CHAPTER XIV
MONETARY SYSTEMS OF FOREIGN COUNTRIES
England[89]
[90]The monetary unit is the pound, or sovereign, equal to $4.8665, divided into 20 shillings of 12 pence each, each penny equal to 4 farthings. Originally the pound was a Troy pound of silver, .925 fine. Under the law of 1816 gold was made the standard and silver subsidiary. The coinage of gold is free, and to avoid delay the Bank of England is required to buy all gold and pay for the same at once at the [minimum] rate of £3 17s. 9d. per ounce, a [maximum] charge of 1-1/2d. being imposed for the accommodation. Silver is only coined on government account and the coinage ratio is 14.29 to one.
They have the gold sovereign (containing 113.001 grains pure gold), the unit of their currency, also half-sovereigns, crowns (5s.), double florins, (4s.), half-crowns, florins, shillings, six and three pence pieces, four pence (groat), two pence and penny, all in silver, also penny, half-penny, and farthing in bronze. A few English banks, operating under old charters, issue notes to a limited extent, which circulate as money. Otherwise the paper currency of England and Wales consists wholly of notes of the Bank of England....
Extraordinary measures were resorted to by the British government in the early stages of the European war of 1914; with the close of the war currency conditions will doubtless go back to normal, as described above.
The Government, also, under date of August 6, authorized an issue of currency notes, in denominations of £1 and 10 shillings....
These notes, which were first issued to the public August 7, were deposited with the Bank of England for account of the British government, as the practical way of getting them into use; they were used for various purposes, including advances to banks at 5 per cent. per annum, up to 20 per cent. of their deposits; the volume outstanding December 30, 1914, was £38,478,164; the amount outstanding on June 23, 1915, was £46,199,705. These notes were protected in part by securities and by an increasingly large gold reserve, exceeding 75 per cent. in March, 1915.
Postal orders were made legal tender and so remained until February 4, 1915....