Last month, Bangladesh Bank warned that some are playing games, conducting scams, online with “oversized” copies of banknotes. Which reminds me that my native England used to have the crime of “uttering.” The penalty for being caught and convicted of this was to be hung by the neck until dead -- fairly serious then. Uttering itself was the crime of “passing on” false documents. Not creating them -- that was counterfeiting -- but of actually going and using them out in the real world.
People really were hanged for this too: There's an online database of all English executions in history and even in the early 19th century -- up to, say, 1850 -- each and every such year there are a few executed for this uttering. They took this seriously -- the use, not just the making of, false banknotes.
I'm also reminded that I saw a whole uttering scam unfold in front of me. This was in the 1980s -- I'm old, but not 19th century old -- and I was working, as a student, in a pub in the east end of London.
The east end has always been the centre of nefarity and criminality and someone had worked out how to make reasonably convincing copies of the £20 note. Back then a pint of beer was under £1. Now, the printing of the fake notes doesn't make money. It's people being able to turn them into “real” money -- uttering -- which makes the money.
So, the deal was that young lads would buy these fake £20 notes off the printers, or their compadres. Pay, say, £8 each. Then they'd “go up west” to the richer areas of London. Leicester Square, Covent Garden, the “West End” and two would walk into a pub.
Buy two halves of beer -- under £1. Get £19 in change, pay the printer £8 for the £20 and make £11. Do this, moving from pub to pub, 10 times in a night and make a good profit and gain a belly full of beer.
No, I didn't. One of the interesting things I did observe is that no one ever tried to use one of these fake notes in the pub where I worked -- good criminals are honest in their own way.
Or, perhaps, you never do these things on home turf. The other fun thing was that it only took about six weeks before the design of the official banknote changed. I've since found out that the Bank of England (who print the English notes) always have a few design changes ready to roll. Just in case someone does figure out how to print the older notes.
So far, just the reminiscences of an old man. But why was uttering such a crime that people were hanged for it? Why is the Bank of England ready with new note designs?
Because the only reason that paper money has any value is because we all agree that it has value. This is “fiat” money, which when properly translated into modern language means that it has a value just because the government says it does.
Which is fine. We need to have a form of money, fiat money is nearly always less bad than the other varied forms of it that we can have. But one of the times that it isn't is when people start to utter it. Not forge, because that's not the point.
It's when people lose money -- pay £19 change on a fake £20 -- that the trust in that fiat money is destroyed. Which is why uttering always was that grand and important crime, because it destroys trust in the very institution of money itself.
Fake money isn't, in fact, all that much of a problem in the grand scheme of things. How much is anyone going to print given how much is out there from the government itself? Except that thing about the trust in the government money itself. If we stop believing the pieces of paper are real money then all of it's worth nothing, not just the fakes. Which would, you know, be a real problem.
It's also true that I just love the word “uttering” as the description of a crime but perhaps that's just my problem, not anyone else's.
Tim Worstall is a senior fellow at the Adam Smith Institute in London.