Wars have a lot to answer for in Britain. One famous legacy that is still with us is income tax, which was first levied to pay for the wars in 1898.
But shortly before that, war was making the public nervous. A series of runs on the Bank of England and the government's need for gold to pay for the war left it dangerously short of bullion. By the end of February 1797, it had less than £1,000,000 left. And so, on 2 March, it started issuing low denomination promissory notes – the pound note was born (along with a two-pound note).
Many people were suspicious. Money usually came in the form of coins, and they wondered if this new-fangled paper stuff was any good. But the prime minister, William Pitt, helped maintain confidence in the new paper money by claiming the bank had plenty of money, and there was no need to hoard coins, as the paper version was just as good. And London's bankers and merchants stepped in to back the currency too, stating it was good for use in all financial transactions.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
But not everyone was so enthusiastic. The playwright Richard Sheridan mocked the Bank and the way it had become an arm of the government, by describing it as an "elderly Lady in the City, of great credit and long standing", who had "unfortunately fallen into bad company".
The Bank acquired the nickname the 'Old Lady of Threadneedle Street' at this time too, coined by cartoonist James Gillray who depicted the bank as an elderly lady being ravished by the prime minister, with the caption, "Political Ravishment, or the Old Lady of Threadneedle-Street in Danger!"
The one-pound note went through several transformations and eventually was taken out of circulation in 1984 and replaced with the equivalent coin used today. This left the £5 as the smallest note available.
-
M&S and Tesco among those warning of a £7bn Budget hitSeventy-nine UK retailers have written to Chancellor Rachel Reeves about possible price rises and job cuts - here is what it means
-
How much does it cost to move home under the Labour government?Home-moving costs are rising and could get more expensive once stamp duty thresholds drop in April 2025
-
31 August 1957: the Federation of Malaya declares independence from the UKFeatures On this day in 1957, after ten years of preparation, the Federation of Malaya became an independent nation.
-
13 April 1960: the first satellite navigation system is launchedFeatures On this day in 1960, Nasa sent the Transit 1B satellite into orbit to provide positioning for the US Navy’s fleet of Polaris ballistic missile submarines.
-
9 April 1838: National Gallery opens in Trafalgar Square
Features On this day in 1838, William Wilkins’ new National Gallery building in Trafalgar Square opened to the public.
-
3 March 1962: British Antarctic Territory is created
Features On this day in 1962, Britain formed the British Antarctic Territory administered from the Falkland Islands.
-
10 March 2000: the dotcom bubble peaks
Features Tech mania fanned by the dawning of the internet age inflated the dotcom bubble to maximum extent, on this day in 2000.
-
9 March 1776: Adam Smith publishes 'The Wealth of Nations'
Features On this day in 1776, Adam Smith, the “father of modern economics”, published his hugely influential book The Wealth of Nations.
-
8 March 1817: the New York Stock Exchange is formed
Features On this day in 1817, a group of brokers moved out of a New York coffee house to form what would become the biggest stock exchange in the world.
-
7 March 1969: Queen Elizabeth II officially opens the Victoria Line
Features On this day in 1969, Queen Elizabeth II took only her second trip on the tube to officially open the underground’s newest line – the Victoria Line.
