by Roger Outing, IBNS 1464.

Some items of paper money are exceedingly rare, with only a very few examples known to exist.  Lucky you if you have one.  Just a very few items of paper money exist as single, uniquely surviving, examples.  Privileged you if you have one.

However this article will be concerned with a selection of paper money issues that are “beyond rarity”.  By this I mean paper money which is known to have been produced but where no surviving example has so far been seen by the collecting community.  There can be no illustrations to this article because if there was a picture of the note then it would fail to qualify as being “beyond rarity”.

Three diverse issues of paper money from Persia, Guernsey, and the Falkland Islands are discussed, in chronological sequence, as examples of “beyond rarity”.

Persia

In Persia in 1294 there was a financial crisis, jointly caused by an extravagant royal court and a serious outbreak of disease amongst sheep and cattle.  Trade was collapsing and money, any form of money, was hard to come by.

By one of those coincidences of history there was an ambassador at the Persian royal court accredited as a representative of the Chinese emperor, Kublai Khan.  Because of this presence, knowledge of the circulation of paper money in China, the very first in the world, was therefore available to the Persian royal court.  Subsequently a scheme for the issue of paper was submitted to the Persian emperor, Kai Khatau Khan.  This proposal was accepted and the Royal Standard Bearer, Izz ed-Din Mazafar, was directed to bring the issue of paper money into practical effect.

An imperial command was circulated throughout Persia to the effect that transactions in specie were abolished and that only the new paper currency would be legal tender.  All gold and silver money was to be paid into the ‘paper money houses’ and exchanged for the new paper currency.

A head office was established at Tabriz with branch offices in all major towns. Managers, note controllers and cashiers were to be appointed at each location.  How much of this administrative structure was actually put in place, elsewhere than at Tabriz, is perhaps in doubt.  There is no doubt that the first issue of the new paper currency commenced at Tabriz during September/October 1294.

The new paper currency was in circulation for just three days before trade and commercial activity at Tabriz had more or less come to a halt.  The unfortunate Izz ed-Din Mazafar was blamed for the disaster and he was killed by discontented and angry citizens.  Representations were made to the emperor Kia Khatau that a general revolt was possible.  The emperor cancelled the imperial command and the paper money experiment ended.

The new paper currency was described as being rectangular pieces of paper with text in Persian, Arabic and Mongolian.  The Persian text gave the date of issue, the denomination and a warning that counterfeiters, with their wives and children, would be summarily punished and their property confiscated.  Denominations ranged from ½ Durhem to 10 Dinars but the intermediate denominations are not recorded.  

With the benefit of hindsight this Persian experiment with paper money can be seen to have been doomed from the outset.  The measure was altogether too radical to engender the general trust and confidence that is required to support the circulation of paper money.  This experiment is an important historical example because it is the only known case where the Chinese experience of paper money was directly transferred outside of China.

The Chinese were the first to issue paper money and it appears that the Persians were second.  First issues of paper money in Europe were still more than 300 years in the future.

Guernsey

Early issues of paper money, especially by governments, are very often characterised in the historical record as failures due to inevitable over issue and subsequent  financial collapse.  This is not always the case and Guernsey in 1815 is a good example of a Government issue which was nothing else than completely successful.

In 1815 a committee was formed under authority of the local island parliament, The States.  The purpose of this committee was to find a means of enlarging the Market House and so provide more retail accommodation which could then be rented out.  Guernsey was by no means isolated but it was an island community and therefore suffered the eternal problem of a shortage of circulating currency. 

The committee resolved the problem with the issue of £1 notes to a total value of £3,000.  These notes had a specific 10 year redemption period.  This money was used to pay for the required building work and extra income was then generated from the increased rentals from the new accommodation.  This extra income was then used to pay off the notes as they came back in.  Presumably some of the notes would have actually been returned as rental payments for the new facilities. 

This whole experiment worked extremely well with no depreciation in the paper currency nor were there any comments regarding increased prices of goods.  An interesting question that has often been asked is, Who actually paid for the new building?

This highly successful example of local currency was replicated on six further occasions between 1815 and 1829.  These issues had specific redemption periods which were strictly adhered to.  Notes to a total value of  £70,080 were created but because of the enforced redemption periods these would not have all have been circulating at the same time.  In 1829 it was specifically stated that there were 48,183 notes in circulation but no total value was expressed.  It is suggested that the vast majority of the notes were of £1 denomination.   All these notes appear to have subsequently redeemed and paid off in full.  There is no record of any surviving examples nor any known description of the notes. Table 1 gives a summary of these Guernsey issues:

Falkland Islands

Most colonies suffer from a shortage of a circulating currency.  The Falkland Islands in the 1840’s was no exception.  Supplies of anything that could be used as money were difficult or just impossible to locate.  Contact with England was erratic and very irregular. 

With some reluctance and as a last resort the Governor self authorised an issue of paper currency to a total value of £1,000 sterling.  The circulating money on the Falklands at that time was the dollar so the Governor’s authorisation for £1,000 had to be carefully converted into the appropriate amount of dollars.  The actual issues made are as detailed in Table 2.

The Governor of the Falkland Islands gave the following account;

“The notes are of the most primitive character, written by hand at some trouble, they are signed by myself ‘on behalf of the Colonial Government’ and were payable to bearer.”

“When the trader arrives he is informed that, upon leaving the Colony, if he brings any of these notes to the Government Office he will receive a Treasury bill in exchange.”

“£1,000 is in circulation, and will be called in immediately I receive specie, although very many will not be forthcoming, as I know of many being accidently destroyed.”

“I propose to give until 31^st March 1845 to individuals to present these notes and close the accounts, passing to the credit of the Government the balance of the notes not presented.”

It is recorded that “about £30 of notes” (3% of the total issue) were not redeemed – their denominations are unrecorded.

The Falkland Island 1/8d note of 1842, with only one single example ever written, must surely qualify as the rarest issued government banknote in the world?

This issue of paper money operated quite successfully for the small local  population and provided a much needed circulating currency which was readily accepted.  When specie arrived the notes were paid off, upon request, before the 1845 deadline. There was no repetition of this early success with a local colonial currency. 

Cataloguing

Standard Catalogue of World Paper Money (SCWPM), General Issues, 8^th Edition, does not have any reference to the early note issues of Persia or the Falkland Islands.  It is possible that the SCWPM entry for Guernsey, Ref. A1, the States of Guernsey £1 variously dated between 1827 – 1836, could possibly be the final issue listed in Table 2.  Any information on this point would be appreciated.  None of the earlier Guernsey notes, 1815 to 1827, are shown in SCWPM.

A specialist publication, “The Standard catalogue of Iranian Banknotes” (Second Edition) by F.N. Farahbakhsh does give a good account of the early Persian notes – utilising the same 1893 reference quoted in the sources to this article.

Conclusion

The purpose of this article is to raise an awareness of these paper money issues and allow the point to be made that examples will not be found unless and until someone actually looks out for them.  If anyone can give any further information please contact the author.

Nothing would give more pleasure than to find just one surviving example of any of the above and so remove them from the list of ‘beyond rarity’.

Sources:

“Banking in Persia” by Joseph Rabino.  Journal of The Institute of Bankers,              (London), Jan. 1892.  Contains all the details that are known of the early Persian issues.  This author was the General Manager of the Imperial Bank of Persia in the 1890’s.   

“History of Currency in the British Colonies” by Robert Chalmers.  H.M. Stationary Office, London, 1893.  (Reprinted by John Drury in 1972.)Contains details of Falkland Islands issues.  This author was a Treasury official who had access to Colonial Office records.

“The Story of Money” by Norman Angell.  Cassell & Co., London 1930.  Contains details of the Guernsey issues.

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