The long history of the pound

England has enjoyed a relatively stable single national currency with an unbroken history of over 900 years. The origins of the pound sterling date even further back. In fact, the pound as a unit of currency has never had to be replaced by a new currency, in contrast lo many European currencies. The pound has also been preferred and widely accepted in international trade for two hundred years. As a result, other countries had to adapt their currency arrangements to fit in with sterling.

Economic activity in the very earliest civilizations had to do with trading or "bartering". Services were traded to meet individual needs. For example, a master would reward his servant with food and shelter. Goods of equal value were also exchanged. People then began to use items that had the same value to everyone. In the earliest civilizations cattle, grain, salt, leaves, and seeds were traded to buy necessities. England has returned to barter several times over the course of its history.

The Ancient Britons used sword blades as currency before they started minting coins. The designs of the earliest coins, dating back to 125 ВС, were imitations of Macedonia's pure gold coins. As their experience of minting grew the designs became more original. The coins started to reflect their lifestyle and interests. The horse was a common feature as they were a rural people. Their love of hunting and farming can be seen in the designs of boars and ears of wheat.

Coins continued to be used in Britain while it was part of the Roman Empire. The Romans did, however, impose their own coinage on Britain. Small brass and copper "minissimi" coins were used for low value purchases. When the Roman Empire collapsed in the 5th century and Britain was invaded by the Anglo-Saxons, minting and the use of coins ceased in England for over 200 years. The island went back to bartering and using other, more primitive, standards of value.

With the Viking invasions of England came an enormous increase in the production of coins. Alfred the Great, who prevented the Vikings from conquering all of England, had eight mints built so that he would have enough coins to pay his soldiers and to build forts and ships. The kings who came after Alfred had to keep increasing the number of mints in order to pay for the defense of the country. It became so complicated, that in 928, King Athelstan passed a law stating that there was to be only one single type of money or currency in England, and there has been just one ever since. This occurred many centuries before other major European countries such as France, Germany and Italy had their own national currency.

The pound was introduced into England by the Normans even before William I conquered and united England in 1066. It was originally an amount of silver weighing a pound and became the basis of the monetary systems throughout the British colonies. With Britain's head start in the Industrial revolution, developments in banking, her military victories and the spread of the British Empire during the 19th century, the pound sterling became the world's most important currency.

In 1816 the standard of value for the sterling changed from silver to gold and other countries followed the British example, making the gold standard an international one. During the worldwide economic crisis in 1931, Britain was forced to abandon the gold standard. The US dollar replaced the pound sterling as the key global currency. Other countries then fixed their exchange rates against the dollar, the value of which remained defined in terms of gold.

After the Norman Conquest, the pound was divided into twenty shillings. The shillings were made of silver and the weight of twenty shillings was exactly that of one pound. The shillings were then divided into twelve pence or pennies. The pennies were made of copper, and the weight of twelve pennies was exactly the weight of one shilling. On 15th February, 1971, Britain introduced the decimal system. This meant that the pound (£) was equal to 100 pence (p) which made it much easier to use.

Source: Upstream Intermediate by Virginia Evans – Jenny Dooley