HM Treasury - Banknote Issue

Banknote Issue

Banknotes in the UK are normally issued by the Bank of England and a number of commercial banks (see Banknotes of the pound sterling). At the start of the First World War, the Currency and Bank Notes Act 1914 was passed which gave the Treasury temporary powers for issuing banknotes to the value of £1 and 10/- (ten shillings) in the UK. Treasury notes had full legal tender status and were not convertible for gold through the Bank of England, replacing the gold coin in circulation to prevent a run on sterling and to enable raw material purchases for armament production. These notes featured an image of King George V - Bank of England notes did not begin to display an image of the monarch until 1960. They replaced coins in circulation, were produced by the Treasury, not the Bank of England. The wording on each note was UNITED KINGDOM OF GREAT BRITAIN AND IRELAND — Currency notes are Legal Tender for the payment of any amount — Issued by the Lords Commissioners of His Majesty's Treasury under the Authority of Act of Parliament (4 & 5 Geo. V c.14).

The promise (never adhered to) was their removal from circulation after the war had finished and the return to the circulation of gold as money.

The notes were issued until 1928, when the Currency and Bank Notes Act 1928 returned note-issuing powers to the banks.