How can a pounds 1 note be worth over pounds 50,000?

Twenty years of inflation should have taught us that keeping old notes and coins is a mug's game. But really old money can be worth more than its equivalent in gold. A Bank of England pounds l note sold at auction in 1993 for pounds 57,200. Amittedly this was no ordinary example, for dated 2 March 1797 and bearing the serial number `2', it is the second note of the denomination ever issued by the Bank.

On April 24 Spink will be offering another Bank of England rarity at auction - a pounds l,000 note. It surprises many people to learn that the Bank issued pounds l,000 notes from the eighteenth century to the early 1940s.

Given that even in the 1930s, pounds l,000 would comfortably buy a couple of houses in Greater London, they were treated with care. According to the Bank's records, 63 examples apparently remain at large, although most of these would have perished in the bombing raids of the Second World War.

The example which will be offered by Spink on Wednesday (pictured above) is a specimen dated 7 September 1922. Specimen notes were issued by the Bank to other central banks to assist identification. Over the years, revolutions and a less meticulous attitude to currency in certain countries has resulted in some getting into private hands. However, large denomination specimens are of the highest rarity. Spink is anticipating its example will realise pounds 20,000-pounds 25,000.

A banknote is not "just money". It can take up to a year to engrave a single plate which is used to print just one side of a note. Just look at the intricate design of any currency note. There are watermarks, elaborate designs and an incredibly subtle use of colour. These are all techniques used to deter the forger. A banknote is where art and technology meet and the result is a miniature work of art.

Banknotes have certainly been an expanding field of collectabilia in recent years. There are two quite distinct markets. Serious collectors are prepared to pay thousands of pounds for just a single note, while there are others who get just as much pleasure simply spending a few pence. It is possible to purchase a pack of 100 uncirculated world notes for pounds 29.

Barnaby Faull, who heads Spink's banknote department, believes the market is now buoyant because banknotes escaped the investment buying of the 1970s and 1980s. Certainly both the coin and stamp markets suffered from an influx of speculators who were buying solely for investment reasons.

They learnt to their cost that when sellers outnumber buyers, prices fall dramatically. Whereas many historic coins may be purchased today for the same prices at which they were selling in the mid-1970s, the market for banknotes has risen in recent years.

The price for Hong Kong banknotes bearing low serial numbers has risen the most dramatically. For example, a Government of Hong Kong $1 which had been sold by a dealer in the late 1970s for pounds 70 found a buyer at Sotheby's in 1993 for pounds 28,600. The attraction of the piece was the serial number - A00001. However, Simon Narbeth of the specialist paper money dealers Colin Narbeth & Son, avoids all notes from the Far East on the basis that the market for the material is not collector-dominated.

There is a strong collectors' demand for English and Welsh provincial banknotes. From about 1780, over 900 different banks operating outside London have issued their own notes. Alphabetically from Ashby-de-la-Zouch to York, local paper money supplemented the nation's coinage to oil the wheels of commerce. Many of these banks failed, while the survivors merged to form the high street banks we know today.

From 1844, their note issuing was strictly controlled and banks which merged were obliged to refrain from printing their own money. The last privately printed banknote was issued in 1920 by Fox, Fowler of Wellington, the year before it merged with Lloyds.

Visually, these provincial notes can be most appealing, with vignettes of rural scenes, allegorical figures, famous local buildings, or simply a shield of arms. They are an integral part of local history with the early ones being signed by the partners who owned the bank. Today, the notes generally sell for pounds 100-pounds 200 each, but rare items can change hands for over pounds 1,000.

For those with an interest in historical events, a note issued during the French Revolution may appeal - a 1795 example can be secured for around pounds 6. A note hand-signed by General Gordon during the siege of Khartoum is a little more expensive, but can be purchased from around pounds 180, whereas a note issued during the siege of Mafeking under the authority of Baden Powell retails at around pounds 50-pounds 100.

Should banknote collecting appeal to you, whatever you buy, treat your acquisitions as an interest and not as an investment. Regard any increases in value as an added bonus rather than a goal in itself.

For a complimentary copy of Coin News, which incorporates Banknote News (cover price pounds 2) and a free banknote, send 50p in stamps to cover postage, together with your name and address to: The Independent Readers' Offer,Token Publishing, PO Box 20, Axminster, Devon EX13 7YT

The Spink sale of Banknotes takes place on 24 April at 10am. For further details telephone 0171-930 7888.

For a complimentary list of paper money for sale, contact: Colin Narbeth & Son. Tel: 0171-379 6975.

Start your day with The Independent, sign up for daily news emails
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Have you tried new the Independent Digital Edition apps?
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Finacial products from our partners
Property search
Don't count your retirement money yet: employers will stop receiving a pension rebate next year and their staff may lose out

Defined-benefit pension schemes: Rebate change in 2016 may leave you out of pocket

Employees in defined-benefit schemes are held up as the lucky ones, but the state pension scheme will be overhauled in April 2016
Labour will raise the national minimum wage to more than £8 an hour by October 2019 (EPA)

Barclays new Blue Rewards hands cash to customers. What’s the catch?

Joining Barclays Blue Rewards costs £3 a month but then lets customers in for handouts of up to £15 a month

New research reveals that despite the recovering economy, four out of five low-income households have seen no sign of their financial situation improving

Hard-up families could be eligible for financial help

A charity is urging anyone struggling financially to see if they could get help from the state

When is the best time to buy foreign currency?

Video: With an election looming, a hung parliament could hit sterling

General Election 2015: Vote for the party that will boost your finances

Experts warn that the general election is unlikely to lead to stable markets. Simon Read talks to two investment managers who are advising caution

Make the most of your money in 2015-16: The end of the tax year is the beginning of the next...

The new tax year brings with it a raft of new rules and regulations

General Election 2015: Will pension reform be a major factor?

Video: Tom McPhail, head of pensions at Hargreaves Lansdown, says May's outcome could alter your pension

General election 2015: David Cameron's promise brings uncertainty to investors

Video: Simon Read talks to Fidelity's Tom Stevenson

Have you won one of the £1m Premium Bonds' jackpots?

Video: The Independent's Personal Finance Editor runs you through the key facts about Premium Bonds

Give me the money: but not all providers are ready for transfers to Junior Isas

Parents will be able to switch dormant child trust funds to more competitive Junior Isa

Millions of dormant junior savings accounts were yesterday given the go-ahead to swap to better deals as the Government agreed to allow switching. Samantha Downes reports
Hard labour: a woman bears the load in a factory. But equal treatment is causing pension problems

Women to lose benefits from contracted-out pension scheme

Workers were promised that the state would pay inflation increases on parts of their pensions. But now the DWP disagrees
The Budget, says one critic, should have done more to encourage construction of affordable homes

Help for buyers but where are the homes?

A vote-winning Budget promised less tax, greater savings flexibility, and government handouts for first-time housebuyers
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
    Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

    UK's Major Tum to blast off on a spice odyssey

    Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
    John Harrison's 'longitude' clock sets new record - 300 years on

    ‘Longitude’ clock sets new record - 300 years on

    Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
    Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

    Let the propaganda wars begin - again

    'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
    Why Japan's incredible long-distance runners will never win the London Marathon

    Japan's incredible long-distance runners

    Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
    Why does Tom Drury remain the greatest writer you've never heard of?

    Tom Drury: The quiet American

    His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
    You should judge a person by how they peel a potato

    You should judge a person by how they peel a potato

    Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
    Beige is back: The drab car colours of the 1970s are proving popular again

    Beige to the future

    Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
    Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

    Bill Granger cooks with fresh cheeses

    More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
    Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

    Shay Given: 'This FA Cup run has been wonderful'

    The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own