Part of the modern banking system involves the familiar magnetic strip on the back of credit cards and the strange-shaped numbers at the bottom of cheques. Both are designed so that a computer can read them and the cheque font is the direct precursor to the all-too-familiar barcode. These were invented in the 1950’s; the magnetic strip originally being placed on cheques before the credit card was introduced. No patent was ever claimed on them, but in 1972 a strange court case began over the cheque font and magnetic strip. A man named Richard Williams was suing the international banking system for infringement of copyright. He was claiming over 20 billion pounds in lost royalties, 2 pence for every cheque ever deposited since the font and strip was introduced. The reason: He’d invented them! The case was doomed to failure, but it gave some publicity to a remarkable man who a few years earlier had given the Banks of England many sleepless nights when he began circulating perfectly legal Welsh banknotes.
Richard Williams was born in 1915 and lived his whole life in North Wales. He started out as a bank clerk in Midland Bank (now HSBC) in Llanrwst. Then he became fascinated with computers and wrote a book in 1955 called The Electronic Office which foresaw many of the communications technologies we’re familiar with today. One of the things he predicted was the use of computer readable numbers and security using coded information stored on magnetic strips. He built working prototypes and demonstrated them to banking directors from all over the world at conferences. He was unfortunately left in the wake of bigger and more powerful organizations willing to exploit his technology, but in his later years he came up with a scheme to get his own back; which inspired many patriotic Welshmen and gave us an idea that lit up the whole fallacy of the modern financial system. He printed an independent currency beginning in 1969: the Welsh Pound.
Williams set up a company called "The Chief Treasury of Wales" which the Board of Trade refused to register because they said the name was misleading. There could be no Chief Treasury of Wales; the only chief treasury was in London. Williams then changed the name to "Y Prif Trysorfa Cymru" and the Board approved it. There was one problem: "Y Prif Trysorfa Cymru" means “The Chief Treasury of Wales”! Lucky for Williams nobody at the Board of Trade spoke Welsh! He then went on to print a series of beautiful banknotes employing a local artist to help design them. He sent them off to the Inland Revenue to be stamped because until 1971 all banknotes had to be taxed with a tuppence of stamp duty. By some amazing administrative error Williams’ notes were approved and returned with the proper 2p stamp attached! By the time the Inland Revenue realized their fatal mistake it was too late. Y Prif Trysorfa Cymru was now licensed to print legal money… forever! If they refused in future all Williams had to do was remind them that they’d approved his previous banknotes; he had them by the balls and he knew it! Over the next two years, several dozen Welsh banknotes were printed and went into circulation: The one pound, fiver, tenner, five shilling and ten shilling, and one extremely rare million pound note, the worlds’ highest valued banknote. Wales is the only country in the UK without its own paper money and the only gold-producing nation in the world without its own currency; but for a couple of years that was not the case. The Welsh Pound became a common sight in corner shops and Williams set exchange rates for Pound sterling as well as other currencies. He traveled to Switzerland and the USA to invest his currency there. He also made a fortune selling the notes to collectors. In 1971 when the British currency was decimalized and stamp duty abolished, the authorities thought they’d got the genie back in the bottle, but alas for them Williams found a loophole; simply changed his company name to “The Black Sheep Bank of Wales”, naming it after a famous local community bank from the 18th Century. He began printing new decimalized notes (he even had the cheek to put “Formerly Y Prif Trysorfa Cymru" on all his notes!). The company brought out a 50 New Pence note which was very popular because the new 50p coin with its chunky size and polygonal shape was very unwelcome. The story of Richard Williams and the Welsh Pound is told in the book Money Galore by Ifor Wynne-Jones, friend and accomplice to Williams: http://www.amazon.co.uk/Money-Galore...0636131&sr=1-1
Eventually the notes ceased when Williams began concentrating on his copyright case, but the moral of this long story is that Williams was demonstrating an important principle: Money is not something physical that can be owned, it in merely a measure or scale to declare the value of something within the financial system. We don’t have to use the usual scale, your nation’s currency, if you don’t want to. If you choose to employ a separate currency there’s no reason why you shouldn’t, so long as all the people in the shops etc that you use accept it too. Like so much in life it’s simply a choice. We think we don’t have this choice because we don’t question the common fallacy that money has inherent value. This fact was lost on the deluded Iraqis who broke into the banks and stole all the money after the fall of Saddam. They really thought they were taking something of value when in fact the currency they were stealing was no longer legal tender under the new regime. They raided a bank to steal useless bits of paper! The success of the Welsh Pound came not from the fact that it had been approved by being taxed, but by the fact that with this approval people took it seriously and began using it. If people had understood the principle and decided to use it even without its license then it would still have been a success. What Williams can do, we all can do. Just one eccentric Welsh businessman, starting a small currency in a small local area almost brought the Bank of England to its knees. Imagine if we all started doing it!
It’s a little known part of history that in response to the stock market crash of 1929, many American towns started their own local economies. The one in Ithaca, New York is running to this day. It has a currency called the Ithaca Hour, because each one represents payment for an averagely-paid person’s single hour of work. The local banks will let you deposit it and it’s causing a terrible headache for the Federal Reserve (Bank of England US branch!) not least because they can’t find a way to tax it. But what they’re really scared of is that the idea will catch on! Well the thrust of this article is to make the idea catch on. Up yours, Allan Greenspan!