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Published Date:
08 Feb, 2019


Economic historians may be interested in the following story from the RSA's history, by EHS member and RSA historian in residence, Dr Anton Howes.

The RSA, a French invasion, and the creation of the modern banknote

In 1797, 1,400 French troops landed in Wales, causing widespread panic of an invasion, and a rush on banks to convert paper notes into gold coin. Keen to avoid depletion of Britain's gold reserves, the government suspended convertibility.

Before 1797 bank notes were not in wide circulation. Often printed in denominations of £10 and upwards (£10,000 in today's money), they exchanged hands infrequently and noticeably. However, when the bank of England suspended convertibility they replaced coinage with tens of millions of notes with low denominations.  With so many notes entering circulation, it became impossible for shopkeepers to keep track. This, together with the poor design of the notes, made forgery both easy and common.

By 1818 the Bank's own inspectors were reportedly unable to distinguish some fake notes from the real ones. If even the experts could not tell them apart, how could the public? The punishment for forgery, or paying with a forged note, was hanging - was the Bank's ruthlessness sending hundreds of innocents to the gallows? Many believed the Bank was itself to blame for making its notes so easy to copy. A technical solution was needed.

The RSA (then known as just the Society of Arts) included among its members some of the country's best artists, engravers, printers, mechanics, and inventors, making it the ideal organisation to respond to the challenge. One proposed solution was that bank notes should be engraved by only the very best artists. The idea was that true talent was difficult to reproduce. Yet finer art would also require the latest engraving technology. The Bank used copper plates to print its notes, which quickly wore out and needed to be re-engraved many times every day by hand. To solve this, the Society recommended steel plates, which could be used twenty to thirty more times than copper.

Another suggestion was to engrave by machine. A "rose engine" could etch intricate geometrical patterns, impossibly complicated for anyone to reproduce by hand. As luck would have it, the engineer Joseph Clement had just won the Society's gold medal for such an engine (Clement is best known today for constructing Charles Babbage's difference engine, a forerunner to the calculator). A more bizarre suggestion was to integrate real peacock feathers into the paper!

In 1819 the Society printed its report, recommending a combination of proposals. But the report fell upon deaf ears - the Bank pursued a perfect solution at the expense of useful improvements. In the end, the crisis simply disappeared: in 1821 the Bank restored gold convertibility and recalled the low-denomination notes (but not before having prosecuted over 2,000 people for forgery, many of whom lost their lives). Despite this disappointment, however, many of the Society's suggestions would become standard elements of modern bank note design. The RSA's archives today are full of many more such stories of invention and social change - contact us if you would like to visit.

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