Things you never knew about bank notes.

I'm currently writing the third in my Victorian saga, The Nightingale Chronicles, Better Bend Than Break, and wanted to know some details about banknotes in the 1840s. My male protagonist needed to receive a considerable amount in exchange for the deeds of his property and could hardly march off with a large bag of gold.

This led to discovering things about our currency that I'd not known before and thought I would share them with you.
I did know, and I'm sure most of you do, that the first use of paper money was in China in the seventh century but paper money wasn't used in Europe until a thousand years later.
Goldsmith-bankers accepted deposits, made loans and transferred funds but they also gave paper receipts for cash (gold coins) that had been deposited with them. These pieces of paper were known as "running cash notes" and were made out in the name of the depositor and promised to pay him on demand. Some also carried the crucial words "or bearer". This was the beginning of paper money. This was in the 1500s.

In 1694 the Bank of England was set up to raise money for King William's war against France. The bank issued notes with the promise to pay the bearer the sum of the note on demand. This meant that the note could be handed in to the bank for gold or coinage by anyone who owned it. Strangely if it wasn't redeemed for the full amount it was endorsed and altered to show how much had actually been withdrawn.
These were initially handwritten on blank paper and signed by one of the bank's cashiers. In 1696 the there was no longer any need for small denomination notes and only notes for sums over £50 were issued. As few people made
more than £20 a year most people never saw banknotes.
In the 18th century banks started issuing lower denomination notes. These notes only had the £ sign and were partially printed and were completed by the bank cashier. The numerals, the name of the payee and the cashier's signature plus the date and the number were added at the time of issue. They could be for uneven amounts, but most were round sums. By the middle of the century notes were being printed ranging from £20 -£1000.
By the end of the 1700s, because of the gold shortage caused by the Seven Years War, both £10 and £5 pounds notes were issued. The bank was also forced to stop exchanging actual gold in return for the notes because of the expense of the wars.
This was when the playwright and MP, Richard Brinsley Sheridan, referred to the bank as "an elderly lady in the city". This was changed by cartoonist, James Gillray, to "the Old Lady of Threadneedle Street," and that name has been in use ever since.

The first notes that didn't need any handwritten additions by the chief cashier were issued in 1853.
The name of the chief cashier as the payee on notes changed in favour of the anonymous quote I promise to pay the bearer on demand the sum of..." This has remained the same until today. Printed signature continue to be one of three cashiers until in 1870 it has always been that of the Chief Cashier.

The Bank of England was not always the sole issuer of banknotes in England and Wales. Many provincial bankers – the so-called country bankers – who were either individuals or small family concerns – continued to issue banknotes. The Country Bankers Act of 1826 made this practice legal if there were more than six partners in the bank and the bank was not situated less than 65 miles from London. The act also allowed the Bank of England to open branches in major provincial cities which gave it more outlets for its notes.

in 1833 notes were made legal tender for all sums above £5  in England and Wales. This was done so that in  the event of a national crisis Joe Public would be willing to accept paper money and  gold reserves could be kept intact. In 1844 the Bank Charter Act gave the Bank of England the monopoly of note making in England and Wales. The last private banknotes in England and Wales were issued by  a Somerset bank, Fox and Co in 1921.

And today we have the nasty little  plastic £5 note. I can remember, just, when a five pound note was a large white note and look what we have now!