Bank of England note issues


Bank of England note issues

The Bank of England, which is now the Central Bank of the United Kingdom, has issued banknotes since 1694. Since 1970, its new series of notes have featured portraits of British historical figures. Of the eight banks authorised to issue banknotes in the UK, only the Bank of England can issue banknotes in England and Wales, where its notes are legal tender. Bank of England notes are not legal tender in Scotland and Northern Ireland, but are accepted there along with other notes.

Contents

History

The Bank of England has not always had a monopoly of note issue in England and Wales. Until the middle of the 19th century, private banks in Great Britain and Ireland were free to issue their own banknotes, and notes issued by provincial banking companies were commonly in circulation.[1] Over the years, various Acts of Parliament were introduced by the Parliament of the United Kingdom to increase confidence in banknotes in circulation by limiting the rights of banks to issue notes. Eventually the Bank of England gained a monopoly of note issue in England and Wales.

Provincial banknote issues

Attempts to restrict banknote issue by other banks began in 1708 and 1709, when Acts of Parliament were passed which prohibited companies of more than six people to set up banks and issue notes. Many provincial banks, however, were small enough to escape this prohibition, and money issued by provincial English[2][3][4] and Welsh[5] banking companies continued to circulate freely as a means of payment.

Gold shortages

Gold shortages in the 18th century caused by the Seven Years' War and war with Revolutionary France began to affect the supply of gold bullion reserves, giving rise to the "Restriction Period". The result was that the Bank was often unable to pay out gold for its notes, and it started to issue lower denominations of £1 and £2 notes.[6] Other private note-issuing banks were affected by the gold shortage, with many going out of business, rendering their banknotes worthless. Confidence in the value of banknotes was adversely affected.

Restriction of banknote issues

The Country Bankers’ Act 1826 relaxed some of the laws of 1709, allowing joint-stock banks with more than six partners to issue notes, as long as they were over 65 miles from London. This Act also allowed the Bank of England to open branches in major provincial cities, enabling better distribution for its notes.[6]

Introduction of legal tender

With the passing of the Bank Notes Act 1833, Bank of England notes over £5 in value were first given the status of "legal tender" in England and Wales, effectively guaranteeing the worth of the Bank's notes and ensuring public confidence in the notes in times of crisis or war.[6] The Currency and Bank Notes Act 1954 extended the definition of legal tender to ten shilling and £1 notes; unlike the 1833 act, this law also applied to Scotland, meaning that English notes under £5 were classed as legal tender. The Bank of England ten shilling note was withdrawn in 1969 and the £1 was removed from circulation in 1988, today leaving a legal curiosity in Scots law whereby there is no paper legal tender in Scotland[7] (Scottish notes were not included in the 1833 or 1954 acts).

Note-issuing monopoly

The Bank Charter Act 1844 began the process which gave the Bank of England exclusive note-issuing powers. Under the Act, no new banks could start issuing notes, and note-issuing banks in England and Wales were barred from expanding their note issue.[8] Gradually, these banks vanished through mergers and closures, and their note-issuing powers went with them. The last privately issued banknotes in Wales were withdrawn in 1908, on the closure of the last Welsh bank, the North and South Wales Bank.[9] The last private English banknotes were issued in 1921 by Fox, Fowler and Company, a Somerset bank.[6][10]

Note printing

Notes were originally hand-written; although they were partially printed from 1725 onwards, cashiers still had to sign each note and make them payable to someone. Notes were fully printed from 1855, no doubt to the relief of the bank's workers. Until 1928 all notes were "White Notes", printed in black and with a blank reverse. During the 20th century White Notes were issued in denominations between £5 and £1000, but in the 18th and 19th centuries there were White Notes for £1 and £2.

The 20th century

In 1921 the Bank of England gained a legal monopoly on the issue of banknotes in England and Wales, a process that started with the Bank Charter Act of 1844 when the ability of other banks to issues notes was restricted.

The Bank's first issue of ten shillings and £1 notes in the 20th century was on on 22 November 1928 when the Bank took over responsibility for these denominations from the Treasury. The Treasury had issued notes of these denominations three days after the declaration of war in 1914 in order to supplant the sovereign and half-sovereign and remove gold coins from circulation. The notes issued by the Bank in 1928 were the first coloured banknotes and also the first notes to be printed on both sides.

World War II saw a reversal in the trend of warfare creating more notes when, in order to combat forgery, higher denomination notes (at the time as high as £1,000) were removed from circulation. Currently (2011) the Bank of England banknotes in circulation, in Series E and F, do not include any denominations above £50.

All banknotes, regardless of when they were withdrawn from circulation, may be presented at the Bank of England where they will be exchanged for current banknotes and coins. In most cases this is done on the spot; however, the issues counterfeited in Nazi Germany must be authenticated. In practice, commercial banks will accept most banknotes from their customers and negotiate them with the Bank of England themselves.

All current Bank of England banknotes are signed by the Chief Cashier Andrew Bailey. All the notes issued since Series C in 1960 also depict Elizabeth II of the United Kingdom in full view facing left and as a watermark, hidden, facing right; recent issues have the EURion constellation around. The custom of depicting historical figures on the reverse began with Series D in 1970. The Bank of England Series D £1 note was discontinued in 1984, having been replaced by a pound coin the year before.

The notes currently in circulation are as follows:

  • £5 note depicting Elizabeth Fry, showing a scene with her reading to prisoners in Newgate Prison.
  • £10 note depicting Charles Darwin, a hummingbird and the HMS Beagle.
  • £20 note, depicting Adam Smith with an illustration of 'The division of labour in pin manufacturing'. It also includes enhanced security features. This, the first note from the new Series F, entered circulation on 13 March 2007.[11]
  • £50 note depicting Sir John Houblon, with a view of his house in Threadneedle Street. A second £50 note entered into circulation on November 2, 2011, featuring industrialists Matthew Boulton and James Watt[12]. This new note will eventually replace the other note entirely, but no date has been set for this.
Bank of England notes since series D
Series D
Value Reverse portrait Issued Withdrawn
£1 Sir Isaac Newton 9 February 1978 11 March 1988
£5 Duke of Wellington 11 November 1971 29 November 1991
£10 Florence Nightingale 20 February 1975 20 May 1994
£20 William Shakespeare 9 July 1970 19 March 1993
£50 Sir Christopher Wren 20 March 1981 20 September 1996
Series E
£5 George Stephenson 7 June 1990 21 November 2003
£10 Charles Dickens 29 April 1992 31 July 2003
£20 Michael Faraday 5 June 1991 28 February 2001
£50 Sir John Houblon 20 April 1994 in use
Series E revision
£5 Elizabeth Fry 21 May 2002 in use
£10 Charles Darwin 7 November 2000 in use
£20 Sir Edward Elgar 22 June 1999 1 July 2010
Series F
£20 Adam Smith 13 March 2007 in use
£50 James Watt and Matthew Boulton 2 November 2011 in use

Denominations

10/-

The Bank of England's first ever ten shilling note was issued on 22 November 1928. This note featured a vignette of Britannia, a feature of the Bank's notes since 1694. The predominant colour was red-brown. Unlike previous notes it, and the contemporaneous £1 note, were not dated but are instead identified by the signature of the Chief Cashier of the time. In 1940 a metal security thread was introduced for the first time, and the colour of the note was changed to mauve for the duration of the war. The original design of the note was replaced by the Series C design on 12 October 1961, when Queen Elizabeth II agreed to allow the use of her portrait on the notes. The ten shilling note was withdrawn on 20 November 1970 following the introduction on 14 October 1969 of the fifty pence coin.

£1

The first Bank of England £1 note was issued on 2 March 1797[13] under the direction of Thomas Raikes, Governor of the Bank of England, and according to the orders of the government of William Pitt The Younger, in response to the need for smaller denomination banknotes to replace gold coin during the French Revolutionary Wars.

The Bank of England's first £1 note since 1845 was issued on 22 November 1928. This note featured a vignette of Britannia, a feature of the Bank's notes since 1694. The predominant colour was green. Unlike previous notes it, and the contemporaneous ten shilling note, were not dated but are instead identified by the signature of the Chief Cashier of the time. In 1940 a metal security thread was introduced for the first time, and the colour of the note was changed to pink for the duration of the war. The original design of the note was replaced by the Series C design on 17 March 1960, when Queen Elizabeth II agreed to allow the use of her portrait on the notes. The Series C £1 note was withdrawn on 31 May 1979. On 9 February 1978 the "Series D" design (known as the "Pictorial Series") featuring Sir Isaac Newton on the reverse was issued, but following the introduction on 21 April 1983 of the One Pound coin, the note was withdrawn from circulation on 11 March 1988.

£2

The first Bank of England £2 note was issued on 2 March 1797[13] under the direction of Thomas Raikes, Governor of the Bank of England and according to the orders of the government of William Pitt The Younger, in response to the need for smaller denomination banknotes to replace gold coin during the French Revolutionary Wars. It was later discontinued.

£5

The first Bank of England £5 note was issued in 1793 in response to the need for smaller denomination banknotes to replace gold coin during the French Revolutionary Wars (previously the smallest note issued had been £10). The 1793 design, latterly known as the "White Fiver" (black printing on white paper), remained in circulation essentially unchanged until 21 February 1957 when the multicoloured (although predominantly dark blue) "Series B" note, depicting the helmeted Britannia was introduced. The old "White Fiver" was withdrawn on 13 March 1961. The Series B note was replaced in turn on 21 February 1963 by the "Series C" £5 note which for the first time introduced the portrait of the monarch, Queen Elizabeth II, to the £5 note (the Queen's portrait having first appeared on the Series C ten shilling and one pound notes issued in 1960).The Series C £5 note was withdrawn on 31 August 1973. On 11 November 1971 the "Series D" pictorial £5 note was issued, showing a slightly older portrait of the Queen and a battle scene featuring the Duke of Wellington on the reverse. On 7 June 1990 the "Series E" £5 note, by now the smallest denomination issued by the Bank, was issued. The old Series D £5 note was withdrawn on 29 November 1991. The Series E note (known as the "Historical Series") changed the colour of the denomination to a turquoise blue, and incorporated design elements to make photocopying and computer reproduction of the notes more difficult. Initially the reverse of the Series E £5 note featured the railway engineer George Stephenson, but on 21 May 2002 a new Series E note, in a green colour, was produced featuring the prison reformer Elizabeth Fry. The initial printing of several million Stephenson notes was destroyed when it was noticed that the wrong year for his death had been printed. The original issue of the Fry banknote was withdrawn after it was found the ink on the serial number could be rubbed off the surface of the note. The Stephenson £5 note was withdrawn as legal tender from 21 November 2003, at which time it formed around 54 million of the 211 million £5 notes in circulation.

£10

A £10 Bank of England note.

The first ten pound note was issued in 1759, when the Seven Years' War caused severe gold shortages. Following the withdrawal of the denomination after the Second World War, it was not reintroduced until the Series C design on 21 February 1964 produced the brown ten pound note. The Series C note was withdrawn on 31 May 1979. The Series D pictorial note appeared on 20 February 1975, featuring nurse Florence Nightingale (1820–1910) on the reverse, plus a scene showing her work at the army hospital in Scutari during the Crimean War. This note was subsequently replaced on 29 April 1992 by the Series E note (the Series D £10 note was withdrawn on 20 May 1994), where the predominant colour was changed from brown to orange. The reverse of the first Series E £10 featured Charles Dickens and a scene from the Pickwick Papers (this note was withdrawn from circulation on 31 July 2003), while a second Series E note was issued on 7 November 2000 featuring Charles Darwin, HMS Beagle, a hummingbird, and flowers under a magnifying glass, illustrating the Origin of Species. The hummingbird's inclusion has been criticised, since Darwin's ideas were spurred by finches and mockingbirds, not hummingbirds.[14]

£20

After World War II, the £20 denomination did not reappear until 1970, when the new Series D £20 note, predominantly in purple and featuring a statue of William Shakespeare and the balcony scene from Romeo and Juliet on its reverse, was introduced on 9 July. On 5 June 1991 this note was replaced by the first Series E £20 note, featuring the physicist Michael Faraday and the Royal Institution lectures. By 1999 this note had been extensively copied, and therefore it became the first denomination to be replaced on 22 June 1999 by a second Series E design, featuring a bolder denomination figure at the top left of the obverse side, and a reverse side featuring the composer Sir Edward Elgar and Worcester Cathedral. The £20 banknote was known to have suffered from higher cases of counterfeiting (276,000 out of 290,000 cases detected in 2007) than any other denominations.[15]

In February 2006, the Bank announced a new design for the note[16] which featured Scottish economist Adam Smith with a drawing of a pin factory – the institution which supposedly inspired his theory of economics. Smith is the first Scot to appear on a Bank of England note, although the economist has already appeared on Scottish Clydesdale Bank £50 notes. The design of the £20 note was controversial for two reasons: the choice of a Scottish figure on an English note was a break with tradition; and the removal of Elgar took place in the year of the 150th anniversary of the composer's birth, causing a group of English MPs to table a motion in the House of Commons calling for the new design to be delayed.[17][18] The new note entered circulation on 13 March 2007.[19] The Elgar note ceased to be legal tender on 30 June 2010.[20]

£50

The proposed reverse illustration to appear on the Series F £50 banknote.

The £50 denomination did not reappear until 1981 when a Series D design was issued featuring the architect Christopher Wren and the plan of Saint Paul's Cathedral on the reverse of this large note. In 1994 this denomination was the last of the first Series E issue, when the Bank commemorated its 300th birthday by featuring its first governor, Sir John Houblon, on the reverse. The old Series D £50 note was withdrawn on 20 September 1996. In May 2009, a new design featuring James Watt and Matthew Boulton was announced by the Bank of England.[21] It entered circulation on 2 November 2011[22] and is the first Bank of England note to feature two portraits on the reverse.[23][24] The predominant colour of this denomination is red.

£100

The Bank of England does not currently issue £100 notes; however several banks issue this denomination in Northern Ireland and Scotland.

£1,000,000 and £100,000,000

The banknotes issued by the banks in Scotland and Northern Ireland are required to be backed pound for pound by Bank of England notes. Due to the large number of notes issued by these banks it would be cumbersome and wasteful to hold Bank of England notes in the standard denominations. High denomination notes, for £1 million ("Giants") and £100 million ("Titans"), are used for this purpose. These resemble simple IOUs and bear no aesthetic design features. [25] They are used only internally within the Bank and are never seen in circulation.[25]

However the need for these large notes has been obviated by section 217(2)(c) of the Banking Act 2009.

Counterfeits and old notes

An Operation Bernhard forgery of the Bank of England £5 note.

During World War II the German Operation Bernhard attempted to counterfeit various denominations between £5 and £50, producing 500,000 notes each month in 1943. The original plan was to parachute the money into Britain in an attempt to destabilise the British economy, but it was found more useful to use the notes to pay German agents operating throughout Europe. Although most fell into Allied hands at the end of the war, forgeries were frequently appearing for years afterwards, so all denominations of banknote above £5 were subsequently removed from circulation.

All old Bank of England notes remain exchangeable for current notes for ever. Forgeries (including Bernhard notes) will, however, be retained and destroyed by the Bank. If a suspect note is found to be genuine a full refund by cheque will be made. However, it is a criminal offence to knowingly hold or pass a counterfeit bank note without lawful authority or excuse.

In popular culture

  • The 2007 film, The Counterfeiters, tells the story of Salomon Sorowitsch, a Jewish forger who is put to work forging Bank of England notes on Operation Bernhard in Sachsenhausen concentration camp.
  • Mark Twain's short story The Million Pound Bank Note deals with an impoverished American in London who is given the use of a million-pound Bank of England note for thirty days—two Englishmen betting whether or not he will be able to survive on a note for which he cannot possibly be given change. He does succeed in surviving, quite well, and marries one of the bettors' daughters. The story was also made into a 1953 film, The Million Pound Note stars Gregory Peck, and is parodied in the episode of The Simpsons:"The Trouble with Trillions".
  • A fictionalised version of the Operation Bernhard story was the topic of a comedy drama serial Private Schulz (starring Michael Elphick and Ian Richardson) produced by the BBC in 1980.
  • The 2001 TV film Hot Money starring Caroline Quentin tells the story of three workers at the Bank who come up with a method of stealing from the cages containing old notes waiting to be destroyed.

References

  1. ^ "£2 note issued by Evans, Jones, Davies & Co.". British Museum. http://www.britishmuseum.org/explore/highlights/highlight_objects/cm/others/%c2%a32_note_issued_by_evans,_jones.aspx. Retrieved 31 October 2011. 
  2. ^ "One Guinea Banknote, Birmingham Bank". Birmingham Museums & Art Gallery. http://www.bmagic.org.uk/objects/1965N221.174. Retrieved 8 October 2007. 
  3. ^ Malcolm Lobley FCIB. "the Swaledale and Wensleydale Banking Company". P-Wood.com. http://www.p-wood.com/articles/swalebank.html. Retrieved 8 October 2007. 
  4. ^ "British Provincial Banknotes". pp. 1–6. http://homepage.ntlworld.com/trev.rh/Notes/prov.htm. Retrieved 8 October 2007. 
  5. ^ "Cardiff and Merthyr Bank note, 1824". Gathering the Jewels/Casglu'r Tlysau. http://www.gtj.org.uk/en/item1/21067. Retrieved 8 October 2007. 
  6. ^ a b c d Bank of England. "A brief history of banknotes". http://www.bankofengland.co.uk/banknotes/about/history.htm. Retrieved 8 October 2007. 
  7. ^ Committee of Scottish Clearing Bankers. "The legal position with regard to Scottish Banknotes". Country Quest Magazine. http://www.scotbanks.org.uk/legal_tender.php. Retrieved 10 October 2007. 
  8. ^ The limitations specified in Section 11 of the 1844 Act only refer to banks in England and Wales:
    "Restriction against issue of bank notes". Bank Charter Act 1844. HM Government/National Archives. http://www.legislation.gov.uk/ukpga/Vict/7-8/32/section/11. Retrieved 4 November 2011. 
  9. ^ Dr A.H. Stamp (1 Jun. 2001). "The Man who printed his own Money" (JPEG). Country Quest Magazine. http://www.katespapermoney.com/page.asp?ID=11. Retrieved 8 October 2007. 
  10. ^ "Fox, Fowler & Co. £5 note". British Museum. http://www.britishmuseum.org/explore/highlights/highlight_objects/cm/f/fox,_fowler__co_%C2%A35_not.aspx. Retrieved 31 October 2011. 
  11. ^ "New Adam Smith £20 note launched". BBC News. 13 March 2007. http://news.bbc.co.uk/1/hi/business/6444003.stm. Retrieved 13 March 2007. 
  12. ^ http://www.bbc.co.uk/news/business-15539934
  13. ^ a b "Withdrawn Banknotes Reference Guide". Bank of England. http://www.bankofengland.co.uk/banknotes/denom_guide/index.htm. Retrieved 13 May 2010. 
  14. ^ McKie, Robin (16 November 2008). "Darwin art strikes wrong note". The Observer. http://www.guardian.co.uk/science/2008/nov/16/darwinbicentenary-currencies. Retrieved 17 November 2008. 
  15. ^ "Counterfeit Bank of England banknotes". Bank of England. http://www.bankofengland.co.uk/banknotes/about/counterfeits.htm. Retrieved 16 June 2008. 
  16. ^ "March launch for Smith £20 note". BBC News. 21 February 2006. http://news.bbc.co.uk/1/hi/business/6384583.stm. Retrieved 10 October 2007. 
  17. ^ "Adam Smith £20 notes hit sour note with Elgar fans". The Scotsman. 3 October 2006. http://news.scotsman.com/uk.cfm?id=1625822006. Retrieved 10 October 2007. 
  18. ^ "County MPs join fight for Elgar on £20 note". Peter Luff MP. 2 October 2006. http://www.peterluff.org.uk/record.jsp?type=release&ID=206. Retrieved 10 October 2007. 
  19. ^ "New Adam Smith £20 note launched". BBC News. 13 March 2007. http://news.bbc.co.uk/1/hi/business/6444003.stm. Retrieved 10 October 2007. 
  20. ^ Adams, Stephen (29 June 2010). "£20 Elgar note withdrawal 'a national disgrace'". Daily Telegraph. http://www.telegraph.co.uk/culture/culturenews/7861063/20-Elgar-note-withdrawal-a-national-disgrace.html. Retrieved 29 June 2010. 
  21. ^ "Boulton and Watt: the New Faces on £50 Banknotes". Bank of England. 29 May 2009. http://www.bankofengland.co.uk/publications/news/2009/043.htm. Retrieved 3 August 2010. 
  22. ^ "Bank of England to launch new £50 note". The Guardian. http://www.guardian.co.uk/business/2011/sep/30/bank-england-new-50-pound-note?newsfeed=true. Retrieved 2 October 2011. 
  23. ^ Irvine, Chris (29 May 2009). "Matthew Boulton and James Watt new faces of £50 note". Daily Telegraph. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5408012/Matthew-Boulton-and-James-Watt-new-faces-of-50-note.html. Retrieved 29 June 2010. 
  24. ^ "Steam giants on new £50 banknote". BBC News. 30 May 2009. http://news.bbc.co.uk/1/hi/scotland/glasgow_and_west/8075130.stm. Retrieved 29 June 2010. 
  25. ^ a b "Other British Islands' Notes". Bank of England. http://www.bankofengland.co.uk/banknotes/about/other_notes.htm. Retrieved 8 October 2007. 

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