A decade before he became PM, a politically inexperienced Robert Muldoon nearly ended his career overseeing the changeover to decimal currency.
It was 50 years ago this month that the New Zealand pound died and dollars and cents started filling our wallets and jingling in our pockets. But the tumultuous arrival of decimal currency severely threatened the rising political fortunes of Robert Muldoon – the MP heading the changeover – as he showed himself a naive and careless parliamentarian with much to learn.
He would later describe the controversies he waded into in the run-up to the changeover as his political awakening, a series of blunders that in his own words “blooded” him.
How hard could the job be? By the 1950s, pounds, shillings and copper pennies were increasingly seen as old school: creaky and cumbersome. So in 1963, the modernising National Government of Keith Holyoake mapped a change to a decimal system. At a time when Kiwis dealt in cash, it was a big call.
In came sharp-elbowed Muldoon. First elected in 1960, the member for Tamaki was an ambitious 39-year-old backbencher, showing enough potential by his second term to be picked as a parliamentary under-secretary by his relaxed but watchful boss, Holyoake. The job was to oversee – and front – the complex changeover.
In his 1974 book The Rise and Fall of a Young Turk, Muldoon writes he knew the high-profile task would be tricky and how he performed would shape his political career. Making his job harder was the fact that he remained outside the cosy portals of the Cabinet, where crucial decisions were being made.
The first year, 1965, passed quietly as Muldoon hunkered down with officials and businesspeople under a newly constituted Decimal Currency Board. A “Mr Dollar” cartoon symbol was rolled out to give the public education campaign a human touch. It would be emblazoned on five million household pamphlets, brochures and books in the run-up to Decimal Currency Day, July 10, 1967.
The political stakes were high. Records held at Archives NZ show the level of nervousness among those shepherding through the change: “There is a need to allay public fears of the changeover. These were generally of difficulty [in understanding the new currency] and of possible increases in the cost of living because of price conversion tables being used.”
The campaign even identified married women as a group to be enlisted as price watchdogs. “The normal shopping habits and price consciousness of the New Zealand housewife will be the greatest policing factor in the changeover.”
Muldoon’s busy to-do list included overseeing conversion of 60,000 cash registers and other machinery and steering the production and delivery of entirely new coins and banknotes. It would be this last task, in the sultry summer months of 1966, that would expose his glaring political inexperience.
Debate over what to call the new currency was already settled. PM Holyoake was known to favour “zeal”; other names in the mix included “royal”, “tui” and “tiki”. In the end, wise heads prevailed and plain “dollar” was decided on.
Designs were another matter. By the end of 1965, a committee of five middle-aged European males approved a set of new coins behind closed doors. The Cabinet ticked them off. Muldoon had forgotten about them. He’d dropped the ball.
The proposed designs were deeply ugly, even crude: the 1c coin had four flat stars; the 2c a dull flax bush; the 5c sunrise and clouds over Milford Sound; the 10c a crude Maori mask; the 50c coin an old musterer on horseback.
But it was the lumbering rugby player on the 20c coin that brought the house down. The Coinage Design Advisory Committee had championed the design “as symbolical of New Zealand’s interest in sport … the design illustrates the vigour of this country and shows the self-reliance of our present youth.”
Early in 1966, Wellington’s Evening Post leaked the committee’s selection. An accompanying story suggested the so-called “uproar designs” were a fait accompli. With an election due later that year, it was political dynamite.
The junior politician was in a dilemma, as he recalled in The Rise and Fall of a Young Turk. “I could say that the designs were not ready to be released, but I could not say that they had not been chosen. Cabinet had in fact made a decision to get plaster casts of these and work was already under way.”
It got worse. Interviewed by an Australian journalist after a long day, a tired Muldoon quipped as the reporter departed, “Of course, there are those who would say that it doesn’t matter what’s on the coins so long as you have enough of them.”
His aside was splashed across front pages – Muldoon was accused of arrogance and having a lack of judgment. Even more infuriated was the highly astute Holyoake, who “solemnly told me the press would ruin me if I could not get out of this. I think he was only mildly exaggerating.”
It was time to run up a white flag. Muldoon announced that all designs would be published, with the final selection decided in a nationwide poll. The storm subsided as tens of thousands of newspaper readers voted, in time selecting the beautiful work of commercial artist James Berry.
Just months from the 1966 general election, Muldoon found himself embroiled in a second controversy. The Decimal Currency Board’s private polling showed growing numbers of Kiwis worrying about possible price rises, the proportion rising from 37% to an alarming 52% in a year.
“There were the ordinary folk, especially the elderly, who were worried about conversion problems … and for a few crazy weeks, by a story that all savings bank accounts would diminish by 20%,” Muldoon wrote. “One cent equals 1.2 pence, so the story went, so all your savings will be discounted.”
So when, weeks from the election, TV’s major current affairs show, Compass, decided to tackle the inflationary aspects of the new currency, Muldoon lost it. Hard-boiled producer Gordon Bick approached the Decimal Currency Board to take part in the show and was referred to Muldoon. But under the state broadcaster’s rule of the day, there was a moratorium on politicians appearing on television within three months of an election. Muldoon was quick to set him right:
“I told him the question of price increases was controversial and a matter for the Government, not the Decimal Currency Board, and that I was under a ban … Mr Bick then rather bombastically said that he would go ahead, with the criticism unanswered.”
What happened next is the stuff of legend, but Muldoon appears to have then uttered the immortal words “We’ll see about that”. Bick then resigned in high dudgeon, amid a flurry of banner headlines and noisy politicking by Labour Opposition leader Norman Kirk.
Bick’s vision for his documentary was always going to be challenging, as his memoir The Compass Affair showed. “I wanted the board’s chief executive officer to appear in the programme with a Melbourne accountant, Mr Bob Parry.
“Mr Parry was carrying on a one-man campaign against the decimal system. His main contention was that cents are not equal to pence. One cent equals 1.2 pence, which meant, for example that, a two-penny box of matches would have to cost 2c – or 2.4 pence; or a pint of milk costing 4.5 pence or 4.75 pence would go up to 5c or sixpence.”
Once again, Muldoon was forced to bite his lip. Holyoake privately fumed that his feisty under-secretary had damaged the Government’s chances at the forthcoming election. In the event, National was comfortably returned. Muldoon, however, saw a sharp drop in his own electorate majority.
More bad vibes
The bad vibes didn’t end there. Holyoake remained grumpy, first signalling that Muldoon was out of contention in a pending Cabinet reshuffle. In the end, Muldoon squeezed into Cabinet as Tourism and Associate Finance Minister. His break came when Finance Minister Harry Lake unexpectedly died early in 1967 and Holyoake tapped a chastened Muldoon for the job.
By the time Decimal Currency Day arrived, the new Finance Minister had moved on, having already grappled with a collapse in wool prices and his first mini-Budget. He’d already grown into his powerful new role, adopting a more polished and tactful persona. For now, anyway.
The Decimal Currency Board’s years of hard work showed. Some recall 1967 as the year of Sgt Pepper’s Lonely Hearts Club Band. But the song ruling local airwaves was an infectious jingle with a calypso beat, reminding us of the forthcoming switch on “the 10th of July this year”.
On the morning of July 10, Muldoon boarded a bus at Wellington Railway Station for a tiki tour around the capital. Newspapers reported how he popped into James Smiths to buy a white shirt – with a crisp new $5 note – and called at the Central Post Office for stamps.
The Post reported that “the public took to dollars and cents yesterday with a wave of excitement and only a ripple of confusion”. Muldoon could barely hide his relief after the long gruelling years of preparation. He told journalists he felt like “a dog with two tails”.
When “DC Day” dawned on Monday, July 10, 1967, the nation’s banks were flush with brand-new crisp dollars and shiny coins. Most had closed their doors the previous Wednesday to ready themselves for the massive changeover.
One little-known aspect of the switch was the hush-hush operation to deliver more than $4 billion worth of newly minted cash to 592 bank branches up and down the country.
Run by the Reserve Bank, so-called Operation Overlander took three secretive months to complete. Over that time, 30 tonnes of notes and 700 of coins were transported by rail, road and ferry, using special trains and dedicated eight-tonne trucks.
Police were fully involved, with two officers standing guard every time the money trains stopped. Overlander proved a total success; the Reserve Bank quietly crowed “not one cent was misplaced”.
This article was first published in the July 22, 2017 issue of the New Zealand Listener.