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The Reserve Bank and Reform of the Currency: 1960–1988

The Reserve Bank was established and decimal currency introduced. A distinctively Australian series of banknotes was issued which captured Australia's emerging social and cultural diversity and its contribution to the wider world.

Image showing the front of a ten royal note

A Separate Central Bank

A separate central bank with responsibilities for the note issue was established – The Reserve Bank of Australia. The decimal system was introduced and a distinctively Australian set of banknotes was issued, though not without some controversy. The new notes captured the emerging diversity of Australia and its contribution to the wider world.

Legislation in 1945, based on wartime regulations, defined for the first time a broad central banking role for the Commonwealth Bank, encompassing macroeconomic objectives.

This step did not end the long-running debate about the need to separate commercial from central banking. By the late 1950s, the Government had decided to establish a separate central bank.

The Reserve Bank of Australia became a reality on 14 January 1960. The original corporate body was preserved under the Reserve Bank of Australia name and the commercial and savings bank business put into a new Commonwealth Bank of Australia.

Dr HC (Nugget) Coombs, Governor of the Commonwealth Bank since 1949, was appointed the RBA's first Governor.

Photograph of Dr HC Coombs

By the time Coombs retired at the end of his third term as Governor in 1968, the Reserve Bank of Australia had established branch offices in all other State capitals, Canberra, Darwin and London and had a staff of 3 200; this compares with about 800 nowadays.

Photograph showing the construction of RBA Head Office

The possibility of locating the The Reserve Bank's head office in Canberra had earlier been considered but Sydney was finally chosen and a site for a new head office building in Martin Place, Sydney, was purchased in December 1958. The building was completed in 1964 and staff moved in during 1965.

An abstract design was chosen for the emblem of the new central bank. It was designed by Mr Gordon Andrews who was also to design Australia's first decimal currency notes.

Image showing original artwork by Gordon Andrews for the Reserve Bank emblem (1960)

Decimal Currency

A major project during the first half of the 1960s was the introduction of decimal currency and the issue of a new series of currency notes.

The Government decided in 1963 that the decimal currency should be based on a 10 shilling/100 cent system. It established the Decimal Currency Board to oversee the conversion process and set February 1966 as the date for introduction of the new currency.

The Royal Controversy

A big decision concerned the name of the new currency unit.

Views varied widely from traditional labels such as 'pound' and 'dollar' to more distinctively Australian names such as 'Austral'.

A public naming competition seeking suggestions 'with an Australian flavour' added nearly 1,000 names to this list including such exotic suggestions as 'Oz', 'Boomer', 'Roo', 'Kanga', 'Emu', 'Koala', 'Digger', 'Zac', 'Kwid', 'Dinkum' and 'Ming' (the nickname of Prime Minister Menzies).

Image showing the front of a ten royal note

In June 1963, with no clear consensus having emerged on a name, the Government decided to name the new currency the 'Royal'. Treasurer Harold Holt explained that the Government saw this name as 'emphasising our link with the Crown' and as being 'a dignified word with a pleasing sound.'

Between June and September 1963, the Bank's Note Printing Branch developed a variety of design concepts for the Royal notes.

Image showing the front design of a one royal note Image showing the front design of a one royal note

Some of the designs were simple adaptations of the existing 1953/54 10 shilling note. Most of the notes were not developed beyond the stage of sketches, stylised images and basic colour schemes.

Image showing the front of a twenty royal note Image showing the back of a twenty royal note

An interesting feature of some of these note designs is that they were labelled as Reserve Bank of Australia notes, rather than Commonwealth of Australia notes.

The Royal designs were not completed because of widespread opposition to the name 'Royal' for the new currency.

Just three months after announcing the 'Royal' decision the Government conceded on 19 September 1963 that the name of the currency unit would be the 'Dollar'. This decision won quick and general public approval.

Early Designs of 'Dollar' Banknotes

The decision to adopt the dollar made necessary the design and production of a new series of banknotes with a fairly short leadtime.

Preliminary designs by four artists, under the general artistic direction of noted artist Russell Drysdale, were completed by March 1964.

Some of the designs not used are shown here.

Image showing the front of an unused one dollar note Image showing the back of an unused one dollar note
Designed by Richard Beck

Image showing the front of an unused two dollar note Image showing the back of an unused two dollar note
Designed by George Hamori

Image showing the front of an unused two dollar note Image showing the back of an unused two dollar note
Designed by Max Forbes

Australia's First Decimal Banknotes

Photograph of Gordon Andrews inspecting a design.

In April 1964, designs by Gordon Andrews were accepted and detailed design work began with the specialist firm, Organisation Giori in Milan, Italy. New note printing machinery was obtained from the UK.

The new $1, $2, $10 and $20 banknotes were issued on 14 February 1966 in line with the timetable set back in 1963. A $5 note was issued the following year.

Compared to the previous currency note series, the decimal banknotes were more clearly 'Australian'. This was the key criterion in the brief given to the designers.

The new notes captured the country's history and its contribution to the wider world. There was by now less attention on people who had explored Australia and on Australia's economic development.

The notes gave more prominent recognition to Aboriginal culture; Women; Australia's unique environment; Architecture and the arts; and Australia's contribution to aeronautics

First decimal series

The front of Australia's new $1 banknote bore a portrait of the Monarch, Queen Elizabeth II, and a representation of the Australian Coat of Arms.

The Coat of Arms conformed with the Royal Warrant of 1912 but was rendered in Aboriginal artistic style, marking a sharp break with the regal style of the pre-decimal notes.

Image showing the front of a $1 banknote. Image showing the back of a $1 banknote.

The back of the banknote was distinctive with an interpretation of an Aboriginal bark painting by David Daymirringu and of other paintings and carvings.

Despite reduced attention to representing economic development, Australia's agricultural industries continued their reign as important features on our currency notes, with wool and wheat symbolised on the $2 banknote.

Image showing the front of a $2 banknote. Image showing the back of a $2 banknote.

Image showing sketch of John Macarthur. Image showing sketch of William James Farrer.

John Macarthur (1767–1834) and the wool industry featured on the front of the $2 banknote. Macarthur and his wife, Elizabeth, contributed to the development of the colonial wool industry, especially through the use of high-quality Spanish sheep to breed the Australian merino.

William James Farrer (1845–1906) played a major role in developing wheat varieties more resistant to rust disease and to drought. His work culminated in the production of the variety, Federation, which allowed wheat farming to advance into drier areas.

As Gordon Andrews remarked in 1966 '…it would have been suicide to have left the sheep out…'.

Image showing the front of a $5 banknote. Image showing the back of a $5 banknote.

Image showing sketch of Sir Joseph Banks. Image showing sketch of Caroline Chisholm.

Sir Joseph Banks and a collage of unique Australian flora featured on the $5 banknote. The $5 banknote featured a woman, other than the Monarch, for the first time on Australia's currency notes. The portrait of Caroline Chisholm is set against a background of the women and children, sailing ships and Sydney foreshore of her time.

Sir Joseph Banks (1743–1820) was with Captain James Cook at the landing at Botany Bay in 1770. He played a major role in exploring and collecting many aspects of natural science in his travels with Cook. Though returning to England, Banks remained influential in the administration of the colony and in botanical studies of Australia.

Caroline Chisholm (1808–1877) first arrived in New South Wales in 1838. She worked to establish better conditions, including suitable employment and accommodation, for young migrant women. Her work expanded to include facilitating the passage to Australia of families. What Australia needed most, in her view, were 'good and virtuous women'.

Image showing the front of a $10 banknote. Image showing the back of a $10 banknote.

Image showing sketch of Francis Greenway. Image showing sketch of Henry Lawson.

Sydney's early architect Francis Greenway, and Henry Lawson, one of Australia's best known poets and short story writers, were shown on the $10 note.

Francis Greenway (1777–1837) was convicted of forging a contract and transported to New South Wales in 1814. A trained architect, Greenway was soon employed by Governor Macquarie in the planning and supervision of public buildings. His work included the Hyde Park Barracks and St James Church, located near the present RBA head office, Macquarie lighthouse at South Head and St Matthews Church, at Windsor.

Despite a harsh and impoverished childhood and an acute hearing problem, Henry Lawson (1867–1922) became one of Australia's best known authors. His writings captured the mateship and hardships of the 'underdog' in the gold fields and outback sheep country.

The profile of Henry Lawson on the $10 note was accompanied by scenes of his childhood years, mainly from the gold town of Gulgong in New South Wales. These scenes were identified from photographs in the Holtermann Collection which came to light in 1951.

Image showing the front of a $20 banknote. Image showing the back of a $20 banknote.

Image showing sketch of Sir Charles Kingsford Smith. Image showing sketch of Lawrence Hargrave.

Charles Kingsford Smith and Lawrence Hargrave appeared on the $20 note. They symbolised Australia's significant contribution to aviation and aeronautics.

Sir Charles Kingsford Smith (1897–1935) won the Military Cross as a fighter pilot in World War I. In 1926, he set records for a round Australia flight and in 1928, with Charles Ulm and two Americans, made the first successful flight across the Pacific in his aircraft, the Southern Cross.

Later flights included the first return trip to New Zealand, the then fastest flight from Sydney to London (12 days and 18 hours!) followed by his first flight round the world. From 1930 to 1935, Kingsford Smith was engaged in the development of airmail services between Australia and England. His aircraft disappeared on a flight from England to Australia in 1935.

Lawrence Hargrave (1850–1915) worked for a time at Sydney Observatory before devoting years to research on human flight. He experimented extensively with various types of engines and kites and devised the famous cellular or box kite. This work was a big influence on European and American efforts at powered flight. The $20 banknote included representations of some of his drawings of kites and flying machines.

Inflation and the Note Issue

High inflation was a major problem during the 1970s and 1980s. One result of inflation was a call for new coins and larger-denomination notes.

The life of $1 and $2 banknotes became progressively shorter as they circulated more rapidly to make small-value transactions. The replacement of these notes by coins – a $1 coin in 1984 and a $2 coin in 1988 – helped reduce costs of maintaining the currency in sound condition.

A $50 banknote was issued in 1973 and a $100 note in 1984.

These higher-denomination notes added to the range of symbols of Australian society on our decimal notes with representations of Australia's contribution to medicine, veterinary science, geology and astronomy based on the underlying themes of research and discovery.

Higher-denomination decimal banknotes

The $50 and $100 banknotes were the first higher-denomination notes on issue for many years.

Image showing sketch of Lord Howard Walter Florey Image showing sketch of Sir Ian Clunies Ross

Image showing the front of a $50 banknote. Image showing the back of a $50 banknote.

The front of this $50 banknote, designed by Gordon Andrews, depicted laboratory research and academic life with a portrait of Lord Howard Walter Florey.

Lord Howard Walter Florey (1898–1968), an Adelaide-born pathologist, played the vital role in the development of penicillin as an antibiotic drug. For this work, he was awarded the Nobel Prize for Physiology and Medicine in 1945. Between 1960 and 1965, Florey was the President of the Royal Society, a position also held at one time by Sir Isaac Newton. He was also a founder of the Australian National University.

The back of the $50 banknote symbolised research into the environment and outer space with a portrait of Sir Ian Clunies Ross.

Sir Ian Clunies Ross (1899–1959), a veterinary scientist, is best remembered for his work on parasites affecting livestock and his leading role in the CSIRO. An outstanding public speaker, he sought to bring scientific discoveries to wider public attention.

Image showing the front of a $100 banknote. Image showing the back of a $100 banknote.

Image showing sketch of Sir Douglas Mawson. Image showing sketch of John Tebbutt.

The ‘discovery’ theme underpinned designs by Harry Williamson for the $100 note.

Sir Douglas Mawson (1882–1958) was featured on the front of the $100 note. Mawson's scientific contributions ranged over a wide area of geology and physics and included three expeditions to the Antarctic. The design depicted Mawson in his Antarctic gear against a background of geological strata formations which he studied in the Flinders Ranges of South Australia.

John Tebbutt (1834–1916) was a pioneer astronomer who helped to lay the foundations for Australia's involvement in astronomy with the discovery of major comets. Tebbutt's portrait is thus set against representations of his observatory at Windsor, New South Wales, and elements to symbolise the sky and comets.

Introducing the New Decimal Banknotes

Image showing the cartoon character Dollar Bill, circa 1965

In the lead up to the introduction of decimal currency there was a concerted program to educate the public. This included extensive media coverage, including the famous Dollar Bill campaign.

In come the dollars and in come the cents
to replace the pounds and the shillings and the pence.
Be prepared folks when the coins begin to mix
on the 14th of February 1966.

Clink go the cents folks
clink, clink, clink. Changeover day is closer than you think.
Learn the value of the coins and the way that they appear
and things will be much smoother when the decimal point is here.

In come the dollars and in come the cents
to replace the pounds and the shillings and the pence.
Be prepared folks when the coins begin to mix
on the 14th of February 1966.

Dollar Bill decimal currency jingle, circa 1965, sung to the tune of 'Click go the Shears'.

Dollar Bill Decimal Currency Jingle sung to the tune of 'Click go the Shears'. Lyrics written by Ted Roberts.

Other educational material included games and play money in schools.

Image showing a play money one dollar note Image showing a play money twenty dollar note

A wide range of brochures was issued explaining the conversion of pounds, shillings and pence into dollars and cents and the effects of this on prices of various goods and services.

Image showing educational material and brochures used during the 'Dollar Bill' campaign Image showing a brochure explaining the conversion of pounds, shillings and pence into dollars and cents

Helped by the smooth conversion to a decimal currency, the new notes were well received. But high-quality counterfeits of the $10 banknote appeared in late 1966, prompting the Reserve Bank to begin a process of collaboration with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to combat threats to the security of the note issue.

Some two decades later, the public would see the results in the form of a unique Australian invention – polymer banknotes. You can read the story of these banknotes on the New Era - Polymer Banknotes: 1988 onwards page.

A New Note Printing Factory

Photograph showing RBA's printing works at Craigieburn in outer Melbourne

The $100 note was the first new note printed at the Reserve Bank's new printing works at Craigieburn in outer Melbourne.

The note printing function was relocated to Craigieburn from Fitzroy in late 1981.

The Fitzroy site had been in operation since 1924 when the Commonwealth Bank was given responsibility for Australia's currency notes.

Planning for a new factory began in the early 1970s when it became apparent that capacity at the existing printing works at Fitzroy was inadequate.

A new facility was required to cope with the likely growth, and evolving technical requirements, of our currency notes.

Photograph showing landscaping at the Craigieburn site

The Craigieburn site of 26 hectares was landscaped with a special area featuring the flora illustrated on the first $5 decimal note, including an example from the banksia family, named after Sir Joseph Banks.

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