Banknotes
and coins are not only means of payment, they are also a symbol of sovereignty.
When the Fathers of the Yishuv [Jewish leadership in Mandatory Palestine]
were engaged in establishing the new state, one of the matters they had to
deal with was its currency. As the name of the new state had not been decided,
the question arose as to what would be printed on the banknotes.
The banknotes
could not be printed in Palestine as the British Mandate had not yet expired,
and also for lack of the required technical expertise. At the same time it
was clear that no reputable foreign firm would print money for a nonexistent
state. After considerable effort, Mr. S. Hoofien, then Chairman of the Board
of the Anglo-Palestine Bank, persuaded the American Banknote Company of New
York to print the banknotes.
To obviate
the need for State Department approval for printing banknotes of a foreign
country, the notes as ordered gave no indication of their being legal tender.
(The legend "Legal tender for payment of any amount" was subsequently
overprinted). In addition, the company stipulated that its name should not
appear on the notes.
The design
of the banknotes was based on different combinations of ornamental borders
in the company's stock, some of which were used for printing banknotes for
China! When the banknotes were ordered, no one yet knew what the name of the
new state would be, let alone its currency. It was therefore decided to print
"Palestine Pound" on the notes, the currency of the mandate.
The banknotes
reached Israel secretly in July 1948. On August 17 the government passed a
law declaring the notes legal tender, and they were put into circulation on
the following day.
On May 1,
1951 all the assets and liabilities of the Anglo Palestine Bank were transferred
to a new company called Bank Leumi le-Israel BM, and it therefore became necessary
to issue a new series of banknotes. These were almost identical to the Anglo-Palestine
Bank series, except that the color of some of the notes was different. The
name of the currency was the "Israeli Pound."
The new money
was introduced in June 1952, along with a 10 percent compulsory loan levied
on cash holdings and current accounts.
ISRAEL'S
CURRENCY SYSTEM
From
August 17, 1948
One Israeli
pound = 1000 mils
From
December 24, 1948
One Israeli
pound = 1000 prutot
From
January 1, 1960
One
Israeli pound = 100 agorot
From
February 24, 1980
One shekel
(IS) = 10 Israeli pounds
One shekel (IS) = 100 new agorot
One new agora = 10 agorot
From
September 4, 1985
One new
shekel (NIS) = 100 agorot
One new shekel (NIS) = 1000 shekalim
One agora = 10 shekalim
