BANK NOTES. Banknotesarepromissory notes, issued by a bank and payable to bearer on demand. but unlike promissory notes they may be re-issued after payment. They are practically money and in the ordinary course of business are treated as cash.
The definition of a bank note by 17 & 18 Witt. c 83, ticctinti 11, is All bills, drafts, or notes, other than notes of the Bank of England, which shall be issued by any banker, or the agent of any hanker, for the payment of money to the bearer on demand ; and all bills, drafts or notes so issued which shall entitle or be intended to entitle the bearer or holder thereof, without indorse ment, or without any further or other indorsement than may be thereon at the time of the issuing thereof, to the payment of any sum of money on demand, whether the same shall be so expressed or not, in whatever form and by whomsoever such bills, drafts, or notes shall be drawn or made, shall be deemed to be bank notes of the banker by whom or by whose agent the same shall be issued within the meaning of the 7 & 8 Vict.
c. 32, and S & 9 Vict. cc. 37 & 38." Notes may not be issued in England for a less sum than five pounds, but in Scotland and Ireland they may be issued for one pound and upwards. Notes for less than z5 were prohibited in England after April 5, 1829 (7 Geo. IV c. 6, Section 3).
The Chinese are said to have been the inventors of bank notes about the year 119 B.C.
The origin of bank notes in England is to be found in the receipts which goldsmiths gave for money left with them for safe keeping. At first they were special promises with regard to some particular money in their possession, but, afterwards, they became general promises to deliver a sum of money on demand.
Bank notes have relieved bankers and the public generally from many inconvenient transfers of large quantities of coins, which would otherwise have been necessary. Pro fessor Jevons says : " I find that a Bank of England note weighs about 20i grains, whereas a single sovereign weighs about 123 grains, and the note may represent five, ten, fifty, a thousand or ten thousand such sovereigns with slight differences in printing." A country bank which is authorised to issue its own notes, must take out a licence for each place where its notes are issued. (See LICENCE.) A country banker usually issues his own notes again and again until they become so soiled as to be unfit for further circulation, when he withdraws the worn ones and issues others in their place.
The duty upon bank notes, as imposed by the Stamp Act, 1891, is :— s. d.