PAPER MONEY

Evening Post, Volume CXI, Issue 79, 3 April 1926, Page 20

PAPER MONEY

ORIGIN OF THE EUROPEAN . ' ' SYSTEM.

TKe origin of the European system of bank notes is to be found in the deposit banks established in Italy five or six centuries ago. At that time t 1 c merchants had s great deal of trouble estimating the value of the clipped and . depricated coinage then in circulation, and they hit upon the method of depositing large sums of money in a bank, where its value was accurately estimated once and for all, and the sums thus placed to their credit were called "bank money." Payments were made by the merchants attending at the banks at a certain hour, and ordering transfers to be in; in the banks-books, or by giving in exchange for goods certificates signed by the bank for amounts standing to their credit; these certificates ten circulated as money. In England about the same time (says a writer in the "Yorkshire Post") merchants used to deposit surplus sums of money with the Mint on Tower Hill for safe custody, but in 1640 King Charles I. appropriated £200,000 of money thus deposited, and the merchants, naturally enough, lost faith in the Government. They then began depositing money with the goldsmiths, who gave them I receipts, and the practice soon commenced of transferring possession of the gold by delivery of these receipts. Such "notes" are frequently referred to in Acts of Parliament, and even as late as 1746 most of the London bankers continued to be members of the Goldsmiths' Company. A remarkable feature of the modern £5 Bank of England note is the fact that the whole of the printing is not in English. The phrase referring to the Governor and Company of the Bank contains the word "Compa," which is the abbreviation for the Italian word Compagna, meaning company. The paper of which it is made, is unique in j character, its strength and fineness, together with its wonderfully clear watermark, being a monopoly of the Bank. No other paper in the country is allowed to be made like it. It is interesting to note that the word "bank" itself has an Italian origin. In the old days the money-chang-ers in Italy counted their money on a table known as a "banco." If one of these men was unable to pay up his table was smashed, and he was spoken of as a "banco rotto," from which we have got our word "bankrupt" of today. When any; bank note that has been issued and circulated as currency through the country is received back by the Bank of England, it is never allowed to leave again, even if in new condition. It is stored in the vaults of the bank for at least five years. In its vaults the Bank of England stores notes that have been canceller 1, to the number of 9l;000,000l' These notes are kept in 16,000 boxes, which, if placed side by side, would extend to a distance of nearly three miles. If the notes themselves were placed in a pile, they would reach to a height of seven miles; or, joined from end t»> cii would form a ribbon 11,847 miles long. Their original value was over £1,388,000,000, and their weight is nearly 93 tons. These _ statistics are as given by the bank i*-elf, and are therefore accurate, and go far to reveal to the ma-, in the street what an amount of paper money is in circulation to-day, and tshat fabulous sums must change hands in the ordinary business of every day. The officials of the bank, by the way, could turn up any one of these 91,000,000 notes in five minutes, so excellent is their system of filing and storing.