The Birth of Indonesia's Own Currency

In a meeting with Vice President Mohammad Hatta in September 1945, Sjafruddin Prawiranegara, a member of the Working Committee of the Central Indonesian National Committee or KNIP, proposed that the government of the Republic of Indonesia issue its own currency to replace the Japanese one. Indonesia’s own currency was important not only as legal tender but also as a symbol of an independent and sovereign state. At first, Bung Hatta was hesitant, but after a long discussion, he finally agreed. The realization, however, took quite some time due to the lack of funds and experts.

At the beginning of independence, Indonesia became a currency market. Japanese currency was still in circulation in large quantities, although its value continued to decline. The Netherlands Indies Civil Administration or NICA, which was trying to occupy Indonesian territory again, also circulated a currency known as "NICA money" or "red money". A monetary crisis and inflation then followed. 

Subsequently, the government issued an edict on October 2, 1945 stipulating that NICA money was not valid in the territory of the Republic of Indonesia. A day later, an edict stipulating that the currency in circulation during the Japanese occupation was recognized as legal tender in Indonesian territory. According to Noek Hartono in Uang Kertas di Indonesia (Banknotes in Indonesia), NICA, which controlled a total of 200 million of Japanese money, squandered it to damage market prices.

Issuing Indonesia’s own currency was one of the ways to overcome this issue. In October 1945, Finance Minister A.A. Maramis instructed the G. Kolff & Co. Printing Labor Union team to look for a money printer with relatively modern technology. The members included Mochtar Matata, Aus Suriatna, and S.E. Osman, who later also became members of the Committee for the Implementation of the Republic of Indonesia Banknotes Printing, chaired by T.B.R. Sabarudin. Based on the team's assessment, G. Kolff & Co. Printing in Jakarta and Nederlandsche Indische Metaalwaren en Emballage fabrieken (NIMEF) Printing in Kendalpayak, Malang, were considered qualified.

Money of the Republic of Indonesia (ORI) 

Preparations were made. Balai Pustaka Printing in Jakarta and De Unie Printing contributed in the design, while the master materials, glass negatives, were made by Bunyamin Suryohardjo, who studied making photographic film at Gita Karya Printing, Sukabumi, in 1924. In addition, painters Abdulsalam and Soerono were noted as the first painters of ORI's (Oeang Republik Indonesia or Money of the Republic of Indonesia). Since the G. Kolff & Co. was still controlled by the Dutch, the offset printing was done at the Printing Company of the Republic of Indonesia, Salemba, Jakarta, using paper from the Letjes factory in Malang. The printing of ORI was carried out from morning to night since January 1946, handled by R.A.S. Winarno and Joenoet Ramli.

The ORI was printed on October 17, 1946, although its official circulation wasn’t until October 30, 1946. Sjafruddin, the finance minister at that time, was responsible for the circulation of the Republic's currency.

The day before the circulation, through RRI, the Radio of the Republic of Indonesia, Vice President Mohammad Hatta announced, as quoted by Bank Notes and Coins From Indonesia 1945-1990: "Tomorrow, October 30, 1946 is a day that is historical for our nation. Our people will face a new life. From tomorrow we will shop with our own money, money issued by our own Republic." Later on, October 30 is commemorated as Indonesian Finance Day.

Apart from announcing the implementation of ORI, the government stipulated the withdrawal of Japanese money. The withdrawal was done by BNI 46 as the central bank although ORI was only valid in Java and Madura, to which the money was sent by train cars and was strictly guarded to prevent robbery.

At the beginning of its circulation, people received one rupiah per person to replace the remaining of the Japanese money that could still be used until October 16, 1946, the date set to exchange bank deposits with ORI. Meanwhile, those with family received an additional 3 cents. 

The front side of this first ORI had the image of President Sukarno with Mount Merapi as the background. There were eight denominations: 1 cent, 5 cents, 10 cents, 1⁄2 rupiah, 1 rupiah, 5 rupiah, 10 rupiah, and 100 rupiah. Although the security elements and printing techniques were still simple, the ORI had included general money characteristics such as signature, date and year of issuance, legal provisions, and statements of it being considered as legal tender. 

Because Japanese money was still in circulation, Law No. 19 of 1946 dated October 25, 1946 set a benchmark value of 10 rupiah ORI equals to 5 grams of pure gold and an exchange rate of 1 rupiah ORI for 50 Japanese money in Java while in Sumatra, 1 rupiah of ORI equals to 100 Japanese money. 

The precarious security situation and the move of the Republic's capital to Yogyakarta caused the whole printing material to be transported with trains. It turned out that even in Yogyakarta they had to print money by moving from place to place. To avoid attacks and raids by the Dutch army, the ORI printing had to frequently move in several printing houses in Yogyakarta, Surakarta, Malang and Ponorogo. 

ORI also had to compete with NICA money, to the point that Indonesia and the Netherlands made an agreement about the border areas of the Republic and Dutch occupied areas: there should be no coercion on people in choosing their preferred currency. The circulation of ORI faltered. Moreover, the ORI, which had a simple design, was easy to counterfeit. In addition to the paper material used being easily torn, the printing technique was not neat. The Dutch took advantage of these by issuing and circulating fake ORIs and introducing NICA money into Republican territory.

"At the beginning of independence, the circulation of ORI was not easy. The Dutch government was still fierce at that time. If we were caught carrying or circulating ORI, we would be accused of being pro-Republican, so we had to struggle," said Made Sudiarta, a Senior Media Public Program analyst from Bank Indonesia's Museum Department, which stores and exhibits currency collections. 

From 1946 to 1949, the Indonesian government issued five series or emissions of ORI. The second emission of ORI was marked “Djokjakarta 1 Januari 1947”, while the third emission read “Jogjakarta 1 Januari 1947”, the fourth one “Djogjakarta 23 Agustus 1948”, and the fifth one “Djokjakarta 17 Agustus 1949”.

The Regional Money of the Republic of Indonesia (ORIDA) 

When the Dutch launched its first military aggression, to overcome the shortage of cash due to the breakdown of communication between the central and regional areas, the government issued Government Regulation No. 19 of 1947 dated August 26, 1947. It mandated regional leaders to issue "local money", later known as Oeang Repoeblik Indonesia Daerah or ORIDA. This currency was circulated and applied on a limited basis in Sumatra, Banten, Tapanuli, and Banda Aceh. 

According to Sejarah Bank Indonesia Periode I: 1945–1949 (the History of Bank Indonesia Period I: 1945-1949), there were various types of ORIDA that were issued. There was ORIDA in the form of bill, notice of acceptance of money, legal tender, and mandate, each had different functions, either as a means of payment or exchange. For example, ORIDA in the form of a mandate that was issued by Bengkulu and Palembang was used as a means of exchanging rice and paddy. The term mandate itself means that with the transfer of the mandate, the state treasury was allowed to issue money and rice for the value of the rice. 

The quality of ORIDA was evidently limited. The printing was generally done by hand printing tools with photographic films made from a mixture of tin and bismuth, some even used wooden photographic films. The security signs for counterfeiting were very simple: dots, certain broken lines, or the use of stamps and signatures. The paper materials consisted of HVS, notebook paper, or typing paper. The ink varied. In Jambi, red wax mixed with turpentine was used as a colorant, while the printing in Rantau Prapat only used ordinary stencils.

After the recognition of sovereignty and the formation of the Republic of Indonesia of the United States of America (RIS), on January 1, 1950, the RIS currency began to be used as a substitute for ORI and ORIDA.

The development of currency issuance and circulation in the early days of independence can be seen in the Arthasuaka Numismatics Gallery at the Bank Indonesia Museum. "The collection comes from relics during colonization (Dutch, Japanese, British) owned by De Javasche Bank, some were bought from collectors through auctions, some were grants," said I Made Sudiarta. 

Through ORI and ORIDA, Indonesia asserted itself as an independent country.

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