Notes and Coins of St Helena

Money, Money, Money

Money, so they say; Is the root of all evil today; But if you ask for a raise it’s no surprise that they’re giving none away.{b}

St Helena has its own banknotes and coinage{5}

The currency we use on St Helena is the St Helena Pound, the ISO code for which is SHP and the symbol for which is £. One Pound is divided into 100 pennies (pence), usually abbreviated to ‘p’. Hence 48p = £0.48. The value of our SHP is linked 1:1 with UK Sterling.

Current Circulating Coins

St Helena coins are generally the same size, shape and weight as their British Equivalents and with a similar face (obverse), differing only in the text. Note, however, that St Helena has not yet adopted the 12-sided £1 coin design.

The text on a St Helena coin’s obverse reads QUEEN ELIZABETH II{6} ST HELENA + ASCENSION{7}. The £2 coins have Loyal and Faithful engraved around the rim and older £1 coins carry the text Colony of St Helena, dropped because St Helena is no longer a ‘Colony’ - it is now a ‘British Overseas Territory’.

But it’s the reverse that is more interesting. Our coins feature:

Note that current UK coins are also in circulation on St Helena, interchangeably with local coins, though they are not actually Legal Tender.

Commemorative Coins

Commemorative coins and coin-sets are available on the island, some of which are pictured below.

East India Company Commemorative Guineas, 2016

At the height of The East India Company’s trade, the Guinea remained the official currency, underpinning much of the Company’s growth and influence in the colonies. These souvenirs mark the bicentenary of the last-circulation coin.

They are struck to the exact same size and weight as the last struck circulating One Guinea coin, 8.4g and 24mm in diameter, and feature the spade design from the last circulating Guineas struck under King George III - a simplified shield with quarters containing the arms of England and Scotland, France, Hanover and Ireland.

The E.I.C mark features under the effigy of Her Majesty Queen Elizabeth II.

Current Banknotes

The current banknotes are as illustrated below:

Note that:

• Unlike the UK, St Helena has not yet moved to issuing plastic banknotes; and

• St Helena does not yet have a £50 note, even though in a cash-based society like St Helena it would seem that would be quite useful.

UK banknotes may also be seen in circulation and are accepted in shops but are not strictly Legal Tender.

History

Coinage circulated on St Helena from the earliest days of settlement but none of it was local, it being a combination of English coins and whatever money was brought ashore from passing ships. For obvious reasons English coinage was hard to come by. In 1684 ‘several’ chests of Japanned copper bars were sent out from England be used in the place of a copper coinage. These were to be weighed and stamped and ‘exposed to sale’ to pass as money. Although initially successful, in practice the bars simply added to the complex mix of circulating ‘coins’. One example coin, The East India Company farthing (left) is thought to have been struck in Madras in 1714 and was found on St Helena. The detail on the reverse side is of a lion wearing a crown.

The first local coins were introduced to St Helena in 1821 by The East India Company. 700,000 St Helena copper Ha’pennies dated 1821 were intended for use by the local population, greatly increased by the military garrison, who were guarding Napoleon in exile. But by the time the coins arrived, Napoleon had died and most of the garrison had left.

At around the same time, Saul Solomon, through his company Solomon, Dickson & Taylor, also issued £147-worth of tokens each worth one ha’penny. Although officially for use only in the Solomon’s shops, these actually circulated alongside the official coins of The East India Company for several years until they came to the attention of The East India Company Directors in London and orders were issued for their withdrawal.

To emphasise how many coins were in circulation here the tables (right) show the ‘Rates of Coins’ fixed by Governor Dallas for coinage in use as at 23rd May 1830.

Just imagine going shopping!

St Helena Shilling, 1833

After the crown took control of St Helena in 1834 the island used primarily British coinage, though some non-circulating commemorative coins were issued. St Helena remained a very international place in the late 19th Century with many different monies in use, as can be seen from the Rates of Exchange page from the 1880 Almanac.

From 1925 to 1961 South African notes and coins circulated alongside UK money; this ended when South Africa converted to decimal currency in 1961.

Decimal Day

Until 14th February 1971 St Helena, like the UK, used Pounds(£), Shillings(s) and Pence(d).The Pound was the same as our current Pound, but was divided into 20 shillings, each in turn divided into 12 pence.Therefore there were 240d in £1, 1s was worth £1/20 and 1d was worth £1/240.Coins used were the ‘Crown’ (5s), ‘Half-Crown’ (2s 6d), ‘Florin’ (2s), ‘Shilling’ (1s), ‘Sixpence’ (6d), ‘Thruppence’ (3d), ‘Penny’ (1d), ‘Ha’penny’ (½d) and ‘Farthing’ (¼d).Banknotes were issued in denominations of £10, £5 and 10s.A typical price might be expressed as ‘19/6d’ - nineteen shillings and six (old) pence (97½p in modern terms) or ‘£1.10.6’ - one pound, ten shillings and six (old) pence (£1.52½ in modern terms). From 14th February 1971 St Helena, like the UK, converted to using ‘decimal coinage’ (Decimalisation).Shillings were withdrawn and the ‘new penny’ (p) introduced at £1/100.This is the system we use today.You can see an old/new conversion table below.

All of the above was extensively explained in the St Helena News Review on 23rd January 1971, covering two pages, and repeated the following week. Also in the 23rd January edition it was announced that all government finance offices would be closed from Thursday 11th February, re-opening Monday 15th February, to allow for the necessary preparations.

Stamps for first St Helena coins{c}

In February 1976 the first St Helena banknotes were introduced, and in 1984 circulating coins were introduced in the names of St Helena and Ascension Island in denominations of 1p, 2p, 5p, 10p, 50p and £1, each coin depicting flora and fauna that are special to the islands. All of the coins were the same size and composition as the corresponding British coins and valued with the British Pound at par. Their specifications can be seen in the poster (left).

Although they ceased to be Legal Tender from 1st August 1976, British banknotes continued to circulate on the island, and remain in circulation today. Similarly UK Coins ceased to be Legal Tender from 1st July 1984 but still circulate here today alongside local coins. When the UK changes its note and coin designs the Bank of St Helena ceases accepting the old styles, but usually sometime after the official withdrawal date in the UK.

Changes have been made to our coins since that first 1984 issue:

• The five pence pieces originally issued showed the Wirebird, which is the national bird of St Helena, whilst the ten pence coins showed Arum Lilies (then our National Flower). These were changed to the current designs in 1998.

• Queen Elizabeth’s effigy was redesigned on most of the denominations between 1991 and 1998.

• Seven sided 20 pence coins were first introduced in 1998.

• As with British coinage, older 5 and 10 pence pieces were resized in 1998 and the 50 pence was resized 2003, though older coins remain in circulation{8}.

• In 2002 nickel-brass £2 coins were introduced, followed by bimetallic £2 coins the following year.

Note that at the time of writing our £1 coins retain the traditional round shape; St Helena has not yet adopted the new UK 12-sided £1 shape, though maybe when new coins are issued for King Charles III…

Older banknotes were larger but with broadly the same design as their modern counterparts. There were also additional notes for £1 and £0.50p, now replaced by coins. The £20 note was not introduced until September 1986. At the time of writing there are no St Helena £50 notes.

1976 Banknote error

The first 1976 £1 and £5 notes contained a small but significant misprint. As can be seen from the images (below) the word Angliæ was printed as Anglæ{9}.

If you know how many of these remain with collectors and what they now sell for, please contact us.

Other money

Below: Financial Year Coins in popular culture Currencies accepted Issues with Sterling Should the SHP be scrapped? Note/Coin Collectors Golden rule?

Financial Year

The financial year runs from 1st April until 31st March. Unless audited (which most aren’t), businesses have to file financial returns by 30th June. Businesses and individuals not covered by PAYE have to pay any tax due by 31st July.

Coins in popular culture

It is common on St Helena to refer to current coins by the image they portray, rather than their value. Hence two donkeys = 2 x 2p = 4p.

So how much is: two dolphins, a Jonathan and a tuna? Answer below.

Currencies accepted

Falkland Islands coins are in unofficial circulation on St Helena. They are identical in size to their local equivalents, but bear different designs. They cannot, however, be exchanged at the Bank of St Helena and may not be accepted in all shops.

Issues with Sterling

£

If you come here for more than a day you will want to use our local money. It used to be the case that it might not be possible to exchange all of this for Sterling (GBP) on your departure. The Bank of St Helena often did not have any Sterling available. In 2013 the bank estimated that it needed c.£50,000 in Sterling per month to meet the demand of its customers. Importing UK sterling is a complex issue as there are restrictions on transporting currency as well as significant costs involved (not the least of which is insurance{10}).

The good news is that now the scheduled commercial air service has begun more tourist visitors mean more Sterling comes onto the island, so the problem is far less severe than it was in the days of the RMS St Helena (1990-2018). If you have large amounts to exchange a bit of planning will help. Sterling comes into circulation just after every weekly flight and also after cruise ship calls, and most shops will, if you ask, keep Sterling back for you, to exchange for local money - the Art & Crafts Association shop certainly will.

Should the SHP be scrapped?

Since 2016 there has been some debate about whether the St Helena Pound should be retained, the alternative being that the island would go back to using Sterling. The issues was raised in Legislative Council in February 2016:

Many believe there are benefits in replacing St Helena currency with UK Sterling. Councillor Essex asked at the Formal Legislative Council meeting on 12th February, What are the benefits of St Helena continuing to have its own currency? The Financial Secretary outlined the main benefits.

It’s a significant source of revenue, Mr Owen said. He reported income from the Currency Fund averaged £191,000 for the period 2006/07 to 2012/13. Once costs were deducted for printing notes, minting coins and investment management charges, the averaged net income was £99,000 a year. The transition to Sterling, Mr Owen explained will be difficult to achieve and could be expensive, depending on the transition option chosen.

Maintaining adequate supplies of Sterling could be difficult if the in-flows brought by tourists are not adequate to maintain currency supplies. Bringing in additional is very expensive. It depends not just on the number of tourists who come, but where they come from and the extent to which they bring cash or use payment cards Mr Owen said.

Many countries view its own currency as a source of pride. This was part of the rationale for introducing the St Helena Pound said Mr Owen. It also brings a level of unique experience to the island for tourists. Having what is probably one of the smallest currencies in the world is a further selling point and should not be undervalued, Mr Owen concluded.{d}

The following month, the island’s Banking Regulator, Chris Duncan, waded in:

The Chair of St Helena’s Financial Services Regulatory Authority, Chris Duncan, has said he thinks St Helena will eventually have to switch to Sterling and abolish the St Helena pound.

This comes after the Financial Secretary dismissed the idea as expensive and difficult in last month’s Legislative Council. It would mean the island would have to import more money as people would take it abroad with them, he said.

But now Mr Duncan says the local currency is unsustainable and creates problems for travellers. The St Helena pound has served good purpose in the past, he said. But it can’t be used anywhere else. It can’t be used where Saints want to use it, and as the island opens up its access and people travel more and have more exposure to the need for an international currency, it becomes rather difficult to justify the continuation of the St Helena pound.

He said he would want to compare the facts and see which currency would be better, but I suspect that at the end of the day St Helena will become - sooner or later - well advised to become fully part of the Sterling world and have as its currency, into the future, the Sterling pound.{e}

Callers to the Rattling Cages programme on 19th March expressed the unanimous view that the island should switch back to using Sterling. Complaints were also made that the Bank of St Helena makes a charge for converting SHP to GBP and vice-versa, and often has inadequate stocks of GBP. Please share with us your views.

One big issue would need to be resolved if the island is scrap the SHP and return to using Sterling: the cost of transporting the cash to the island (visitors don’t bring enough for the island’s needs). Sterling is a commodity worth stealing because it is accepted worldwide; SHP is not, because it is only accepted on St Helena and Ascension Island. So while neither is actually printed/minted on the island, transporting SHP is a great deal cheaper. However a solution to this problem may be in sight. The world is moving towards cashless operation. Most countries now have cashless payment systems (even St Helena has a rudimentary one) and these are growing in popularity. If St Helena could become a near-cashless society then the amount of Sterling that would need to be brought here would be dramatically reduced, and hence the cost would fall similarly. Then returning to Sterling might become a practical proposition.

Note/Coin Collectors

As far as we know there are no banknote or coin collectors on St Helena and no numismatic groups (if you know otherwise please contact us).

We asked the Government of St Helena about coin sales and received the following reply:

Our precious metal commemorative coins are produced and sold on our behalf by the East India Company.

We do not produce non precious metal coins any more only precious metal as above but there are previous issues of non-precious metal which can be found on www.thecommonwealthmint.co.uk.

We regret that Saint Helena Island Info does not have the resources to help with coin/note exchanges.

The golden rule?

Mike Olsson, writing in The Independent on 17th September 2010{13}, tried to describe the process whereby the UK backs St Helena’s pound with ‘Gilt-edged securities’. In a small typo he may have revealed more than he intended:

…every St Helenian Pound is secured with an investment, normally in UK guilt, with the same amount.

Read More

Below: Conversion Table: Pre-decimal to Decimal Money Article: St Helena’s Forgotten Currency Board ‘Money’

Conversion Table: Pre-decimal to Decimal Money

Article: St Helena’s Forgotten Currency Board

by Steve Hanke and Matt Sekerke, Johns Hopkins University, retrieved from www.sthelenacurrency.gov.sh, downloadable here as a .pdf fileⒾ{11}

Below: Life before the Currency Board St Helena’s high point Sterling holds sway Currency Board solution Good deal all round Insulated from Government Lessons from St Helena

The tiny isle of St Helena was discovered in 1502 and settled permanently by The East India Company in 1659. It was only after the British dispatched Napoleon to its shores in 1815 that St Helena became a real ‘place,’ however.

In the monetary sphere, St Helena wasn’t on the map until 1976. Until then, the British dependency did not have its own unit of account and primarily used currencies issued elsewhere. That changed, however, when the passage of the Currency Fund Ordinance of 1975 and the Currency Regulations of 1976 established a currency board and the new St Helena pound became legal tender. Surprisingly - given the burgeoning currency board literature - St Helena’s currency board remains unreported. In what follows, we correct that oversight.

Life before the Currency Board

From the beginning of The East India Company’s administration, sterling was the official unit of account in St Helena. Nevertheless, the predominant circulation was Spanish dollars, not pounds. In 1684 an Order in Council introduced St Helena’s first unique coinage, a series of copper bars stamped with their weight and valued at one penny per ounce. This awkward money was refused by ships calling at the island and shunned by St Helenians. Consequently, the unwieldy copper bars had more or less disappeared by the early eighteenth century. Such too would be the fate of St Helena’s later forays into the coinage business. As an active port of call - owing to its strategic placement in the middle of trans-Atlantic trade routes - St Helena hosted traders from around the world, merchants laden with the international currencies of the day. St Helena became a sort of exchange house on the high seas in which currencies traded at rates fixed by the council.

When the council’s fixed rates of exchange departed from those prevailing in the world markets, visiting traders spotted arbitrage opportunities and exploited them ruthlessly. In some cases, the island was virtually depleted of currency in the process. For example, legislation devaluing Spanish pieces of eight from 6s to 5s in March 1708 allowed traders to buy Spanish dollars cheap in St Helena and sell them dear in Madras at the 6s rate. Soon The East India Company needed to order new coins struck to provide the cash-strapped island with circulation. The company’s quick action was key to reviving St Helena’s economy in the early 18th century. In time, however, gold pagodas and Venetian florins, undervalued in India, returned to fill St Helena’s vaults and further lubricate the island’s commercial activity.

St Helena’s high point

This situation prevailed into the early 1800s, when St Helena reached its zenith. With the arrival of Napoleon and his extensive entourage in 1815, the island’s population doubled and trading activity and the demand for money trebled. The council’s catalogue of official exchange rates reveals the staggering array of currencies circulating on the island in 1823, two years after Napoleon’s death.

After the post-Napoleon slump, St Helena (and many other British possessions) faced a new challenge as a result of fluctuations in the gold price of silver. The old parities for silver standard currencies vis-a-vis gold standard currencies became obsolete when the price of silver fell. Arbitrageurs sold silver currencies in St Helena and other locales where the old exchange rates prevailed, at high cost to those territories. Gresham’s Law struck with a vengeance.

Such exchange-rate difficulties arose not long after St Helena was handed over to the Crown in 1834. Orders in Council adjusting parities to market levels solved the problem, albeit at a cost. St Helena took the first such action on July 15 1843, when most foreign coins were exchanged for silver and sent away to be melted into bullion. Spanish doubloons and dollars remained in circulation alongside sterling at the rate of 4/2d. A subsequent decline of the Spanish dollar from 4/2d. to 3/8d. in 1879 prompted the St Helena Council to demonetise the Spanish coins, leaving sterling as the sole official medium.

Sterling holds sway

Sterling remained the exclusive legal tender until the passage of the St Helena Coinage Order of 1925. This order made legal tender in St Helena all coins which are legal tender coins in the United Kingdom under the Coinage Acts of 1870 and 1891 and all silver coins which are legal tender in the Union of South Africa under the Coinage Act, 1922. By legalising South Africa’s currency, the council hoped to lay the groundwork for a more formidable trading relationship with South Africa. Unfortunately, that relationship failed to develop. The government ultimately replaced the 1925 measure with the Currency, Coinage and Legal Tender Ordinance, No. 5 of 1948, as amended by Ordinance No. 12 of 1949, which provided, inter alia, that [St Helena’s] currency should be Bank of England notes and United Kingdom coins which are legal tender in the United Kingdom from time to time.

The only branch of a foreign commercial bank to operate in St Helena was the Standard Bank of British South Africa, a corporate ancestor of today’s Standard Chartered Bank. It operated briefly from 1864 to 1865 and was closed for commercial reasons. At that time, St Helena was rapidly declining as a port of call because steamships began to replace sailing ships and could bypass the island without obtaining provisions. Today, banking on the island is carried out by the Government Savings Bank{12}.

The Currency Board solution

It was in this context that St Helena passed the Currency Fund Ordinance of 1975 and the Currency Regulations of 1976 in the interest of generating seigniorage revenue. These measures established a currency board, giving the island its first unique legal tender currency. The currency fund issues the St Helena pound, which is at parity with the pound sterling, in denominations from 1p coins to £20 notes. As of March 31 2001, there was £3,480,256 in circulation, or roughly £480 per capita. The currency fund’s story, like that of any currency board, is told by its financial statements.

A good deal all round

The currency fund is managed on behalf of St Helena’s Commissioners by Crown Agents Asset Management, Ltd. Formerly a British public corporation, Crown Agents is now a private firm owned by the Crown Agents Foundation, whose members include other firms, NGOs, the British government, and various international agencies. Crown Agents Asset Management charges a fee of 0.5% of the market value of the funds under management (a ‘safe custody’ charge of 0.02% was added in fiscal year 2001). Orthodox currency boards are characterised by small staffs and low expense, with expenses typically amounting to 0.5-1% of total assets. The currency fund is no exception.

The fund’s foreign assets are UK gilts and bank deposits, both denominated in sterling, and the bullion value of commemorative coins in circulation is likewise included. Ten-year gilts have been the investment of choice. The currency fund’s bank deposits are kept in overseas banks and have been moved around of late between several banks.

The currency fund holds deposits in the St Helena Treasury, and the latter provides the Fund with cash overdraft facilities. The currency board has also provided the Treasury with a tidy source of revenue, averaging £300,000 in operating profit each year, or about 5% of the Treasury’s self-generated revenue. The Fund’s balance sheet makes it clear that the currency board operates very close to orthodox currency board rules. It does not hold any domestic assets, does not regulate banks, and therefore has no scope for engaging in sterilisation or introducing a domestic monetary policy. Its only deviation from orthodoxy is the relatively large foreign exchange cover for its monetary liabilities, which has ranged from 117% to 138%. Orthodox currency boards of the British colonies typically operated with 110-115% cover.

Insulated from Government

This small departure from orthodoxy is no cause for alarm, however, because the board remains insulated from the kind of government and banking sector shenanigans which recently engulfed Argentina’s unorthodox currency board. Argentina’s unorthodox board suffered from wild fluctuations in its foreign exchange cover of its monetary liabilities and in its net domestic assets, as it engaged in aggressive sterilisation. Although the unorthodox currency boards in Bosnia and Herzegovina, Bulgaria, Estonia, Hong Kong and Lithuania have avoided the problems encountered in Argentina, they, too, have scope for sterilisation and have used it. By contrast, the currency fund has no scope for sterilisation.

Lessons from St Helena

Since the currency board was introduced, the St Helena pound has been trouble free. With the currency board, the Treasury has also gained a source of revenue which reduces, in part, the island’s dependence on the United Kingdom. Judging by this example, currency board orthodoxy pays, and other currency boards should draw lessons from St Helena’s experience. Clearly, other small territories (not to mention the 61 larger countries identified in Hanke, 2002) would benefit from following St Helena’s example. Each has a central bank that issues a domestic currency. In all cases, a currency board would be more suitable than a central bank.

‘Money’

Answer to how much is: two dolphins, a Jonathan and a tuna?

From The Sentinel front page, 22nd July 2022{g}

A dolphin is 10p; a Jonathan is 5p; a tuna is 1p. So two dolphins, a Jonathan and a tuna is 2 x 10p + 5p + 1p = 26p.