Crises and Adaptation

Introduction

The nineteenth century witnessed epochal developments in Nigerian history. These included the rise of the Sokoto Caliphate, the final collapse of Old Oyo and the rise of the successor Yoruba state of Ibadan, the abolition of the trans-Atlantic slave trade, the introduction and rapid expansion of Christianity in Southern Nigeria, the transition to legitimate trade, and the imposition of British colonial rule and its enabling road, rail, port and fiscal infrastructure, banking and currencies. This article is focused on the lastnamed development: the transition from precolonial to colonial currency systems.

As detailed by Antony Hopkins and Walter Ofonagoro, the British colonial government systematically demonetized precolonial currencies in Southern Nigeria from the 1890s onwards.¹ Although the process has been portrayed as a “revolution,” given the drastic change that it engendered, the transition was protracted and problematic.² As will be demonstrated in this piece, the currency system experienced at least two transitions: the first from precolonial currencies of cowries, manilla and the Maria Theresa Thaler (also referred to as “Dollar”) to British coinage; and a second transition from an all-metal British currency system before 1916 to one that combined coinage and paper currency. By the 1920s, Nigeria operated a three-tier currency system with the denominations valued in a descending order: bank notes, silver coins and nickel/alloy coins. It reverted to a two-tier system when silver coins were phased out. It should be noted that experiences varied across the vast landscape stretching from Lagos to its immediate hinterland in Western Nigeria and the more distant, railway-linked Kano region in Northern Nigeria.

The transition to colonial currencies was not the monopoly of the colonial government. The commercial banks—Bank of British West Africa (BBWA) and the Colonial Bank, the Royal Mint, the foreign and indigenous traders, and the African population played various roles in the circulation of the colonial currencies. The process was fraught with challenges posed by commercial vicissitudes, and by the attitudes of African inhabitants and traders to the innovation. This article dwells on this subject in the spatial, cultural and commercial contexts of Lagos and its Nigerian hinterlands, notably Abeokuta, Ibadan and the Western Nigerian region in general. Occasional reference shall be made to the more distant hinterland in Northern Nigeria. This article highlights and explains the diverse manifestations of indigenous peoples’ agency, responses and adaptions to the introduction and circulation of colonial currencies, both coinage and notes.

The Transition to the Colonial Currency System in Lagos and Its Hinterland

A report of 1901 by Governor William Macgregor provides a bird’s eye view of the colonial currency system in the Lagos Colony and its Protectorate at the turn of the century.³ First, precolonial currencies proved resilient. “In practically all small transactions in the numerous markets, both at Lagos and the interior,” the colonial governor stated, “the currency is still cowries.”

Second, the report asserted that British silver coin was the “established currency” of the Lagos Colony. No other coin was in circulation by 1901. Large quantities of the coin had been imported by the colonial administration before the BBWA was established in Lagos in 1892. An estimated £150,000 of silver coin (presumably all British) was in circulation in the Colony. However, at an average of £6 per head of the population, the total amount in circulation might have been as much as £250,000. The governor suspected that “large sums of coined silver (were being) hoarded” in the Lagos hinterland though he admitted that “one sees and hears absolutely nothing” about it. He also speculated that the hinterland of Lagos had as much as the Colony itself, with a total of as much as £500,000 in British silver coin in the Colony and Protectorate. That said, the smelting of the silver into ornaments was an emerging phenomenon, which at the time appeared minimal. The governor had noted that “little silver is converted to ornaments.”

A third highlight was the role played by railway construction in fostering currency circulation as railway laborers were paid in the new currency. A final feature of currency circulation was that the BBWA exported silver coins to Nigeria and returned them to the UK as required by commercial trends. In 1900, Macgregor reported, the circulation was so saturated with silver coins that the BBWA exported £120,000 to Nigeria between January and July. In the eighteen months between 1 January 1900 and early July 1901, BBWA imported £60,200 and exported £136,942, amounting to net exports of £76,000. The discrepancy between the bank’s net exports and Nigeria’s net imports of £81,000 (in Table 1) could be because of a surge in demand for silver coins in the second half of 1901 or perhaps because figures from other parts of Nigeria were added.

The colonial government took steps to ensure the monopoly of its currency. In 1904, it passed Ordinance (No.1 of 1904) “An Ordinance to amend the Customs Tariff Ordinance, 1899,” which prohibited imports of the Maria Theresa Thaler, one of the demonetized precolonial currencies.⁴ In 1911, another ordinance prohibited thirteen items including “1. CoinFalse money, or counterfeit sterling – Maria Theresa Dollar. 2. Cowries (except by land from Northern Nigeria in conformity with the Importation of Cowries Ordinance).”⁵ This indicated that the demonetized currencies continued in circulation beyond their proscription. That said, the dominance of British silver coin in the opening decade of the century is indicated by its imports and exports in Table 1 above.

Next on the monetary agenda of the colonial government—establishing a monopoly of its currency—was the introduction of subsidiary coinage, different from silver, in denominations of one penny and one-tenth of a penny as legal tender in both Southern and Northern Nigeria.⁶ The subsidiary coinage of pennies, half-pennies and tenths were made of nickel-bronze. The pennies and tenths were introduced in 1907, and half-pennies in 1911. Aluminum tenths, which had proved to be a failure, were replaced by nickelbronze tenths.

The coins were obtained from British Mints through the Crown Agents at a total cost consisting of cost of nickel, mint charges, and freight, insurance, and commission. The government made “a very considerable profit on the half-pennies, a substantial profit on the half-pennies, and a small loss on the tenths.”⁷ The coins were supplied to the public at the Treasury, Lagos, and at the various Sub-Treasuries throughout Nigeria, at face value, no premium being charged. All cost of transport after the coins left the Treasury or the Sub-Treasury was borne by the purchaser. Between 1908 and 1912, the government paid a total of £743 16s 8d for porterage, railway freight, salaries, presents to Chiefs, money changers boxes, extension of the strong room, and expenses of repatriation of bronze coins.⁸

Anticipating rejection by the indigenous population, the government employed money changers to stand at street corners to assist people in converting silver to subsidiary coinage. The changers were paid a commission of £3 a month apart from their salary for their service.⁹ Lagos newspapers reported that the anticipated opposition to the new coinage did not occur after all. An editorial in the Lagos Standard stated that: “There is not the slightest doubt that the small coinage—tenths of a penny—recently issued by the Government is a convenience which will be much appreciated.”¹⁰ This was because, since the prohibition of the importation of cowries, people had encountered “considerable difficulty” in making small purchases. In that event, it was anticipated that the small-denomination coins would finally supplant cowries. An official report of 1909 claimed that the “natives … readily accept the coins.”¹¹ The Lagos Weekly Record reported that money changers were literally besieged by the people anxious to change their silver.¹² Still, as indicated above, the introduction of the new coins faced some challenges. First, the flat rate commission paid to the changers did not incentivize those converting small sums of money. Second, as noted above, the coins made of aluminum proved unsuitable for the local climate. The damp heat made some of them swell to double their proper size and to flake off. This caused prejudice against alloy coins generally.

The Clamor for Nickel Coinage

Given the difficulties with aluminum and bronze coins, commercial and official stakeholders concurred on the need for a new coinage. However, the proposal for the British government to introduce nickel coins generated some debate. The Nigerian government stated its preference for nickel coinage, as opposed to bronze, for some reasons.¹³ First, unless the government could bear the considerable expense of importing and transporting Imperial bronze coins into distant areas, it would take many years for the coin to circulate in considerable quantities. Besides, compared to the cumbersome bronze, nickel was cheaper to transport. Second, officials argued that bronze coins were never likely to be widely accepted in communities bordering the German border along Nigeria’s eastern frontiers. This negative attitude might have been a response to the currency transition in Kamerun and the currency regulations drafted in 1905 and implemented from March 1908. The German administration exchanged the nickel or copper coins for silver coins of the German Reich (Reichssilbermünzen).¹⁴ In any case, minting nickel would yield a decent profit. At the cost of some £290 for every £500 of face value, profit on every £500 as it left the Mint would be about £210. A profit of about £4 2s on £10 (a camel’s load) would cover the cost of importation from England, conveyance to any place in Lagos and its hinterland and also leave a sufficient margin to establish a reserve.

Nigeria’s Governor Walter Egerton recommended introduction of a nickel half penny coin of the same design as the existing nickel penny. He justified this on the following grounds.¹⁵ First, there was a considerable local demand for a half-penny coin. Second, the indigenous population counted by fives. Hence, the half penny would be equal to five nickel “tenths.” Third, they refused to accept the nickel tenth though it was a thoroughly durable coin. Their mistrust was a reaction to the “unfortunate experiment” with the aluminum “tenths,” which lacked durability and were easily discolored. “In West Africa,” he argued, “it is desirable to have a coin which retains its original color, for the native is suspicious of and dislikes coins that tarnish to any considerable extent.” Fourth, under the existing arrangement with the Mint, the cost of nickel tenths greatly exceeded their face value.

The governor’s position was buttressed by the government’s Commercial Intelligence Officer (CIO), the BBWA and the Chamber of Commerce, which was an all-white body before 1929. The bank declared that there was “unquestionably a considerable local demand for half-pennies” to the extent that it recently received requests—which it declined—for the old bronze half pennies from applicants who were willing to pay a premium for them. It corroborated the claim that the “natives” counted by fives.¹⁶ C. A. Birtwistle, the CIO of Lagos, also commented that government sustained a loss in minting nickel tenths, and the chances of success of a white metal coin of the same denomination were imperiled by the misadventure of minting aluminum tenths, which the government objected to at the time. He, therefore proposed “a bronze tenth of a penny bearing the King’s Head.”¹⁷ The Lagos Chamber of Commerce declared that it was “strongly in favor of [nickel half pennies in Southern Nigeria] … and will welcome its introduction at an early date.”¹⁸

Attitudes to Nickel Coinage

The indigenous people were initially suspicious of the nickel coinage introduced in 1907 after the disaster of the aluminum coin. However, by 1910, the nickel pennies were reportedly “well received generally, … in Southern Nigeria,” but nickel tenths were not popular, given the failure of the aluminum tents.¹⁹ The government envisaged that increased commercial activity would remove the bad impression created by the unpopularity of the aluminum tenths. It hoped that the people would adapt to the new coinage in preference to the multiplicity of precolonial currencies, and in anticipation of expanded commercial growth and agricultural productivity.

One issue of concern for officials and traders was the peoples’ rejection of worn coins which the Mint declined to repatriate.²⁰ The repatriation of such coins became a bone of contention between the government and the BBWA, which shifted responsibility for repatriating them to the government. The Nigerian government had argued that “under the present circumstances when the whole of the large profit from the silver coinage is taken by the Mint, any expenses for the repatriation of out of date or worn coin should fairly be borne by those who retain the profit on the coinage.”²¹ Its Financial Commissioner recalled that before the BBWA assumed a monopoly of currency supplies, the government undertook the task and repatriated currency to the UK at its expense. “At the present time,” he posited, “the BBWA has the monopoly in Lagos Southern Nigeria to import silver, which is one of the thorns in the side of the other Bank established here.” He, therefore, wondered why the Bank, “while possessing this privilege can call upon the Government to repatriate its worn silver which duty … [one would] have expected would have fallen upon the Bank itself as suggested in paragraph 3 of Mr. Fiddes letter … of 14 February 1910 to the BBWA.”²² The Bank countered that the Royal Mint, in a letter of 5 February 1911 cited in a Legislative Council Paper No. 17 of 1911 had stated that “under the regulations for the withdrawal of worn coins, the local Governments, except where branches of the Royal Mint exist, are alone responsible for the withdrawal of worn British coin. Such coins are usually transmitted to this Department from the Crown Agents, and if accepted after examination the nominal value is paid to the Crown Agents.” BBWA claimed that some £50,000 of worn silver coins circulated in Southern Nigeria by 1911.²³

Much later, in 1914, the tenths were reportedly used to some extent as washers (used with nails in roofing), being cheaper than the ordinary washers of the same size.²⁴ Lagos market people reportedly refused to take “coins of the realm with an effigy of the late Queen Victoria of blessed memory, thereby causing much annoyance and inconvenience.”²⁵ However, in contrast to the negative response to the new coins in Lagos, the response in Abeokuta in the Lagos hinterland appeared more positive. By 1909, there were reports that the innovation was eliciting favorable responses in Abeokuta. The annual report on the Egba District for the year referred to “evidence of the increasing popularity of the nickel pennies and the advisability of coining a nickel half penny.”²⁶

The indigenous peoples appeared to have overcome their distaste for the nickel pennies though their preference was for the nickel half-pennies which were more useful in retail transactions. Scarcity of the denomination was said to have increased food prices. Apart from the apathy and suspicion of the indigenous population, there was “a certain amount of silent opposition from Europeans, officials, merchants and bankers, who dislike the trouble of dealing with coins of very small denominations.” Nonetheless, the new nickel coinage was said to be “proving a very great success.”²⁷ This was contrary to fears expressed in Lagos newspapers that it would not attract much subscription. While only £5,000 worth of bronze coinage was in circulation across Nigeria in 1906, over £30,000 face value of the nickel coinage had been issued in four years, by May 1910. Later in the year, officials reported that nickel pennies “continued to be well received generally,” but nickel tenths did not fare as well in Southern Nigeria because of the negative impression created by the aluminum coin. Increased commercial activity was expected to erase the memory of the aluminum coin especially when the people perceived the advantages of a uniform colonial currency as opposed to the multiplicity of currencies that they handled hitherto.²⁸

Statistics in Table 2 indicate the rapid disappearance of the calamitous aluminum coins which were withdrawn by the Crown Agents, and the steady infusion of nickel tenths to replace them. A total of £3,117 7s 7d (face value) of aluminum tenths were returned to the Crown Agents in 1908/9 as being unsuitable.²⁹ Still, the tenths were far less popular in Southern Nigeria while in both Northern and Southern Nigeria, nickel pennies remained the dominant coin in circulation in both territories. Indeed, nickel coins were absorbed in increasing quantities, if statistics of requests for them are a reliable indication of their increasing acceptability. In 1910, quarterly requests for nickel pennies were £3,000 in March and June and £2,000 in August. Figures for March and June for tenths were £1,300 and £1,500, respectively.³⁰ In May, 1911, Southern Nigeria alone requested £3,000 in new nickel-bronze half-pennies.³¹ Quarterly returns of requests for coinage from the UK for the year 1911 made on the fourth Wednesday of the respective months are provided in Table 3. These are indications of increasing acceptance of alloy coins, in spite of the negative impact of the failure of aluminum coins. However, a stable level of returns was maintained.

On the eve of World War I, imperial subsidiary coinage had become firmly entrenched in Nigeria. This is indicated in the statistics of the circulation of various denominations of alloy coinage contained in Table 4. They show as much as 90 percent of absorption of all denominations excepting for aluminum tenths which were being phased out.

A major dimension of the circulation of colonial currencies was the seigniorage question that pitted the Nigerian colonial government against the imperial government.³² This was a major preoccupation of Governor Walter Egerton (1904–12). The Report of the Committee of the Currency of the British West African Colonies and Protectorates under Sir David Barbour on 20 January 1900 had recommended either the British West African Colonies having a special silver coinage of their own or that they should be granted by the Imperial Government a share in the profit due to the absorption of British silver coins in West Africa. In July 1904, Egerton had advocated for a special Nigerian silver coinage based upon the Imperial shilling and half sovereign. However, the imperial government rejected the recommendation of the Barbour Committee. This did not deter Egerton who continued the campaign in various despatches to London. In April 1910, he pleaded that:

the British West African Governments should share in the very large profit that is now being enjoyed by the Imperial Treasury in proportion to the net annual absorption of coinage by them. The justness of this allowance can hardly be disputed because … a share in the profit on the silver coinage has long been granted to the Australian Dominions which have lately been granted the further privilege of minting silver locally.³³

A month later, he repeated the plea that “some share of the large revenue which accrues to the UK owing to the large annual absorption of Imperial silver coinage in this Administration which during the present century has certainly averaged £100,000 a year” be given to Southern Nigeria.”³⁴ In December 1910, he recalled that “there has, for a long series of years, been an annual net import of silver coin in which the Imperial Government realize a very large profit; it is only reasonable, as all share in this profit is denied to the Colony, that at least new coin should be sent out.” He requested that the “large profit,” of about £150,000 a year from British West Africa should be constituted into “a fund to meet the feared contingency and the cost of putting into the melting pot the redundant coinage.”³⁵ In 1911, he noted that specie imports of the previous five years and the “enormous imports” of 1910 meant a net import from the UK of over £606,000 for that year alone. The profit of over £3,000 accruing to the Imperial Government mainly from Southern Nigeria more than repaid the Imperial grant to the Northern Protectorate.³⁶

The Question of a Separate West African Silver Coin

In the years immediately preceding World War I, the currency situation was further complicated by the introduction of a silver coinage for the British West African colonies. But this was done in the face of debate and opposition from the business community. The Lagos Chamber of Commerce objected to it on the grounds that “the natives are very conservative in such matters.”³⁷ It also argued that the Germans introduced a similar coinage in East Africa “without success, and they were pleased to dispose of it.” The Chamber insisted that the innovation was “very undesirable in the interests of trade that the existing arrangements should be upset by the introduction of a special silver coinage confined to the British West African Dependencies.”³⁸ In contrast, Nigeria’s Governor-General, Frederick Lugard, fully “support[ed] the introduction of a Special West African silver currency without any limit of tender of silver for gold, and backed by a reserve of gold and realisable securities in the UK, at the same time the British sovereign remaining legal tender in West African and the ultimate standard of value.”³⁹ In the end, Secretary of State Lewis Harcourt approved with effect from 1 July 1913 the replacement of Imperial Sterling Silver by a new silver currency, on the recommendation of the West African Currency Board (WACB).⁴⁰

The introduction of the new silver coin did not win universal support. A Lagos newspaper expressed popular opposition to it as follows:

The disadvantages of the West African Currency have been dawning on the people of this country. The recent Nigerian Currency is styled Ayelujara and one of it has been strictly refused by the people. It does not answer their purposes. Now they are calculating from the description of the West African Currency that it will not profit them. They are under suspicion as to the reason why gold coins have been to (sic) scarce and why while the Bank will not pay in gold yet is anxiously pleased to accept gold coins… . The Currency now being introduced into West Africa has been introduced and remains still with them an affliction. The people of Nigeria appreciate gold coins and use silver only for change etc. Silver is depreciating in every country in the world, and yet silver constitutes what is called the West African Currency. Why should such a questionable currency be saddled upon West Africa?⁴¹

Ironically, the same newspaper reported shortly afterwards that “the new Silver Coin is in evidence everywhere in Town.”⁴²

As previous studies have shown, World War I occasioned a disruption of trade and shortage of silver currency, which necessitated the introduction of currency notes.⁴³ This was the second currency transition: from metallic to a paper currency from 1916. Following wartime exigencies and the crisis occasioned by the shortage of silver, the government in 1916 issued notes of several denominations, derisively known as “MacGregor Notes” because they carried the signature of D. S. MacGregor, the Treasurer of the Nigerian government. The Banking Member of the Nigerian Legislative Council recalled several years later that the signature “was the only respectable looking thing about them.”⁴⁴ These were followed in February, 1919 by a new issue of WACB Notes and those Notes, together with a very meagre supply of silver coins, had to meet the demands formerly met by coin.

A post-war boom between 1918 and 1920 increased demand for currency that the reserves could not satisfy. At the same time, the price of silver rose steeply thus giving silver coin greater worth than its face value. Currency notes were so unpopular that when, in 1920, the first alloy coinage arrived in Nigeria it became popular compared to the notes, but still rated inferior to silver coin.⁴⁵

The scarcity of silver coin was a dominant theme in the economic history of the war and its immediate aftermath. Anecdotal evidence of the scarcity of silver coin was a rumour that a British colonial officer collected £5,000 tax in silver coins in a District and gave everything to a favored firm instead of the Banks.⁴⁶

A report on the currency situation in Nigeria in 1920 in the context of overarching commercial conditions highlighted the following developments.⁴⁷ First, alloy metals of the face value of 2s, 1s, 6d and 3d were introduced during 1920 (by Proclamations Nos. 3 and 4 of 20 May 1920). Second, silver coins of reduced fineness were put into circulation (Proclamation No.1 of 18 May 1920). Third, the discounting of West African Currency Notes was forbidden (Ordinance No. IV of 1920). Fourth, the convertibility of West African Currency Notes was suspended for two further periods, the latter of which expired in May 1921. Finally, the importation of silver coinage ceased and the circulation of paper currency contracted owing partly to the introduction of the new Alloy Coinage but mainly owing to a serious decline in trade.⁴⁸

The post-war shortage of silver had serious ramifications for business in Lagos. A local newspaper claimed that it had been ‘interfering with the smooth working of almost every business for the simple reason that small coin for “change” purposes were not always available to satisfy the requirements of sellers and buyers.’ It stated that the scarcity had become “a complete and vexatious nuisance on occasions of emergency and necessity.” It seemed as if every business house had decided ‘not to part with any Silver for change purposes, and to leave a customer who requires “change” in a position of either to pay more for his requirements or go without them.’ Even a government department, the Railways, refused to give “changes.”⁴⁹ Shortage of silver coin also had wider ramifications beyond trade. It reportedly complemented a craze for cocoa-planting in reducing the acreage devoted to food cropping and creating shortage of labor on the farms.⁵⁰

Available statistics indicate the steady spread of the new currency notes and the continuing importance of both silver and alloy coinage. From a little above £50,000 in 1916, currency notes in circulation across Nigeria attained a peak of £2.9 million in 1919, more than half of the amount of silver coins. Yet, though coins in circulation amounted to £655,000 only by June 30, 1924, it was “evident, as was to be expected, that the African communities, have only a limited use for paper currency.”⁵¹ Silver remained dominant from 1916 to 1921. Money in circulation in Nigeria during the period is reflected in Table 5. The astronomical rise in the quantity of currency notes in 1919 could have been a consequence of the post-war trade boom, which peaked in that year.

Governor Hugh Clifford claimed that during the 12 months preceding February 1922, at least £2,471,138 had passed out of circulation, and more than £500,000 of this was returned in the form of silver coin. “As silver is the only form of money which is hoarded by the rank and file of the African population,” he explained, “this is to be recognized [as] … a clear indication that the people of Nigeria to-day are not only unable to accumulate additional wealth, but are compelled to begin dispersing in considerable quantities as much wealth as they have been able in the past to acquire.”⁵²

Alloy coin was re-introduced in 1920 as substitute for silver coins, with which it coexisted during the 1920s. However, as reported by Leslie Couper, General Manager of the BBWA and Board Member of the WACB, in 1925, silver coins “are now fast disappearing, without any apparent ill effects.” He recalled that the Emmott Committee had reported that “whatever the advantage of U.K. silver might be to West Africa, the risk to the Imperial Government of supplying U.K. silver in unlimited quantities to any Colony constituted an actual danger to the Imperial Government.” It has been pointed out that British officials feared that “in West Africa as well as other British territories, the value of the coin would begin to depreciate, resulting in a loss of exchange rate stability within the empire.”⁵³ Besides, “in the event of a serious West African trade depression, a sufficient number of the coins would be repatriated to Britain that their value would be threatened.”⁵⁴ Wartime and immediate post-war experience had shown that “sufficient U.K. silver could not have been supplied to the Colonies, and it was fortunate for British West Africa that a special currency was established in time.” The UK government facing its own crisis was fortunate that it was not called upon to redeem the large amount of British silver which, “had they supplied West Africa’s needs, they would have been required to take back during the years 1920 to 1922.”⁵⁵

A paradoxical situation arose in 1926/27 when two extreme situations were reported at different locations in Nigeria. On the one hand, it was reported that Abeokuta was “becoming flooded with French copper coin due to shortage of nickel pennies and half-pennies.”⁵⁶ The local official decided to obtain the supply of British nickel coins at the rate of some £400 per month as remedy. The supplied coin was circulated through the Native Administration. The Bank volunteered to supply the coin if reimbursed to the extent of £1 5s per £100 to cover expenses from Lagos. An unfounded rumor that the Alake (The Paramount Ruler) would soon abolish the use of alloy coins in Abeokuta created panic but this was dispelled by the Alake’s refutation via the town crier. Abeokuta had experienced hardship caused by shortage of small coins (“change”).⁵⁷ Scarcity of half-pennies was also reported in proximate Ijebuland: “The dearth of this token (there) is fully realized in Lagos where the least sum in circulation is the penny.” Whereas tenth-pennies were used only in the Northern Provinces, they were “refused by the market people” in Lagos.⁵⁸

On the other hand, Kano in Northern Nigeria had £4,000 surplus nickel while Lagos had over £1,000. The Currency Officer assured that there was enough to cope with the unfolding situation. He alluded to increased orders by the Supervising Agent of African and Eastern Trade Corporation despite the glut.⁵⁹

The excessive demand by expatriate firms for nickel coinage led to “a long conference with both Banks on the … subject” in August 1926.⁶⁰ Government and the banks reached a consensus on the following points. First, they strongly deprecated the unlimited importation and use of nickel. Second (though Barclay’s Bank dissented), it was agreed that nickel coin should be supplied only through the Banks. Third, the government was urged to adopt a system of rationing, after due consultation with the banks and their own officials, in any district in which demand appeared to be abnormal. The Currency Agents (BBWA) endorsed the suggestion that Central Depots should be established under their control at which surplus nickel would be received and paid for. If the government provided free transport of nickel by rail and watercraft, the Currency Board would allow BBWA a reasonable rate of interest on all the nickel so deposited. The meeting stipulated that the supply of nickel should be sufficient for use as small change—but not more than sufficient. Correspondingly, it censured and prohibited the practice in certain districts of paying it out in bulk, in exchange for produce. The meeting condemned the reckless use of nickel and enjoined the banks to exert restraining influence on its perpetrators. All the proposals were approved by the government.⁶¹

The Currency Officer attributed the “present position” to merchants’ demand for more nickel than they required for small change. It was reported that in some districts they paid entirely in nickel for the produce they bought. He noted that for about a year they had been warned that such misuse of the coin was likely to bring about what had now occurred and were warned that the government would not help them by taking over their excess supplies if it recurred. Even in the UK, the government did not take over surplus pence and half-pence. “The remedy,” he submitted, “seems to be for the merchant to store their nickel in the same way that they formerly stored manillas, brass rods, etc.”⁶²

As is well known, the late 1920s and early 1930s witnessed commercial vicissitudes which were reflected in the fluctuations in the circulation of various currency denominations.⁶³ A common refrain was the scarcity of money, which was not merely that certain denominations were in short supply but that business was generally bad. A newspaper report on Epe in the eastern district of the Lagos Colony stated that trade ‘is very bad at this time of the year. There is cry everywhere of “scarcity of money.”‘⁶⁴ The same issue was raised in the Legislative Council in 1931, at the height of the Great Depression, by A. S. Agbaje, the Representative of Oyo Division, north of Ibadan. “In view of the general cry of scarcity of money,” he asked whether “the Government could not consider the advisability of importing the metallic one-tenth of a penny and half-pennies in large quantities to enable more circulation of them in the Southern Province for the benefit of the poorer classes.”⁶⁵ The government replied that there was no demand for nickel tenths from the Southern Provinces and stated its readiness to meet any contingencies. It noted that while nickel tenths were well received in the Northern Provinces, there had “been no special demand for this denomination which ordinarily circulates with the nickel penny.” The indigenous population thus displayed ambivalent attitudes toward the nickel tenths in the face of the global economic adversity. As a Lagos newspaper noted in 1931:

A paternal government provided us with “tenths of a penny,” the smallest coin which is legal tender in Nigeria. This small but very useful coin is largely in use in the Northern Provinces of Nigeria but for some reasons or the other the people of the Southern Provinces refused to have anything to do with it. Of late we are told that the people of Ibadan are resorting to the use of these coins and the Egbas are clamouring for them. Why cowries and tenths of pennies?⁶⁶

The clamor for the tenths occurred in the context of scarcity, which spurred a surprising demand for reversion to the use of cowries to meet small retail needs. Customers were short-changed if there was no small denomination coin to get a balance (“change”) in small purchases. Yet, at the same time, market women were reported to be rejecting worn coins. The newspaper stated that the clamor indicated a need for smaller coins than the half-penny which was the smallest coin circulating in Lagos. Even so, it declared that the “idea of going back to the use of Cowries is unthinkable in these days.”⁶⁷

Campaign for Return to Silver Coinage

A fresh debate arose in the mid-1920s over the possibility of returning to silver coinage, especially as wartime and immediate post-war conditions of scarcity of silver had abated. During the debate in the Nigerian Legislative Council in February 1926, the Banking Member moved a Motion for a return to silver coinage now that the abnormal conditions which necessitated introduction of a base metal currency no longer existed.⁶⁸ He argued that West Africa was “the only place in the British Empire which had a coinage (other than subsidiary coinage) of base metal.” However, he conceded that nickel coin was popular; it was not hoarded; it was difficult to counterfeit; and cheaper to mint and more profitable. He added that too many changes would disorient the illiterate user.⁶⁹

Governor Graeme Thomson acknowledged arguments in favor of the clamor. He noted that there had been cases of fraud or loss arising from the similarity of the alloy shilling and sixpence to the alloy franc and 50 centimes piece, recently introduced into the neighboring French colonies. Besides, alloy coinage provided greater temptations to the counterfeiter than a silver coinage did, and counterfeiting had “of late obtained an unacceptable notoriety.” Yet, he was unconvinced that there was justification for a reversion to silver. First, counterfeiting had not attained a scale that warranted the reintroduction of a silver subsidiary coinage.⁷⁰ He assured the Secretary of State that the situation was under control, and that it was a matter which primarily affected the banks. He was convinced that it had had no adverse effect on British trade. Second, the African inhabitants had “now become thoroughly accustomed to the alloy coinage” and on the basis of information from the heads of “responsible” trading firms, there was “no reason to suppose that trade will be stimulated by the reintroduction of a subsidiary silver coinage.” Finally, from the perspective of government revenue, the reversion to silver would force the government to relinquish “for no compensating advantages its share of the profits on the alloy coinage, estimated at some £100,000 p.a.”⁷¹

The colonial government’s position was reinforced by mercantile opinion, as represented by the Calabar Chamber of Commerce. The Chamber had resolved that “the reintroduction of silver was neither necessary nor required, and that the expense of the change would be considerable and unwarranted.” Some of its members claimed that “silver was being refused by Native traders up the river, and that preference was given to alloy coinage.”⁷² This was probably an isolated case, an indication of the divergent responses to colonial currencies. The Governor’s Deputy, F. M. Baddeley, described the Chamber’s opinion as “especially valuable … [because] there is probably no Chamber of this description in Nigeria which is more in touch with the native views.”⁷³

The clamor for a return to silver persisted nonetheless as notable voices were added to it. This was in the face of mounting cases of counterfeiting, which had assumed “a critical dimension.” “Many businessmen capable and sufficiently experienced in such matters,” a newspaper reported, “have expressed the opinion that the only solution is a withdrawal from circulation, and as early as possible, of currency notes and alloyed coins and a reversion made to silver.”⁷⁴ The newspaper cited the supportive views of a notable Nigerian merchant and politician, S. H. Pearse, and W. F. Becker of the BBWA.

That said, a consistent feature of the late 1920s and early 1930s was the steady withdrawal of silver coinage from circulation. Alloy coins and notes were issued to replace them, while the silver was shipped to the UK to be melted down. The statistics of withdrawn and repatriated silver coins are provided in Table 6. As silver was withdrawn, the circulation of currency notes shrank, and its place was taken by alloy coins.

The Nigerian currency system survived the crisis occasioned by the introduction of currency notes, which became steadily entrenched. Alloy and nickel coins co-existed with it for the rest of the colonial period. Statistics of currency circulation between 1922 and 1931 are provided in Table 7.

Conclusion

This article has detailed the crises of the transitions to British colonial currencies in Lagos and its hinterland in the opening three decades of the twentieth century. The demonetization by imperial fiat of precolonial currencies, often dubbed a “revolution,” was long-drawn, uneven, and crisis-ridden. As shown above, the imperial imposition elicited varying responses and adaptation by the indigenous population. Their diverse forms of agency exemplified pragmatism, opportunism, and enterprise. Opportunistic criminal elements counterfeited coins or passed off colored paper as currency notes to defraud the unwary and unsophisticated. Those impelled by cultural values, social prejudice or economic rationality smelted silver coins into ornaments, discounted unpopular currency notes, and rejected worn coins and those bearing the effigies of dead sovereigns (such as Queen Victoria) which were thought to have lapsed with their death. This essay has also highlighted local and regional peculiarities in the attitudes toward particular denominations. Thus, whereas the tenths were popular in Northern Nigeria, they circulated to a lesser extent in the Southern Provinces. Yet, the tenths were the most suitable for retail transactions in markets and urban centers. It may be inferred that, beyond cultural prejudice for/against a particular denomination, the dominance of tenths in the currency system of Northern Nigeria reflected lower retail prices or lower purchasing power of African inhabitants in that region vis-à-vis the South.

Commercial vicissitudes and global events (World War I and the Great Depression) also affected the supply and circulation of currencies generally. A boom in trade was reflected in a significant demand for currency but the reverse was the case during a slump. Economic dynamics often led to demand for currency that was not previously popular in certain localities, such as Abeokuta, where previously less popular tenths were in demand during the Great Depression. Scarcity of low-denomination coins, which became more popular during the Great Depression, created a vacuum that was filled by the currencies of a rival power. Thus, French pennies flooded Abeokuta markets on at least two occasions in the 1920s and 1930s. In both instances, the indigenous peoples pragmatically adopted a foreign coin that served their immediate purpose, and the colonial government was forced to supply its own equivalent currency.

Beyond the intrinsic value, the appearance or aesthetics of currency mattered—the MacGregor Notes and aluminum tenths were despised because they were made of poor material. Aluminum coins suffered from tropical humidity while the flimsy paper of the initial notes doomed them. Once rejected or damaged through handling, their possessors suffered a dead loss, which they sought to ameliorate through discounting.

There were cultural symbolisms implicated in the circulation of colonial currencies.⁷⁵ Coins with a hole bored in their center were called ayelujara, a literal referent for the hole and a metaphoric depiction of interconnectivity of humans in the world. The loaded appellation also inferred their acceptability among the Yoruba. Ayelujara coins were apparently popular because they could be held together by a string through the hole which made it convenient to carry large quantities of them. The colonial government was apparently sensitive to the cultural and commercial sensibilities of the colonial people, such as the preference for counting in tens. Hence, the denominations were arranged in such a way that they could be counted in tens, as epitomised by the tenth pennies (known as onini by the Yoruba). The tenths (onini) survived the colonial period as cultural appropriation by Yoruba Christian Churches which conscripted the coin into promoting payment of tithes or tenths (idamewa). This is stated in the following song⁷⁶:

In the end, the colonial currency “revolution” took place in stages and phases. There was first, a shift from a multiplicity of precolonial commodity and other currencies to a single British metallic colonial currency. Second, the currency system changed from metal coins to paper money. In all, the transition displayed a spatial diversity that is not stressed in the literature. This essay represents an attempt to highlight and explain the dimensions and consequences of African population’s diverse responses, agency and adaptation, to the colonial currency system in Lagos and its hinterland between 1900 and 1930.