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