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C ontents
Introduction

Origins and development of the museum

Opening ceremony

Timelines, feature window and the balancing act

Timelines

Feature window: Sir Edmund Hillary

The balancing act

Bill Phillips and the MONIAC

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About Bill Phillips

Artefacts and memorabilia

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Reserve Bank Building brochure and plaques

Silver platters

Reserve Bank Coat of Arms

Interactive and audio-visual

Inflation calculator

Bloomberg monitor

Recordings

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Copyright 2008 Reserve Bank of New Zealand

ISBN 978-1-877466-00-7 (print)
ISBN 978-1-877466-01-4 (online)

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Currency function

Counterfeit notes and polymer security features

Replica vault door

One million dollars

Circulating coin dies and blanks

Numismatic collection

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

F urther

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reading

The Reserve Bank and New Zealands 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 ACourt unless otherwise noted.

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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 Zealands
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.

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Origins and development

of the museum
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,

The decision to establish

calculating machines, monogrammed

a banking and economic

Noritake chinaware and works of art. Not

museum in the Reserve

all could be displayed. A representative

Bank of New Zealand was

taken during 2003-04,

cross-section was eventually selected,

including note stitching apparatus, scales,
and the memorial to Bank staff who lost

following the development

their lives during the Second World War.

of similar museums by

Another difficult task involved selecting

central banks overseas, and

the introduction of museums
by government departments
such as Parliamentary
Services.

ranging from historical ledgers to old

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highlights from the Banks small but

relatively valuable numismatic collection.

O pening

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.

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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.

T imelines
Timelines on the walls of the museum
offer brief summaries of key events in
New Zealands 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.

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F eature window :
S ir E dmund H illary
Prominent New Zealand mountaineer,

Above: The Hillary feature window, seen here soon

after the Museum opened in 2006.

In 1958, as part of the massive

explorer, diplomat and tireless benefactor

Commonwealth Trans-Antarctic Expedition

of Nepal, Sir Edmund Percival Hillary

under Dr Vivian Fuchs, Hillary established

(1919-2008) KG, ONZ, KBE, was the first

Scott Base on the Ross Sea. He then

man to climb Mount Everest in May 1953,

became the first to drive overland to the

with Tenzing Norgay. After an initial effort

South Pole leading a small New Zealand

to reach the summit failed, expedition

team to transport supplies for Fuchs, who

leader John Hunt sent Hillary and Tenzing

intended to drive across from the Weddell

to make the attempt. Hillary found a way

Sea. Although equipped only with

up a rock face, later known as the Hillary

modified Massey Ferguson TE-20 tractors

Step, and they reached the summit on 29

and a Studebaker M-29 Weasel, Hillary

May. The news reached Britain on the day

made a daring push for the pole, arriving

H.M. Queen Elizabeth II was crowned, and

at the US base a fortnight ahead of

Hillary was knighted for his achievements.

Fuchs in his Tucker Sno-Cats. Hillary was

He led a further expedition into the

awarded the Royal Geographical Societys

Himalayas the following year.

Founders Gold Medal for 1958.

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Jane Mulgrew, widow of his friend Peter

Mulgrew.
Hillarys 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 Hillarys 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
Hillarys portrait and reveals some of
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

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the detailed artistic features of the New

Zealand sixth series banknotes.

T he B alancing A ct

was taken by government to extend the

The rear wall of the museum has been

Banks regulatory oversight to finance and

dubbed the Balancing Act and is

insurance companies, building societies

designed to highlight the wide range

and credit unions.

of tasks and functions performed by

The Bank also operates New Zealands

the Bank under the Reserve Bank Act

wholesale payment and settlement

1989. The Bank has roles that range

systems, which registered banks use to

from formulating monetary policy to

complete their transactions with each

monitoring and supervising the health

other, and which handle approximately

of the financial system, maintaining

$40 billion in transactions per day. These

foreign reserves, operating in the financial

systems are vital to the New Zealand

markets if necessary, and issuing currency

economy, and also allow the Bank to

as required. Aspects have since been

implement its monetary policy settings.

refined by subsequent amendments. It is

very much a balancing act, symbolised by
scales from the Banks collection.
New Zealands 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 Banks 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

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.

their names. In late 2007 the decision

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Bill Phillips

and

The Moniac

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.

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

Phillips built the MONIAC on Keynesian

MONIAC was one of the worlds first

and classical economic principles,

computers designed to simulate economic

showing the circular flow of income,

phenomena, and could perform logical

expressed mathematically as Y = C + I

functions that no other computer of the

+ G + (X-M) (income equals household

day could match, due to a combination

expenditure plus business investment

of its analogue calculation principles and

plus government expenditure plus export

the use of water flows as the calculating

sales, less purchase of imports).

medium.

water tanks represent households,

Separate

business, government, and the exporting

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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

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.

history, Phillips is probably better

remembered for his development of the

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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, largescale, practical macroeconomic modelling
has long been part of the research and
policy effort.

A bout B ill P hillips

In 1967, Phillips moved to Australia

Alban William Housego Phillips

and took up a position in the Australian

remains one of New Zealands best

National University. He suffered a

known and most accomplished

stroke two years later and retired to

economists. Brought up on a dairy

New Zealand, where he taught at the

farm after the First World War, he

University of Auckland. Phillips died in

spent time in Australia and then

March 1975.

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 wars 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.

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Bill Phillips with the prototype MONIAC.

(London School of Economics LSE/LSE History
Photographs/6/2/P)

Artefacts

and memorabilia

Artefacts and memorabilia from

S ilver

the Banks past are displayed

The engraved silver platters on the

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;

platters

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.

and a cigarette lighter that was in use

until the Reserve Bank became smoke-free
in the late 1980s.

R eserve B ank

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.

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R eserve B ank C oat

of

A rms

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
bulls head, fleece and ship also reflect
the pastoral imperatives of New Zealands
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.

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Interactive

I nflation

and audio-visual
calculator

The inflation calculator allows the user

to compare price indices between any

needs to be input as 5.575 (5 + 11.5/20

shillings).
The figures produced by the calculator

two dates for which figures are available.

are guides only and should not be

A number of price indices have been

regarded as official Reserve Bank

programmed into the database, including

calculations. The Reserve Bank accepts no

the general Consumers Price Index (CPI),

liability or responsibility for any errors or

food price index and clothing.

for any use to which the resulting figures

The CPI records changes in the price of

may be put.

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

B loomberg

monitor

The Bloomberg monitor above the timeline provides a real-time view of the
currency markets.

denomination is pounds; if a date after

R ecordings

that is selected the denomination is

A range of oral histories were collected

presumed to be dollars. At decimalisation,

from former Bank staff and other

1 = $2. The calculator only works with

individuals who played an important role

decimals, so an amount like 5.11.6

in the economy.

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Currency

function

The Reserve Bank has had the

sole right to issue New Zealand
bank notes since its inception in

notes and

polymer security features

A few of the counterfeits the Reserve
Bank has collected over the years are on

1934. The right to issue coins

display here, along with details of some

was passed from The Treasury

of the security features in the current

in the late 1980s. Artefacts on

note series. New Zealand was one of

the first countries in the world to adopt

display in the museum include a

polymer for its banknotes; the notes are

set of note printing plates, and

more durable than cotton-based paper

draft sketches of the third series

decimal notes.

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notes and offer superior security features.

Displays highlight some of the security
features of New Zealands modern notes.

R eplica

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.

O ne

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.

C irculating

Above: Replica
vault door.
Right: The
cancelled
million dollars.
Below: Coin
dies.

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.

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Numismatic

collection

The Reserve Bank owns a

small collection of notes

In many respects, this collection is

incidental to the Banks ordinary business;
as sole producer of New Zealands

and coins, some of which

banknotes since 1934, the Bank has by

are on display in the

nature produced a fair range of material

museum.

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 Zealands
wider numismatic history include those
featured below.

C ommemorative

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 Banks 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.

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M erchants 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.

S eries 1 R eserve B ank

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.

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of

A otearoa

end of the New Zealand Wars period,

probably reflected the politics of the

one pound note

period. In the event, however, the note

Tukaroto Matutaera Potatau Te

was never circulated, and the specimen

Wherowhero Tawhaio (?-1894) was the

here is one of only three known to exist

second Maori king. In the early 1880s

today. Tawhaios role in issuing this note

he founded the Bank of Aotearoa, which

prompted his inclusion on BNZ circulating

issued this one pound note. His reasons

notes, and later on the first series Reserve

for doing so at that stage, after the

Bank of New Zealand notes.

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F itz R oy

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
W aitangi 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 Nenes
clothing.

Temporary

exhibitions

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.

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Above: James Berry exhibition,

late 2007. Right: Amilie Taylor
and her five cent dress (RBNZ).