EARLY USERS OF PAPER CURRENCY: Evidence from the Bank of England Note, 1720s-1820s
- 30 Mar 2016
New research examines the geographical and social penetration of the Bank of England note from the 1720s to the 1820s. The study by Hiroki Shin, to be presented at the Economic History Society’s 2016 annual conference in Cambridge, draws on 10,000 lost note claims in the Lost Note Book held by the Bank of England Archives.
The research reveals the impact of wars and metropolitan culture on the penetration of paper currency in Britain. Widening of the Bank of England note’s user base can best be seen in the large increase in claimants from the retail trade after 1797, evidence that the note appeared more frequently in everyday transactions.
As we enter the age of digital money, there is much discussion about abolishing cash – the physical forms of money, such as banknotes and coins. Reflecting on the future of money leads to the realisation of how little we know about its past, especially the history of paper currency. Despite the exponential increase in paper currency in recent centuries, we still lack historical knowledge of how we came to accept flimsy pieces of paper as money. Nor do we know sufficient details about early users of paper currency and how banknotes permeated everyday transactions.
This study contributes to the history of paper currency by examining the geographical and social penetration of the Bank of England note from the 1720s into the 1820s. The research methodology draws on John Clapham’s official history of the Bank of England (published in 1944), which examined what he called ‘the radius of the Bank Note’, using the records of claims for lost banknotes.
Inspired by Clapham’s early work, this research uses a data set compiled from nearly 10,000 lost note claims in the Lost Note Book held by the Bank of England Archives. The Lost Note Book contains details of claimants (place of residence, gender and occupation), providing a rare glimpse into the early users of the Bank of England note.
The findings show that the Bank of England note had uneven geographical penetration. Claims overwhelmingly came from London, but throughout the eighteenth century, the geographical distribution of lost note claims became more diverse. Especially after 1797, when the Bank of England suspended cash payments due to the wars with France, an increasing number of claims came from English provinces, Wales, Scotland and Ireland.
Metropolitan culture and wars were among the factors affecting notes’ penetration pattern. Relatively large numbers of claims came from the famous pleasure resort, Bath, indicating that the culture of sociability led to adoption of the note there. After 1797, claims from navy and port towns, such as Plymouth and Portsmouth, notably increased, suggesting that naval activity and payment of navy personnel had significant impacts on where Bank of England notes were used during the French wars.
The Lost Note Book displays a clear gender bias as more than 90% of claimants were men, likely due to the gendered process of claiming lost property in the eighteenth century. The proportion of female claimants increased only slightly during the early nineteenth century.
Widening of the Bank of England note’s user base can best be seen in the large increase in claimants from the retail trade after 1797, evidence that the note appeared more frequently in everyday transactions. As well, the number of claimants engaged in war-related occupations increased up to 1815 and declined afterwards, confirming the impact of the French wars on the geographical and social distribution of the Bank of England note.
The Radius of the Bank of England Note Revisited, 1720s-1820s
Hiroki Shin (Birkbeck College, University of London)