All the above coins were introduced in order to discourage the people fromusing the

primitive money and to get rid of foreign coins. The coins werecirculated slowly
by the people, but the coins were unable to abolish the Maria Theresa thaler
completely from circulation, as it had been popular andwidely used for many years. The
reason that the new coins were not able tor e p l a c e t h e t h a l e r c o m p l e t e l y a n d
i m m e d i a t e l y w a s t h a t t h e p e o p l e discovered that the silver content of the
new coin was not equal to that of the Maria Theresa thaler. In other words, the
Maria Teresa thaler served ad u a l p u r p o s e , o n e f o r c o m m e r c e
a n d e x c h a n g e a n d t h e o t h e r f o r speculations and various
ornamental decorations. A similar thaler when melted down could be worth
approximately its own value in silver.
Bank Notes
Historically speaking, the use of bank notes is said to have begun, for thefirst
time by gold smiths. As they used to keep peoples thus, for moneyentrusted to
them, whether a small or a big sum, receipts were issu ed. Thereceipts a ted as a
sort of money, the gold smiths returned the money bytaking back the receipts,
and the buyers bought this with their cash. But as b u ye r s f o u n d i t t i r e s o m e t o
g o t o t h e g o l d s m i t h , r e t u r n e d t h e m o n e y b y taking back the receipts, the
buyers bought things with their cash. But as buyers found it tiresome to go to the
goldsmith each time they considered buying an item, the buyers gave the receipt to
merchants and took the itemsthey wanted. Thus, the merchants obtained money by handing
the receipts tothe goldsmiths. And so the receipts acted like bank note and in this
earlyforms of bank notes were created.In contrast to the metalli or commodity money used
in Ethiopia in the past, anew kind of money was now introduced. This was the bank
note or paper money, which appeared for the first time in Addis Ababa in -1914
1915,issued by the Bank of Abyssinia. It was used as legal tender and was
freelyexchangeable against gold or silver cover. This paper money, in 5, 10,
100and 500 birr denominations was printed in London.Again, notes were issued in 1933
by the Bank of Ethiopia, whi h replaced the Bank of Abyssinia. These new dollar notes
again were printed in Londonin a series of bank notes of 5, 10, 50, 100 and 500 values. The
paper moneywas circulating in place of gold or silver as representative money. Moreover,as
the government promised to pay the amount stated on the note in gold, itgot relative
acceptance in the market than the former (previous) notes. Thiswas done in order to
encourage the spread of bank notes and to make the public understand that bank notes
were as good as gold and silver. Althoughthe notes were issued in larger quantities than the
previous ones, they werenot circulated in all parts of Ethiopia. However, they were widely
circulatedin Addis Ababa.E v e n t h o u g h t h e p e o p l e w e r e a d v i s e d r e p e a t e d l y
that 100 percent gold

deposits backed the paper currency, still a good size of the population didnot
have much confidence in it. The reason why the notes were not widelyaccepted
was that the Ethio-Italian war of 1935 was approaching and thus people thought
the time was risky and were looking for silver coins that l a t e r c o u l d b e
converted into another commodity money. In
s u c h circumstances, the Maria Theresa thaler and salt bar regained
popularityonce again.By proclamation No.76 of 1945 the State Bank of Ethiopia,
later NationalBank of Ethiopia, had issued bank notes and coins with the image
of theEmperor Haileselassie.The issued Ethiopian Birr (dollar) was divided into 100 cents.In
order to create the confidence among the people the reserve requirementswere being upto
75% and later reduced to 30 percent.T h e B i r r w a s p r i n t e d l e g a l l y b i n d i n g
p r o m i s e b y t h e N a t i o n a l B a n k o f Ethiopia to pay the bearer on demand
specified amount of dollars and fo r this reason were also accepted for the
payment of debts. Payments weremade in accordance with the value of each notes and as
denoted on the noteto the "payable to the bearer on demand".The currency issued in the
effigy of ex-Emperor Haileselassie in 1945 were:
O n e E t h i o p i a n d o l l a r
n o t e E t h . $ 1 . 0 0 F i v e
E t h i o p i a n d o l l a r n o t e E t h .
$ 5 . 0 0
Ten Ethiopian dollar note
Eth. $10.00T w e n t y E t h i o p i a n d o l l a r n o t e E t h .
$ 2 0 . 0 0 H u n d r e
d E t h .
$ 1 0 0 . 0 0 F
i v e
H u n d r e d E t h .
$ 5 0 0 . 0 0

When the Ethiopian paper dollar was issued, it was used for six months side b y s i d e w i t h
t h e E a s t A f r i c a n S h i l l i n g s , w h i c h w e r e i n t r o d u c e d b y t h e British for the
payment of the salaries of their troops.T h e c e n t s w e r e m a d e o f c o p p e r
m e t a l c o m p o s e d o f t h e f o l l o w i n g denominations of coins.
O n e H u n d r e d t h o f a d o l l a r n o t e E t h . $ 0 . 0 1
One twentieth " " "
Eth.$
0.05
O n e t e n t h
" "
" E t h . $ 0 . 1 0
O n e q u a r t e r
" "
" E t h . $ 0 . 2 5 One half of " " "
Eth.$0.50
Currency of the Derg Era and the present.
On September 21, 1976, the provisional Military Administrative Council(Derg )
declared that the old currency was replaced with the new one. In accordance with
the legal tender currency notes regulations No.45 of 1976.The Ethiopian dollar issued in
1945 was redeemed and in its place a new paper note alled "Birr" valued at 100 cents
was adopted.The Birr notes included:
One hundred birr note Birr 100.00Fifty birr note Birr 50.00Ten birr note Birr 10.00Five birr note
Birr 5.00One birr note Birr 1.00
In accordance with its legal tender currency coins regulations No.57/1977 of t h e
National Bank of Ethiopia issued coins on January 23, 1998
i n replacement of the former ones.The coin denominations are:
One hundredth of a birr note Birr 0.01O n e t w e n t i e t h o f a b i r r
n o t e B i r r 0 . 0 5 O n e t e n t h a
b i r r n o t e B i r r 0 . 1 0 O n e
q u a r t e r a b i r r n o t e B i r r
0 . 2 5 O n e h a l f a b i r r
n o t e B i r r 0 . 5 0
After some 20 years the Derg Legal Tender was hanged. The change is not in a full
format. But in some minor adjustment. With the exception of that of some background,
color interchange among the different denominations, itremains the same as of
the Derg Legal Tender. And also the coins remain unchanged
.
( The Article is taken from Ato Belay Gdey Book called Currency
a n d Banking Ethiopia, September