Decimalisation

Overview

Decimalisation or decimalization (see spelling differences) is the conversion of a system of currency or of weights and measures to units related by powers of 10. Most countries have decimalised their currencies, converting them from non-decimal sub-units to a decimal system, with one basic currency unit and sub-units that are valued relative to the basic unit by a power of 10, most commonly 100 and exceptionally 1,000, and sometimes at the same time, changing the name of the currency and/or the conversion rate to the new currency. Today, only two countries have de jure non-decimal currencies, these being Mauritania (where 1 ouguiya = 5 khoums) and Madagascar (where 1 ariary = 5 iraimbilanja): however, these currencies are de facto decimal as the value of both currencies' main unit is now so low that the sub-units are too small to be of any practical use, and coins of these sub-units are no longer used. Russia was the first country to convert to a decimal currency when it decimalised under Tsar Peter the Great in 1704, resulting in the silver ruble being equal to 100 copper kopecks. For weights and measures, this is also called metrication, replacing traditional units that are related in other ways, such as those formed by successive doubling or halving, or by more arbitrary conversion factors. Units of physical measurement, such as length and mass, were decimalised with the introduction of the metric system, which has been adopted by almost all countries (with the prominent exceptions of the United States, and, to a lesser extent, the United Kingdom and Canada). Thus, a kilometre is 1,000 metres, while a mile is 1,760 yards. Electrical units are decimalised worldwide. Common units of time remain undecimalised. Although an attempt to decimalise them was made during the French Revolution, this proved to be unsuccessful and was abolished by Napoleon eleven years later.

Currency decimalisation by region

Decimal currencies have sub-units based on a power of 10. Most sub-units are one-100th of the base currency unit, but currencies based on 1,000 sub-units also exist in several Arab countries. Some countries changed the name of the base unit when they decimalised their currency, including:

Europe

In 1534, the kopek of Novgorod was equated to 1/100 of the ruble of Moscow, thus making the Russian ruble Europe's first decimal currency. In the 18th century were introduced the coins grivennik (10 kopeks) and imperial (10 rubles). This was not quite decimal currencies as they are known today, as there were smaller units beneath the kopek itself: the denga (half a kopek, or 200 to the ruble) and the polushka (half a denga, one-quarter kopek, or 400 to the ruble). After the October Revolution, the Soviet Union transitioned to a purely decimal model by eliminating the non-decimal subdivisions of the kopek. France introduced the franc in 1795 to replace the livre tournois, abolished during the French Revolution. France introduced decimalisation in a number of countries that it invaded during the Napoleonic period. The Dutch guilder decimalised in 1817, becoming equal to 100 centen (instead of 20 stuivers = 160 duiten = 320 penningen), with the last pre-decimal coins withdrawn from circulation in 1848. Sweden introduced decimal currency in 1855. The riksdaler was divided into 100 öre. The riksdaler was renamed the krona in 1873. The Austro-Hungarian Empire decimalised the gulden in 1857, concurrent with its transition from the Conventionsthaler to the Vereinsthaler standard. Spain introduced its decimal currency unit, the peseta, in 1868, replacing all previous currencies. Cyprus decimalised the Cypriot pound in 1955, which comprised 1,000 mils, later replaced by 100 cents. The United Kingdom (including its overseas territories) and Ireland decimalised sterling and the Irish pound, respectively, in 1971. (See £sd and Decimal Day.) Malta decimalised the lira in 1972.

United States

Decimalisation was introduced into the Thirteen Colonies by the American Revolution, and then enshrined in US law by the Coinage Act of 1792.

Canada

Decimalisation in Canada was complicated by the different jurisdictions before Confederation in 1867. In 1841, the united Province of Canada's Governor General, Lord Sydenham, argued for establishment of a bank that would issue dollar currency (the Canadian dollar). Francis Hincks, who would become the Province of Canada's Prime Minister in 1851, favoured the plan. Ultimately the provincial assembly rejected the proposal. In June 1851, the Canadian legislature passed a law requiring provincial accounts to be kept decimalised as dollars and cents. The establishment of a central bank was not touched upon in the 1851 legislation. The British government delayed the implementation of the currency change on a technicality, wishing to distinguish the Canadian currency from the United States' currency by referencing the units as "Royals" rather than "Dollars". The British delay was overcome by the Currency Act of 1 August 1854. In 1858, coins denominated in cents and imprinted with "Canada" were issued for the first time. Decimalisation occurred in:

The colonial elite, the main advocates of decimalisation, based their case on two main arguments. The first was for facilitation of trade and economic ties with the United States, the colonies' largest trading partner; the second was to simplify calculations and reduce accounting errors.

Mexico

The Mexican peso was formally decimalised in the 1860s with the introduction of coins denominated in centavos; however, the currency did not fully decimalise in practice immediately and pre-decimal reales were issued until 1897.

Bermuda

Bermuda decimalised in 1970, by introducing the Bermudian dollar equal to 8 shillings 4 pence (100 pence, effectively equal to the US dollar under the Bretton Woods system).

Caribbean

The Cuban peso decimalised in 1869 (became equal to 100 centavos instead of 8 reales). The Dominican peso decimalised in 1877 (became equal to 100 centavos instead of 8 reales). The Haitian gourde decimalised in 1881 by peg to French franc (became equal to 100 centimes/santim). The Netherlands Antillean guilder decimalised in 1892 by peg to Dutch guilder (became equal to 100 centen). The British West Indies dollar decimalised in 1955. The Jamaican dollar decimalised in 1969.

Central America

Costa Rican peso decimalised in 1864, divided into 100 centavos, instead of 8 reales. Honduran peso decimalised in 1871, divided into 100 centavos, instead of 8 reales. British Honduran (Belize) dollar decimalised in 1885, divided into 100 cents.

South America

The Venezuelan peso decimalised in 1843. The Colombian peso decimalised in 1847 (became equal to 10 décimos instead of 8 reales, later became equal to 100 centavos). The Chilean peso decimalised in 1851 (became equal to 10 décimos or 100 centavos instead of 8 reales). The Uruguayan peso decimalised in 1863. The Peruvian sol decimalised in 1863 (equal to 10 dineros or 100 centavos). The Paraguayan peso decimalised in 1870 (became equal to 100 centésimos, later centavos, instead of 8 reales). The Ecuadorian peso decimalised in 1871. The Argentine peso decimalised in 1881.

Africa

The Ethiopian birr decimalised in 1931 (became equal to 100 metonnyas instead of 16 ghersh). The Ghanaian cedi decimalised in 1965. The new base unit was worth eight shillings and four pence, making one penny equal to one pesewa (1⁄100 cedi). The Zambian kwacha decimalised in 1968. The Rhodesian dollar decimalised in 1970. The Gambian dalasi decimalised in 1971. Unusually, the new base unit was worth four shillings (1⁄5 of a pound). The Malawian kwacha decimalised in 1971. The Nigerian naira decimalised in 1973.

South Africa

The rand was introduced on 14 February 1961. A Decimal Coinage Commission had been set up in 1956 to consider a move away from the denominations of pounds, shillings and pence, submitting its recommendation on 8 August 1958. It replaced the South African pound as legal tender, at the rate of 2 rand = 1 pound or 10 shillings to the rand. Australia, New Zealand and Rhodesia also chose ten shillings as the base unit of their new currency.