1946 Penny - the 3rd Rarest Australian Penny
The 1946 penny is Australia's 3rd rarest penny – one of the last gaps to be plugged in most penny albums, and a real prize in top condition. The mintage was among the lowest in the entire penny series because 145 million pennies had been struck in the seven years leading up to 1946, and few extra coins were required once Australian and US armed forces began to demobilize in September 1945.
Depending on exactly which events and dates are taken into account, World War II began in September 1939 and ended in September 1945. During this six year period, almost a million Australians, both men and women, served in the Second World War. They fought in campaigns against Germany and Italy in Europe, the Mediterranean and North Africa, as well as against Japan in South-East Asia and other parts of the Pacific.
Following the fall of Singapore to the Japanese in February 1942, and it was apparent that Britain could not provide Australia with the forces required to the nation, Prime Minister Curtin proposed that conscription be introduced to help defend Australia from Japanese attack.
How Much is the 1946 Penny Worth?
In average condition the 1946 penny retails for around $50, while better examples in uncirculated condition are worth upwards of $2000.
Although the 1946 penny is the 3rd rarest coin in the penny series, it is reasonably readily available in average condition. Most 1946 pennies grade between Fine and about VF condition – there are not that many that turn up that are extremely badly worn, damaged or corroded, and they start to become tougher to get in VF or better condition.
Typical of King George VI pennies generally, the 1946 penny is seldom seen with lustre in the devices (ie in EF condition or thereabouts), and is extremely tough to get in mint state – that is, without any wear and attractive to boot.
Discerning collectors will pay a significant premium for a mint state coin with full original “red” lustre, a coin in that condition and graded Choice Uncirculated or better wouldn't be out of place in one of the finest collections. Weak detail in the centre of the obverse (in the area of King George's ear) should not come as a complete surprise, given the rushed manner in which the dies were introduced to production.
World War II's Effect
As a result of conscription, more men and women were recruited and sent to contribute to the war effort abroad, the result of this was that there was a critical shortage of labour (particularly skilled labour) needed to keep the economy running. The Government went on to create the Commission for Manpower in 1942 to help co-ordinate and direct the limited human resources remaining in Australia, to more effectively manage the wartime economy. These two significant changes meant that almost every Australian was involved in the war effort in some way. The Australian manufacturing sector responded quickly to the demand for war materials and equipment - vital industries expanded and new ones developed rapidly to produce munitions, ships, aircraft, new kinds of equipment and machinery, chemicals and textiles.
Not only were the branch mints at Melbourne and Perth required to devote part of their manufacturing resources to the production of items that supported the war effort, their human resources had been significantly depleted when experienced staff either volunteered or were conscripted for the war effort. Staff that had retired in recent years rejoined the Mint's payroll to contribute as they could, and their numbers were complemented by younger men that were either too young or were otherwise ineligible for war service.
Despite their best efforts, it is a fair statement that production quality at both Mints dipped during this period – even a cursory examination of the numismatic aspects of coins produced during this period, aspects such as planchet quality and depth of strike show that mint staff had their work cut out for them keeping apace with the nation's demands for coinage during WWII.
As if these dual challenges weren't enough for the Mints to cope with, Commonwealth authorities soon realized that the coinage in circulation would be woefully insufficient once US armed forces began to arrive on Australian shores in significant numbers.
The Australian Government, not having full confidence in the nation's capability to defend itself alone, expressed its willingness to host the base for the supreme commander of allied forces serving in the south-west Pacific in Australia. This situation offered Australia strategic protection, as well as the further weapons and personnel with which to fight the Japanese.
Almost a million American servicemen were stationed in Australia during WWII - the first “Yanks” began to arrive in December 1941, while General Douglas MacArthur, Supreme Commander of Allied Forces in the South-West Pacific Area, arrived in March of 1942. General demobilization of all military forces in Australia began on October 1st, 1945.
Boost In Production
The presence of so many American troops caused a huge boost in rural production as farms across the nation rushed to keep up with the new levels of demand for food supplies. In towns and cities near the largest US bases in Queensland, the opening hours of hotels, clubs and restaurants became more liberal to accommodate them.
Keep in mind that this million extra people was equivalent to about 10% of Australia's population at the time! It would surely not be a huge presumption to believe that most of the wages of the million US servicemen based in Australia during WWII would not have been spent on food, but far more on wartime life's little luxuries such as cigarettes, alcohol and entertainment. Unlike Australian soldiers, US servicemen were paid in cash, and this incredible increase in discretionary spending on inexpensive retail items by a million extra individuals required an equally large increase in the number of coins in circulation, if troop morale were to be maintained and peace to be kept in the pubs and shops of Australia.
The consequences of stressed servicemen not being paid the correct amount of local currency that could be instantly spent on wartime life's little luxuries would have played a significant role in the Commonwealth Treasury's decision request the US Government to quote on supplying quantities of (Australian) silver coins to supplement those being produced in Australia. Significant quantities of pennies and halfpennies were also struck at the Bombay Mint in 1942 and 1943.
The price of silver began to rise as the war progressed, and there was a real concern that the bullion value of Australia's coins would soon exceed their face value. The decision was made to reduce the purity of Australia's silver coins to 50%, so that as the circulating coinage of 92.5% purity was withdrawn and replaced, the resulting silver surplus (42.5% of all silver coinage withdrawn) could be used to repay the silver owed to the United States.
An average of 25 million coins per year were produced between 1938 and 1941, while an average of 97 million coins per year were produced between 1942 and 1947. The number of coins produced in any one year peaked in 1943 at 196 million. 145 million pennies were produced between 1938 and 1945, these coins circulated throughout Australia for many years following the end of WWII.
In 1946, staff at the Melbourne Mint worked to implement the strategy of debasement straight away - production volume measured in terms of the number of coins produced rose by 51%, yet when measured in terms of total face value, increased by 92%. Mintage figures show that the Mint focused on producing florins and shillings to begin with, and no pennies at all were struck in Australia at any time during 1946.
Numbers of Pennies
At least a modest number of pennies were required early in 1947, however the amount produced was to be limited to the number of penny blanks that were on hand. No die hubs for pennies dated 1947 had yet been made, so hubs dated 1946 were used. These had been partly prepared, but weren't used during 1946 due to the capacity required to strike the new 50% silver coins required.
At least one die hub for the 1946 penny apparently required further work on it before it was up to the Melbourne Mint's usual standards, however this wasn't done prior to the dies being put into use. Former Mint staff have stated that 1946 pennies “were not of high standard” due to the dies used to produce them, and that since most 1946 pennies have a reverse that is at least flat, if not concave, they certainly shouldn't be used when playing two-up!
Once the Commonwealth Bank in Melbourne took delivery of the 1946 pennies, staff there indicated that the coins would all be sent to Sydney for some unstated purpose. Former Melbourne Mint staff subsequently found out “in a round about way”, that a large number of 1946 pennies were sent to the Australian contingent serving in Japan as part of the British Commonwealth Occupation Forces. The rarity of the 1946 penny was increased even further than it's tiny mintage would indicate because very few of the coins sent to Japan would have been brought back to Australia.
And so as the new year opened on 1946, the Australian economy was largely awash with the many millions of coins that had been struck since 1939. The hundreds of thousands of US servicemen that had been spending their paycheques hand over fist in Australian pubs and tobacco stores had either made or were making their way back home.
Once the war was over, there was a widespread expectation within the general population that another crisis or even another war, this time perhaps involving nuclear weapons, could eventuate in the short term. On the economic front, it was thought that the economy would take some time to recover, and that unemployment would be high for an extended period of time. Many feared that the end of World War II and the subsequent drop in military spending might bring back the hard times of the Great Depression.
Instead, Australian exports became vital to post-war reconstruction in Europe, and pent-up consumer demand, stifled for many years by the Great Depression and the war, fuelled exceptionally strong economic growth in the postwar period.
Against all predictions then, Australia had full employment within about 12 months of the war's end, and the government had begun an unprecedented drive to draw immigrants from Europe to build the population to a level that would ensure it could resist any effort at invasion in future.
The 1946 penny then is a coin struck in the blink of an eye between the departure of the “over-sexed, over-paid and over here” US servicemen from Australia's shores, and the arrival of the post-war economic boom. We can see from the relatively ready availability of the pennies struck between 1942 and 1945, then from 1947 through until at least 1952, that the uncertain months of 1946 were thankfully short-lived.