Political sketch
An overseas collectivity of France.
New Caledonia has probably been inhabited since before 1000 B.C. The French navigator Louis-Antoine de Bougainville may have sighted the islands in 1768, but it was the English captain James Cook who landed on the main island in 1774 and named it New Caledonia (after the Roman name for Scotland). In 1853, France annexed the neighboring Loyalty Islands after French missionaries and the crew of a French survey ship were killed and eaten by islanders. New Caledonia was under French military governors from 1853 to 1884 and was a penal colony from 1864 to 1897. Nickel was discovered in 1863, but development, which began in 1870, was hampered by frequent native uprisings until 1917. After the German invasion of France during the Second World War, New Caledonia joined the Free French movement on 18 July 1940. Beginning in 1942, the United States used the islands as a military base for the war against Japan. Japanese forces never tried to invade the island. In 1946 New Caledonia became an overseas territory of France, and in 1958 the first popular election of ministers and members of the Council of Government was held.
In the early 1980s the minority native Melanesians, known as Kanaks, expressed a desire for independence from France. In elections of 1984 the pro-French majority rejected steps that might lead toward independence. Militant Kanaks reacted with riots and general strikes. The French government sent troops to quell violence and postponed movement toward independence. Many Kanaks refused to participate in a 1987 referendum that resulted in a large vote favoring continued union with France. On 19 March 1999, New Caledonia became an overseas collectivity of France. The economy is based largely on mining, metallurgy, and tourism, and is highly dependent on France. An elected territorial assembly exists. New Caledonia also elects two members of the French National Assembly and one member of the French Senate.
Wars since 1500
Occasional native uprisings in late 1800s, such as the Kanak Revolt of 1878; Second World War in the Pacific, 1942-1945 (Japan against United Kingdom, United States, China, Australia, New Zealand, Netherlands, and allies) (New Caledonia was used as a base but was not invaded).
Convertibility
The French franc zone:
When the First World War began, France imposed a moratorium of payments on all negotiable instruments starting 1 August 1914. The moratorium was subsequently extended by decrees until 1 March 1915. The central bank, the Bank of France, abandoned the gold standard on 5 August 1914, although no official prohibition on exporting gold existed until by a decree of 3 July 1915, affirmed by a law of 15 November 1915. A decree of 2 April 1918 prohibited capital exports without authorization. A law of 25 June 1928 officially restored the gold standard and repealed exchange controls. When the French franc was an object of currency speculation , a law of 13 August 1936 imposed extensive exchange controls, supplementing some lesser measures that had been implemented in 1935.
France imposed exchange controls on 9 September 1939 by a decree of that date, after the Second World War broke out in Europe. On 20 May 1940, capital controls within the franc zone were greatly relaxed by a French decree of that date. France's Pacific Ocean territories switched allegiance to the Free French government in exile in late 1940; see below for a description of what followed. Communications with metropolitan France were restored in September 1944, by which time the Allies had liberated Paris and the main French port cities. For legal purposes, France, arrêté of 18 December 1945 set the period of interruption of communications between France and its colonies as lasting from 5 November 1942-31 December 1944. Exchange controls within the franc zone were not removed until 6 June 1946. Afterwards, the recently created CFP franc became convertible both for current- and capital-account transactions within the French franc zone (France, Monaco, French possessions, and countries using the CFA franc). Outside the French franc zone it became convertible for current-account transactions when France resumed current-account convertibility, but it was not convertible for capital-account transactions. France had multiple exchange rates from 26 January 1948 until 17 October 1948, and a dual exchange rate from 18 October 1948 to 29 September 1949. On 20 September 1949 it devalued the French franc and unified the exchange rate, taking advantage of the lead offered by the United Kingdom, which had devalued the pound sterling on 18 September 1949.
French Pacific Ocean territories:
France's Pacific Ocean territories switched allegiance to the Free French government in exile in late 1940. Territories controlled by the London-based Free French government were linked to the sterling or dollar areas. After the war, their currencies were revalued against the French franc.
Other
Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): None.
Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): None.
Frankel and Rose (1996) list of currency crashes: Country not listed.
No exchange rate data in Reinhart and Rogoff (2003).
References
Primary sources:
--Laws and decrees:
European Community. Gazette. 1968-2003. Journal officiel des Communautés européenne. Législation (English version from 1973 Official Journal of the European Communities. Legislation). Luxembourg: Office des Publications Officielles des Communautés (in English, Office for Official Publications of the European Communities).
European Union. Gazette. 2003-present. Official Journal of the European Union. Luxembourg : Office for Official Publications of the European Communities. Accessible through Eur-Lex portal to European law, <http://europa.eu.int/eur-lex/en/>, viewed 23 October 2005.
France. Gazette. 1762-present. Gazette de France (1762-1789); Gazette nationale de France (1789-1799); Bulletin des lois (1791-1831; a separate publication); La gazette nationale ou le moniteur universel (1799-1810); Moniteur universel (1811-1848); Moniteur universel: journal officiel de la République française (1848-1852); Journal officiel de l'Empire français (1852-1870); Journal officiel de la République française (1871-1941); Journal officiel de l'État français (Vichy France, 1941-1944); Bulletin officiel des Forces françaises libres (Free France, 1940-1941); Journal officiel de la France libre (Free France, 1941); Journal officiel de la France combattante (Free France, 1941-1943); Journal officiel du Haut commissariat de France en Afrique (Free France, 1943); Journal officiel du Commandement en chef français en Afrique (Free France, 1943); Journal officiel de la République française (Free France, 1943-1944; France, 1944-present). Paris (1762-1940, 1944-present); Vichy (1940-1944); London (Free France, 1941-1943); Algiers (Free France, 1943-1944): Imprimerie des Journaux Officiels (1944?-present). Many issues are in France, Legifrance Web site (see below).
France. Legifrance Web site, <http://www.legifrance.gouv.fr>. Reference site for French treaties, laws, and decrees, including the full text for recent items.
France. Overseas gazette. 1887-1961. Bulletin officiel (1887-1953; new series, 1953-1959); Bulletin officiel de l'administration provisoire des services du Ministère de la France d'Outre-Mer (1959-1961). Issued by Ministère des Colonies (1887-1950); Ministère de la France d'Outre-Mer (1950-1961). Paris: Imprimerie Nationale.
New Caledonia. Gazette. 1859-present. Moniteur impérial de la Nouvelle Calédonie et dépendances (1859-1886); Journal officiel de la Nouvelle-Calédonie et dépendances (1886-1988); Journal officiel du Haut-Commissariat de France pour le Pacifique et la Nouvelle Calédonie et dépendances (November-December 1941 only); Journal officiel de la Nouvelle-Calédonie (1988-present). Port-de-France, New Caledonia, later Noumea: No publisher. Recent issues are available at <http://www.juridoc.gouv.nc/applications/legislation/Legis.nsf/Juristart?openpage>. (Early issues are sometimes referred to as Moniteur de la Nouvelle Calédonie.)
--Publications of monetary authorities:
Banque de l'Indochine. Annual report. 1875-1967. Assemblée générale. Paris: Banque de l'Indochine.
Banque de l'Indochine. Bulletin. Service des Études Économiques. 1931-? Bulletin mensuel d'information. Paris: Banque de l'Indochine.
IEOM. Institut d'Émission d'Outre-Mer. Annual report. 1967-present. Rapport d'activité (1967-1991); Rapport annuel (1992-present). Paris: Institut d'Émission d'Outre-Mer. From 1973 the annual report was divided into a general report and a separate report for each territory in which the organization operated.
IEOM. Institut d'Émission d'Outre-Mer. Annual report (branch). 1973-present. Rapport d'activité Nouvelle-Calédonie (1973-1991); Rapport annuel Nouvelle-Calédonie (1992-present). Paris: Institut d'Émission d'Outre-Mer.
IEOM. Institut d'Émission d'Outre-Mer. Bulletin. 1967?-present. Bulletin trimestriel de conjoncture. Paris: Institut d'Émission d'Outre-Mer.
IEOM. Institut d'Émission d'Outre-Mer. Bulletin (branch). 1974-present. Bulletin trimestriel de conjoncture, Nouvelle-Calédonie. Paris: Institut d'Émission d'Outre-Mer.
--Web site of the current monetary authority (viewed January 2005):
<http://www.ieom.fr>
--Other publications or Web sites:
Comité Monétaire de la Zone Franc. Secrétariat. 1953-present. Premier [etc.] rapport annuel du Comité de la zone franc établi en exécution du décret du 5 fevrier 1952 (art. 4, §2) (1953-1956); La zone franc en 1957: cinquième rapport annuel du Comité Monétaire de la Zone Franc (1957); La zone franc en ...: rapport publié par le Secrétariat du Comité Monétaire de la Zone Franc (1958-1983); La zone franc: rapport ...: publié par le Secrétariat du Comité Monétaire de la Zone Franc (1984-1991); La zone franc: rappport annuel ...; publié par le Secrétariat du Comité Monétaire de la Zone Franc (1992-2003; inside page says La zone franc en ...); Rapport annuel de la zone franc (2004-present; inside cover says La zone franc: rapport annuel ...). Paris: Imprimerie Nationale (1953-1956); Secrétariat du Comité Monétaire de la Zone Franc (1957-1991; 1957 is a mimeo with no explicit publication information); Banque de France (1992-present). Recent issues are available on the Web site of the Banque de France, <http://www.banque-france.fr/fr/eurosys/zonefr/zonefr.htm>.
France. Commision de Surveillance des Banques Coloniales. 1875-1939. Rapport au président de la république sur les opérations des banques coloniales d'émission pendant l'exercise ... (1873/1874-1936/1937); Rapport au président de la république sur les opérations des banques coloniales d'émission ... (1927/1929-1936/1937). Paris: Imprimerie Nationale.
Main secondary sources:
Brou, Bernard. 1973. Memento d'histoire de la Nouvelle-Calédonie: les temps modernes, 1774-1925. Noumea: publisher unknown to me. Noumea: Le Santal. (I have not seen this.)
Buttet, Catherine. 2000. "La banque de la Nouvelle-Calédonie: existence éphémère, expérience oubliée (1874-1877)." Cahiers d'histoire, v. 45, no. 1: 71-105. Summary at <http://ch.revues.org/document67.html>.
IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.) (No direct information on New Caledonia, but some information can be inferred from data on France.)
Mazard, Jean. 1953. Histoire monétaire et numismatique des colonies et de l'Union française, 1670-1952. Paris: Émile Bourgey.
Meuleau, Marc. 1990. Des pionniers en Extrême-Orient: histoire de la Banque de l'Indochine (1875-1975). Paris: Librairie Arthème Fayard.
Schwan, C. Frederick and Joseph E. Boling. 1995. World War II Remembered: History in Your Hands--A Numismatic Study. Port Clinton, Ohio: BNR Press.
Shafer, Neil, and Colin R. Bruce II. 2000. Standard Catalog of World Paper Money, Volume 2: General Issues. Iola, Wisconsin: Krause Publications.
Skully, Michael T. 1987. Financial Institutions and Markets in the South Pacific: A Study of New Caledonia, Solomon Islands, Tonga, Vanuatu, and Western Samoa. New York: St. Martin's Press.
Monetary authorities: New Caledonia
| Dates | Type | Name | Source | Remarks |
| 1853?
-1873 |
government issue | government of New Caledonia (Trésorerie de Nouméa) (headquarters Nouméa, New Caledonia) | Mazard (1953: 76) | New Caledonia became a French colony in 1853. Mazard remarks that "in the early years of colonization, the [local] Treasury had frequent recourse to the issuance of bills" known as bons de caisse. Howver, I have been unable to find details on them. The first bank was the Banque Marchand (headquarters Paris, France), in Nouméa, in 1871. The City Bank of Sydney (Australia) was interested in establishing a branch in 1866 but nothing came of it because of Australia's economic troubles of the time (Buttet 2000: 75). |
| 1873
-20 July 1874 |
private monopoly note issue | Compagnie de la Nouvelle Calédonie (headquarters Paris, France) | France, ministre de la Marine et des Colonies and Compagnie de la Nouvelle-Calédonie, convention of 7 February 1871, cited in Mazard (1953: 77); Shafer and Bruce (2000: 243) | Frequent issues of government notes convinced the French colonial administration that there was a need for a note-issuing private bank similar to those in many other French colonies of the time. The Compagnie de la Nouvelle Calédonie issued 5-franc notes dated 1 July 1873-September 1874 |
| 21 July 1874
-16 October 1877 |
private monopoly note issue | Banque de la Nouvelle-Calédonie (headquarters Paris, France) | New Caledonia, decree of 14 July 1874, cited in Mazard (1953: 77); Buttet (2000: 78-80, 99-100) | Shareholders of the Banque Marchand traded their shares for those of the Banque de la Nouvelle-Calédonie, which succeeded the Compagnie de la Nouvelle-Calédonie. The bank opened a branch in Nouméa. Business was weak. The bank suspended payments on 16 October 1877 and was declared insolvent on 27 November 1877. |
| 17 October 1877
-20 November? 1877 |
coins only | Buttet (2000: 100) | There was a brief interval without circulating notes. | |
| 21 November? 1877
-mid or late 1879 |
government issue | government of New Caledonia (headquarters Nouméa, New Caledonia) | Buttet (2000: 100) | The colonial government again issued notes called bons de caisse after the Banque de la Nouvelle-Calédonie failed. The purpose of the notes was to supply the demand for a convenient paper currency. |
| mid or late 1879
-16 September 1888 |
coins only | New Caledonia, arrêté of 28 June 1879, cited in Buttet (2000: 100 n. 102) | The government declared its notes void, to prevent counterfeiting, which was apparently a problem. | |
| 17 September 1888
-July? 1942 |
private monopoly issue (as part of a currency union) | Banque de l'Indochine (headquarters Paris, France) | France, decree of 21 January 1875 chartering bank; decree of 20 February 1888, cited in Mazard (1953: 77); law of 31 March 1931 extending bank's term of note issuance | The Banque de l'Indochine was France's note-issuing bank for colonies in the Orient. Soon after the end of the First World War, the colony issued small-denomination government notes called bons de caisse to substitute for coins, which were scarce because inflation had made their value as metal greater than their face value. The notes were issued from 1918 until after the war ended (France, decree of 14 November 1918, cited in Mazard 1953: 81). |
| July? 1942
-1945 |
government issue alongside private monopoly issue (as part of a currency union) | government of New Caledonia (headquarters Nouméa, New Caledonia) alongside Banque de l'Indochine (headquarters Paris, France) | New Caledonia, ordinances of 9 July 1942 and 29 January 1943, cited in Schwan and Boling (1995: 152) | The government issued bons de caisse notes of 1-20 francs as an emergency measure to supply currency at a time when the colony was cut off from its usual sources of supply and the presence of Allied forces increased demand for currency. |
| 1945
-31 March 1967 |
private monopoly issue (as part of a currency union) | Banque de l'Indochine (headquarters Paris, France) | starting date inferred from general histories; no specific information on monetary history | Returned to prewar arrangements. For quite a while, the Banque de l'Indochine was the only bank in New Caledonia. Crédit de la Nouvelle-Calédonie (headquarters Nouméa, New Caledonia) opened in Nouméa in 1955. Apparently Société Générale entered at some point to give the the colony had two banks at once, but I have not found a date. The first coins for New Caledonia were issued in 1949. |
| 1 April 1967
-present (2005) |
joint monetary institute (as part of a currency union) | Institut d'Émission d'Outre-Mer (IEOM) (headquarters Paris, France) | France, Law No. 66-948, 22 December 1966; Decree No. 67-120, 10 February 1967; Decree No. 67-267, 30 March 1967 | A monetary institute replaced note issuance by the Banque de l'Indochine long after bank had ceased issuing elsewhere. The Banque Nationale de Paris/Nouvelle-Calédonie (headquarters Noumea, New Caledonia) opened in 1969 as the first commercial bank in many years to compete with the Banque de l'Indochine. As its name implies, it was a subsidiary of the French Banque Nationale de Paris (Skully 1987: 15). |
Exchange rate arrangements: New Caledonia
| Dates | Official arrangement | Source | Unofficial arrangement, if different | Remarks |
| 1853?
-16 October 1877 |
pegged; 1 local franc = 1 French franc | Mazard (1953: 76) | French government of the island began in 1853. The French monetary system was established. The main coins in use were silver French 5-franc pieces (Buttet 2000: 74). The local government began issuing notes, making the exchange rate pegged. Later, two private monopoly banks issued notes. | |
| 17 October 1877
-20 November? 1877 |
fixed; used French franc | Buttet (2000: 100) | There was a brief interval without circulating notes. | |
| 21 November? 1877
-July 1940 |
pegged; 1 local franc = 1 French franc | The colonial government again issued notes, so the exchange rate changed from fixed to pegged. | ||
| July 1940
-7 February 1944 |
pegged; 176.625 local francs = UKŁ1 (and later 43.80 local francs = US$1) | Anglo-Free French agreement of 19 March 1941, cited in Mazard (1953: 105) | During the Second World War, New Caledonia supported the Free French government-in-exile from July 1940. The Anglo-French agreement preserved the prewar exchange rate of the French franc with the pound sterling (and later with the US dollar, when the United States entered the Second World War). | |
| 8 February 1944
-5 December 1944 |
pegged; 200 local francs = UKŁ1, or 50 local francs = US$1 | Anglo-Free French agreement of 8 February 1944, cited in Mazard (1953: 106) | The Anglo-French agreement devalued the French franc slightly to the level already prevailing in other territories under Free French control. | |
| 6 December 1944
-25 December 1945 |
pegged; 1 local franc = 1 French franc | Anglo-Free French agreement of 8 February 1944, cited in Mazard (1953: 106) | Following the liberation of most of France by the Allies during the Second World War, the metropolitan French franc was devalued to the level of the overseas francs under Free French control. Doing so in effect restored the French franc as the anchor currency. | |
| 26 December 1945
-25 January 1948 |
pegged (as part of a currency union); 1 CFP franc = 2.40 French francs | France, Decree No. 45-0136, 25 December 1945 | The CFP franc was created when France devalued from 200 to 480 French francs = UKŁ1 and from 50 to 119.10669 French francs = US$1. The initial exchange rate of the CFP franc kept unchanged the cross rates with the pound sterling and US dollar. "CFP" stands for Colonies Françaises du Pacifique (French Pacific Colonies). | |
| 26 January 1948
-17 October 1948 |
pegged (as part of a currency union); 1 CFP franc = 4.32 French francs | France, Ministry of Finance and Economic Affairs, Avis No. 291 de l'Office des Changes, 26 January 1946 | France devalued from 480 to 864 French francs = UKŁ1 and from 119.10669 to 214.39 French francs = US$1. The CFP franc was revalued to offset the devaluation of the French franc. | |
| 18 October 1948
-26 April 1949 |
pegged (as part of a currency union); 1 CFP franc = 5.31 French francs | France, Ministry of Finance and Economic Affairs, Avis No. 352 de l'Office des Changes, 17 October 1948 | France devalued from 864 to 1,062 French francs = UKŁ1 and from 214.39 to 263.50 French francs = US$1. The CFP franc was revalued to offset the devaluation of the French franc. | |
| 27 April 1949
-19 September 1949 |
pegged (as part of a currency union); 1 CFP franc = 5.48 French francs | apparently France, Ministry of Finance and Economic Affairs, Avis No. 391 de l'Office des Changes, 27 April 1949 | France devalued from 1,062 to 1,097 French francs = UKŁ1 and from 263.50 to 272 French francs = US$1. The CFP franc was revalued to offset the devaluation of the French franc. | |
| 20 September 1949
-31 December 1959 |
pegged (as part of a currency union); 1 CFP franc = 5.50 French francs | France, Ministry of Finance and Economic Affairs, Avis No. 421 de l'Office des Changes, 20 September 1949 | Following the devaluation of the pound sterling on 18 September 1949, France revalued to 980 French francs = UKŁ1 but devalued to 350 French francs = US$1. The CFP franc was not revalued to offset the devaluation of the French franc; rather, it was simply revalued slightly to make the exchange rate a round number. | |
| 1 January 1960
-20 August 1971 |
pegged (as part of a currency union); 1 CFP franc = 0.055 (new) French franc | consequence of France, Ordonnance No. 58-1341, 27 December 1958; Ministry of Finance and Economic Affairs, Circulaire du 19 novembre 1959 relative au nouveau franc, 19 November 1959; Decree No. 59-1450, 22 December 1959 | France redenominated its currency at 1 new French franc = 100 old French francs. | |
| 21 August 1971
-20 March 1974 |
pegged (as part of a currency union), dual rate; official rate 1 CFP franc = 0.055 French franc | France, Ministry of Economy and Finance, Circulaire du 20 août 1971 relative à l'exécution des transferts à destination de l'étranger, 20 August 1971 | The second rate, called the financial rate, was a managed or perhaps independent float. | France established a dual exchange rate for itself and its territories other than Djibouti. |
| 21 March 1974
-31 December 1998 |
pegged (as part of a currency union); 1 CFP franc = 0.055 French franc | France, Ministry of Economy and Finance, Circulaire du 20 mars 1974 relative à l'exécution des transferts entre la France et l'étranger sur le marché officiel des changes, 20 March 1974 | France eliminated the dual exchange rate. | |
| 1 January 1999
-present (2005) |
pegged (as part of a currency union); 1 CFP franc = 0.00838 European euro, or 1,000 CFP francs = 8.38 European euros | France, Decree No. 98-1152, 16 December 1998; arrêté of 31 December 1998, NOR ECOT9820119A | The CFP franc was fixed to the European euro by using the cross rate of 6.55957 French francs per European euro and rounding the amount of 1,000 CFP francs to the nearest European euro cent. |