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The Cyprus Emergency Shilling Note, 1919.
War creates all sorts of problems, not the least of which is the picking up of the pieces afterward. If anything, the period following the First World War was even more severe in this regard.
With the outbreak, the combatants universally went off the Gold Standard, the bedrock on which their respective currencies were based, and fought the war with paper, all the time maintaining that the various marks, pounds, francs and so forth had kept their pre-war values. But after the Armistice, the piper had to be paid and the various countries scrambled to buy gold as currency reserves, the result being that the higher the price they paid, the more their currency was devalued – in direct proportion. Only the U.S. and Switzerland had stayed on the Gold Standard (and even they were careful to keep their gold safely tucked away in the vaults for the duration) so the U.S. dollar became one of the yardsticks of gold's value: $20.67 U.S. per Troy ounce. By the time they had stabilized, the French franc had lost more than half its value, the Belgian some 80-90% and, as we all know, the German mark became worth less than toilet paper. While still off the Gold Standard in 1919/20, the English pound traded for as little as $3.05 U.S. against its former price of $4.86 2/3; England managed to go back on the Gold Standard in 1925 at the old value (foolishly, as things turned out; the overvalued pound caused widespread unemployment and her own depression just before the Big One).
Silver was the poor man's gold and while separate from the noble metal, its price rose dramatically as well. Just before the war, an ounce of sterling silver cost about 57¢ U.S.; by war's end, it stood at just under $1 per ounce – and during a brief, heady period in late 1919 and very early 1920 went a lot higher than that. With the bullion value of Canadian silver coins in danger of surpassing face (and actually did so for a very short time), our government cut the fineness of new silver coin from .925 to .800. Britain cut hers from .925 to .500. But silver prices dropped nearly as fast as they rose and by 1921 were back to something like pre-War values. Anyone who rode out the silver-prices storm (like the U.S. ) were not forced to change for another forty years. Into this silver maelstrom fell Cyprus , a British island colony located in the eastern Mediterranean just off the coasts of Turkey and Syria . Until its capture from the Ottoman Empire in 1878, the island had used the Turkish currency system and the British continued with it in a slightly modified way: 9 piastres equaled a shilling and 20 shillings (or 180 piastres) equaled a Cypriot pound (equal to a Pound Sterling). Piastres were used on the island's coinage; shillings and pounds on its paper currency.
Cyprus had received no coinage supplies since before the war, silver or otherwise, and as soon as the guns were stilled, orders went out for the denomination most urgently needed: the silver 9-piastres (or shilling) coin. Little did they know that the coin would walk into problems. Arriving in the spring of 1919, all silver coin in Cyprus was starting to be hoarded as the price of silver rose. While bullion values did not yet equal face, there was every expectation that they would do so. Consequently, no sooner did the Imperial Ottoman Bank (the government bank) pay out the new 9-Piastre than they were popped into cookie jars all over the island. By September, the situation was becoming acute: there was very little circulating currency between the bronze 1-Piastre and the smallest paper note of 5-shillings (or 45 Piastres) value. An urgent order for 2/ and 1/ notes made to Thomas De La Rue & Co. Ltd., currency printers, only resulted in more disappointing news: their volume of work was such that it would be months – well into 1920 – before they could fill the order. In the meantime, things were urgent in Cyprus . The idea for the emergency notes came from W. A . Bowring, the government Treasurer of Cyprus who made his proposal on 3 November, 1919 to the Chief Secretary. Since the island had a large supply of 5-shilling notes on hand, all of them uniface, he proposed that notes be overprinted on the reverse in three sections, each for 1 Shilling, and the notes then cut in thirds and circulated. Since the value of the note would have been reduced from 5-shillings when whole to 3 shillings when in pieces, it prevented counterfeiting by overprinting legal circulating notes. The Five-Shilling notes then in circulation were of a fair size: about 5¼” long by 3” high, making their thirds each 1¾” wide by 3” high. The note shown below for illustration purposes only is a 10-Shilling note; the 5-Shilling was similar, except with a large “V” in the center.
Bowring got his wish – and quickly. The proposed measures were approved by the governor on November 10 th and a proclamation of the 12 th gave the new notes legal tender value. Fortunately, the War Measures Act was still in effect, allowing colonial governors a certain leeway in meeting various emergencies rather than such requests having to make their slow and tortuous ways through the offices of the British Treasury, Colonial Secretary, parliamentary committees and the rest. 20,000 5-shilling notes in reserve stock were so overprinted and cut into thirds – 60,000 pieces in all. A misunderstanding that seems to have been perpetuated to the present day crept in at this point. The Secretary seems to have assumed that Bowring
wanted 2/ emergency notes as well but the later release makes it plain that he wanted 1/ pieces only. Even so, the Krause catalogue of banknotes lists such a 2/ emergency note as being “Rare” when there is every possibility that it never existed at all.
The 1/ emergency notes did their job. By the time the La Rue printing of 1/ and 2/ notes arrived in the spring of 1920, they weren't much needed. From the spike around New Years, 1920, the price of bullion silver tumbled precipitously and continued to drift lower for the next year or more. With any potential hoarders' profit gone from the silver coins, most returned to circulation and both the colony and British government felt sufficiently secure to mint and release 4½-, 9- and 18-Piastres pieces in full sterling silver in 1921 (mintages: 600,000 ; 490,000 ; and 155,000 respectively). The government- printed 1- and 2-shilling notes with the 1920 date were never popular and are very scarce or even rare today. With bullion in the silver coins running at less than half face, it was cheaper for the government to issue long-wearing coins rather than short-lived paper notes and the Cypriots preferred hard coin anyhow. We might assume that the 1/ emergency notes were retired just as soon as the government issue was received to replace them – but that is not completely true. Perhaps the officials in Cyprus were cashing in on a rule that every banker knew well: the longer a paper issue circulates, the more will be lost or destroyed and the fewer have to be redeemed for “good money”. In the case of the emergency 1/ notes, they were not called in and demonetized until 1922 at which time slightly over 5000 remained unaccounted for. Just the same, as far as I know , not a single specimen remains in captivity today! The Krause notation of “Rare” for the 1/ would seem to be as gross an understatement for it as it is for the non-existent 2/! Because they do seem to be unknown today, we are left with one more small mystery: the original directive ordered that the faces of the cut notes also be cancelled in some way: “The Printing Board will then proceed to cancel the face of the 5/ notes by overprinting some symbol and will give a certificate to this effect which will support the entries in the Registers”. We have no idea as to what this “face-cancelling symbol” was.
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January 2007The Woods/Highway Dairy of Sandwick, B.C The Cyprus Emergency Shilling Note, 1919
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