About money
"Today, money takes the form of bank credit that must be borrowed into circulation."
"Conventional money commonly exists as bank deposits, that is, balances in checking or savings accounts that are secured by interest-bearing debt. Money is the product of a private banking cartel."
"In order for money to come into circulation, someone must go into debt to a bank."
Page 5
"Federal Reserve notes, while printed by the United States Treasury, are put into circulation by the banking system, which buys them from the Treasury for the cost of printing."
Page 6
"Only about 5% of the money supply, which exists as coins spent into circulation by the Treasury, arises outside the banks. In sum, the bulk of our money gets created as bank credit."
"The amount of credit money that the banking system as a whole can create is determined by the policies of the Federal Reserve Board. ...... The share of the money-creating power allocated to each individual bank is determined by the mount of deposits that a bank is able to attract from customers and use as "reserves"."
Page 7
Thomas H. Greco Jr., (2001) Money: Understanding and creating alternatives to Legal Tender. Vermont: Chelsea Green Publishing Company.
Link
Origination of legal tender
"Our homogenous-globule-of-desire forefathers were inconvenienced by barter until they spontaneously hit upon the idea of using tobacco, furs, huge rocks, landmarks, and wives as media of exchange. Over time, greater efficiency was obtained as homo economicus coined precious metals, and market efficiency was enhanced by free banks, which substituted paper money backed by precious metal reserves."
"There is no evidence of barter-based markets (outside trivial prisoner-of-war cases), and all the evidence about the origins of money points to state involvement."
Page 1
"It is more likely that the practice of measuring value came from the elaborate compensation schedules developed to prevent blood feuds; these required measuring the debt one owed for injuries - actual or imagined - inflicted on others."
Page 2
Originally, palaces may of demanded 10% of everything produced, however with the development of the palaces and it's domain, tax payments became standardised in terms of quantities of these products produced, such as wheat or grain. These standardised amounts of product formed the basis for modern money units, such as the dollar, pound, lira etc. In these days, money existed as a unit of account, in which debts to the palace were measured.
Pages 2-3
"The first evidence of lending at interest comes from the practice of payment of taxes by the tax farmers, who then took bond servants and took interest on the village tax debts."
"For many centuries, how many we do not know, the principle instrument of commerce was the tally. (Innes, 1913, p. 394) This was a stick of hazelwood, notched to indicate the amount of the purchase or debt, created when the buyer became a debtor by accepting a good or service from the seller who automatically became the creditor."
The date and the debtors names were written on either side of the stick, which was then split so the notches were in half, with one piece larger than the other. The larger piece was called the stock, and the shorter the stub. The name and date were still visible on each piece of the tally. The creditor would have the stock (larger piece) and the debtor would have the stub (shorter piece).
"There appear to be copper tallies from Italy from 1000 to 2000 years BC., purposely broken at the time of manufacture to provide a stock and stub." This was to prevent tampering with the tallies.
"The denominations of all the early precious metal coins (even the least valuable) were far too high to be used in everyday exchanges."
Page 4
"The typical case until recently was a large variety of coins, sometimes including many with the same face value but different exchange value, issued by a wide variety of merchants, kings, feudal lords, barons, and others."
"Coins were more likely invented by kings to make a large number of uniform payments in the form of precious metal to reduce counterfeiting.
Page 5
"It was likely recognised from the very beginning that the purpose of the coin was to give the population a convenient means for paying taxes."
"The use of hazelwood tallies continued in England until 1826."
Page 6
The main concept is debt, which the government imposes on the public, and then decides how they can 'pay' the debt. If someone is liable to tax, however doesn't have the crowns coins, then they must offer up a product to receive the crowns coins.
Page 6-7
"The coins were nothing but evidence of the crowns debt, hence, it would make no sense to debase them (by reducing precious metal content)."
Page 7
L. Randall Wray, (1998) Modern Money, Working Paper No. 252.
Link
How bank notes are produced.
Some images are hand engraved into metal plates whilst others are produced using CAD "and are drawn onto film by a laserbeam." These images are then put onto printed plates ready for pressing. The 85 inks (approx.) for the 4 bank notes are produced on site.
The paper for The Bank of England notes is produced by a specific supplier, using cotton fibre and linen rag. The watermark is engraved in wax, and the metallic thread and images are incorporated at the manufacturing stage.
Offset litho, intaglio and letter press printing processes are used for the production of bank notes.
Offset litho - Most of the front and back of the note, except Her Majesty's portrait, lettering and numbering.
Intaglio - The portrait of Her Majesty and the raised print on the front of the note.
Letter press - The cypher and serial numbers on the front of the note.
(BankofEngland.co.uk)
Early bank notes were originally black and white, however today they are often brightly coloured. They also feature sophisticated designs which make them recognisable as a national currency and protect them against counterfeits.
(British Museum)
The new Polymer bank note
In 2016 The Bank of England will introduce a new polymer £5 bank note instead of the current cotton paper notes, featuring Winston Churchill. They say the new polymer material will be 2.5 times more durable and survive going in the washing machine however can still melt under the heat of an iron. The notes will also be smaller dimensions than the current notes. They will initially be more expensive to produce than the current cotton paper notes, however because of their decrease in size and improved durability, they will be cheaper to issue.
The polymer note will be made of a thin, transparent film made of polypropylene, which will allow an ink layer which will carry the printed design, but also allow for sections be remain transparent, which should enhance protection against counterfeits.
This is not the first time polymer notes have been introduced in the UK, in 1983 a £5 note was introduced in the Isle of Man, however it was withdrawn in 1988 due to problems with the ink. Also, in 1999 the Northern Bank of Northern Ireland introduced a commemorative polymer £5 note to celebrate the year 2000. Canada also currently use the polymer bank note, as well as more than 20 other countries worldwide.
(BBC)
How coinage is produced
Coins have nearly always been produced using metal since their development in 17th Century BC. The metal has to be extracted from it's natural state, often by mining, and then turned into the appropriate form. Striking and casting are two of the most important methods of coin production. The Western tradition normally used the striking method, which involved striking coins between engraved dies. The Chinese and Far Eastern tradition normally used the casting method, up until the 20th Century. This involved casting the metal in moulds.
During the 17th and 18th Centuries the most development was made in the production of legal tender. The screw-press and the first steam powered machinery were developed and used in the process, although initially they were slower and less accurate than traditional methods, and therefore took time to convince mints to switch to the new machinery. These new machines increased the amount of coins produced for circulation, which helped to meet the worldwide demand for more coinage being available.
(British Museum)
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