At the outbreak of war in August 1914, one of the government’s first priorities was to withdraw gold from the circulating economy so that it could be put towards the national war effort. Moreover, hoarding of gold and silver coin was widespread, impeding normal small payments. To ensure that people still had cash in their tills and pockets, the government needed to introduce paper money instead.
In Scotland banknotes were already widely used, but in England and Wales the picture was very different. The Bank of England issued notes for values of £5 and up, but this was a large sum of money, comparable to more than £400 today. Most people never saw or used banknotes at all.
In order to replace gold coins effectively, a large supply of notes had to be made available for values of £1 and 10 shillings (that is, half a pound). The Bank of England could not prepare and print the required number of notes quickly enough, so the government took the unprecedented step of deciding to issue the notes itself. They would be called Treasury notes or, unofficially, 'Bradburys', after the signature they bore of Sir John Bradbury, permanent secretary to the Treasury. They would be legal tender, meaning that they had to be accepted when offered in payment of a debt; the creditor couldn’t hold out for gold.
Designs were drawn up over the weekend of 1-2 August 1914. They were delivered to the printer on Tuesday 4 August, the day Britain entered the war. The engraved vignette was borrowed from an existing one at the Royal Mint, and the notes were printed on postage stamp paper – the only ready supply available at the time. After two days of round-the-clock printing, £2.5m of new £1 notes were distributed to banks on Thursday 6 August 1914, ready for when they reopened on Friday. The £1 notes got them through the immediate crisis, and the 10s notes – useful for smaller transactions – were ready a week later.
The great haste with which the notes were prepared was necessary in the immediate crisis, but led to subsequent problems for anyone handling cash, including bank clerks. For one thing, the notes were small, measuring less than 13x7cm – smaller than a modern £5 note. In contrast, a Bank of England £5 at that time was about the size of a paperback book cover. In Parliament one MP likened them to ‘lottery tickets’. Their small size made them difficult to handle. One Ulster Bank clerk complained, ‘the operation of dealing with a large number of 10/- notes is a severe test even to a sleight-of-hand artist. In short the notes are too small for rapid manipulation.’
There were also problems with forgery. The hasty design had made it impossible to incorporate effective anti-counterfeiting measures. Worse still, in England and Wales people were not used to handling banknotes, so didn’t know how to spot a fake. Furthermore, people were moving around the country more than in peacetime. Shopkeepers and bank clerks found themselves dealing with strangers, making it easier for forgers to pass their work into circulation unnoticed.
‘Forgeries’ were not always the result of criminal intent. In 1915, there was a flurry of cases of companies issuing advertising flyers in the style of treasury notes. Meant as eye-catching topical references, some were very similar to the notes they copied, and actually found their way into circulation, either deliberately or by accident.
Despite the difficulties, Treasury notes played a vital role in keeping the economy moving during the First World War. For the first time in England and Wales, paper money became normal currency, used by ordinary people. After the war, its use continued. Treasury notes were issued until 1928, and thereafter the Bank of England took over responsibility for issuing £1 and 10s notes.