Bank of England - Banknote Issues

Banknote Issues

The Bank of England has issued banknotes since 1694. 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. Until 1928 all notes were "White Notes", printed in black and with a blank reverse. In the 18th and 19th centuries White Notes were issued in £1 and £2 denominations. During the 20th century White Notes were issued in denominations between £5 and £1000.

Until the mid-nineteenth century, commercial banks in Britain were able to issue their own banknotes, and notes issued by provincial banking companies were commonly in circulation. The Bank Charter Act 1844 began the process of restricting note issue to the Bank of England; under this act, new banks were prohibited from issuing their own banknotes and existing note-issuing banks were not permitted to expand their issue. As provincial banking companies merged to form larger banks, they lost their right to issue notes, and the English private banknote eventually disappeared, leaving the Bank of England with a monopoly of note issue in England and Wales. The last private bank to issue its own banknotes in England and Wales was Fox, Fowler and Company in 1921. However, the limitations of the 1844 Act only affected banks in England and Wales, and today three commercial banks in Scotland and four in Northern Ireland continue to issue their own sterling banknotes, regulated by the Bank of England.

At the start of the First World War, the Currency and Bank Notes Act 1914 was passed which granted temporary powers to HM Treasury for issuing banknotes to the value of £1 and 10/- (ten shillings) in the UK. Treasury notes had full legal tender status and were not convertible for gold through the Bank of England, replacing the gold coin in circulation to prevent a run on sterling and to enable raw material purchases for armament production. These notes featured an image of King George V (Bank of England notes did not begin to display an image of the monarch until 1960). The wording on each note was:

UNITED KINGDOM OF GREAT BRITAIN AND IRELAND — Currency notes are Legal Tender for the payment of any amount — Issued by the Lords Commissioners of His Majesty's Treasury under the Authority of Act of Parliament (4 & 5 Geo. V c.14).\

Treasury notes were issued until 1928, when the Currency and Bank Notes Act 1928 returned note-issuing powers to the banks. The Bank of England issued notes for ten shillings and one pound for the first time on 22 November 1928.

During the Second World War 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 on the UK 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 frequently appeared for years afterwards, which led banknote denominations above £5 to be removed from circulation.

In 2006, a sum in excess of £53 million in banknotes belonging to the bank was stolen from a depot in Tonbridge, Kent.