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About the ReseRve bAnk MuseuM 1
ReseRve bAnk MuseuM
About the
Introduction 3
Origins and development of the museum 4 Opening ceremony
Timelines, feature window and the balancing act 6 Timelines
Feature window: Sir Edmund Hillary
The balancing act
Bill Phillips and the MONIAC 10 About Bill Phillips
Artefacts and memorabilia 13 Reserve Bank Building brochure and plaques
Silver platters
Reserve Bank Coat of Arms
Interactive and audio-visual 15 Inflation calculator
Bloomberg monitor
Recordings
Contents
Copyright © 2008 Reserve Bank of New Zealand
ISBN 978-1-877466-00-7 (print)
ISBN 978-1-877466-01-4 (online)
2 About the ReseRve bAnk MuseuM
Currency function 16 Counterfeit notes and polymer security features
Replica vault door
One million dollars
Circulating coin dies and blanks
Numismatic collection 18
Commemorative and proof coin selection
Merchants’ tokens
Series 1 Reserve Bank notes
Bank of Aotearoa one pound note
FitzRoy promissory note
1935 pattern Waitangi crown
Temporary exhibitions 20
FuRtheR ReAding
— The Reserve Bank and New Zealand’s Economic History
— Explaining Monetary Policy
Print editions are free of charge by request from the Reserve Bank Knowledge
Centre, or download a PDF from http://www.rbnz.govt.nz/publications/index.html
Photography by Stephen A’Court unless otherwise noted.
About the ReseRve bAnk MuseuM 3
intRoduCtion
The Reserve Bank Museum is
the only specialist economic
and central banking
museum in New Zealand,
designed to educate and
inform, highlighting and
celebrating New Zealand’s
wider economic and banking
history, as well as the origins
and role of the Reserve Bank.
Top: Reserve Bank building
and museum frontage.
Above: Displays in the
Reserve Bank Museum,
Directors’ tea set at left,
MONIAC econometric
computer on right,
Sir Edmund Hillary display
window in background.
Left: The banking display
panels in the museum.
4 About the ReseRve bAnk MuseuM
oRigins And developMent
oF the MuseuM
The decision to establish
a banking and economic
museum in the Reserve
Bank of New Zealand was
taken during 2003-04,
following the development
of similar museums by
central banks overseas, and
the introduction of museums
by government departments
such as Parliamentary
Services.
Development took approximately two
years and drew on the skills and expertise
of a wide range of Bank staff as well as
an architecture firm, and specialist design
consultants 3D Design and Management
Ltd.
Perhaps the most challenging task
was selecting appropriate artefacts. The
Reserve Bank has a significant collection
of memorabilia and historical material,
ranging from historical ledgers to old
calculating machines, monogrammed
Noritake chinaware and works of art. Not
all could be displayed. A representative
cross-section was eventually selected,
including note stitching apparatus, scales,
and the memorial to Bank staff who lost
their lives during the Second World War.
Another difficult task involved selecting
highlights from the Bank’s small but
relatively valuable numismatic collection.
About the ReseRve bAnk MuseuM 5
opening CeReMony
The museum was opened in September
2006 by Peter Hillary, on behalf of his
father Sir Edmund. Around 10,000 people
visited during the first 18 months of
operation. During that time the museum
also acquired a new exhibit, the MONIAC,
on long-term loan from the New Zealand
Institute of Economic Research; and
hosted two temporary exhibitions.
Top right: Peter Hillary formally opens the
museum on behalf of his father, Sir Edmund.
Right: Reserve Bank Governor, Alan Bollard,
addresses the audience.
Below: The Museum interior, September 2006.
6 About the ReseRve bAnk MuseuM
tiMelines, FeAtuRe window And the bAlAnCing ACt
The museum space includes
three major display bays
covering aspects of the
economy, the banking
system, the history of
the Reserve Bank and
numismatic displays. It also
includes a range of displays
around the walls, which
extend and give context to
the exhibits.
tiMelines
Timelines on the walls of the museum
offer brief summaries of key events in
New Zealand’s economic, central banking
and currency history, giving a wider
context with which to understand both
our economic past and the specific origins
and history of the Reserve Bank.
About the ReseRve bAnk MuseuM 7
FeAtuRe window:
siR edMund hillARy
Prominent New Zealand mountaineer,
explorer, diplomat and tireless benefactor
of Nepal, Sir Edmund Percival Hillary
(1919-2008) KG, ONZ, KBE, was the first
man to climb Mount Everest in May 1953,
with Tenzing Norgay. After an initial effort
to reach the summit failed, expedition
leader John Hunt sent Hillary and Tenzing
to make the attempt. Hillary found a way
up a rock face, later known as the ‘Hillary
Step’, and they reached the summit on 29
May. The news reached Britain on the day
H.M. Queen Elizabeth II was crowned, and
Hillary was knighted for his achievements.
He led a further expedition into the
Himalayas the following year.
In 1958, as part of the massive
Commonwealth Trans-Antarctic Expedition
under Dr Vivian Fuchs, Hillary established
Scott Base on the Ross Sea. He then
became the first to drive overland to the
South Pole – leading a small New Zealand
team to transport supplies for Fuchs, who
intended to drive across from the Weddell
Sea. Although equipped only with
modified Massey Ferguson TE-20 tractors
and a Studebaker M-29 ‘Weasel’, Hillary
made a daring push for the pole, arriving
at the US base a fortnight ahead of
Fuchs in his Tucker Sno-Cats. Hillary was
awarded the Royal Geographical Society’s
Founder’s Gold Medal for 1958.
Above: The Hillary feature window, seen here soon
after the Museum opened in 2006.
8 About the ReseRve bAnk MuseuM
During the early 1960s, Hillary spent
extended periods in the Himalayas, joining
a number of scientific expeditions and
then working tirelessly on behalf of the
Sherpa people to build further schools,
hospitals, a bridge and even an airfield.
This humanitarian work became a passion,
but tragedy struck in 1975 when his wife
Louise and youngest daughter Belinda
were killed in an air crash in Nepal. Hillary
was hard-hit by the loss, but continued his
work. In 1977 he led a jet-boat expedition
from the sea up the Ganges to the
Himalayas, and in 1985 – with astronaut
and lunar pioneer Neil Armstrong – he
flew to the North Pole. In 1989 he married
Jane Mulgrew, widow of his friend Peter
Mulgrew.
Hillary’s achievements and work made
him a highly respected household name
in New Zealand and Nepal. He was made
High Commissioner to India in 1984, three
years later appointed to the Order of New
Zealand, and in 1995 was made a Knight
of the Garter – a rare honour. He was
selected to feature on the New Zealand
five dollar note in 1992, becoming the
only living person to appear on a New
Zealand banknote other than H.M. The
Queen. At Hillary’s request the design
included Mount Aoraki (Cook) and the
tractor he drove on his epic polar crossing.
The extremely large reproduction of the
note on the museum window highlights
Hillary’s portrait and reveals some of
the detailed artistic features of the New
Zealand sixth series banknotes.
About the ReseRve bAnk MuseuM 9
the bAlAnCing ACt
The rear wall of the museum has been
dubbed the ‘Balancing Act’ and is
designed to highlight the wide range
of tasks and functions performed by
the Bank under the Reserve Bank Act
1989. The Bank has roles that range
from formulating monetary policy to
monitoring and supervising the health
of the financial system, maintaining
foreign reserves, operating in the financial
markets if necessary, and issuing currency
as required. Aspects have since been
refined by subsequent amendments. It is
very much a balancing act, symbolised by
scales from the Bank’s collection.
New Zealand’s monetary policy
framework is conventional by current
international standards, designed around
an overall goal of price stability. Price
stability itself is defined by a Policy Targets
Agreement, which at the time of writing
required the Bank to keep consumers’
price index (CPI) inflation between 1 and
3 percent on average over the medium
term.
The Bank’s role in the New Zealand
financial system has developed over
the years, and includes a requirement
that banks must be registered with the
Reserve Bank. Registered banks must
meet certain criteria in regard to their
financial position, and only organisations
formally registered with the Reserve Bank
are entitled to use the word ‘bank’ in
their names. In late 2007 the decision
was taken by government to extend the
Bank’s regulatory oversight to finance and
insurance companies, building societies
and credit unions.
The Bank also operates New Zealand’s
wholesale payment and settlement
systems, which registered banks use to
complete their transactions with each
other, and which handle approximately
$40 billion in transactions per day. These
systems are vital to the New Zealand
economy, and also allow the Bank to
implement its monetary policy settings.
Above and opposite: In balance. Historic scales from
the Bank collection are a metaphor for the
‘balancing act’ of 1989, legislation that gives the
Reserve Bank a range of important roles.
10 About the ReseRve bAnk MuseuM
bill phillips
And the MoniAC
The MONIAC was developed by New
Zealand economist and inventor Bill
Phillips (1914-1975) and was first
displayed at the London School of
Economics in 1949. This particular
example is the first to be built, and is on
long-term loan from the New Zealand
Institute of Economic Research.
MONIAC is an acronym for ‘Monetary
National Income Analogue Computer’.
Operating on analogue principles, the
MONIAC was one of the world’s first
computers designed to simulate economic
phenomena, and could perform logical
functions that no other computer of the
day could match, due to a combination
of its analogue calculation principles and
the use of water flows as the calculating
medium.
Phillips built the MONIAC on Keynesian
and classical economic principles,
showing the circular flow of income,
expressed mathematically as Y = C + I
+ G + (X-M) (income equals household
expenditure plus business investment
plus government expenditure plus export
sales, less purchase of imports). Separate
water tanks represent households,
business, government, and the exporting
The MONIAC hydraulic computer
is the sole working example of its
type in the southern hemisphere
and one of only fourteen known
to have been built.
About the ReseRve bAnk MuseuM 11
and importing sectors of the economy.
Coloured water pumped around the
system measures income, spending and
GDP. The system is programmable and
capable of solving nine simultaneous
equations in response to any change
of the parameters. A plotter can record
changes in the trade balance, GDP and
interest rates on paper.
Simulation experiments with fiscal
policy, monetary policy and exchange
rates can be carried out. Although the
MONIAC was conceived as a teaching
tool, it is also capable of generating
economic forecasts.
Although the MONIAC remains an
important contribution to our economic
history, Phillips is probably better
remembered for his development of the
Above: The MONIAC under refurbishment in the
Reserve Bank workshops. (RBNZ)
Below: Reserve Bank Governor Alan Bollard outlines
the operations of the MONIAC to Reserve Bank staff.
12 About the ReseRve bAnk MuseuM
Phillips Curve, which shows an inverse
relationship between unemployment
and inflation, which he developed in the
1950s. The Phillips Curve relationship
became a significant part of economic
policy analysis in the developed world
over the next generation.
Although the MONIAC is not used for
policy analysis at the Reserve Bank, large-
scale, practical macroeconomic modelling
has long been part of the research and
policy effort.
About bill phillips
Alban William Housego Phillips
remains one of New Zealand’s best
known and most accomplished
economists. Brought up on a dairy
farm after the First World War, he
spent time in Australia and then
went to China in 1937, then studied
electrical engineering in Britain.
When the Second World War broke
out Phillips joined the Royal Air Force
and was posted to Singapore. He was
ultimately captured by the Japanese
and imprisoned in a POW camp. He put
his engineering skills to use, building a
miniature radio among other devices.
At war’s end, Phillips was awarded a
New Zealand Forces scholarship. With
these funds he attended the London
School of Economics (LSE) from 1946.
It was here that he developed the
MONIAC.
In 1967, Phillips moved to Australia
and took up a position in the Australian
National University. He suffered a
stroke two years later and retired to
New Zealand, where he taught at the
University of Auckland. Phillips died in
March 1975.
Bill Phillips with the prototype MONIAC.
(London School of Economics LSE/LSE History
Photographs/6/2/P)
About the ReseRve bAnk MuseuM 13
Artefacts and memorabilia from
the Bank’s past are displayed
around the museum.
They include official Bank wax seals, with
the wax and seal press; a nib pen used
to write board minutes during the 1960s;
and a cigarette lighter that was in use
until the Reserve Bank became smoke-free
in the late 1980s.
ReseRve bAnk building
bRoChuRe And plAques The Reserve Bank building at 2 The
Terrace was built on the former site of the
Congregational Church. A painting of this
church is on display in the museum along
with a comemorative plaque that stood
for many years in the Reserve Bank foyer.
A booklet issued to mark the opening
of the Reserve Bank building is also on
display, and includes various interesting
facts about the building.
Designed by Allied Architects,
incorporating Mitchell and Mitchell and
Partners, and Calder, Fowler and Styles,
the building took almost seven years to
complete and was officially opened in July
1972.
silveR plAtteRs
The engraved silver platters on the
rear wall of the museum, flanking the
‘Balancing Act’, were presented by the
Bank of England in 1934 to mark the
opening of the Reserve Bank. They stood
for many years in the Board Room.
ARteFACts
And MeMoRAbiliA
14 About the ReseRve bAnk MuseuM
ReseRve bAnk CoAt oF ARMs
The Bank took the decision to seek a
formal Coat of Arms in 1960. A warrant
was issued on 24 October 1961 and
Letters Patent affixed on 1 June 1965.
The Letters Patent are on display in the
museum. A large-scale metal relief version
of the crest is mounted nearby, taken from
the Reserve Bank building in Christchurch
when that branch closed in 2000. Another
is mounted at the far end of the Reserve
Bank foyer, and the Reserve Bank logo
embodies a stylised form. The crest has
historical significance for the Bank for a
variety of reasons, not least because the
bull’s head, fleece and ship also reflect
the pastoral imperatives of New Zealand’s
mid-twentieth century, when the crest was
developed.
Above: Sketch drafts of the proposed
Reserve Bank Coat of Arms.
Left: A watercolour draft sketch of the
proposed Reserve Bank Coat of Arms.
Mid-twentieth century imagery
characterises all these sketches.
About the ReseRve bAnk MuseuM 15
inFlAtion CAlCulAtoR
The inflation calculator allows the user
to compare price indices between any
two dates for which figures are available.
A number of price indices have been
programmed into the database, including
the general Consumers Price Index (CPI),
food price index and clothing.
The CPI records changes in the price of
a nominal ‘basket’ of goods and services
purchased by an ‘average’ New Zealand
household. The rate of change between
the CPI price level today and the CPI price
level one year ago is commonly referred
to as the inflation rate, or sometimes
‘headline CPI inflation’.
The calculator is not designed to
estimate changes in the level of prices of
assets or the prices of assets or individual
goods or services, as these can change by
significantly more or less than the change
in the CPI. An article in the December
2003 issue of the Reserve Bank Bulletin
further discusses the calculator.
The calculator presumes that if a date
prior to July 1967 is selected then the
denomination is pounds; if a date after
that is selected the denomination is
presumed to be dollars. At decimalisation,
£1 = $2. The calculator only works with
decimals, so an amount like £5.11.6
needs to be input as 5.575 (£5 + 11.5/20
shillings).
The figures produced by the calculator
are guides only and should not be
regarded as ‘official’ Reserve Bank
calculations. The Reserve Bank accepts no
liability or responsibility for any errors or
for any use to which the resulting figures
may be put.
inteRACtive
And Audio-visuAl
blooMbeRg MonitoR
The Bloomberg monitor above the time-
line provides a real-time view of the
currency markets.
ReCoRdings
A range of oral histories were collected
from former Bank staff and other
individuals who played an important role
in the economy.
16 About the ReseRve bAnk MuseuM
The Reserve Bank has had the
sole right to issue New Zealand
bank notes since its inception in
1934. The right to issue coins
was passed from The Treasury
in the late 1980s. Artefacts on
display in the museum include a
set of note printing plates, and
draft sketches of the third series
decimal notes.
CuRRenCy
FunCtion
CounteRFeit notes And
polyMeR seCuRity FeAtuRes
A few of the counterfeits the Reserve
Bank has collected over the years are on
display here, along with details of some
of the security features in the current
note series. New Zealand was one of
the first countries in the world to adopt
polymer for its banknotes; the notes are
more durable than cotton-based paper
notes and offer superior security features.
Displays highlight some of the security
features of New Zealand’s modern notes.
About the ReseRve bAnk MuseuM 17
Above: Replica
vault door.
Right: The
cancelled
million dollars.
Below: Coin
dies.
RepliCA vAult dooR
The replica vault door is indicative of
doors securing vaults such as those below
the Reserve Bank building. A core sample
of the steel-and-concrete vault wall is
displayed nearby.
one Million dollARs
Ever wondered what a million dollars
in fifties looks like? That is what is on
display inside the cage. Although real,
the notes have been cancelled and are
valueless. Nearby, a plastic tube contains
half a million dollars in ground-up notes.
CiRCulAting Coin
dies And blAnks
Some of the dies used to make the first
decimal circulating coins are displayed
in the museum, along with some of the
blanks from which the coins are made,
and cases of old two cent pieces. These
are long since demonetised but highlight
the way that coins have been stored and
handled by the Reserve Bank over the
years. Also on display, and of particular
interest, are samples of a one dollar coin
proposed for the 1967 decimalisation
release. This was never issued and the
current one dollar coin, produced more
than two decades later, is a quite different
size and design.
18 About the ReseRve bAnk MuseuM
nuMisMAtiC
ColleCtion
The Reserve Bank owns a
small collection of notes
and coins, some of which
are on display in the
museum.
In many respects, this collection is
incidental to the Bank’s ordinary business;
as sole producer of New Zealand’s
banknotes since 1934, the Bank has by
nature produced a fair range of material
of numismatic interest. However, the
collection also includes a range of other
notes and coins, such as the one pound
notes issued in the 1860s and 1870s by
the Bank of Otago, Bank of Auckland,
and Bank of New Zealand. Some of these
are displayed in the museum. Other rare
and important examples of New Zealand’s
wider numismatic history include those
featured below.
CoMMeMoRAtive And
pRooF Coin seleCtion
This is a selection of coins issued by the
Bank over the years to commemorate
various events, along with other coins
from the Bank’s collection. These include
one dollar collectors’ coins from 1970,
1974, 1978, 1983 and 1986; a ‘Benz’
gold coin from 1998; a complete proof set
from 1937, and an issue set from 1965.
Opposite: Top, merchants’ token. Centre: Reserve
Bank Series 1 fifty pound note. Bottom: Bank of
Aotearoa one pound note.
About the ReseRve bAnk MuseuM 19
MeRChAnts’ tokens
In the early colonial period there was
no formal New Zealand currency, and
British pounds, shillings and pence
were commonly used. Promissory notes
appeared to help fill the gap, and so
did merchants’ tokens. These were
redeemable from the issuing merchant.
Because many were not redeemed in
practice, they provided a source of
profit in some cases. The Bank collection
includes examples by Jones and
Williamson, J. Caro & Co., Edward Reece
and Milner and Thompson.
seRies 1 ReseRve bAnk notes
The first series of Reserve Bank notes were
designed in 1933 and issued the following
year on a temporary basis until a more
permanent series could be developed.
A complete set of Series 2 Reserve
Bank notes from 1940, the intended
lasting design, is also on display in the
museum. These notes were first issued
in 1940 and remained in circulation until
decimalisation in 1967.
bAnk oF AoteARoA
one pound note
Tukaroto Matutaera Potatau Te
Wherowhero Tawhaio (?-1894) was the
second Maori king. In the early 1880s
he founded the Bank of Aotearoa, which
issued this one pound note. His reasons
for doing so at that stage, after the
end of the New Zealand Wars period,
probably reflected the politics of the
period. In the event, however, the note
was never circulated, and the specimen
here is one of only three known to exist
today. Tawhaio’s role in issuing this note
prompted his inclusion on BNZ circulating
notes, and later on the first series Reserve
Bank of New Zealand notes.
20 About the ReseRve bAnk MuseuM
From time to time the Bank holds
temporary exhibitions. These have
included the work of Reginald George
James Berry, responsible for thousands of
stamp and coin designs; and a dress from
the World of Wearable Arts Awards of
2006 featuring the withdrawn five cent
coin. This was designed by Hutt Valley
artist Amilie Taylor and included 642 five
cent coins.
teMpoRARy
exhibitions
Above: James Berry exhibition,
late 2007. Right: Amilie Taylor
and her five cent dress (RBNZ).
FitzRoy pRoMissoRy note
Robert FitzRoy, former Captain of HMS
Beagle and Governor of New Zealand
from 1843-1847, issued promissory
notes to fund his impoverished colonial
government. He went beyond his brief by
doing so, and the decision contributed to
his sacking in 1847 by the Colonial Office.
1935 pAtteRn
wAitAngi CRown
This rare ‘pattern’ crown differs from the
‘issued’ Crown, notably in the size of the
crown between the heads of Governor
William Hobson and Nga Puhi chief Tamati
Waka Nene, and in the length of Nene’s
clothing.