Before the establishment of the Reserve Bank of New Zealand in 1934, private "Trading Banks" in New Zealand issued their own banknotes.
Incorporated in 1861, the Bank of New Zealand began operations on October 16th on Queen Street in Auckland. By 1862, branches were functioning in Dunedin, Wellington, and Nelson, and an office was established in London the same year. Over the next two decades, they were the largest and most prolific issuer of banknotes until August 1934, when the Reserve Bank of New Zealand ( RBNZ ) was given the authority to issue banknotes exclusively by the New Zealand Government.
The Bank of New Zealand, still in operation today as BNZ, was the largest of these banks. Other banks, such as the Bank of Australasia and the Union Bank of Australia, merged to become ANZ. The Commercial Bank of Australia and the Bank of New South Wales merged to form Westpac.
In the late 19th century, New Zealand saw the end of The Land Wars from 1845 to 1872. Under Colonial Treasurer and later Prime Minister Julius Vogel, the country embarked on ambitious economic reforms, notably increasing national spending and borrowing. The BNZ introduced its One Hundred Pound banknote during this economic boom period.
Its un-altered official description by the BNZ is as follows:
ONE HUNDRED POUNDS
No. 3 Issue ( No earlier issue of £100 Notes)
Printed in brown on white ground, with large figure ”100” in pink across a pink panel in centre. Two Medallions at left,, of Maoris above, and of Kiwis &c. beneath. Back: large figure ”100” across panel in pink the same as the front but printed in reverse.
To demonstrate the immense purchasing power of a single One Hundred Pounds, consider the following statistics from The Official Handbook of New Zealand 1875:
Wages in Auckland in March 1874: ( 8 Hours Average per Day )
In 1874, a jeweller, considered among the higher earners, received £3 weekly. On the other hand, the cost to rent a typical six-room house in Auckland ranged between 12 shillings to 18 shillings per week. This translates to an annual rent ranging between £31.2 and £46.8. Remarkably, a single £100 note could cover over two years of rent for such a house.
Falconer Larkworthy played an instrumental role in founding the Bank of New Zealand. He served as its managing director on the London board from 1862 until his retirement in 1888.
In 1861, facing delays in the arrival of the official BNZ notes from Australia, Larkworthy secured approximately 5,000 ounces of gold from the Otago goldfields by having his own banknotes printed. This led to a significant public uproar after locals could not redeem them at other banks because it was an unofficial issue. The situation was quickly defused when he offered to exchange them back into gold sovereigns, reportedly having 8000 of them in boxes. None of these emergency notes exists today, and it is reported that Larkworthy searched in vain in his later years to locate one.
During his directorship at the Bank of New Zealand, c.1872-1873, Falconer was presented with this exact £100 specimen banknote by Bradbury Wilkinson & Co of London, the company contracted by the BNZ to print their banknotes.
Subsequently, Larkworthy became a director at the BNZ-associated mortgage company, the New Zealand Loan and Mercantile Agency Company, in London. However, by 1893, allegations of mismanaging company finances, particularly concealing the company's losses from the public, led to his ousting.
The Long Depression of the 1880s saw Larkworthy in extreme financial difficulty; most of his later years were spent repaying his debts. He died in London in May 1928.
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