The History Of Decimalisation And How It Affected Currencies
Posted by Allison on 6 April 2009, 15:11
If you talk to someone who is old enough to remember what the world of money was like before decimalisation, it's very likely that they will roll their eyes at the memory of having to get used to a whole new way of thinking about money.
Decimalisation was a huge change for people who remember what it used to be like to deal with money before the change was made. However it is generally accepted that decimalisation is a much easier system to get to grips with once you are used to it.
Most modern currencies are decimalised, and it is easy to see which ones are decimalised and which ones aren't. In basic terms, if the units of a currency are divisible by ten, then it is decimal. In most cases you will see that the main type of currency can be divided into a hundred parts. So for example the dollar is divided into a hundred cents, the pound is divided into a hundred pennies, and the Euro is divided into a hundred cents. On the odd occasion there may be a thousand units making up the main form of currency but on the whole you will see that a hundred is the most popular number.
Decimalisation was introduced into Britain in 1971, but it was far from being the first country to do so. Way back in 1710 Russia adopted the decimalised version of their currency and set in motion the way towards more and more countries doing the same.
Australia finally went decimal not long before Britain did, in 1966, while New Zealand followed the year after. In those countries, as in virtually every other country that adopted the new way of dividing up their currency, both the old and the new currencies remained in use for a while, giving people a chance to adopt the new one gradually rather than being thrust into it overnight and having to give up all the old coins and notes at the same time.
Australia had actually made a previous attempt to try to introduce decimalisation back in 1901. It seems that the right combination of people and determination were needed in order for the actual event to finally take place some sixty five years later.
This example of a tried and failed attempt is not uncommon though. Britain had also tried to go decimal over a century before it finally did, and although when it eventually did happen people probably wondered why it hadn't happened earlier (since the new system was actually far easier to understand once you got used to it) it still wasn't welcomed with open arms to begin with.
It was common for the people in each country to be wary of the new decimalised currency when it came into being. This was understandable since they were used to a particular way of buying things and they now had to get used to a new set of prices. While one could look at a conversion table to understand what each new coin represented when compared to the old versions, it was still hard to get used to the new money.
It's perhaps not surprising that decimalisation brought about some confusion in each country to begin with. Old denominations of coin were suddenly valued at odd amounts when compared to the new denominations now in use, such as the old British halfpenny, which after decimalisation was valued at five twenty fourths of a penny! It was a small wonder that it took some time for some people to get to grips with it.
It was also difficult to relate one's own currency to that of other countries as different places made the change at different times. Some people worried that their money wasn't worth as much as it used to be, and perhaps didn't buy as much as it used to. In Britain it was certainly suspected that some people took advantage of the change to increase the amount they charged for everything, but this was difficult to prove in the general air of confusion that was around for a while at the time while everyone tried to get used to the new decimalised currency.
So are there actually any countries left which haven't adopted decimalised currencies?
Mauritania and Madagascar haven't adopted it in theory – but in actual fact even they operate under a decimal system. It seems that while we all kicked and screamed when it was announced that decimalisation would be brought in, every country in the world has benefited from doing so. No one ever likes change, but sometimes it really is for the better.
One particular area where decimalisation has made a real difference is in currency exchange. It's far easier to understand the exchange rates between different countries when they both divide up their amounts in one hundred pieces. It's also easier to understand how things work when we go on holiday. We don't have to struggle with different divisions of money since we understand that a hundred pennies make up a pound, or a hundred cents make up a dollar. There are very few currencies where the main currency isn't divided by a hundred.
One wonders why - in the face of overwhelming evidence of decimalisation being fought every step of the way before finally being introduced in many countries – people didn't take a look at the countries who had already adopted the system before they did. Surely looking at the positive results would have made the change in their own country much easier to take?
In the end only those who experienced the change at the time will know exactly what it was like. Many of us are too young to remember anything other than decimalised currency, and can't imagine what dealing with anything other than what we know today.
Fortunately it has been a success in many ways, even though the journey itself may have been hard at times – and it's doubtful whether any of us would go back to the old system if we could.