Story of banknotes is full of funny money

Times

2 days ago

If you hold strong views about the design of Britain's banknotes, your moment has come at last. The Bank of England intends to relaunch the £5, £10, £20 and £50 notes, and in a predictable nod to our populist age, it has appealed to the public for suggestions.
Very little, it seems, will be off limits, since the Bank's statement suggests that great historical characters could give way to images of 'food, film, television or sport'. So out will go Winston Churchill, Jane Austen and JMW Turner, and in might come, say, Luke Littler, chicken tikka masala and Adolescence. And to think people doubt the idea of progress in history.
• Churchill may be dropped from banknotes for diverse designs
As Bank officials are surely aware, though, no conceivable combination will please everybody. Indeed, no less a figure than Sir Jacob Rees-Mogg has already condemned the 'Bank of Wokeness' for its 'supine kowtowing to the gods of political correctness'.(this, remember, before a single image has been chosen).
Yet even though this story seems like a gift to the permanently outraged community, no venerable tradition is in danger of being sullied, since pictures on banknotes are a modish innovation. Until the late Queen Elizabeth made her debut on March 17, 1960, no British shopper had ever seen a face on a pound note, unless you count the image of Britannia.
Indeed, if Sir Jacob wants to take a properly conservative position, he might argue that banknotes themselves are a dangerous innovation. There are suggestions that the ancient Carthaginians issued promissory notes on scraps of leather or parchment, but most historians agree that the first proper paper money originated, inevitably, in China. This was a note called a jiaozi, issued by private merchants in the city of Chengdu some time around the year 1000.
Printed in black ink on an early version of paper, jiaozi often showed images of merchants. Each had a different value, depending on the buyer's needs. Over time they became standardised, and eventually the imperial government took over production, stamping notes with seals to prevent counterfeiting.
But the problem with paper money, as the Chinese emperors soon discovered, is that it is very tempting to keep printing it. Inflation inevitably followed; then came the first of innumerable currency reforms. Paper money, however, never went away. 'All these pieces of paper,' marvelled the Venetian traveller Marco Polo at the end of the 13th century, 'are issued with as much solemnity and authority as if they were of pure gold or silver … [and] wherever a person may go throughout the Great Khan's dominions he shall find these pieces of paper in use, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold.'
By contrast, most European countries were slow to embrace the paper revolution. Although late medieval bankers in Florence and Flanders, such as the Medici, issued promissory notes, it wasn't until 1661 that a central bank, Sweden's entertainingly named Stockholms Banco, issued notes known as kreditivsedlar. Alas, when ordinary Swedes tried to cash in their notes, the bank ran out of money, and after just ten years the whole thing collapsed. There was a lesson there in overpromising and overprinting, though we can all think of finance ministers who never learnt it.
What, though, of Britain? The new central banks of England and Scotland issued their first notes in the mid-1690s as part of William III's financial mobilisation to fight the French. Neither had a monopoly, though. English private banks had the right to print their own notes well into the Victorian period, and the very last private banknotes were issued as late as 1921 by the little Somerset bank of Fox, Fowler and Company.
As for Scottish banknotes, the Royal Bank of Scotland and Clydesdale Bank still print their own notes to this day. (But are they legal tender in England? The short answer is no. I look forward to Scottish readers' letters.)
Back, though, to the wider story of paper money. Given the Swedish debacle, many people were deeply suspicious of this flimsy substitute for the real thing. And during the early 1790s they gazed in horror at the economic chaos in France, where revolutionary printers were churning out colossal quantities of notes known as assignats.
Within just two years of the fall of the Bastille, almost 2.5 billion assignats were in circulation, and all the time the value was plummeting. As food prices rocketed, Jacobin radicals blamed the royal family, aristocratic exiles and British politicians — all implicated, they claimed, in a nefarious conspiracy to debauch France's currency. The chief printer was arrested and executed, while the finance minister, Étienne Clavière, took his own life before he could be dragged to the guillotine.
Yet although the assignats were economically disastrous, they did at least look good, with illustrations interweaving eagles, Roman iconography and revolutionary bonnets. By contrast, British banknotes were remarkably plain until the 20th century. Clearly the Bank of England felt no need to show off, preferring to project an image of sobriety, simplicity and solidity.
As a result, it was not until 1960 that Bank of England notes displayed the monarch's face, while the first commoner, William Shakespeare, didn't appear until 1970. He was followed by the Duke of Wellington, Florence Nightingale, Sir Isaac Newton and Sir Christopher Wren … and so the faces have changed over the years, leaving us with Churchill, Turner, Austen and Alan Turing today.
But who comes next? Most readers will surely agree that the sane choices would be Harold Godwinson, Horatio Nelson, General Gordon and Agatha Christie. Alas, we live in strange times, so who knows whom the Bank will choose? Even the prospect of a John Lennon banknote, which would mark the lowest moment in our history, can't be ruled out. But if the Bank does make such a terrible choice, there is one consolation. Since cash payments now account for barely a tenth of all transactions, most of us will only rarely have to gaze upon the consequences. And if the alternative is to hand over a little portrait of the man who wrote Imagine, the ding of a contactless payment will sound sweeter than ever.