 |
| Libyan Pound banknote, with the portrait of King Idris of Libya |
 |
| Currency of Libya - Libyan pound banknote |
Libyan banknotes, Libyan paper money, Libyan bank notes, Libya banknotes, Libya paper money, Libya bank notes
Obverse: Portrait of King Idris I of Libya the first and only king of Libya, reigning from 1951 to 1969, and the Chief of the Senussi Muslim order. While in Turkey for medical treatment, Idris was deposed in a 1969 coup d'etat by army officers led by Muammar Gaddafi.
The Libyan Currency Commission
The Libyan Currency Commission was established as the monetary authority to guide independent Libya to financial stability. The authority had a short life of four years and produced two series of banknotes. While the notes are relatively simple to describe, the intriguing aspect to these notes is that they are catalogued in the wrong order of issue in the Standard Catalog of World Paper Money. The reasons for this, as will be shown, are understandable, but it is surprising that this mistake has not previously been noted.
From the early sixteenth century, Libya was part of the Ottoman Empire, but from 1711 to 1835 the area maintained some autonomy under the rule of the Karamanli dynasty. When a dispute arose in 1835 over succession within the dynasty, the Ottomans intervened and re-established direct rule from Istanbul. This situation lasted until the beginning of the twentieth century. During the Italo-Turkish war of 1911–12 Italy occupied Libya and, by the Treaty of Ouchy signed in 1912, Turkey ceded Libya to Italy.
The Italians commenced a program of colonization that continued under various Italian governments. Benito Mussolini's government was the most active in this area and by the outbreak of World War II some 150,000 settlers had arrived from Italy. At the conclusion of the Second World War, Great Britain and France were in control of Libya. Great Britain was responsible for the provinces of Tripolitania and Cyrenaica in northern Libya, while France was responsible for the province of the Fezzan in the south. Great Britain took responsibility for the two northern provinces because their army had occupied the area after driving out the Axis forces in the winter of 1942-43, while France had liberated and occupied the Fezzan following a march by the Free French from Lake Chad during the War.
After World War II, debate over Libya's future occupied the international community for some years and ultimately it was decided that the UN should guide Libya to nationhood. On 21 November 1949 the United Nations resolved that Libya should become an independent nation before 1 January 1952. A commissioner appointed by the United Nations then worked with Britain and France to establish self-rule for Libya. On 24 December 1951 the United Kingdom of Libya, under the sovereignty of King Idris I, became the first country to be established as an independent state through efforts of the United Nations.
From the end of World War II the three Libyan provinces were maintained by separate administrations. By the force of circumstances, this resulted in separate currencies circulating in each of the three provinces. The following extracts, from "Currency Unification in Libya" (Staff Papers of the International Monetary Fund, Volume II, 1951-52) by G. A. Blowers and A. N. McLeod, describe the situation in each province. Blowers and McLeod had been nominated by the United Nations to investigate the economic conditions of Libya in preparation for the introduction of Libya's own currency. (George Blowers was later to become the first Governor of the Saudi Arabian Monetary Agency.)
The report of Blowers and McLeod notes that the Italian metropolitan lira circulated in Libya prior to World War II, then describes the situation in each province at the time the report was written. With regard to Tripolitania, the following is stated:
"The currency now circulating in Tripolitania is the Military Authority Lira (MAL), having an exchange value equal to an English halfpenny (480 to the pound sterling). It was originally issued in exchange for the Italian lira on a one-for-one basis. At the beginning of the British occupation early in 1943 the British Military Administration Pound was introduced, but the metropolitan Italian Lira was allowed to continue in circulation at the arbitrarily fixed exchange rate of 480 to the pound sterling. Beginning on September 15, 1943, however, the Military Authority Lira was introduced. The British Military Administration Pound and the metropolitan lira were retired, ceasing to be legal tender in the territory on November 30, 1943. In order to meet the need for small change, however, denominations of five lire or less were permitted to continue in circulation, being accepted at their face value as equivalent to Military Authority Lire."
The notes issued by the Military Authority in Tripolitania were in eight denominations – 1, 2, 5, 10, 50, 100, 500 and 1000 lire.
description of the situation in the province of Cyrenaica was stated in the following terms by Blowers and McLeod.
"In Cyrenaica the Egyptian pound, which had been used to pay the British Eighth Army while operating from bases in Egypt, was introduced at the time of the occupation late in 1942 and early in 1943. Throughout the first nine months of 1943, the Italian lira was accepted for the purchase of foodstuffs, that is, for the majority of the payments made by the local populace to the administration, as at that time lire were required by other branches of the Army and the amounts acquired in Cyrenaica were easily disposed of. Beginning in September 1943 the percentage of payments for foodstuffs acceptable in lire was gradually reduced, the remainder being payable in Egyptian currency. Italian lire in the denominations of 50 lire and less (later reduced to denominations of 10 lire and less) continued to be accepted because of the shortage of small change. Late in 1944 an attempt was made to require all payments to the Administration to be made entirely in Egyptian pounds. This proved unenforceable at the time, but the change was made effective from October 1, 1945 without serious difficulty; as of September 30, 1945, some 437.8 million Italian lira had been withdrawn. The shortage of small change in Egyptian currency continued, and limited amounts of Italian money in denominations of one to ten lire continued to circulate. The lira had been revalued at 500 to the Egyptian pound for this purpose, although by December 1945 the rate of exchange in open markets was 1,500 to the Egyptian pound. By 1947 the Italian lira had practically ceased to circulate in the territory."
Information on the Fezzan proved to be scanty for the researchers and their comments on currency circulating in this territory are short.
"In the Fezzan area the Algerian franc (equal in value to the franc of metropolitan France) circulates. No data are available on the amount in circulation in the area, but the population is so small in numbers and has such a low standard of living that the amount cannot be large."
The notes that circulated in the Fezzan are of some interest. The Standard Catalogue of World Paper Money (Volume 2, Ninth Edition) describes three denominations—5, 25 and 100 francs issued by the Banque de l’Afrique Occidentale (Bank of West Africa) which are purported to have circulated in the Fezzan. The notes carry a stamp that reads "R F Fezzan", with the "R F" believed to represent Republique Français. However, a caveat accompanies the description of these notes in the Catalog. The caveat states: "There is a possibility that all Fezzan ovpt. notes except some of #M9 [5 francs] are spurious."
Leclerc and Kolsky, in Les Billets Africains de la Zone Franc, state that 5 franc notes dated 10 March 1938 issued by the Banque de l’Afrique Occidentale were used in the Fezzan. According to records held by the Caisse Centrale de la France Libre, a monetary crisis arose in the Fezzan because people refused to use the Italian currency following the occupation of the province by the Free French. A proposal to use notes of the Bank of Algeria was rejected and notes previously used by the Banque de l’Afrique Occidentale and withdrawn from circulation were over stamped by linotype and placed into circulation. While the records of the Caisse Centrale de la France Libre specifically mention the 5-franc notes, they are silent on any other denominations, casting doubt as to whether higher denomination notes were issued in a similar manner. (This suggests that the higher denomination notes with the over stamp are contrived to sell to collectors.)
Despite the initial rejection of Algerian currency, it appears that the short term solution of over stamped 5-franc notes soon gave way to the circulation of Algerian banknotes in the Fezzan. The report by Blowers and McLeod that "the Algerian franc" circulated in the Fezzan is echoed in the First Report of the Libyan Currency Commission, which states that the new Libyan currency was exchanged for Algerian francs in the Fezzan.
While there were many matters facing the United Nations during the preparation of Libya for independence, one of their greatest concerns was the Libyan economy. Libya was a relatively poor country, subject to drought and possessing limited arable land. The United Nations realized that specific measures would have to be instigated so that stability could be brought to the new nation. In order to achieve this, a new currency for Libya was necessary. The first objective of a new currency was to provide a unified currency for Libya, which would encourage trade between the three provinces. The second objective was to establish an internationally recognized currency that could facilitate commerce between Libya and other nations.
These objectives were seen to be so important, that the United Nations sought to specifically address these issues, along with other general economic issues, at a series of meetings organized during 1951. The first meeting was held in London from 14–16 March and the remaining meetings in Geneva, from 11–28 April, 29 May to 9 June, 5–7 July, and 24–29 September. The governments of Egypt, France, Italy, the United Kingdom, and the United States of America were invited by the UN Commissioner for Libya to meet and discuss the economic issues. Egypt sent only an observer to the first and fourth meetings and declined to be involved in the final meetings.
Advice at the meeting was supplied by Blowers and McLeod, based on their report prepared for the UN Commissioner. Blowers and McLeod advised against establishing a central bank in Libya, as they believed that Libya had no experience of central banking. Indeed there was very little experience in any type of banking by Libyan nationals, as most banks in Libya were run by foreign companies. Their recommendation was for a "Currency Authority domiciled in Libya and composed in part of Libyan nationals and in part of foreign experts." As a currency unit, they recommended a value equivalent to four shillings sterling – divided into 100 parts. Banknotes were to be issued in denominations of 500, 100, 50, 10, 5 and 1 unit.
These recommendations, amongst many others, were presented to the experts meeting in London and Geneva. Most delegates at the conference supported the recommendations compiled by Blowers and McLeod, but the Egyptians found difficulties in accepting some of the proposals and dissociated themselves from the final recommendations.
The Libyans accepted most of the recommendations presented to them, but they would not accept the proposed units of currency. The Libyans insisted that the unit of currency be called the Libyan Pound, that it be equal to one pound sterling, and that it should be divided into 100 piastres and 1000 millièmes. The Libyan Government also opted to become a member of the Sterling Area. The inclusion of Libya in the Sterling Area caused a deal of consternation with the Egyptians and drew some protest from the French and Italians. However, the latter two countries accepted the proposal on the understanding that some of the currencies securing the Libyan pound would be French francs and Italian lire.
At the third series of meetings, convened in Geneva from 29 May to 9 June, most matters concerning the proposed currency and the currency authority were decided, although they had been discussed earlier. Firstly, a "Preparatory Currency Committee" was established to undertake the responsibilities that would in future be undertaken by the permanent currency authority. The members of the Committee were: Dr. A. N. Aneizi and Mr. A. al-Missellati (representing the Provisional Government of Libya), Mr. J. Koszul and Mr. de Fleurieu (representing France), Mr. A. Zecchi (representing Italy), and Mr. F. A. Ticehurst and Mr. C. E. Loombe (representing the United Kingdom). It was expected that the Egyptians would have representation on the Preparatory Currency Committee, but their decision to distance themselves from the proceedings and recommendations of the meetings held in Geneva also led to their absence from the Committee. The Preparatory Currency Committee first convened as an entity in Geneva from 31 May to 1 June 1951.
The Committee endorsed Libya's desire to name the currency unit as the "Libyan Pound" and to subdivide it as requested. They also decided on the form and amount of currency to be ordered. Decision No.3 of the Committee was "That the Bradbury Wilkinson "A" design should be taken as the basic note for the basic unit of currency.’ This decision suggests that designs for the notes had been called for at one of the earlier meetings convened in London or Geneva. Unfortunately, the companies requested to submit designs is not recorded, and neither is the range of designs available to the Committee. Ultimately, the first issue of Libyan notes was printed by the British security printers Bradbury Wilkinson and Company and Thomas De La Rue and Company.
The required number of notes was determined to be:
100,000 at £10 = £1,000,000
200,000 at £ 5 = £1,000,000
3,000,000 at £ 1 = £3,000,000
3,000,000 at £ ½ = £1,500,000
3,000,000 at £ ¼ = £ 750,000
3,000,000 at 10 piastres = £ 300,000
4,000,000 at 5 piastres = £ 200,000
£ 7,850,000
The recommendations of the delegates at the Geneva conferences, with the modifications required by the Libyans, were embodied in Law No.4, the Libyan Currency Law, which was enacted on 23 Moharram 1371 (24 October 1951). The British had issued the "Transfer of Powers (No.1) Proclamation No.220" on 12 October 1951 specifically to empower the Provisional Government of Libya to enact and implement the law for the introduction of the currency. The Currency Law also established the Libyan Currency Commission to control the currency.
The Currency Commission held its first meeting in London on 12 February 1952. The Chairman and two members of the Commission were nominated by the Libyan Government, two members by the Bank of England, and one each by the Banque de France, the Banca d’Italia, and the National Bank of Egypt. The initial members of the Commission were:
Sir Reader Bullard – Chairman (nominated by the Libyan Government)
Dr. A. N. Aneizi (Libyan Government)
Mr. Salim Sharmit (Libyan Government)
Sir Sidney Turner (Bank of England)
Mr. C. E. Loombe (Bank of England)
Mr. J. Koszul (Banque de France)
Mr. A. Zecchi (Banca d’Italia)
The National Bank of Egypt did not nominate a member for the Commission for several years. This was evidently in protest at the implementation of financial controls objected to by Egypt at the Geneva conferences. However, by the year ended 31 March 1955 Mr. Moustapha al-Sakkaf had been nominated to the Commission by the Egyptians.
The Libyan members of the Currency Commission changed over the period of the Commission's existence, although other members of the Commission remained relatively static. By the time the Second Report of the Libyan Currency Commission was issued, in 1954, the Libyan representatives were H.E. Al-Sayed Mansur Gadara and H.E. Al-Sayed Mustafa bin Halim. The following year the Libyan representatives were Al-Sayed A. R. Shaglouf and Al-Sayed Omar Baruni. H.E. Mahmoud bey Muntasser, the Libyan Ambassador in London, became the Chairman of the Commission following the resignation of Sir Reader Bullard on 31 January 1955. The commission remained unchanged in its final year.
On 13 December 1951 the British Government had undertaken to provide one-hundred percent backing in sterling for the initial issue of the new Libyan currency and on 3 January 1952 Libya was included in the Sterling Area. The new Libyan currency was placed into circulation on 24 March 1952. During the period of exchange the new currency was swapped for the existing currencies at the following rates:
1 Libyan pound = 480 British Military Authority Lire
1 Libyan pound = 97½ Egyptian Piastres
1 Libyan Pound = 980 Algerian Francs
After the period of exchange, the following amounts were handed over to the British Government:
1,216,247,049 British Military Authority Lire (2,533,848 Libyan pounds)
1,113,794 Egyptian pounds (1,085,949 Libyan pounds)
141,377,493 Algerian Francs (144,263 Libyan pounds)
The period of exchange was originally scheduled to be three months. While this period remained unchanged in Tripolitania, ending on 24 June 1952, the period in which the old currencies could be redeemed was shortened in the other two provinces. The period of exchange ended in Cyrenaica on 25 April 1952 and in the Fezzan on 12 April 1952. These dates were also the dates after which the Libyan pound became the sole legal tender in each of the provinces.
The banknotes of the Libyan Currency Commission were issued in seven denominations— 10, 5, 1, ½, and ¼ pounds, and 10 and 5 piastres. The four higher denomination notes—10, 5, 1, and ½ pounds—were printed by Bradbury Wilkinson and Company Limited, while the remaining denominations ¼ pound, 10 piastres, and 5 piastres were printed by Thomas De La Rue and Company Limited. This division of production and obvious difference in design by the two printers appears to have overturned the earlier decision to adopt the Bradbury Wilkinson "A" design, previously approved by the Preparatory Currency Committee in Geneva.
The front of the notes printed by Thomas De La Rue have a portrait of King Idris at the left and a palm tree above two crossed branches at the right. The notes printed by Bradbury Wilkinson similarly have a portrait of King Idris at the left, but the right-hand side of the notes are dominated by the denomination of the note in Arabic numerals. The lack of consistency between the design of the lower denomination notes and the higher denomination notes is emphasized by the portrait of King Idris. On the notes designed by Bradbury Wilkinson a profile of the King is used, while a three-quarter face is used on the De La Rue designed notes.
The three lower denomination notes prepared by De La Rue have no watermark and are printed entirely by the lithographic process. The Bradbury Wilkinson notes are printed by the intaglio and lithographic processes and have a watermark. The watermark replicates the portrait of King Idris which appears to the left of the notes; but while the portrait on the note faces to the right, the portrait in the watermark faces to the left.
Each note has two serial numbers, one in the top left and one in the bottom right on the front of the notes. The number in the top left uses Arabic letters and numerals, while the number in the bottom right uses Latin letters and western numerals. The serial number prefixes are fractional, consisting of a letter over a number, and each denomination is assigned a letter within the prefix. The Latin letters assigned to each denomination are:
A 10 pounds
B 5 pounds
C 1 pound
D ½ pound
F ¼ pound
H 10 piastres
K 5 piastres
It is not known why the letters "E", "G", "I" and "J" were not used in the sequence. A reason for omitting the first three of these four letters could be that they have no directly corresponding Arabic letter, but the letter "J" can usually be transliterated as "jiim". (The sample set of notes available for the observation of serial number prefixes has been very low.)
A peculiarity of the notes is that they have no signatures on them. The lack of signatures was forecast in the "Report on the second session of the Meeting of Experts on Libyan financial, monetary and development problems held in Geneva from 20 April to 27 April 1951." The report states:
"Therefore, it is recommended that a Preparatory Committee be appointed with limited powers to proceed with the printing of notes and the minting of coins and with power to provide for the costs of its operations through a loan to be discharged by the Libyan Currency Authority from its future earnings. The notes need not necessarily bear signatures of the issuing authority."
It was realized that, because the members of the permanent "Currency Authority" could not be known at the time the notes were printed, signatures would have to be excluded from the notes. That this point is specifically minuted in the Report suggests that some discussion took place over this issue.
Another feature that can be ascribed to the uncertainty surrounding the preparation of the first issue is the dates that appear on the notes. The dates are "3 Rabi II 1371" and "1 January 1952". When the notes were being designed, there was uncertainty as to when the new currency would be required and when the pertinent currency laws would be passed. This made it impossible to place dates authorizing the issue within the design. As a compromise, the date nominated by the United Nations as the date by which Libya must achieve independence was the date chosen to place on the banknotes.
The text on the front of the notes is in Arabic and is repeated in English on the back of the notes (except that the order of the text is slightly different and the Hejira date is not mentioned in the English text). The Arabic text on the front of the note can be translated as:
Kingdom of Libya
(denomination)
3 Rabi II 1371 1 January 1952
These currency notes are legal tender for the payment of any amount
Subsequent to the introduction of the new currency, the Commission believed that the notes may not have been issued in the optimum mix. The following extract from the First Report of the Libyan Currency Commission identifies their concerns:
"In the light of experience gained, it is possible that a larger proportion of £L 5 and £L 10 notes should have been issued. Outside Tripoli and Benghazi practically all business is transacted on a cash basis, and it is quite common for a merchant to carry several thousand pounds in notes on his person. Notes of larger denominations also would, no doubt, have been readily absorbed, but the Commission felt that such issues would be against the interests of Libya, as they would tend to encourage frontier trading and hoarding."
The first series of notes circulated for three years, after which it was decided to introduce a new series of notes. It is probable that, after three years, a new order of notes was necessary to replace dwindling reserves. The requirement for a new order of notes offered an opportunity to change certain features of the notes. It was now possible to include the details of the law authorizing the issue of the banknotes, and it was possible to include the signatures of two members of the Libyan Currency Commission. The text on the notes of the second issue reads:
United Kingdom of Libya
These currency notes are legal tender for the payment of any amount
(Denomination)
Issued by the Libyan Currency Commission in accordance with Law No.4
of 24 October 1951, in the reign of King Idris the first.
For the Currency Commission
(Signatures)
The signatories of the banknotes are the Chairman of the Currency Commission, His Excellency Mahmoud Bey Munatasser, and al-Sayed Abdul Razak Shaglouf, a Libyan member of the Commission.
The most notable difference between the notes of the first and second issues is the removal of the portrait of King Idris I. It is not known why the portrait of the King was removed, but it is possible that objections were made to the representation of the King on the bank note, when Islamic tradition dictates that animate beings should not be portrayed in any manner. This may have been significant for King Idris, as not only was he the Amir of Cyrenaica before becoming King of Libya, but as he was also the head of the Sanusiyah, a Muslim Sufi brotherhood founded in 1837 by one of his forebears. It is likely that the depiction of the monarch was frowned upon by his followers and advisers. That his likeness appeared on the notes in the first place is probably a mistake, with the approval probably being given by the Libyan representatives in Geneva during the meetings of experts.
The three lower denomination notes, presumably printed again by Thomas De La Rue, replace the portrait of the King with vignettes of famous ruins in Libya. The 5-piastre note carries an illustration of the Roman Forum at Cyrene, the 10 piastre note depicts the Arch of Trajan at Leptis Magna, while the ruins of the temple by the sea at Sabratha adorn the ¼ pound note. The higher denomination notes replace the portrait of King Idris with the central motif of the Royal Coat of Arms, which consist of the star and crescent moon enclosed within a circle, which is in turn surmounted by a crown and surrounded with stars. It is assumed that the higher denomination notes were once again printed by Bradbury Wilkinson.
As for the first issue, the De La Rue notes carry no watermark, while the Bradbury Wilkinson notes see the introduction of a new watermark. The watermark on the new series is the central motif of the Libyan coat of arms, which is printed at the left on the front of the note. The watermark consists of the crescent moon and star enclosed in a circle, surmounted by a crown and surrounded by nine stars.
The serial numbers continue to be similar to the first series, but the letters assigned to each denomination have changed. The assignations are now:
A 10 pounds
B 5 pounds
C 1 pound
D ½ pound
G ¼ pound
K 10 piastres
L 5 piastres
While the sample set to test the consistent use of these letters has been small, it is believed that the use of these letters is constant for all denominations. Although the use of the letters in the serial numbers on the notes printed by Bradbury Wilkinson remain the same as the first issue, the letters used on the De La Rue notes have changed. A peculiarity of this change is that the ¼ pound notes use ‘G’ in the lower right serial number and the Arabic letter "jiim" for the serial number in the upper right. The letter "jiim" is usually transliterated as "J" in English and not "G".
The exact date of the issue of the notes of the second series is unknown, but some indication is given in the Reports of the Currency Commission. The Third Report of the Libyan Currency Commission, for the period ending 31 March 1955, states: ‘A new design of notes is in course of preparation and should be available in the early months of the new financial year.’ The Fourth Report of the Libyan Currency Commission, for the year ended 31 March 1956, states: "During the year under review notes of new design have been issued and are circulating as legal tender jointly with the notes of the original issue." Therefore, it is probable that the notes were introduced as required between April and August 1955; that is, during the first four months of the financial year (which ran from 1 April to 31 March).
The Standard Catalog of World Paper Money (Volume two, ninth edition) reverses the order of the two issues by the Libyan Currency Commission. The series without the portrait of King Idris is listed as the first issue and the series with his portrait is listed as the second issue. This error is probably due to the dates used on the two series of notes. As 1 January 1952 postdates 24 October 1951, an assumption has been made that the notes with the earlier date must have been issued first, which is incorrect.
Within several years of its formation, the Libyan Currency Commission had achieved its principal aims of introducing a single, internationally recognized currency to Libya. However, it is probable that Libya viewed the control of its currency by a Commission located in London as less than satisfactory. In 1955 Libya began plans to establish a central bank completely under its control. Subsequently, the Libyan Government passed the National Bank of Libya Law (Law No.30 of 1955) on 4 Ramadan 1374 (26 April 1955) to create the National Bank of Libya. The Currency Commission was officially advised in October 1955 of the Government's intention to establish the central bank, whereupon the Currency Commission undertook to continue their duties until the bank could be established. The National Bank began business on 1 April 1956, and absorbed all the assets and responsibilities of the Libyan Currency Commission.
The Currency Commission held their last meeting in September 1956. On 11 October 1956 the Libyan Ambassador to London held a reception in honour of the Governor of the National Bank of Libya and members of the Libyan Currency Commission. This marked the end of the work of the Currency Commission, although their notes continued to circulate under the control of the National Bank for some time after the Commission was disbanded.