Banknotes: The Money of Civilization

Abstract

For centuries, the value of Bank of England’s notes had been guaranteed through the state’s punitive system and prerogative to claim future taxes. The early nineteenth century saw a deliberate and extensive mobilization of human skill and sophisticated technology through which the value of the bank’s notes was further secured by force of their inimitability. This chapter describes how through this deliberate ‘combination of the arts’, Bank of England notes came to embody the immutability of the abstract gold standard, acquiring a function as immutable mobiles which might be circulated without deterioration, or in other words through a time independent of their motion. In this way, Bank of England notes, and the networks that produced them and facilitated their circulation, mediated secular time.

On 23 February 1797, all that was solid melted into air. In swift response to the latest of a series of French invasion attempts, the Privy Council unanimously decided to suspend the Bank of England’s cash payments.¹ This meant the Bank would temporarily abstain from honouring the promise printed on its banknotes to ‘pay the bearer on demand’ the notes’ value in gold or coin.

The decision was swift for a reason. When France declared war on England back in 1773, several local banks had collapsed as people demanded gold for locally issued notes, and desperate bankers sought help at the Bank of England. Many also remembered how the French assignat had depreciated during the war (in fact with some help from counterfeit notes exported from England) and how this had threatened to drain England’s gold reserves.² Hoping to avoid new bank runs by inducing a counterintuitive popular trust in the value of ‘mere paper’, bankers, merchants, politicians, and community leaders across the country responded by publishing joint declarations that they would accept banknotes as payment. The Times ensured its readers it ‘felt sure the bank was sound’.³

Together with a drastic increase in note issuing at the Bank of England, the restriction led to a profusion of country banknotes, changing the terms of competition between country banks. Local bankers were willing to take greater risks, which again led to overissuing and consequent inflation impacting the entire national economy.⁴ In 1810, the government appointed a committee to investigate the effects of the overall increase in circulating paper. The Bullion Report spurred further debates about the state’s relation to the bank, and about absolute convertibility as a potential guarantee of economic stability. Peace returned in 1815, and a year later gold was adopted as the official standard of value. Still, the suspension of payments was repeatedly extended and only finally lifted in 1821.

The railway booms of the 1830s and 1840s further increased country banknote issuing, and in 1844 Sir Robert Peel’s government concentrated all note issuing with the Bank of England, allowing its Issue Department to produce £14 million of fiduciary money—that is, notes that were not convertible—and after that a one-for-one note issue against its varying gold reserves. The Banking Department was to buy and sell gold on international markets, and had no corresponding governmental rules for its operation. It was thought that this arrangement would be self-regulating with the stock of gold increasing or decreasing in synchrony with international gold flows and with the domestic economy thus remaining stable due to convertibility.

It was an age of gold; it was an age of paper. In debates continuing throughout the century, the relation between gold and banknotes (often simply referred to as ‘paper’) would remain a central topic, and especially the question of how to control issuing and guarantee convertibility.⁵ At stake was the relation between a domestic economy, whose stability, it was generally believed, depended on some kind of convertibility between paper notes and bullion,⁶ and an international market where the commercial price of minted metal often diverted from the legal standard decided by domestic policies.⁷ Exploring what they believed was uncharted territory in monetary policy and practice, contemporary commentators felt certain that no nation had ever before gone ‘solely on paper’. As Lord Liverpool put it, the ‘state of the Paper currency of this country, in its manner and extent taken together, is, I believe, without example in the history of mankind’.⁸ This would remain a common view across the spectrum in debates between the ‘bullionist’ and ‘anti-bullionist’ schools following the restriction period, between the Currency and Banking schools surrounding Peel’s 1844 Bank Charter Act, and in the wakes of various crises, for instance in 1847, 1857, and 1866.

To some, gold was a civilizational achievement founded on the collective wisdom of humanity. To others, it was a barbaric metal destined to be replaced by paper money as civilization progressed. Likewise, to some, banknotes signalled immorality, civilizational decline, and historical regress to a barbarian past. To others, they were the promise of a harmonious and prosperous future.

Some believed the insistence on convertibility between paper and gold was a regressive development in a civilization whose mercantile and industrial expansion depended primarily on ‘paper credit’ and which should be elevated above ‘base metals’. An anonymous pamphlet from 1802 opened by stating that ‘[b]anks and paper currency have necessarily grown out of progressive civilization, and the increase of trade which it has accompanied or given rise to’.⁹ In 1818, barrister John Wray declared that metallic money—by which he meant money with intrinsic value—belonged to ‘the ruder ages … the infancy of society’.¹⁰ Writing in 1827, Whig MP Henry Brooke Parnell suggested:

as coin metal were substituted for barter in the first stages of the civilization of mankind, it may be expected, as the world becomes more and more refined, that paper money will be substituted universally for coin.¹¹

Sir William Congreve, mostly known for his many technological and military inventions, concurred, stating that a state of civilization implied leaving behind the notion of intrinsic value all together: ‘in civilized society … the circulating medium is one of no value in itself.’¹² As one anonymous writer put it in 1844, describing in a single paragraph what was taken as general signs of civilizational progress—cultivation of land, industrialization, population growth, and urbanization—as ultimately being effects of banknotes and the popular trust on which their function was premised:

In the early and uncivilized history of a nation, the transactions between man and man are found to proceed on the principle of barter, and the precious metals, possessing intrinsic value, become an important means of interchange; but, as civilization and settled government succeed, greater confidence ensues, and a system of credit arises…[Both in England and its colonies it has been found] that, by means of credit or symbolic currency, the people … have advanced rapidly in wealth; land has been cleared and brought more extensively into cultivation; large manufactories have arisen; population has proceeded with rapidity; towns have been built where before huts or villages only were known; and incredible strides towards national wealth have been made.¹³

Later in the century, during the debates between the Banking and Currency schools surrounding the Bank Charter Act of 1844, the two sides agreed in principle on the need for some convertibility on a fixed gold standard. Facing the crisis in 1847, however, this ‘Peelite consensus’ met opposition from newly founded reform groups advocating the abolishment of the gold standard altogether, in favour of either a bimetallic standard or indeed a pure paper currency.¹⁴ The same year, the Birmingham Currency Reform Association sent a memorial to the Queen, and in Glasgow the National Anti-Gold Law League marshalled 3000 people for its organizing convention.¹⁵ The Liverpool Currency Reform Association became a noted ‘anti-gold’ voice.¹⁶ One of its founding members and most industrious pamphleteers, James Harvey, published several pamphlets arguing against the gold standard and advocating an exclusive paper currency backed by state power. In 1877, he summarized his arguments in the book Paper Money, The Money of Civilization. Quoting heavily from John Ruskin’s Unto This Last (1860)¹⁷ and George Berkeley’s Querist,¹⁸ Harvey argued that paper money was ‘the money of the future’, something he took to be ‘evident from the various steps through which nations advance in their progress in the paths of civilization’.¹⁹ In fact, Harvey argued, ‘the vast commercial and industrial transactions of this country cannot … be carried on securely for any length of time with a circulation based upon or even nominally convertible into gold. There is not enough gold in the world’. The ‘love of gold’, Harvey stated, ‘was not only impracticable in a civilized community’,²⁰ but ‘a relic of barbarism’,²¹ and the assumption that convertibility was necessary, a ‘prejudice’. Paper money backed by state power was the only circulating medium capable of expanding in synchrony with the expanding production²²—‘the money of civilization and progress’.²³

But views such as Harvey’s were rare, even towards the end of the century. Many saw the profusion of inconvertible paper money as an unequivocal sign of decadence, generating new powerful classes of fund-holders whose wealth was ‘fictitious’. In 1817, journalist William Cobbett published a series of essays where he argued that not only was the increase in paper money a sign of depreciation rather than financial growth, but it also consolidated the power of ‘stock jobbers’ as well as creating higher levels of poverty in general.²⁴ Later, Thomas Carlyle lamented how the ‘cash nexus’ of profit-making and commercial exchange had become the main mode of human interaction, in contrast to the reciprocal and charitable modes of hierarchical social being that (he imagined) had characterized the medieval world.²⁵ Others argued that if banknotes were taken as representative of gold, then printing inconvertible notes amounted to ‘virtually [making] Gold as plentiful as Paper Money’. Hence, for example, if a £5 note was at a discount of fifty shillings of its value, then ‘there would be a virtual creating of Two Pounds Ten Shillings in Gold’, as if one had mastered the diabolic art of alchemy, or discovered ‘the Philosopher’s Stone’.²⁶ Money was ‘one of the grand links that connect[ed] the natural and the moral world’; hence, the amount of paper must be fully based on the secure basis of scientific calculation of the unchangeable amount of gold in the world, so that the circulation of notes might perfectly mirror the immutable and uniform motion of the natural universe. Friedrich Engels, writing in 1844, accused ‘the middle classes in England [of having become] the slaves of the money they worship’.²⁷ Several writers and novelists—Charles Dickens, William M. Thackeray, Anthony Trollope, and John Ruskin, to mention only a few²⁸—levelled similar charges at the speculators whose wealth they thought reduced human relationships to an impersonal question of financial gain.

Performing the Economy

To scholars familiar with Victorian debates on political economy, these topics are nothing new, and it is easy to overlook how peculiar were the new genres framing the debates. Towards the end of the seventeenth century, the emergence of a public sphere described in Chap. 4 coincided with the introduction of economic matters as a topic of public discussion.²⁹ Circulating newsletters increasingly included sections with information about international exchange rates, market prices, and shipping, all presented under a single rubric as if belonging to the same sphere and operating according to the same logic. After the mid-eighteenth century, these sections came to be seen as providing ‘facts’ about which readers might have differing opinions. The genres carrying the opinions of the reading public also helped naturalize ‘the economy’ as an object of discussion, as something existing independently of the debates about its nature and state.³⁰

In the nineteenth century, and especially during and following the restriction period, the economy came into its own. In addition to the question of gold, paper, and convertibility, the discourses of political economy emerging during the early decades of the century dealt with topics ranging from factory production and Corn Laws to principles of free trade and monetary policy. Prior to the 1870s, most publications in the new genre were composed according to the template provided by David Ricardo’s Principles of Political Economy (1817): an opening discussion of labour as the basis of value, followed by chapters on rent, prices, wages, profit, taxes, trade, and finally a discussion of money as a means for making universal exchange feasible and practicable.³¹ Culminating in John Stuart Mills’ two-volume Principles of Political Economy (1848), the genre provided, in the words of one assessment, ‘the most prestigious and highly developed vocabulary for the discussion of a very large set of political issues’.³² Dozens of treatises purporting to define and establish its fundamental principles were published between 1820 and 1850. In 1843, James Wilson established the periodical The Economist, which combined financial news journalism with economic analysis.

By the 1860s and 1870s, ‘political economy’ had become one of the main genres available to Victorian intellectuals seeking to weigh in on the current condition of England and its surrounding world. However, just as its ‘wisdom [was settling] down into the common sense of the nation’,³³ as Bagehot put it in 1876, a new genre of ‘economics’ began to emerge as a science dealing with fundamental and universal principles.³⁴ In his pioneering work The Theory of Political Economy (1871), logician William Stanley Jevons sought to combine mathematical (deductive) and statistical (inductive) methods in order to establish the principles underlying the economy (preferably without the term ‘political’), laying the basis for what later became known as the ‘marginalist revolution’.³⁵ For Jevons, the notion of value was based not on the cost of production but on the proportionality of prices to utility. Put another way, value was based not on labour but rather on ‘fundamental laws’ governing the desires and wants of the consumer—ultimately his or her rational anticipation of pleasure and pain—and could hence be calculated mathematically.³⁶ With Alfred Marshall’s The Principles of Economics (1890), some have suggested, the ‘economic sphere’ became theoretically established as a fully ‘objectified reality’,³⁷ intertwined with but distinct from ‘political’ and ‘social’ spheres—indeed, the absence of the word ‘political’ and the elevation of ‘economy’ to ‘economics’ is testament to its ever-more theoretically disaggregated status.³⁸

Following Charles Taylor, we could see this emerging conception of the economic sphere, with its conceptual roots in the eighteenth-century Enlightenment (especially its Scottish variant), as an example of a secular, modern social imaginary: an interlocking system of immanent laws of efficient causality,³⁹ to which ‘buffered’ individuals have direct access.⁴⁰ Again, the emerging economy was not secular in the sense that no self-confessed religious persons participated in its associated practices. Quite the contrary, as Boyd Hilton has argued, in Victorian England Christian evangelical ideas of both ‘moderate’ and ‘extreme’ forms underpinned widely held assumptions in debates regarding political economy at least into the 1860s; and while the latter half of the century saw a shift in theological emphasis, there was no simple decline in what one might term ‘religious contributions’.⁴¹ The emerging economic sphere became and remained, in the words of H.S. Jones, ‘common ground to secular utilitarians and to those … who wished to give it a theological significance’.⁴²

Taylor argues that the imaginary of the ‘economy’ is nonetheless secular in the sense that it is performed as if existing solely in secular time, upheld only by the collective action of its participants, irrespective of confessional identities.⁴³ It came to define ‘a way [people were] linked together, a sphere of coexistence which could in principle suffice to itself, if only disorder and conflict didn’t threaten’.⁴⁴ While some might invoke God as the supreme ruler of the economic sphere, this was now merely as designer of a well-engineered, impersonal order where specific moral codes would secure ‘blessing’, or where individual self-love might indeed—through the work of underlying principles such as an ‘invisible hand’—ultimately be turned to the benefit of all. While we do not have to accept Taylor’s claim that the emerging economic sphere implied secular time exclusively,⁴⁵ secular time was certainly mediated on some level through the technologies and collective practices through which it was performed.

Mundane monetary practices were essential to the integration of the Victorian economy on a national scale. In what would become one of the most famous and influential contributions to the genre of political economy, Karl Marx highlighted the peculiar role of the money commodity in its performance. Opening his Capital I (1867) with a discussion of money—thereby inverting the usual order of topics in the genre⁴⁶—he sought to reveal how money tended to conceal from workers how their labour was the true source of ‘surplus value’.⁴⁷ For Marx, money was one commodity among other commodities, but one being ‘reified’ or ‘fetishised’ in a particular way. On this point, Marx’s theory was quite similar to the Ricardian theories it critiqued: money ‘symbolised’ or ‘veiled’ an underlying economic ‘reality’. But where most other theories described this economic reality as foundational, Marx further postulated that all value in fact stemmed from human labour: the economic reality in turn ‘veiled’ an even more fundamental ‘social’ reality.

On this perspective, rather than merely expressing an ontological basis of universal exchange, money was central to the processes of modernization and its associated reconfiguring of social relations.⁴⁸ Many later sociological theories of money (of course, not all of them therefore ‘Marxist’) have continued in a similar vein. In his Philosophy of Money (1907), George Simmel argued that modern money had become a pure symbol disconnecting individuals from groups and contexts on which they formerly depended, recasting all relationships in terms of quantitative difference.⁴⁹ More recently, sociologists such as Anthony Giddens has generally speaking maintained this view. The use of money as a medium of exchange, they argue, implies trust in the abstract capacity of money as such, rather than in the persons involved in the transaction. Money is therefore one of the key ‘disembedding’ mechanisms, as Giddens puts it, distinguishing modern from ‘traditional’ societies.⁵⁰

Responding to this classic sociological perspective on money as at once embedded in and recasting social relations, several scholars have pointed out that far from functioning as a universal acid dissolving personal relationships, money takes on a multitude of different roles in as many different contexts. It is always embedded in reciprocal and complex moral orders founded on personal trust,⁠ ⁵¹ and influencing a rich variety of identities and relations.⁠⁵² Attempts by governments (or indeed economic scholars) to police the orthodox meaning of money, they argue, have always gone together with an increasing awareness of the ambiguity of such meanings evidenced by ‘heretical’ everyday practices not sanctioned by institutional sources or financial authorities.⁠ ⁵³ One example cited is how, after they went out of print in 1821, Bank of England £1 and £2 notes continued to circulate for decades: one estimate suggests that a value of £9304 was paid in such low-denomination notes between 1843 and 1881—perhaps not a high sum in itself, but remarkable considering the notes’ official lack of value.⁠ ⁵⁴

For the present purposes, it suffices to acknowledge that money was a particularly important technology through which the Victorian economy was performed on a daily basis,⁵⁵ and constituted an essential part of processes increasingly integrating people of all classes in institutions and practices tacitly educating them in the logic of investment, credit, and contractual relationships. Among other developments we might instance the establishment of provincial building societies,⁵⁶ the consolidation and international expansion of the London Stock Exchange,⁵⁷ the emergence of the so-called gentlemanly capitalism of those whose money ‘made itself’ through investment in urban properties,⁵⁸ and the proliferation of joint-stock companies following the Limited Ability Act of 1855 and the Companies Acts of 1856 and 1862—all of which relied on the expanding network of credit and investment guaranteed by the Bank of England.⁵⁹ These acts substantially expanded commercial markets (then by far the most permissive in Europe), transforming middle- and upper-class Victorians into what some scholars have called a ‘nation of shareholders’,⁶⁰ a category which also included increasing numbers of women.⁶¹ Together with rising membership numbers in friendly societies such as the Oddfellows providing insurance services, and industrial insurance companies such as Prudential’s targeting of working-class individuals for industrial branch insurance, these practices served to ‘[embed] within a wide segment of the population a familiarity with financial institutions, an understanding of concepts such as interest and economic risk, and an appreciation of the role that financial planning might play in ensuring personal and familial well-being’.⁶²

When it came to paper money, Victorians were familiar with many forms of such—cheques, shares, and bills of exchange, to mention only some. But among all of these, banknotes stand out because of their connection to specific territories. Banknotes are promises made by the issuing banker to pay the bearer the note’s value in gold when they return the note to the issuing bank. This means that its value depends not on the trustworthiness of the person using the note, but rather on the trustworthiness of the issuing bank, and also how geographically far this trust holds. If this territorial aspect makes banknotes a peculiar form of paper money, notes issued by the Bank of England were even more so, since they increasingly came to replace gold as security in the coffers of provincial banks. It was well known that these particular notes provided security for the local bank.

Victorian working classes did not themselves keep banknotes, though there is evidence that they used them in local banks to redeem their wages in coin.⁶³ As early as the 1810s, when small note denominations circulated, it was not uncommon for several workingmen or sailors to be paid with a single note and left to break it up among themselves. This practice continued after the cash payment restriction was lifted; indeed, it was the rationale behind the exception of £5 notes from becoming legal tender in 1833—they had to remain convertible into gold on demand for the payment of wages.⁶⁴ While Victorians were well aware of the advantages (and challenges) associated with banknotes, coins remained the common money form in most transactions.

The fact that paper notes gradually came to assume status as ‘sound money’ would have been, as one historian puts it, ‘thoroughly counter-intuitive’ to people living in the eighteenth century.⁶⁵ Before the restriction period, no one would have accepted final payment in banknotes—these were only valid as promises of future payment in coin. By 1900, no one would have lifted an eyebrow or worried whether there was enough gold in the bank to honour the promise.

How did this popular trust in Bank of England notes arise and sustain itself? Scholars have suggested several explanations. Perhaps it was the bank’s century-long reputation of prudence and relative independence from the state and its wars.⁶⁶ Perhaps it was a well-founded fear of a Bank operating as a state-sanctioned private prosecutor with a reputation for pursuing capital punishment for note forgery.⁶⁷ Perhaps it was due to banknotes’ role as a circulating medium which, much like newspapers, served to instill a sense of synchronicity in the imagined community of the nation.⁶⁸ Perhaps it was because a strong sense of communal solidarity and social obligation remained present despite later scholars’ insistence that economic transactions became more impersonal during the eighteenth century.⁶⁹

In this chapter, I propose that in addition to all of this, Bank of England notes were key to integrating the economy on a national level in a literally more ‘hands-on’ way. The effort put into designing and producing notes that were impossible to counterfeit should be seen as an attempt to impart the properties of an abstract gold standard—its immutability in particular—into flimsy but easily transportable pieces of paper in order to make these ’as good as gold’. The first half of the nineteenth century saw a deliberate and extensive mobilization of human skill and sophisticated technology—reaching a temporary apogee with the introduction of the notes printed in 1855—in order to secure near-perfect inimitability. To the accompaniment of a cacophony of voices debating their convertibility and role in civilization, Bank of England notes were deliberately and successfully made to embody the immutability of the abstract gold standard with the intention of impressing a notion of trustworthiness on the minds and physical senses of the population. The notes came to acquire a function as immutable mobiles being moved without deterioration between the metropolitan central bank and local banks. Insofar as they were both mobile and as immutable as the abstract and universal standard, Bank of England notes were able to anchor the national economy, and by implication move through a time independent of motion. In this sense, and on this specific level, the networks that produced and circulated Bank of England notes mediated secular time.

Gold Standard

Historically speaking, the gold standard has played a peculiar role in English monetary development.⁷⁰ Since the fourteenth century, continental European states usually strengthened their domestic currencies through regular ‘debasement’, a practice which entailed reminting old coins into new ones containing less gold or silver than their nominal value, thereby allowing the crown to keep some of the precious metal for itself. The actual effects on national economies were minimal; people simply adjusted prices according to the ‘real’ value of the coins, which again would lead to inflation and eventually new rounds of debasement. In England, by contrast, the landlords who regularly convened with the Crown in order to agree on new taxes (what would later become Parliament) often opposed such practices. As a result, England has historically had far fewer of these recoinages than other European countries. This meant merchants could profit from exporting English coin and have them reminted in other European states. In response to this drainage of precious metals, the English Crown sought to regain control over the currency by concentrating all exchange with the Royal Mint, which thus became one of the cornerstones of the state’s power.

Instead of fluctuations in the continental money market, then, the value of English coins was determined by reference to an abstract standard whose integrity the state had to police and protect. In 1805, Lord Liverpool explicitly related metallic standards to a high level of civilization:

In all civilized nations, Money has been made either of Gold, Silver, or Copper, frequently all three, and sometimes of a metal composed of Silver and Copper, in certain proportions, commonly called Billon. It has been found by long experience, and by the concurrent opinion of civilized nations in all ages, that these metals, and particularly Gold and Silver, are the fittest materials, of which Money can be made.⁷¹

Most Victorians would have agreed that ‘[i]t [was] of the first necessity that there should be one common standard to which the value of all commodities should be referred’.⁷² And even if debates might rage as to whether that standard should be gold or silver or both, it was accepted across the board that commodity standards as such were ‘inevitable, [and] within the natural order of things’, beyond what merely human institutions could simply decree.⁷³ ‘That the standard of value shall not be altered needs no more resolution of the House of Commons to affirm it, than the standard of heat’, wrote publisher and currency reform advocate John Taylor in 1833.

All that Parliament can do, is to provide that our pound sterling, and its fractional parts, shall be as true and equal an indicator at all times, and under all circumstances, of that which it professes to measure—value, as the scale of the thermometer is of that which it professes to measure—heat.⁷⁴

As several contemporary commentators pointed out, establishing a universal commodity standard of value required an act of mental abstraction; a selected commodity had to be thought of as evacuated from the realm of commodities altogether, so that the relative value of other commodities could be measured against this abstract absolute. As a universal standard, then, gold was imagined as existing independent from all the changes occurring in the world.

Perhaps paradoxically, the reason gold was considered suitable for this role as immaterial standard lay precisely in its material properties, namely its comparative homogeneity, portability, divisibility, and durability. In 1866, Knight’s English Encyclopedia described how gold was supremely fitting for the purpose of universal standard because as a substance it underwent no change over time:

[A]n ounce of pure gold extracted from the earth 100 years ago is of precisely the same quality as an ounce of pure gold got yesterday. Exposure to weather, the scorching sun, or the rigour of frost, produces no deterioration in its quality. From all which it follows, that the relative weight of any portion of it determines at once its relative quantity and value to every other portion. Two ounces of gold are worth exactly twice as much as one…it is not liable to corrode or rust, and therefore is fitted to the purposes of a circulating medium.⁷⁵

In the terms of the present argument, gold was fitted to represent an absolute standard because it could be moved without deterioration; in other words, it was measured by a time independent of motion.

Britain was one of the first states to move from a bimetallic (silver and gold) to a monometallic (gold) standard,⁷⁶ and by the second half of the nineteenth century, ‘[t]he British were fairly sure that gold was the most civilized metal on which to base a cash economy’.⁷⁷ The language of civilizational progress was marshalled equally by all sides in the debates. Many saw the waves of financial speculation as a threat to civilized society, casting gold as representing a stable and rational ground from which to resist the passions of eager speculators, and English devotion to the gold sovereign a sign of the nation’s civilizational stature. The term sterling came to signify a high quality, a sense of trustworthiness and reliability. In his Expansion of England (1883), historian J.R. Seeley used the term in this way, remarking that ‘the treasure of truth that forms the nucleus of the civilization of the West is incomparably more sterling not only than the Brahminic mysticism with which it has to contend, but even than that Roman enlightenment which the old Empire transmitted to the nations of Europe’.⁷⁸ In analogy with the complete coincidence of intrinsic and signified value in a gold sovereign, Englishness constituted for Seeley a complete consistency between inner character and external appearance, just like gold coins embodied the rationality and trustworthiness of English civilization.

Around mid-century, when large quantities of gold were discovered in California and Australia, the world’s annual production of gold increased nearly threefold.⁷⁹ European nations on bimetallic standards scrambled to stabilize their economies, readjusting their gold-silver rate, or demonetizing gold. Britain came through the disturbances largely unscathed. London remained the world’s financial centre, and the convenience of operating on its standard when trading there meant most European states adopted the gold standard by the 1870s.⁸⁰ Some even saw the discoveries as ‘providential solutions to the problem of liquidity posed by the return to convertibility and the Bank Charter Act [of 1844]’, since the increase of available gold in the world conveniently coincided with English commercial expansion.⁸¹

The State

The gold standard had to be policed, and this task fell to the state. ‘Between 1688 and 1714’, argues John Brewer, ‘the British state underwent a radical transformation, acquiring all of the main features of a powerful fiscal-military state: high taxes, a growing and well-organized civil administration, a standing army and the determination to act as a major European power’.⁸² Together with the extension of international commercial networks during what historians have later dubbed the ‘Financial Revolution’,⁸³ the late seventeenth and eighteenth centuries saw a strong shift towards securing value in an abstract standard transcending local communal relationships. Bankers developed new forms of promissory notes—bills of exchange—by which debt could be transferred to unknown third parties. Large-scale merchants (such as those involved in the South Sea or East India companies) progressively operated on an international scale, calculating future profits on the assumption that the value of the means of exchange would remain unaltered over time. British commerce and naval power went hand in hand, and unprecedented infrastructures were established providing new ways for the state to mobilize wealth for financing military activity. In short, the state was expected to ensure and protect economic interests both at home and abroad.

At the local level, which remained in the grip of civic and landed elites without much in the way of central oversight or interference, ⁸⁴ what Brewer calls the fiscal-military state apparatus had merely a sporadic administrative presence. Partly because of such limitations in state bureaucracy, the population’s primary sphere of engagement with the state was through an extensive and complex system of monetary fines and rewards.⁸⁵ Throughout the eighteenth century, for instance, the government increasingly offered money to ordinary citizens assisting the state in dealing with criminal behaviour.⁸⁶ Partly as an effect of this, in the words of one historian, ‘English people came to think of themselves as rate payers and investors, as well as regular spenders … often measur[ing] their world and even themselves in monetary terms’.⁸⁷ Monetary policies of this sort were embedded in already-existing social orders and relations. Most commercial activity likewise took place in reciprocal networks of interpersonal trust, where credit was offered on the basis of personal moral reputation.⁸⁸ People would trade on credit and meet at regular intervals to compare accounts, cancel mutual debts, and either agree among themselves on a new amount of debt or pay the remaining sum with ‘ready money’ (i.e. lower-denomination coins).

These emerging local practices spurred a growing concern for marketing morals, personal trustworthiness, and how to use money ‘appropriately’. As Matthew Rowlinson has argued, paper bills were almost always used in transactions in ‘local networks of obligation, credit, and mutual identification’.⁸⁹ In this ‘grand system of reciprocity’, money was imagined to be able to take on the ‘good’ or ‘bad’ character of its owner, as well as impart its own qualities to whoever handled it; all personal acts were seen as connected in a providential scheme where reward in one area (‘spiritual’) might play out in another (‘social’ or ‘physical’).⁹⁰ The state’s increasing efforts to define and authorize the precise meanings of money hence coincided with a growing popular awareness of money’s inherent ambivalence.

Long-distance trading made these challenges even more pressing. As demographic migration increased and regional markets became more integrated, the trust involved in credit relations increasingly had to be extended beyond face-to-face encounters, leaving many merchants to rely on word of mouth when considering someone’s character and trustworthiness.⁹¹ The fact that one might never meet the person one was dealing with meant that credit—at least in certain circumstances and social segments—had to be granted independently of personal character and interpersonal trust.⁹² The guarantee of authentic value became more detached from the morality of specific persons, and came to rest elsewhere.

This is where the state became significant. The standard of value itself was abstract and universal, and transcended the state’s powers. The state’s task was to ensure convertibility between this standard and its circulating representative tokens. Crucial to achieving this would be technological innovations that helped towards securing state monopoly on money production.

Policing the Standard

Before the nineteenth century, the state’s key monetary challenge was that the value of its coins was affected by widespread forgery undermining popular trust in their ability to accurately represent the standard. Legal prohibition alone failed to hinder de facto circulation of counterfeits and alternative currencies. The problem was essentially a technological one—coins made with hammer and anvil could easily be ‘modified’ by any local smith.⁹³ Practices of ‘clipping’ were widespread and made the wealthy hoard their coins. The resultant shortages led to more counterfeiting as well as a ubiquitous use of informal credit relations in everyday transactions.⁹⁴ Throughout the seventeenth and into the early eighteenth century small denomination coins had largely functioned as a balancing item when short-term credit accounts were settled. In the late eighteenth century, the shortage of coin generated such a pressing demand for alternatives—particularly in urban centres where poor wage earners lacked that history of personal reliability so basic to local credit economies—that many industrialists began issuing their own copper trade tokens for daily and weekly payment of wages in low-denomination coins. In this way, ‘private’ copper tokens entered into local and sometimes even regional circulation (which was also the industrialists’ intent). ⁹⁵ Regional and local trade tokens of this sort continued to circulate even into the early nineteenth century.⁹⁶

Whenever this happened, recoinage became the only way the state could attempt to regain control of territorial money circulation. The official recoinage of copper in 1797 (and those that were to follow in subsequent years), for instance, could hence be seen as the result of a ‘conscious policy to drive counterfeit and token copper out of circulation’,⁹⁷ thereby reinforcing state authority. In 1798, Parliament set down a Privy Council committee that would inquire into the situation of money scarcity. One member of this committee, the Earl of Liverpool, suggested that gold should be the sole standard coin in the entire realm, and in 1816 (when the Earl’s son was prime minister) his outline of such a system was acted upon: coins of silver were made into token coins, that is, nominal representations of a certain value measured in gold.⁹⁸

Even if the gold standard was imagined as transcending the state, its actualization—especially since coins had never perfectly embodied their nominal value—came to depend on the technologies of money production. Towards the end of the eighteenth century, these technologies progressively came under state control. Matthew Boulton’s innovative steam presses in Birmingham made it possible to stamp uniform coins with smooth edges and regular size, and therefore almost impossible to counterfeit.⁹⁹ The machines were ‘tailored’ for the Royal Mint, and the details of the manufacturing process kept from the public.¹⁰⁰ In this way, metallic money based on a single universal standard became the prerogative of the state. With a monopoly on the technological means necessary for producing ‘sound money’, the state could be much more efficient in eradicating counterfeits and regional pragmatic alternatives. The characteristic immutability of gold could now be imparted to metallic coins through Boulton’s presses. The secular time implied in the mental abstraction of a single commodity from the realm of material change could be mediated to particular forms of state-sanctioned money through the technological networks of money production.

Centralizing the technological means of money production with the state policing an abstract standard solved century-old problems of maintaining popular trust in material tokens representing that standard. But the restriction period between 1797 and 1821 raised the same problems with regard to paper money. In contrast to Boulter’s coins, the trust in Bank of England notes’ ‘promise to pay’ could not be backed up by their technological and material constitution. Popular trust in banknotes had to be based solely on the Bank of England’s privileged position with the government. What lay behind the notes’ ‘promise to pay […] the bearer on demand’, then, was primarily the state’s punitive system and prerogative to raise and by force extract future taxes.

The Bank of England

The establishment of the Bank of England was a key event in the emergence of the new alliance between administrative (and military) state and commercial market, as well as a breakthrough for the conception of money as a measure of value independent of personal character.¹⁰¹ Originally conceived as a means of financing the state’s wars, the Bank received its charter in May 1694 under the authority of the Ways and Means Act, which immediately bestowed on it exceptional privileges. In return for a loan to the government of £1,200,000 at an 8 per cent return, the Bank was allowed to incorporate as a joint-stock company, whose stocks the state then sought to persuade the population to purchase. For many speculators, the fact that the Bank’s chief asset was an irredeemable loan to the government made this seem a unique and infallible business opportunity.¹⁰² Crucially, it was these state guarantees (in the form of potential future taxes, extracted by force if necessary) that enabled the Bank, from its very establishment, to invest more money than it presently had—resulting in the formal erasure of all finite limits on the market and the creation of ‘a form of credit which need never be repaid’.¹⁰³ In the words of Fernand Braudel:

[t]he long-term debt converted itself almost spontaneously into a perpetual debt […] This was the miracle: the state never repaid the loan, but the lender could recover his money whenever he wanted it […] The entire system depended on the ‘credit-worthiness’ of the state, on public confidence in other words.¹⁰⁴

During the mid-eighteenth century, David Hume famously opposed this practice of public credit, arguing that the government could become too indebted to intervene in domestic or international crises.¹⁰⁵ Against Hume’s dire views, however, Dutch investor Isaac de Pinto, whose 1774 Essay on Circulation and Credit was widely read among English financial elites at the time, argued that the then unique English combination of state power and Bank was in fact beneficial in the long run.

[T]he national debt has enriched the nation, and I prove it thus. On every new loan the government of England mortgages a portion of taxes to pay the interest, and creates a new artificial capital, which did not exist before, which becomes permanent, fixed, and solid; and by means of credit circulates to the advantage of the public, as if it were in effect so much real treasure, that had enriched the kingdom.¹⁰⁶

Already in its first decades, the Bank of England saw its issued notes gain the popular trust necessary for them to function as ‘real money’, at least among merchant elites.¹⁰⁷ As the Bank paid for army supplies throughout the country using bills marked with its seal, these were soon, according to one historian, accepted as payment ‘everywhere’.¹⁰⁸ While these sealed bills were discontinued in 1716, they had made apparent a general and increasing readiness to accept payment in paper, as long as the notes bore the state-sanctioned seal of the Bank.¹⁰⁹ Indeed, historian Keith Horsefield deems Bank of England notes the only convincing candidate for the title of ‘paper money’ in the early part of the eighteenth century, and suggests that by the 1760s the Bank’s notes were generally regarded as ‘proper’ money, long before they were officially made legal tender in 1833.

Some have argued that the growing trust in the Bank’s notes was due to the national symbolism displayed on them. The Bank had adopted the figure of Britannia as its official seal shortly after its foundation in 1694. Most country banknotes understandably emphasized the local roots and trustworthiness of the issuing bank, carrying images of local bank buildings, past local worthies, or general symbols of commerce, though Britannia’s image could also be seen on some of these provincial notes.¹¹⁰ Whenever she was featured, her protective figure was seen as a personification of the state and/or the nation as a whole. Artist Daniel Maclise’s vignette on the notes issued in 1855, for instance, depicted Britannia as a Saxon princess resembling a young Queen Victoria, reclining in quiet confidence on a chair overlooking the sea and horizon. Like earlier versions, she was surrounded by symbols of national heritage and dominance: a frame of English oak leaves, a branch of laurels, and a shield bearing the red-on-white cross of St George. Since it was ultimately the state that guaranteed the value of its territorial currency, there was (as some have pointed out) in every monetary transaction a covert honouring of the state’s authority: an implicit trust or indeed faith in the ultimate power of the state.¹¹¹ Matthew C. Rowlinson has suggested that the use of state-sanctioned money effects

identification with other subjects [of the state]; one accepts such a currency only in the belief that there exists other subjects like oneself who will accept it in their turn in a future transaction. As a materially embodied medium of exchange, then, modern money has symbolic effects that can reinforce state and national identifications.¹¹²

But the power of such symbols should not be exaggerated. Arguably, Bank of England notes exhibited no blatantly nationalistic symbols until a Britannia ‘rising for war’ was depicted on the 1918 currency notes.¹¹³ Much more important was the relation between the Bank and the state. Throughout the eighteenth century, notes were relatively easy to forge, and the general willingness (among those who could afford to use them) to accept them as payment was no doubt partly due to the fact that the state put paper money almost on a par with gold coins when it measured out punishment for counterfeit—at the time a crime considered an act of treason. Already in 1697, only three years after the Bank’s establishment, capital punishment was introduced for the forgery of its printed notes, and in 1729 this was extended to the forgery of private banknotes as well. When it came to guaranteeing the value of Bank notes, there is no doubt the policing force of the state was essential.¹¹⁴

A Network of Notes

At this point, it is worth recalling the territorial significance of bank-issued notes as a form of money. Being redeemable at the issuing bank, notes were valuable only within the particular geographical area served by that bank, which meant that their value depended on the trustworthiness of the banker who ‘promised to pay the bearer’, and so on. Within regional borders, this worked very well. Problems arose with the introduction of long-distance transactions. In his 1805 report on the monetary state of the country, the Earl of Liverpool had lamented how the banking system created problems for the travelling gentleman who had to exchange currencies when crossing the border between two English districts just as if he had been ‘passing from one small independent state on the continent to another’.¹¹⁵ The early nineteenth-century gradual concentration of note issuing authority with the Bank of England can therefore be seen as consolidating its—and hence the state’s—territorial influence and control.

On a political level, the Bank’s monopoly on note issuing was established through a series of parliamentary acts, through which the state also secured an even stronger form of territorial monetary governance. Already by the turn of the nineteenth century, the Bank had succeeded in eliminating competing note issuing in the London area.¹¹⁶ An act of 26 March 1826 prohibited the issuing of notes less than £5 (during the 1825 crisis, the £1 and £2 notes had been reissued), and an act of 26 May the same year preserved the Bank’s monopoly on joint-stock banking within a 65-mile radius of the centre of London. Note issuing banking corporations were authorized to set up business anywhere else. As compensation, the Bank was allowed to set up its own branches throughout England and Wales, and soon established an office in most major cities.¹¹⁷

In 1833, Bank notes above £5 were made legal tender, and a weekly return of the Bank’s accounts and bullion reserve was to be sent confidentially to the Treasury, for the government to be able to more closely monitor Bank policy. London joint-stock banks were allowed to establish branches outside of London, though only as deposit banks (they could not issue notes). After this, a high number of joint-stock bank branches were set up in the provinces. Their reserves were full of Bank of England notes, which further strengthened the monetary connections between the provinces and their headquarters in the City.¹¹⁸ The Bank of England itself set up branches in areas where local banks had collapsed, and generally encouraged existing banks to use the Bank’s notes instead of issuing their own. Provincial banks could rely on the convertibility of their stock of Bank of England notes, which could also be quickly increased through the Bank’s local branch. Already by 1840, Bank of England notes had fully replaced provincial notes in the Liverpool area, though in most areas they circulated together with provincial notes.¹¹⁹

Robert Peel’s Bank Charter Act of 1844 officially concentrated all note issuing authority with the Bank of England, and in line with what was known as the Currency school divided the Bank into two separate departments: the Issue Department and the Banking Department. The Issue Department was subject to a number of state-imposed restrictions on note issuing, granting the state increased direct control over domestic currency.¹²⁰ The arrangement established a bond between the government and the notes printed in the Bank which would remain strong throughout the century.¹²¹

A series of crises in 1847, 1857, and 1866 further consolidated popular confidence in the notes, again largely because of the Bank’s privileged position with the state. In 1845–1846, harvests were bad; grain had to be imported, and gold exported. The railway mania spurred overconfident speculation, adding pressure on already-struggling country banks.¹²² Eventually, the government unofficially informed the Bank that it would present a Bill of Indemnity should the Bank breach the 1844 limit on note issues, and the Bank went on to print the required additional notes. As it turned out, public knowledge that notes need no longer be hoarded proved sufficient to abate the panic.¹²³ In the 1857 crisis, the Bank breached the limit by £2 million (less than half of which was put into circulation), but once again a governmental guarantee ‘eased the public mind’.¹²⁴ In 1866, the mere expectation that the government was going to present a Bill of Indemnity if necessary had ‘such an effect that the next day the crisis seemed to be at an end’, and no excess notes were printed.¹²⁵

As could be expected, the crises also spurred controversy over the role of the Bank—after all a private corporation—in the national economy. Bagehot’s Lombard Street (1873)—named after the street address of the discount bank whose failure had caused the 1867 crisis—famously set out the embryonic principles for what came to be known as modern central banking, with the Bank of England acting as a lender of last resort. Throughout the latter half of the century, the Bank was increasingly referred to as a ‘central bank’, and whilst its governors kept running it primarily as a private corporation with limited financial resources, it was distinguished from other banks in that its commercial interests were occasionally eclipsed by its unique responsibilities to the nation and its privileges in this regard. The Baring crisis in 1890, for instance, demonstrated the governors’ understanding of how the Bank and the financial market were related, even though the Bank also in this instance sought its own interests as a private company.¹²⁶

But there was also a more subtle, less overtly political, aspect to this consolidation of the Bank of England as a central node in the money network, one directly related to the notes it issued. Already during the restriction period, country bankers preferred Bank of England notes to gold as reserve media. That is, rather than keeping gold in coffers as guarantee for their own notes, they kept Bank of England notes. In 1811, an author writing under the pseudonym ‘Timothy Tickle’ described this as established practice. ‘It is supposed, the Bank of England has as great an amount in circulation, as the whole of the Country Bankers together; for the latter always keep a quantity of Bank of England Notes, to pay their own with, when presented for payment.’¹²⁷ Similarly, an anonymous ‘Old Country Gentleman’ stated in 1818 that having the Bank’s paper notes in country bank coffers was in fact preferable to gold: ‘[t]he people of this country do not wish for gold in circulation. They are accustomed to paper currency and they prefer it.’

A short time ago guineas and sovereigns were to be had for asking at every banker’s; but nobody, that is, no British subject, was willing to take them. Paper is more portable and more convenient, and while there is confidence in that paper it is by far the most eligible circulating medium.¹²⁸

In this way, the Bank slowly but surely gained control over the reserves of other banks across England. ‘The notes of country bankers in England have a circulation only within a certain distance of the place in which they are issued’,¹²⁹ wrote one commentator in 1823. By contrast, ‘the notes of the Bank of England are received in every part of England [even if] the circulation of its notes is principally confined to London and its immediate neighborhood’. He went on to argue that the Bank would only benefit from the establishment of local banks even in the London area: this would only ensure that its notes would be plentiful both in circulation and in other banks’ coffers, where they already functioned as a ‘fund to answer demands in gold and silver’.¹³⁰ Local bankers no longer needed worry about the convertibility of their own notes, since their security now lay in the full convertibility of the Bank of England notes stored in their coffers.¹³¹

What secured the Bank of England’s dominant position in the domestic money network, then, was not its relative financial strength compared to other banks. Rather, ‘[t]he source of [this] power […] was the Bank’s control over [other] banks’ redemption media’, that is, the fact that other banks used Bank of England notes as security and that these notes were backed by the state’s punitive system.¹³² The gradual concentration of issuing authority with the Bank of England increasingly pushed country banks away from the note issuing that had earlier been central to their local and largely informal credit arrangements with local industrial entrepreneurs. Instead, joint-stock banks—which were regional rather than local, and operated on deposit banking rather than note issuing—received more privileges, and gradually incorporated the old country banks. As country banks became part of joint-stock banks with headquarters in London, thereby losing their footing in the geographical area where they operated, they also lost their right to issue their own notes for local use, generally turning to deposit transfers as a means to provide liquidity in the provinces.¹³³ The number of bank amalgamations increased dramatically towards the end of the century—114 took place only between 1891 and 1902.¹³⁴ By 1900, provincial country banknotes constituted a mere 7% of the complete banknote circulation.¹³⁵ Thus, while remaining a private institution—towards the end of the century even taking up direct competition with regional banks for private provincial customers through its branches¹³⁶—from mid-nineteenth century, the Bank of England slowly but surely replaced the Royal Mint as the central governmental institution of monetary affairs. Real money—now also the paper kind—became the prerogative of the centralized nation state and its privileged central bank.

A Combination of the Arts

Ultimately, integrating the national economy through the circulation of Bank of England notes was a technological achievement. Pitt’s Restriction Act of 1797 and its prohibition of payments in gold had led to a drastic increase in the overall demand for banknotes, putting a corresponding pressure on bank printing offices. In the Bank of England’s case, three journeymen at the printing offices of James Cole had been printing about 2000 notes per day before the act. The new demand created unprecedented needs for space and equipment, and in 1800 Cole’s offices were moved to the Bank’s facilities. Eighteen presses now printed more than 15,000 notes per day, counting only the new £1 and £2 notes—a number which more than doubled in the following five years.¹³⁷ Between 1809 and 1810, the amount of Bank of England notes outstanding increased from 17 million to more than 20 million.¹³⁸ One estimate suggests that by 1810, banknotes (including those printed by country banks) represented near 60 per cent of the entire English money supply.¹³⁹ Their circulation was becoming vital to the national economy, and their vulnerability to counterfeit a correspondingly increasing concern.

The traditional copperplate printing method soon proved inadequate to meet the several hundred per cent increase in demand for small denomination notes of uniform appearance. Copperplates quickly wore out and had to be replaced after only a few hundred prints (many would already have been used for printing higher denomination notes), and paper moulds needed high maintenance due to hard use. Engravers had to be hired to reproduce new copies of the original design, which obviously required a lot of time and made the reproductions only as uniform as their respective handiwork could be.¹⁴⁰ The consequent lack of standardization further encouraged the already-widespread counterfeiting. ‘There never was any thing invented, which afforded so great a field to swindlers, as Paper Credit’, declared one writer in 1811.¹⁴¹ The notes’ design was relatively simple, and so any of the country’s thousands of copper engravers might imitate the machine engravings without too much trouble.

The restriction period between 1797 and 1821 saw a rising concern with securing the credibility of notes in all domestic trade. Lack of technological sophistication made it difficult for ordinary people—especially poor and illiterate, who were now using notes for the first time—to distinguish between authentic and counterfeit notes. Indeed, most of the over 300 individuals who between 1797 and 1817 were transported to penal colonies for passing forged notes (or, until 1832, sentenced to death for forging them) belonged to the poorer classes.¹⁴²

Because of the many executions and deportations, making the notes more difficult to counterfeit was seen as partly a humanitarian and philanthropic endeavour of high public interest. At the Bank of England, printers Applegath and Cowper (who would later be serving with more success in the printing offices of The Times) spent several years attempting to make the Bank’s note inimitable, but to no avail. The Bank even welcomed suggestions from the public on whatever would render its notes more difficult to counterfeit. When the 24-year long restriction on cash payments was lifted in 1821, a pile of 400 rejected suggestions lay in the dustbin, and the sole material result of all the attempts to improve the situation was a watermark that had been added in 1801.¹⁴³

In 1819, the Society of Arts issued a report suggesting that the solution to the problem of inimitability, and by extension the widespread forgery problem, lay in multiplying the skilled processes involved in note production. Earlier that year, Jacob Perkins and Gideon Fairman had applied for a patent on a complex stereographic process that would allow the production of duplicated steel printing plates from imprints of other printing plates. The members of the Royal Committee—many of whom were employees of the Royal Mint—lauded the combination of a wide spectre of techniques such as etching, machine drawing, and handiwork on a single plate which could then be duplicated. By putting two months’ work by 25 artists into the production of the original plate, they said, one could ‘concentrate the labour of more than four years’, which the committee felt would be enough to discourage most would-be counterfeiters.¹⁴⁴ Using heavy and expensive machinery, employing expert engravers and engineers, or even skilled artists, would make note forgery that much harder for the individual forger.¹⁴⁵

This ‘principle of a combination of the arts’ became the dominant paradigm in the subsequent development of an inimitable Bank of England note.¹⁴⁶ Over the following three decades, the Bank proactively connected itself to a range of inventors, engineers, and skilled artists. The authenticity of the notes would soon be guaranteed by a unique combination of industrial techniques and skilled artistry both mechanical and manual, which no unauthorized person would be able to replicate.

In 1832, a delegation from the Bank of England visited the Bank of Ireland to inspect the printing methods of John Oldham, who during his time as chief engraver there had made several improvements to their printed notes. Oldham was invited to join the staff of the Bank of England, and was appointed ‘Mechanical Engineer and Principal of the Engraving, Plate Printing, Numbering, and Dating Office’ in 1836.¹⁴⁷ His automatic dating and numbering machine made counter-signing by hand redundant (together with 84 employees), and secured an even higher degree of uniformity in the printed notes’ appearance. When John Oldham passed away in 1840, his position at the Bank was taken up by his son Thomas. Ambitious to carry on his father’s work, Thomas suggested printing the cashiers’ signatures instead of signing each note by hand, a change that was finally authorized in 1853 by an act of Parliament,¹⁴⁸ two years after his death.

Yet looking back in an 1850 report on the possibilities for further improvement of the notes, Thomas Oldham was convinced that technology, however useful, would not be sufficient. He expressed disappointment with the Royal Commission’s prolonged patience with the printers Applegath and Cowper, who had failed to create inimitable notes despite expensive machinery and several years of effort. The Commission had been ‘quite captivated’ by the two printers’ machines and industrial drawing techniques and so wrongly assumed, he argued, that mere technological execution would secure notes against forgery. ‘The Royal Commission contained a majority of scientific men, and, as might be expected, they applied themselves to the subtleties of art, rather than its beauties.’¹⁴⁹ The principle of a combination of the arts required rather the inclusion of more professional artists, and to constantly renew the note design to keep it up to speed with the very latest and most refined aesthetic achievements of the age. In 1851, the Bank requested painter Daniel Maclise to design the new Britannia vignette for a proposed new series of notes. The design he made was pre-Raphaelite in style and as such (somewhat ironically) ‘up to date’ with the latest artistic developments, as Oldham had proposed.

Soon after this, however, Thomas Oldham passed away and was eventually replaced by former surgeon Alfred Smee, who did not share the former’s reservations about technological innovation as the ultimate solution to the forgery problem. Smee initiated and oversaw a number of technological improvements to the notes. The old watermark, for instance, had not been of satisfactory quality. Even contemporary commentators had noticed. ‘Imitative skills are great now-a-days’, warned Joseph Lockwood in his open letter to the Chancellor of the Exchequer in 1848, ‘[and] their [the Bank’s] most perfect notes are imperfect’.

If you examine a few Bank of England Notes with care and attention, you will soon perceive that even those which are supposed to be of one kind, differ, very materially, if you hold them to a ray of light, magnify them with a glass, and slightly moisten them, you will see that the lines of the water marks are not all the same.¹⁵⁰

In 1851, the Bank signed a deal with the firm of their former paper mould maker William Brewer, giving the Bank exclusive rights to use his new watermarking machine, which went a long way in solving this problem. The same year, Smee himself introduced the idea of printing the notes from electrotype plates, which would allow perfect replications of a single original plate.¹⁵¹ In this way, one single engraving could serve as basis for new prints ‘almost ad infinitum’, since the original did not have to be reused in the process.¹⁵²

Smee’s new Bank of England notes were introduced on 1 January 1855. They were produced through a combination of several technologies, techniques, and processes. A copy of Maclise’s original Britannia vignette and the other elements of the note were engraved on steel—an immensely demanding job—by two of the Bank’s veteran engravers, J.H. Robinson and John Thompson. After engraving a copy of the new vignette, they made another relief copy of the copy, which was then cut in copper by a John Skirving, who had lifelong experience as a typefounder’s punch-cutter. This second copy was placed in a locked safe (a so-called Smee cell) in which the process of electrodeposition could take place undisturbed overnight. The result of this process was yet another copy made of thin copper shells. These shells were made more solid by applying molten solder, planed down to the correct height after solidification, and screwed onto a brass block.¹⁵³ The actual printing was performed on a platen press—a development of the traditional hand press (in contrast to the new cylinder presses used in newspaper printing) produced by the firm D. Napier & Son. Surface printing presses of this type had a weakness in that too high pressure might cause the ink to ‘sink into’ the paper. In order to avoid this, six different sheets were cut to match respective parts of the note, and reassembled to provide a ‘backing’ as the note was printed, distributing the pressure equally to every point of the paper surface.¹⁵⁴

The ink itself was specifically made for the purpose of making forgery difficult. Until 1854, it had been composed of vines and charred husks of Rhenish grapes, ‘mixed at the Bank with pure linseed oil, carefully prepared by boiling and burning’, resulting in a ‘vinous refuse afford[ing] a characteristic velvety black’.¹⁵⁵ However, the production of ink for the new note was entrusted to the printing ink manufacturers at Winstone & Sons Ltd., since ‘it required somewhat careful treatment for the peculiar arrangement of the blacks and lights in the note’, as Smee explained. This process was no less intricate.

The black colouring material is made by burning coal-tar naphta, and collecting the smoke in large rooms. This smoke or lamp-black is placed in a retort, and heated to a high temperature, to drive off all volatile matters, when the ink becomes consolidated and improved in colour. This is subsequently ground with a suitable varnish to proper consistence to rest firmly on the delicate lines of the Britannia.¹⁵⁶

Although Smee’s innovative printing methods received some criticism (mainly from former banknote engravers and printers his machines had put out of work), the note remained, apart from a few occasional improvements, in principle unchanged until the First World War.¹⁵⁷ A late-nineteenth-century Bank of England note was the combined result of contemporary art, highly skilled hand engraving techniques, and machine-drawn patterns, transmitted onto no less than nine different electrotype plates, each containing specific parts or levels of the final imprint and each of which could be changed at need without perceivable alteration in the finished note, and finally printed with the Bank of England’s exclusive ink.¹⁵⁸ In addition came the automatic enumeration and dating which was added to each individual note. There was no way individual copperplate printers could repeat the construction of such a complexly assembled entity. Following the new note’s introduction, Bank of England note forging practically disappeared overnight.¹⁵⁹

As Good as Gold

With the ‘combination of the arts’ and Smee’s innovative technologies, the value of Bank of England notes was now guaranteed not only through the state’s prerogative to tax or punish but also—even primarily—through its technological superiority. As Frances Robertson has argued, the visual rhetoric of technical illustrations on nineteenth-century banknotes participated in a wide cultural celebration of machines’ capability to transcend the productive limitations of mere human hands.¹⁶⁰ The extensive network implicated in its manufacture effectively evacuated the Bank of England note from the realm of worldly change; the immutability characteristic of the gold standard had successfully been imparted to humble pieces of paper.

But this ‘transcending’ of the human realm was not an effect solely of the notes’ visual appearance; the 1855 Bank of England note was not merely a text to be decoded.¹⁶¹ A crucial difference between Thomas Oldham’s call for more intricate and beautiful artwork and Alfred’s Smee’s more technological approach was the latter’s insistence that a banknote was a material object designed and manufactured for hands-on use. As such, tactile characteristics were equally important in guaranteeing its authenticity and value. The note’s very status as trustworthy immutable mobile was established and affirmed through all the senses.¹⁶²

For instance, Smee himself highlighted the characteristic quality of the paper as one of the note’s particular advantages. ‘To ensure as far as possible identity even in the paper, [machinery has been employed] in which all the improvements and adaptations heretofore adopted by machine paper are brought into operation for the Bank of England note.’ Indeed some of Smee’s critics, among them printer Henry Bradbury, worried that the public’s trust in banknotes was invested solely in the paper’s, ‘peculiar colour … its thinness and transparency … its feel, crisp and tough, patent to the sense of touch alone’.¹⁶³ For Smee, however, this was not a weakness but a strength.

In a prize-winning essay on technological innovations and practical banking, Granville Sharp quoted an article from Household Words declaring that ‘[t]here is nothing like [the Bank of England note] in the world of sheets’.¹⁶⁴ The colour, thinness, strength, watermark, and peculiar feel of its paper afforded the new note both ready recognition and inimitability, he argued.¹⁶⁵ Similarly, in an informative pamphlet on the new Bank note of 1855, W.H. Smith (of book-selling fame) made a point of how notes were not meant for the literate population only. His pamphlet included a paper sample, and suggested putting this in one’s mouth to ascertain its authenticity: ‘[a] very simple and ready method of testing the Watermark in a Note, is by pressing either side of it against the Tongue, or damping it; if genuine, the Watermarking will appear brighter than it formerly was; if put in by pressure, rolled, or stamped, it will disappear.’¹⁶⁶ The watermark’s palpability was a mark of the note’s high quality. Smith described how the new note was distinguished by how the thickness of the paper itself followed the visual patterns of the watermark.

In the Genuine Note, the Watermark, is clear and distinct, and of different gradations, and brightest in the thinner portions of the paper: in a counterfeit it is generally all of one colour….In the New Note, the paper is considerably thicker in the dark shadows of the centre letters and the figures at the ends. The shadows will be seen by holding the Note up to the light; when down, the shadows, also the centre and ends, look Whiter than the other parts of the paper, by reason of there being a greater Body of pulp, rendering them thicker and consequently more opaque, thereby causing it to appear as a dark graduated shadow; if this was a pressed forgery, the paper would be of one uniform thickness.¹⁶⁷

Later in the century, the printing process, the ‘peculiar make’ of the paper, together with the ‘ingenious construction’ of the printing machinery would come to be considered a sight ‘well worth seeing’ for tourists visiting London.¹⁶⁸ A high number of visiting spectators would—despite a forgotten or ignored 1820 prohibition—be admitted into the Bank’s Printing Offices so they could admire the making of the money of civilization first-hand. The tour must have been exciting in more than one respect; a sign was fastened to the machines requesting the visitors specifically ‘not to touch the Notes’.¹⁶⁹

Having once been lifted into a realm transcending worldly changes, there was literally no returning a Bank of England to the world from whence it came. Its complex construction implied such a substantial change that once completed, a note could no longer be dissembled into is former composites. ‘When the note returns to the Bank, after inspection, it dies, never to be resuscitated’, Smee explained in a lecture on the notes’ production and circulation. ‘The signature is torn off, the denominations are punched out, and it becomes a piece of waste paper … [I]t is then deposited in the vaults for [public] reference for ten years, when it is burnt.’¹⁷⁰

Experiments have been tried to reduce them again to pulp [from which new paper commodities could be made], but they have never succeeded, and no plan answers so well as their destruction by fire. A large iron cage is built in the middle of the yard, including a light brick furnace pierced with holes. In this cage the notes are placed and burnt by sackfuls at the time, and nothing is left but a little white ash.¹⁷¹

Smee made sure to point out how from a ‘philosophical point of view’ the absolute uniformity of the new notes was of course only apparent; strictly speaking, perfect inimitability was impossible. ‘To attempt to construct an unforgeable or inimitable note would be a mere delusion and snare.’¹⁷² He nevertheless believed that historical progress would eventually achieve precisely such perfection. ‘We are all apt to think that art will stop at our point, and not progress, but it is the property of invention ever to move forward. The point at which we have arrived must be the step from which future improvements must spring, and proceeding step by step, the highest possible excellence will doubtless eventually be secured.’¹⁷³

Until this future arrived, the new Bank of England notes were, for the general public and, for all practical purposes, as if removed from the realm of change. They moved in a time independent of motion. For Smee, this combination of immutability and mobility was crucial to the public gradually accepting that circulating notes embodied an absolute standard of value. He underlined, for instance, the importance of preserving in the notes the same tone of colour. A certain ‘constancy of appearance is of paramount importance’, he stated, ‘and in this particular the new … note stands pre-eminent’.¹⁷⁴ Only in this way could the public ‘be familiarized with a constant standard, [so that] a uniform appearance [could] be marked in their mind’.¹⁷⁵

The new printing process evacuated the original design and the finished notes equally from the deteriorating effects of the world. The electro-metallurgic duplication process left the originals untouched (as we have seen, only engraved copies were used in actual printing), and hence, he said, the originals would ‘retain their integrity for any length of time without change’.¹⁷⁶ The printed Britannia vignette remained ‘line for line invariably the same. The same expression of face is constantly maintained … Not the slightest variation within certain limits … exists’.¹⁷⁷ The notes’ evacuation from the realm of change secured their authenticity and the public’s trust. As he summarized:

Day after day, and year after year, the character of the paper will not vary. The same signature of “Mr. Marshall” which appears in the paper of one note will be repeated in the next. The same wave lines, the same rough edges on three sides, the same shadows in the water-mark will be brought continually before the sight. The Britannia will have the same expression of countenance, and will be repeated line for line, and dot for dot, for millions of impressions unchanged and apparently unchangeable. The very weight of the paper does not vary above two or three grains, unless damaged by wear, and the colour of the ink will be maintained as far as possible. As the stone is worn by water constantly dropping, so will the mind be impressed with one uniform appearance.¹⁷⁸

Multiplying the nodes in a production network involving both human artistic expertise and complex machinery successfully imparted to the 1855 Bank of England note the characteristic properties of the abstract gold standard. Transcending the realm of human hands, and practically inimitable, Bank of England notes were as immutable, uniform, and portable as any gold coin. The effect was that to their users—their bodily senses as well as their minds—these paper notes were removed from the realm of change to move in a time independent of motion. The notes were now as good as gold, and could serve and circulate as ‘real’ money—the absolute measure of all commodities—while securing the popular trust necessary to vitalize an expanding national economy.

Conclusion

Knight’s 1866 encyclopedia had celebrated the ability of gold to remain unchanged over centuries. But it did have a few reservations. In order to ‘resist friction, to a very large extent, for a great length of time’, it said, gold must be ‘properly treated’, for example by alloying it to other metals, such as copper. Gold was fit to be an abstract universal standard because it was inherently immutable; and yet, its immutability had to be carefully constructed through alloys and combinations with other substances. In its pure form, apart from such processes, even gold was unfit to embody the gold standard.

Inventor Sir William Congreve put it bluntly: ‘[t]here is, in fact, no such thing as a constant value to be found in any single commodity or tangible shape, be it gold, or silver, or any thing else: such a thing exists not in society, in any palpable¹⁷⁹ form.’¹⁸⁰

John Rooke, a Cumberland landowner writing extensively on issues of political economy, concurred. ‘[T]o make the precious metals, or any other precious commodity, the standard of real value is quite absurd’, he stated. ¹⁸¹ ‘[N]o fixed metallic standard can be invariable in value where the precious metals are circulated.’ ¹⁸² ‘[N]o one will deny’, wrote banker James W. Bosanquet in 1842, ‘that gold itself, like linen or cotton, is liable from time to time to variation in value, according to the demand for it in the market’.¹⁸³ In a passage that revealed his well-known personal interest in geology, Rooke went on to discuss how gold was inexorably immersed in the qualitative changes of the world, and hence not at all a fixed standard.

Heat and cold, the want of moisture and its excess, storms, the various tribes of insects and the diseases of plants, are ever causing the annual produce of the earth to vary. These, added to the speculations of merchants, the rise and fall of credit, the constant variations that take place in the quantity of money, and the influence of fashion, with other moral and intellectual causes, produce a continual fluctuation in the market prices of commodities in general … Population is always multiplying or diminishing—the industry, the skill, and the artificial facilities of labour are ever varying; and cultivation is uniformly causing the earth to become more or less productive, according to the system of agriculture pursued. The precious metals laid the original basis of our monetary system; but the depreciation of coined money, the variable productiveness of gold and silver mines, and their wear, loss, and application to purposes of use and ornament, render them, naturally, a variable standard of value.¹⁸⁴

For Rooke, the world was a chaotic system of unpredictable movements and relations, in which gold was fully implicated; its value was subject to ever-changing circumstances. Precious metals might be mentally evacuated from the realm of change in order to function as a universal standard; materially, however, they were as entangled in ‘a constant train of fluctuation’ as everything else.

A similar paradox was evident in the case of Bank of England notes. The problem was described by MP George Poulett Scrope in 1830. All exchange required some passing of time, he pointed out, and this inevitably implied substantial change (however small) in the commodities traded, including in the value of the money commodity. Because absolute simultaneity was impossible in actual economic transactions, banknotes would always be asynchronous with the universal standard they supposedly embodied.

All this [trading] is on the supposition that, during the process of exchanging commodities, no alteration in the value of the medium takes place. But this is never practically the case. Money is not made use of only as a measure of the relative value of goods at one and the same time. On the contrary, nearly all transactions regarding the exchange of commodities occupy more or less time. If then during the time that elapses between the evaluation of money of the one commodity and the other, or between the agreement of a money-contract and its fulfilment, any change takes place in the general value of money as compared to commodities at large, it is clear that in this instance money is a false and incorrect measure, and that the one party has to pay, and the other to receive, a larger or smaller exchangeable value than he [sic] bargained for; Thus an element of great uncertainty is introduced into all dealings; namely, variations of the exchangeable value of money itself, the assumed standard of value;—variations which is impossible for persons in business to foresee, owing to the complicated and remote nature of the causes that bring them about.

The value of Bank of England notes was not ultimately grounded in an abstract standard, he pointed out, but in a collective assumption. An unarticulated and practical collective agreement to accept and use Bank of England notes as sound money. Even when it was known that they were inconvertible. Even despite the knowledge that the promise to pay would be infinitely postponed, that the debt would in fact never be paid.

This chapter has described how this everyday popular confidence was the precise aim of a concerted effort to imbue Bank of England notes with properties characteristic of the gold standard. Removed from the realm of worldly change, effected by a combination of the state’s punitive system, parliamentary acts, artistic skills, and technological superiority, Bank of England notes became a key technology in the process of gradually integrating the national economy. This economy was secular in the sense that the networks mobilized to produce and circulate Bank of England notes as immutable mobiles, to the degree that this operation was successful, thereby also mediated secular time.