Everything Everywhere Daily: History, Science, Geography & More - The British Pound(s)

Episode Date: January 17, 2021

If you visit a different country you might need to get some of the local currency. You might get Ringgit in Malaysia, Pesos in Mexico, Kip in Laos, or Tala in Samoa. However, there is one country where you have to be careful what currency you get because there are different notes produced in different parts of the country, and the different notes aren’t accepted everywhere in the country. Learn more about the various British Pounds on this episode of Everything Everywhere Daily. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you visit a different country, you might need to get some of the local currency. You might get ringet in Malaysia, peso in Mexico, Kip in Laos, or Tala in Samoa. However, there's one country where you have to be careful what currency you get, because there are different notes produced in different parts of the country, and the different notes aren't accepted everywhere in the country. Learn more about the various British pounds on this episode of Everything Everywhere Daily. What if your perceptions about the past were wrong? throughline is a podcast that takes you back in time to uncover the parts of the story that may have gone unnoticed.

It effectively turned day into night and how it shaped the world now. Time travel with us every week on the ThruLine podcast from NPR. This episode is sponsored by CuriosityStream. If you're interested in money in economics, then CuriosityStream has programs for you. They have shows like The History of Money, the Ascentive, money, and also shows on the topic if money can buy happiness. CuriosityStream is currently running a new year special, where you can get a full year for 40% off or only 1199.

That's a dollar a month for some of the best educational programming online. If you love to learn, and you probably do if you're listening to this podcast, then start your subscription by visiting everything-everywhere.com slash curiosity stream or by clicking on the link in the show notes. The genesis of this episode was an experience I had back in 2011. I was traveling around the British Isles. I had just been to Northern Ireland, and I was on the Isle of Man where I had spent the last few days. I was going to fly to Glasgow the next day, so before I left, I went to an ATM machine to take out 200 pounds to cover me for the next two weeks.

As the money came out of the machine, I put it in my wallet and never bothered to look at it. A few days later, I was in Glasgow. I went to a theater to see a movie, and I took out a 20-pound note to pay for my money. ticket. After I handed it to the woman at the ticket window, she said, Sir, we can't accept this. I asked her, why not? And then she said, look at it. It wasn't a normal pound note that I was familiar with. It was an Isle of Man pound note, which, unbeknownst to me, was totally different from the notes I had seen previously around London. This transaction was my introduction down the rabbit hole of British bank notes.

In this discussion, there will be a whole bunch of subtle distinctions that are required, that you probably never had to think about before unless you happen to live in the UK. For starters, I should note that the United Kingdom only has one currency, the British pound, also known as the pound sterling. It is the currency for the whole country. As you can probably guess from the name, the pound sterling used to be a measure of a pound of sterling silver. The pound symbol, which is a gothic letter L, comes from the Latin word Libra,

which was a Roman unit of weight, which was later converted into an English pound. Fast forward several centuries, England merges with Scotland and Northern Ireland, and the United Kingdom keeps the term pound sterling as the name of their currency, even though it no longer has anything to do with weights or silver. As money moved from precious metal coins to paper, banks began issuing their own paper money which had the equivalent amount of hard currency in reserve back at the bank. In the UK, the United States, and other countries, private banks often issued their own bank notes. In 1844, Britain passed the Bank Charter Act, which put limits on the ability of banks to issue notes.

Over time, as banks merged to form larger banks, they lost the right to print notes. Today, the only bank which can issue bank notes in England and Wales is the Bank of England, which is the central bank for the government of the United Kingdom. The last private bank to issue notes in England was Fox Fowler and Company, which ended note production in 1921. However, in Scotland and Northern Ireland, there are still banks that can produce their own pound notes. In Scotland, three banks have the right to issue pound-denominated bank notes. The Bank of Scotland, the Royal Bank of Scotland, and the Clydesdale Bank. In Northern Ireland, four banks have the ability to print notes.

The Bank of Ireland, Danska Bank, and Ulster Bank. First trust banks ceased issuing notes in June 2020, but they will be in legal circulation until June 2022. So you have notes from eight different banks floating around the UK for what is, in theory, the exact same thing. British pound sterling. Here is where you now have to get into the weeds about something which you pretty much never have to worry about unless you live in the UK. Legal tender. In most of the world, whatever the currency is, is legal tender in that country. For this, I'll just use the definition from the Bank of England website to clarify it.

They note, quote, legal tender has a narrow technical meaning which has no use in everyday life. It means that if you offer to fully pay off a debt to someone in legal tender, they can't sue you for failing to repay. So all of the notes I just listed above are legal currency for the British pound sterling. But they are not necessarily legal tender all over the UK. That means no one has to accept it if they don't want to. In particular, in England and Wales, legal tender consists of Bank of England notes and coins from the Royal Mint. In Scotland and Northern Ireland, only coins from the Royal Mint are legal tender. No bank notes are legal tender, not even notes issued by banks in Scotland and Northern Ireland.

If this sounds a bit nuts, it is. That being said, most everyone in the UK will accept Bank of England notes, and most people in Scotland and Northern Ireland will accept notes from banks from their countries. Most chain stores will also accept any pound note from any country. It all gets deposited in the bank and get sorted out there. However, if you duck into a pub in England and try to pay with a Scottish pound note, it will not be guaranteed to be accepted.

If this is all confusing, it gets worse. As I mentioned at the top, my story started in the Isle of Man. The Isle of Man is technically not part of the United Kingdom. They're a crown colony. They are in a unilateral currency union with the UK, which means that all of the Manx pounds have the same value as British pound sterling and are backed up by pound sterling, but they're not legal currency in the UK. Likewise, the other crown colonies of Jersey and Guernsey have their own pounds.

The British territories of Gibraltar, St. Helena, and the Falkland Islands, also all issue their own pound notes, which have the same value as Bank of England notes, but are not legal currency outside of their territory. So, what do you do if you have a pound note from one jurisdiction and you're in another? Any bank in the UK will accept and convert any pound notes you bring in. That's how I got rid of most of my Isle of Man pound notes when I was in Scotland. It wasn't a problem and there were no transaction fees. However, if you do have some odd pound notes and want to have some fun, find a small pub in

in England and try to pay with them. Just also make sure to have some Bank of England notes with you, or else you might get a very hard lesson in the meaning of legal tender. Executive producer of Everything Everywhere Daily is James McAlla. The associate producer is Thor Thompson. Remember to leave a five-star review to get your review read on the show. They can be left at Apple Podcasts, Podcasts, Podcast Republic, or wherever you listen to the show. Also, you can help support the show over at patreon.com.

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