Local currency

Money - William Cook on how regional interests gave way to national myths on our banknotes

What defines a nation? Nationalists thought it was language. Eurosceptics think it's money, and they are probably quite right. After all, even way back in the ninth century, when Charlemagne ruled a Holy Roman Empire whose borders bore an uncanny resemblance to the boundaries of the 20th-century Common Market, he made sure that he alone had "the right to coin", the sole authority to mint money.

But if Britain's patriotic europhobes went down to the British Museum today, they would be in for a very unpleasant surprise. Because hidden away in a corner of the west wing is a new display of old banknotes that portrays the history of Middle England's beloved pound sterling in an entirely different light.

For although this fascinating collection confirms that currency is the defining thread of nationhood, the nation it reveals is not one interwoven United Kingdom, but a patchwork quilt of independent regions that has become badly frayed around the edges.

The rudest shock for Little Englanders so fearful of the impending euro is that although the Bank of England has printed paper money since 1694, its banknotes did not actually depict the monarch until 1960. Queen Elizabeth II was the first British head of state to appear on a Bank of England note, nearly a decade into her reign. What's more, until 1921, when the Bank of England finally became the sole supplier of folding stuff, at least in England and Wales, banknotes were printed by a myriad different local banks, and featured idiosyncratic designs that were often far more parochial than national. Even today, the Channel Islands and the Isle of Man still have their own notes and coins, while three Scottish and four Northern Irish banks retain the right to issue banknotes.

The intricate collage that emerges from this absorbing cross-section is not a portrait of a nation state, more a loose alliance of isolated counties, whose insular inhabitants rarely ventured beyond their nearest county town. A five pound note, printed by the Hull Banking Company, does not depict Westminster or Whitehall, but Lincoln High Street. A fiver from the Carlisle City & District Banking Company features a Carlisle cityscape, complete with castle, cathedral, factories and humdrum washing lines. Brighton's newly built Royal Pavilion is the natural choice for a Brighton Union Bank note, while the Holywell Bank chose St Winefride's Well, a holy spring named after a seventh-century nun beheaded by her thwarted suitor, to illustrate its Flintshire fiver. Provincial motifs even survived beyond the Second World War. The Clydesdale & North of Scotland Bank's 1952 pound note depicted a local beauty spot that the general manager had admired on a family holiday.

Other bygone local banknotes commemorate bygone local industries. Tin and copper mines adorn a West Cornwall Bank pound note. Fishermen mend their nets on a Berwick Bank fiver. A horse-drawn barge decorates a Suffolk & Essex Bank note. On Scottish banknotes, steel-making and shipbuilding make way for North Sea oil.

Monarchs were actually more prevalent on old Scottish notes than on English ones. The Commercial Bank of Scotland and the Aberdeen Town & Country Banking Company both used portraits of Victoria and Albert. George IV had only to visit Scotland in 1825 to get his mugshot on a Leigh Banking Company guinea.

In England, Britannia not Victoria ruled the wallets, appearing on every Bank of England note since 1694. On a York City & County Banking Company fiver, she stands guard over Scarborough. In the First World War, the Treasury gave her a helmet, shield and trident, to fend off the marauding Hun.

Britannia's Scottish and Irish sisters, Scotia and Hibernia, both featured on Scots and Irish notes, and all three of them appeared hand in hand on a Dundee Union Bank note, a symbol of unionist solidarity that would be inconceivable today. Llanidloes Bank's ten shilling note bore the arms of the Prince of Wales, but Merionethshire Bank's fiver preferred a more nationalistic druid. More recent Celtic notes reflect the gradual retreat from the heraldry of unionism. Robert the Bruce dresses for battle on a postwar Clydesdale Bank note. (Bruce would have liked the 1999 Bank of Scotland pound note, which shows the new Scottish Parliament.)

In troubled Northern Ireland, the banks must try to find icons that cannot be easily appropriated by either side. The Ulster Bank opts for the non-partisan beauty of the timeless Giant's Causeway. Belfast's Northern Bank honours politically neutral local inventors such as John Boyd Dunlop, the eponymous creator of the first pneumatic tyre.

Meanwhile, in an adjoining gallery, mainland Europe's newest banknotes prepare to usurp the lira, peseta, franc and Deutschmark. Within the wider context of this permanent exhibition, which surveys several thousand years of money-making, there is no doubt about the immense historic significance of the euro. "Plans for a single currency in Europe recall the unified systems of earlier empires," states the accompanying text. However, the designs on these new euro notes, with their uneasy, anonymous images of bureaucratic bridges, are a stark contrast to the self-confident specifics of the redundant British notes next door.

If there is any link between the aesthetics of a currency and the economy it represents, then this young pretender to the pound is surely all set for a bad beginning. Maybe the EU should ask someone from the Aberystwyth & Tregaron Bank to lend them a helping hand.

"Country Views: place and identity on British paper money" is at the British Museum, London WC1 (020 7323 8000), until 17 February 2002

This article first appeared in the 19 November 2001 issue of the New Statesman, And now the trouble really begins