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Legal Tender and Valid Currency in the UK

Started by UK Decimal +, September 05, 2009, 03:20:00 PM

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UK Decimal +

I am starting this topic with a summary of information taken from the Bank of England and Royal Mint websites (it is not the exact wording).

'The term legal tender has a very narrow technical meaning in relation to the settlement of debt.   If a debtor pays in legal tender the exact amount he owes under the terms of a contract, he has good defence if he is subsequently sued for non-payment of the debt.'

'Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes.'

What it all means is that if you both agree to pay for goods/services in cows, pigs and sheep that is fine, but if you end up paying in 'legal tender' it is unlikely that you can be sued for non-payment.

But now it starts to get interesting.   Bank of England notes are legal tender, BUT ONLY in England and Wales, NOT Scotland nor Northern Ireland.   Coins are legal tender throughout the United Kingdom to certain maximum amounts for each value of coin.

The Royal Mint lists the coins as £5, £2, £1, 50p, 25p, 20p, 10p, 5p, 2p and 1p which represent the coins in normal circulation.

Question   What is missing from the list?   At least Maundy money which I believe to be valid back to about 1820 (but I can't substantiate that), and I also believe that the old (issued up to 1944) silver 3d (three old penny) coins have never been demonetised and like the Maundy money issued pre-decimalisation are still valid at 2.4 times their old value (i.e. the face value in old pence becomes new pence).   I also believe that the 5/- (five shillings) crowns have never been demonetised and might also be valid back to the reign of George IV.   And possibly the groat (4d)?   And why am I thinking 1820?

Bill.
Ilford, Essex, near London, England.

People look for problems and complain.   Engineers find solutions but people still complain.

UK Decimal +

#1
Now for part two.   (I have taken this mainly from the Royal Mint website, but again it is not the exact wording).

'Coins from the Channel Islands and Isle of Man are NOT legal tender in the UK although the bear a portrait of the Queen.   The same applies to UK Overseas Territories (such as Falkland Islands and Gibraltar).'

Warning.   I have seen mentioned on some website somewhere that they are legal tender in the UK so be careful where you get your information (if I find the website in question again, I will post a suitable message here).

BUT if you have agreed to perform a transaction using these coins, or the euro, dollar, etc., it is quite acceptable to do so.

Bill.
Ilford, Essex, near London, England.

People look for problems and complain.   Engineers find solutions but people still complain.

UK Decimal +

#2
Now a true story.   I used to work regularly on one of the preserved railways in Wales, usually as fireman on the engine but I was also passed for quite a few other duties, including booking clerk.

Towards the end of one year's running season I was in the booking office at the main terminus.   We had an arrangement with the local bank that once a year they would accept foreign coins (often sent as donations) provided that they were made up to complete units (i.e. cents made up to complete dollars, etc.) and I had all the foreign coins sorted by country together with conversion tables.

A knock on the booking office window.    American couple there (I won't try to do the accent although it was quite heavy).   "Is the little train running today?"   "Yes sir, about two hours time."   "Can we get our tickets now?"   "Of course."   (I date the tickets).   "Do you take dollars?"   "Of course sir."   Yes, he got his change in quarters, dimes, cents, whatever.

Hearing this, the Traffic Manager sitting at the far side of the room was doubled up with silent laughter.   Eventually he was able to speak, "Did you?"   "Yes."

As soon as he had recovered, he followed them on to the platform, explained the joke which they appreciated, took them on a tour of the museum and arranged with the driver for them to ride on the engine.   A good time was had by all.

In a little village in Wales ... ...

Bill.
Ilford, Essex, near London, England.

People look for problems and complain.   Engineers find solutions but people still complain.

Galapagos

#3
Welsh dollars.  :D

Our UK coins are also legal tender in the rest of the sterling area: Jersey, Guernsey, the Isle of Man, Gibraltar, the Falkland Islands, and "St. Helena and Ascension". Of those, the only ones who will accept each other's coins are the Isle of Man, Jersey and Guernsey.

UK Decimal +

The plot thickens!

This afternoon I received a Gibraltar 2008 5p (Barbary Ape on the reverse) in my change.   I noticed it immediately but did not complain.

Bill.
Ilford, Essex, near London, England.

People look for problems and complain.   Engineers find solutions but people still complain.

Galapagos

#5
In practice, these overseas coins circulate because at a glance they're similar enough to our own. Once I included an year 2000 Isle of Man 20p in the coins I tendered to a Sainsbury's check out woman. She sat looking at the reverse design of a monk for a few seconds. I thought she was going to refuse it, but then she just dropped it into the till without a word. Perhaps she thought, well, they do special 50p designs, etc. - maybe this is similar.

A few years ago, somebody posted a message on the Royal Mint forum (before the Forum was taken down), wondering what on Earth a monkey was doing on his 5p piece. He wasn't a numismatist, so I explained it to him.

Figleaf

#6
As you noted in your first post, the whole legal tender thing is virtually meaningless. The important thing is that both parties agree that payment is made. An obvious example. All 500, 200 and 100 euro bills are legal tender, yet not accepted in most shops here. Neither are the 1 and 2 cent coins, although they are also legal tender. Dutch silver commemoratives are not legal tender in Belgium. Yet they are accepted most of the time. If that doesn't convince you, try convincing a vending machine to sell you something for legal tender coins it's not equipped to take.

Legal tender is a modern invention. It became necessary when token coins were introduced, in Britain in 1816. Up to that time, coining was a business. You could bring metal to a mint and receive coin in its place (cost deducted, of course) and you could melt coin (I am cutting corners here to make it simple, but that has no effect on the story). A perfectly accepted method to change currency was to bring foreign coins to the mint. They would weigh and assay them (or have assay reports on hand), calculate the amount of silver or gold, deduct cost and pay you in local currency. The foreign coins would of course be melted and turned into local coins.

When only selected coins could be freely minted and melted, it became necessary to regulate their acceptance. This took the form of two rules: a) you must accept these coins b) up to a certain amount. The theory was that you could always save up the token coins and change them for convertible coins.

After the economic crisis of 1929, all coins were token coins and there is no freedom to mint and melt (some trade coins excepted, but they have a negotiated value). That made the legal tender rules superfluous, but they mostly remained on the books by inertia, called tradition. The only function of legal tender rules today is for a state to take responsibility for certain coins and banknotes. Since this is already done by the coinage law, the rules could be abolished without any effect.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

UK Decimal +

A form of token that I remember well is 'milk cheques'.   On our weekly visit to the Co-op shop my mother would buy milk cheques which were avilable as pint and half-pint values.   Each morning the appropriate cheques representing the milk order for that day would be left out with the empty milk bottles.   This practice continued at least well into the 1960s.   Then there are such things as pre-paid bus tickets ... ...

If a vendor does not specify on a machine how payment must be made, presumably it could be legal to use anything that the machine will accept, even forgeries and washers.   Interesting.

Bill.
Ilford, Essex, near London, England.

People look for problems and complain.   Engineers find solutions but people still complain.

Figleaf

#8
There are also bread tokens for a half loaf or a loaf from that period and they were not used in Britain only. Have a look here. Or look here and here for other kinds of British tokens. In fact, the board "Other tokens used for payments" is a display case full of interesting token money.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

BC Numismatics

Bill,
  No notes at all are legal tender in either Scotland or Ulster,not even the Scots & Ulster cash is legal tender within their respective home countries.

Both Wales & Cornwall have also had their own notes in the past 40 years as well.

The Welsh notes were issued by the Chief Treasury of Wales Ltd. (which became the Black Sheep Company of Wales Ltd. after the Board of Trade intervened to get its name changed).

The Cornish notes have been issued by the Cornish Stannary Parliament with the most recent issue being in 2000.

These are the present-day successors to the British Armed Forces Special Vouchers; http://www.efipogs.com .They are not listed in Pick like the American ones are.

Aidan.

UK Decimal +

#10
Quote from: bilnic on September 05, 2009, 03:20:00 PM
Question   What is missing from the list?   At least Maundy money which I believe to be valid back to about 1820 (but I can't substantiate that), and I also believe that the old (issued up to 1944) silver 3d (three old penny) coins have never been demonetised and like the Maundy money issued pre-decimalisation are still valid at 2.4 times their old value (i.e. the face value in old pence becomes new pence).   I also believe that the 5/- (five shillings) crowns have never been demonetised and might also be valid back to the reign of George IV.   And possibly the groat (4d)?   And why am I thinking 1820?

(Above copied from my first message).

Has anyone any knowledge of demonetisation of the 5/- (Crown) and silver 3d and 4d or information on the Maundy Money?
Ilford, Essex, near London, England.

People look for problems and complain.   Engineers find solutions but people still complain.

Galapagos

Quote from: bilnic on September 06, 2009, 04:17:56 PM

Has anyone any knowledge of demonetisation of the 5/- (Crown) and silver 3d and 4d or information on the Maundy Money?

No knowledge of these, but you're close enough to the National Archives that you could spend some time there researching, now that you're retired. Go on - join and become a expert!

Go to this link for the National Archives catalogue:-

http://www.nationalarchives.gov.uk/catalogue/search.asp

Enter "maundy money" (without the quotes) in "Word or phrase"

and "MINT" (w/o quotes) in "Department or Series code",

click on "Search", and see what comes up.

If that doesn't excite you, I don't know what will.   ;)

Figleaf

Excellent suggestion! Here's another, more modest one. Rather than "think 1820", follow this link and ride Google from there :)

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

UK Decimal +

Unfortunately I am unable to leave the immediate area because I care for a sick nephew, in fact I had to rush him to hospital on Friday, so a visit (or series of visits) just isn't on.

Pity that I can't read the documents from the link that you gave.   Any more ideas?

Bill.
Ilford, Essex, near London, England.

People look for problems and complain.   Engineers find solutions but people still complain.

Figleaf

Have you seen the "request this" button? It costs some, but saves travel.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.