The Bradburys and the Bank Holiday.

Britain was almost completely unprepared for the outbreak of World War One. As late as August 1 st , just a few days before the Germans would march into Belgium and precipitate Britain's declaration of war, the country enjoyed its normal “Bank Holiday Weekend” when businesses were closed and everyone headed for the beach. This year, it would be somewhat different.

At this time, the British currency system was locked into place: the highest silver denomination in normal circulation being the halfcrown (2s6d); then the gold half-sovereign and sovereign; followed by banknotes – by law, of no less than £5 denomination. This particular weekend would open a vast hole between the silver halfcrown and paper notes.

Great Britain. Gold “sovereign” (20s or 1 Pound) 1914. Gold was the backbone of the British currency.

The Bank Holiday was of long standing. Until 1833, the Bank of England celebrated a total of 33 days per year, Sundays aside, but by the Bank Holidays Act of 1871, these became just four: Easter Monday, Whitsun Monday, the first Monday in August and Christmas (or December 26 if Christmas fell on a Sunday). The word “holiday” was derived from “holy day” but the one in August became one in every modern sense of the word. Businesses and banks closed and cities emptied as vacationers headed to beaches and resorts – many taking the Channel steamer to France for the long weekend. The August Holiday was a time of splurging and many vacationers withdrew funds from their local bank on the last day of business, the Saturday before. Over in France, English gold was freely accepted; English notes were not.

On this particular pre-Holiday Saturday, August 1 st , not everyone was totally oblivious to the disturbing events in Europe – ultimatums, military call-ups and the like. Some were determined to have a special vacation just in case war did break out; others may have decided it might be a good thing to have a bit of gold tucked under the hearthstone just in case. For whatever reason, there was an increased demand for gold coin on that Saturday and while the Bank of England paid out readily enough, some of the smaller banks soon found that their gold reserves were below the point at which, by law, their notes had to be backed. Some began to refuse paying out gold for notes or account withdrawals and with the speed of light, there was a run on gold throughout the nation. Within a space of two hours, the Bank of England paid out £11,000,000 in gold and found that its gold reserves had been reduced from a traditional 40% against her circulating notes to just 14%. Although the Bank Holiday on Monday gave all banks two day's breathing space, the currency was in crisis: bank notes and cheques were widely refused.

Bank of England £1 note signed by John G. Narine, chief cashier 1902-18.
This denomination was never issued but the others (£5 through £1000)
are identical save for the denomination.

The British government was forced to several rapid moves. First of all, it extended the bank holiday for two more days and ,secondly, effectually removed Britain from the Gold Standard (no matter the reading on the notes). During this brief period, British currency was on a “make-do” basis ( no one was offering gold) and, reportedly, the hole was partially filled by the British Post Office issuing 10s and £1 money orders made out to “Bearer”; apparently, not a single such specimen has survived.

A “Bradbury” 10-shillings of August, 1914.

But in an unbelievably short time (a Canadian Bankers' Association article says “August 6 th ! – other sources a more reasonable ten days or two weeks), new government notes were prepared and distribution begun. These were “Treasury Notes” (meaning that although legal tender, there was no backing save the credit of the nation), widely called “Bradburys” due to the signature of John Bradbury, “Secretary to the Treasury”. As might be expected for such a rapid production, they were quite crude. Both 10/ and £1 denominations were issued but work was immediately started on better-quality notes, less liable to be counterfeited.

The One-Pound notes were the first to be re-vamped, the new issue appearing 23 Oct., 1914 and the old ones retired as they came in. It was January, 1915, before an improved counterpart 10-shilling note joined it to retire the “Bradburys” of August.

Although Britain went back on the Gold Standard in 1925, it was not the same as before. Under the new rules, the Bank of England had to buy and sell gold bars freely at £3 17s. 10½d per Troy ounce .917 fine (the old pre-War rate) – but only in minimum quantities of 400 ounces and ordinary citizens could no longer ask for gold coin from the Bank. Returning to the old value effectively overpriced the pound by at least 10% and there was a consequent giant rise in unemployment.

In 1931, Britain was forced to leave the Gold Standard if her national stocks of the metal were not to bleed away completely and the pound slumped to something like $4.25 U.S., a point more or less at equilibrium with reality. A couple of years later, the U.S. left the Standard as well, gold rising to about $35 per ounce; shortly thereafter, France – the last holdout – also left and gold became a commodity , not money.

 

Wayne Jacobs is numismatic expert. He is the award winning author of numerous articles. He is the secretary and editor of the "Mid-Island Coin Club Numismatic Journal"of Nanaimo, Vancouver Island , British Columbia. The MICC journal are hosted here: MICC webpages Copyright 2006 Wayne Jacobs. This article may be reprinted freely for non commercial purpose only if the resource box is left intact, linking back to us.