCDay, dollars and cents replaced pounds, shillings and penceas New Zealand’s units of currency.In 1990, the Reserve Bank decided to completely revamp theappearance and features of New Zealand’s bank notes - thefirst overhaul since the introduction of decimal currency in1967. The result, after the Reserve Bank had consulted widelywith the New Zealand public, was an all-new series of noteswith a distinctive New Zealand look. The designs of the noteswere changed slightly in 1999 when the Reserve Bankintroduced polymer bank notes. These designs are detailedon pages 8-12.Defacing bank notesThe Reserve Bank Act 1989 says that “No person shall,without the prior consent of the Bank, wilfully deface,disfigure, or mutilate any bank note.” A person can be finedup to $1,000 if caught defacing a bank note.Are damaged notes worthanything?If you come across a badly damaged bank note, don’t throwit away, as it will normally have some value. The ReserveBank is liable to pay on currency it issues, provided that thenote is not so badly damaged that it is unrecognisable. Inextreme cases, individual assessments of notes may need tobe made. As a rule of thumb, if you have half a note, theReserve Bank will pay half its value. To receive payment on adamaged note, you need to present it to a bank or to theReserve Bank in Wellington.Real notes fluoresce under ultraviolet light. An operatorin the Reserve Bank checks a note for validity.Reproducing or imitatingcurrencyIt is an offence to reproduce or imitate currency without theprior consent of the Reserve Bank. The Reserve Bank Actsays that you cannot “make, design, engrave, print, orreproduce; or use, issue, or publish any article or thingresembling a bank note or coin or so nearly resembling orhaving such a likeness to a bank note or coin as to be likelyto be confused with or mistaken for it”.Explaining Currency: New Zealand’s bank notes and coins 19

For further information please contact:Lisa WeekesCorporate Affairs SectionReserve Bank of New ZealandPO Box 2498WellingtonTelephone 04 471 3767, fax 04 471 2270email: rbnz-info@rbnz.govt.nzVisit our web site www.rbnz.govt.nzMay 2000