MONEY
See Also: CRIME Forgery; ECONOMICS; LA BELLE
Bank Notes1
The
concept in Britain of using bank notes as currency grew out of a 17thC
practice by which goldsmiths issued bills of exchange that were secured against
bullion that they had in their possession.
The key factor in their widespread adoption was to make the note
cashable to its bearer rather than to a specific person. The Bank of England exploited the existence
of this practice to issue its own notes.
In 1756 the Seven Years War started.
It was the first global war. It
was extremely expensive to wage. Gold
became scarce, therefore, the Bank started issuing 10 notes. A simple design was used so that
counterfeiters mistakes would be easier to spot. Following the return of peace in 1763 the
notes remained in circulation. The
Napoleonic Wars again placed the British economy under immense pressure. In 1797 the country was taken off the gold
standard and did not return to it until 1821.
The Bank furnished the economy with liquidity by issuing 1 and 2
notes.
The
Bank Charter Act of 1844 stopped any new banks of issue being set up.2 In 1855 stereotype printing was
invented. This enabled notes to be
printed so that they were virtually identical.
Following
the start of the First World War removed gold coins from circulation. The Treasury assigned a contract to print 1
and 10s. to Waterlow & Son. In 1928
the Bank of England was granted responsibility for producing them.
While
the Bank remained a private business, its notes did not bear a portrait of the
sovereign. The image of Britannia that
came to adorn its notes was drawn by the artist Daniel Maclise. It was only in 1961, over a decade after the
body's nationalisation, that Queen Elizabeth II's portrait started to appear on
bank notes. (In part the image acts as a
deterrent against forgery. People are
good at detecting a difference in a portrait.)
In 1988
the Bank of England withdrew the 1 note.
The Scottish banks continued to issue the denomination. Subsequently, in a number of areas of London
banks found that they were receiving requests for the Scottish 1s. It took a while for the reason to
emerge. In some communities, notably the
Greek Cypriot one, it was customary for wedding guests to pin banknotes onto
the bride's gown.
In 2003
De La Rue acquired the Bank of England's Debden works.3 The facility included a note-destruction
depot.
In 2016
the Bank of British introduced Britain's first polymer banknote, a 5. However, it was soon reported that
vegetarians unhappy that in part it was made from beef tallow.
Location:
The Bank of England Printing Works, Langston Road, Debden Estate, Loughton,
IG10 3TN
See
Also: THE BANK OF ENGLAND; NOT CHOCOLATE; PRINTING; VEGETARIANISM &
VEGANISM Notable Beef
Website:
www.bankofengland.co.uk/banknotes www.delarue.com
1. The principal Scottish banks, which are commercial businesses, still
issue their own bank notes. In 1994 the
Royal Bank of Scotland issued two million 1 notes to commemorate the centenary
of the death of the writer Robert Louis Stevenson. The note could be bought in a collectors
pack that cost 2.50.
2. In 1920 the private bank Fox, Fowler & Company of Wellington,
Somerset, stopped issuing bank notes.
This left the field in England and Wales solely to the Bank of England,
which was itself privately-owned at the time.
3. De La Rue was founded in Guernsey in 1813 to print a newspaper. In 1860 the firm printed its first bank
notes. These were for the Bank of
Mauritius.
Nazi
Notes
During
the Second World War the Nazis assembled at Sachsenhausen concentration camp a
muster of internees who had the requisite skills to be able to produce high
quality, banknote forgeries. The group
created 134m worth of 5, 20 and 50 bank notes. The Nazis plan was to try to aid their own
cause by destabilising the British economy.1 Because British bank notes were large it was
customary for them to be folded and pinned.
The prisoner-forgers made pin holes in their creations in order to make
them look more authentic. However,
surreptitiously they were careful to insert holes through the image of
Britannia because they sure that British people would never do so and that
therefore there would be a way of telling whether a note had been forged or
not.
The
authorities in Britain learned of the operation. In 1943 all banknotes, bar 5 ones, were
withdrawn. In 1945 the 5 was
redesigned. 10 notes were not
reintroduced until 1964. The foil
security thread that runs through British bank notes is a legacy of the efforts
to combat the forgery.
See
Also: THE SECOND WORLD WAR
1. In the wake of the Credit Crunch, what was then economic warfare
might now be termed by economists as quantitative easing.
Coins
Change
is inevitable - except out of a vending machine.
England
had a silver coinage. King Henry III
introduced gold coins. The experiment
was abandoned. In response to the florin
Edward III introduced the noble. The
coin was successful and became a permanent part of the economy.
In
about 1341 King Edward III issued the double leopard in the hope that it would
become a European-wide currency. About
2000 worth were issued during a six-month-long period. The coin could not be easily divided into a
pound.
King
Henry VIII was known as Old Copper Nose .
This was because he had devalued the quality of the coinage by re-smelting
it with copper. If a coin was worn the
copper would reveal itself.
In 1982
the 20p. was introduced.
Imagery
The
image of Britannia first appeared on British-minted coins during the A.D.
117-138 reign of the Emperor Hadrian.
During
the 1837-1901 reign of Queen Victoria Britannia became a symbol of the British
Empire.
In 2008
the image of Britannia stopped appearing on new coins, as did the chained
portcullis and the crowned lion.
However, the occasional use of the imagery was intended.
The
Monarch
It is
customary for the monarch's profile to switch with each new reign. An exception was Edward VIII who had a strong
preference for his left profile.
Decimal Currency
In 1710
Russia became the first European country to introduce a decimal currency. The United States did so in 1792 and France
in 1803. In 2007 it was revealed that in
a four-and-a-half page document John Wilkins (d.1672), the founding Secretary
of The Royal Society, had devised a decimal system.
In 1867
a Royal Commission was established to ascertain whether Britain should adopt a
decimal currency. It concluded that
there was little that the nation would gain through doing so.
In 1961
the government appoint the 3rd Earl of Halsbury to chair the
Committee of Inquiry on Decimal Currency.
Five years later the Labour government took the decision to decimalise
the British currency. In 1969 the half-crown
(2s. 6d.) and half-penny ( d.) were withdrawn from
circulation. The following year the
Conservatives were elected to office.
The arrangements for the changeover had progressed too far for the
Tories to be able to stop them. On 15
February 1971 the currency was switched.
In the public mind the change came to be associated with inflation. Some elderly people objected to the use of
pee as an abbreviation for pence.
See
Also: CHAMPAGNE Secondary Fermentation
F.D.
In the
early 1520s King Henry VIII was still a loyal Roman Catholic. In 1521 he wrote a tract that attacked the
Lutherans and their actions. This was
published across Europe. In thanks for
it, Pope Leo X granted the monarch the title of Fidei Defensor, which is
still commemorated on coins by the letters F.D.. Martin Luther was sufficiently stung by
monarch's composition that he wrote a reply to it. This was so defamatory that the king could
not in decency respond to it. Therefore,
the royal servant Thomas More involved himself in the matter and pseudonymously
penned Responsio ad Lutlerum (1523).
See
Also: SIR THOMAS MORE
The Florin
An
English florin made of gold was in circulation during the 14thC. The coin's name was derived from fiore,
the Italian word for a flower, there having been one depicted upon the first
Italian coin to have the name.
In 1848
a 2s. coin was introduced. This
became known as a florin.
See
Also: ITALIANS The Lombards
The Guinea
The
guinea was a 20s. ( 1) coin that the Royal Mint first struck in
1663. It was made with gold that had
been shipped from Guinea in West Africa, hence the name. It included the image of an elephant below
that of King Charles II. However, during
the early 1690s the value of English silver coinage declined as a result of
people clipping the coins. The value of
the guinea, which was not subject to the same pressures, began to rise,
reaching 30s. in 1694. A
recoinage of the silver currency improved matters but it did not settle them;
merchants became aware that England's silver coins were worth more as bullion
overseas than they were as coins in England.
Sir Isaac Newton, in his capacity as the Warden of the Royal Mint, was
asked by the Treasury for his opinion on the matter. He replied that the value of guinea should be
set below its then rate of 21s. 6d.. His advice was not acted upon. Eventually, in 1717, the coin should be fixed
at 21s. ( 1.05p).
In 1813
the final guineas were struck. Four
years later the coin passed out of legal circulation. However, by then it had become customary for certain
non-everyday items - such as paintings, racehorses, and the fees of some
professionals - to be paid for in guineas as the money of account.
See
Also: SIR ISAAC NEWTON; TRADING COMPANIES
The Pound Sign
The £ sign is an adaptation of the letter L. It stood
for libra (pound), an abbreviation of libra pondo (pound by
weight). Originally, libra pondo
was expressed as lb.. However, it
was appreciated that the letters could be mistaken for the number 16. By the 14thC scribes had taken to
distinguishing the letters from the number by drawing a horizontal line through
them. The first known instance of a
sign was on a cheque that was handwritten in 1661.
The Royal Mint
In
about 1280 the Royal Mint was first established within the Tower of
London. In 1810 coins were minted in the
Royal Mint buildings at Tower Hill.
In 1870
the Mastership of the Mint became attached to the Chancellorship of the
Exchequer, a political office.
Since
1968 coins have been minted at Llantrisant in South Wales. The facility produces much of the world's
coinage.
Location:
The Tower of London, EC3N 4AB (purple, orange)
Royal
Mint Court, EC3N 4QN (purple, red)
See
Also: BELLS The Whitechapel Bell Foundry
Website:
www.royalmint.com
Sir
Isaac Newton
In the
early 1690s clippers and counterfeiters degraded the quality of England s
silver coinage. This caused economic
stresses that were compounded by the government's need to meet the costs of
conducting the Nine Years' War (1688-97).
In 1695
the government asked eight men of financial expertise or intellectual
achievement - of whom Newton was one - to examine what courses of action the
Royal Mint might pursue in order to address the crisis. Seven members of the panel advocated
recoinage as the optimum means of restoring the value of the currency. The state endorsed this view.
The
following year the ministry offered Newton the post of Warden of the Royal
Mint. He accepted it with alacrity. His appointment was facilitated by the
leading Whig politician the 1st Earl of Halifax. Both men were Fellows of Trinity College
Cambridge.
As
Warden, Newton proved to be an excellent administrator. He quickly came to appreciate that while he
might possess the most senior post within the Mint, he did not hold the most
influential one. That was that of
Master, which was filled by Thomas Neale.1 The Warden was paid 400 p.a., while
the Master received 500 p.a. and it was the latter who controlled the
disbursement of both salaries. In
addition, the Master was paid what was effectively a royalty for each pound of
gold or silver coin that was minted.
Neale received over 22,000 from the recoinage, an operation to which he
contributed nothing. In 1699 it was
apparent that the man was dying. In a
move that was without precedent, Newton used his connections within the
government to become the first Warden of the Mint to be demoted to the more
profitable junior position. As someone
who had engaged in alchemy, Newton had developed a range of knowledge and
skills that helped him to hold his own in disagreements with goldsmiths.
In 1717
Newton's beautiful and vivacious niece Catherine Barton married John Conduitt,
who was a forthright admirer of Newton.
During the mid-1720s he started acting as Sir Isaac's de facto
deputy at the Mint. In 1727 Newton
died. Conduitt succeeded him as Master.
The
French writer Voltaire witnessed the interring of Newton's coffin in
Westminster Abbey. He was moved to
declare that in England they treated the bodies of intellectuals with a
reverence that elsewhere only the remains of emperors received.
See
Also: COLUMNS Seven Dials; ECONOMICS Dr Nicholas Barbon; FINANCIAL SCANDALS
The South Sea Bubble; SIR ISAAC NEWTON
1. Sir Thomas Neale was not only Master of the Mint, he was also the
Groom Porter, a post that required him to supply the dice and playing cards
that were used at court.
Slang
500
Monkey - Indian 500 rupee note (Hindu monkey note)
200
Bottle - Bottle of spruce cost 2d..
25
Pony - Indian 25 rupee note.
A 2s.
coin was called a florin.
A 6d.
coin was called a tanner.
A 4d.
coin was called a joey.
See
Also: LANGUAGE & SLANG
Spink & Son
Spink
& Son specialises in numismatic items (coins and medals). John Spink established himself as a goldsmith
in Lombard Street in 1666.
Location:
67-69 Southampton Row, WC1B 4ET (red, grey)
Website:
www.spink.com
Tokens
In the
17thC copper started to be used as a metal for minting. Token currencies were used locally as small
change.
David
Backhouse 2024