Manx pound
From Wikipedia, the free encyclopedia
| Manx pound | |||
|
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| ISO 4217 Code | none | ||
|---|---|---|---|
| User(s) | Isle of Man | ||
| Inflation | 3.6% | ||
| Source | The World Factbook, 2004 | ||
| Pegged with | variant of pound sterling | ||
| Subunit | |||
| 1/100 | penny | ||
| Symbol | £ | ||
| penny | p | ||
| Plural | |||
| penny | pence | ||
| Coins | 1p, 2p, 5p, 10p, 50p , £1, £2 | ||
| Banknotes | £1, £5, £10, £20, £50 | ||
| Treasury | Isle of Man Treasury | ||
| Website | www.gov.im/treasury | ||
The Manx pound or Isle of Man pound is the currency issued by the government of the Isle of Man.
Contents |
[edit] Currency union
The Isle of Man is in currency union with the United Kingdom, and the Manx pound is not a separate currency but is a local issue of banknotes and coins denominated in pound sterling,[1] in a similar way to the banknotes issued in Scotland and Northern Ireland (see Sterling banknotes). It can be exchanged at par with other sterling coinage and notes (see also Sterling zone).
For this reason, ISO 4217 does not include a separate currency code for the Manx pound, but where a distinct code is desired IMP is generally used.[2]
UK notes and coins are generally accepted in the Isle of Man. Although there is no legal impediment, Manx notes and coins are generally not accepted in the United Kingdom, and travellers are advised to exchange them before leaving the island. The Manx coins do, however, sometimes creep into general UK circulation as they have identical size and shape to the corresponding UK coins. Many banks and Bureaux de Change in the UK will convert Manx notes to British notes at no cost. To assist those travelling, the ATM machines at the Sea Terminal, Douglas, and at Ronaldsway Airport (IOM) both issue British notes only.
The Isle of Man Treasury states that the locally issued currency, United Kingdom coinage and Bank of England notes are all legal tender within the island.
[edit] History
The first Manx coinage was issued privately in 1668 [3] by a Douglas merchant, consisting of pennies equal to their English counterparts. These 'Murrey Pennies' were made legal tender by order, and in 1679 when the Court of Tynwald outlawed the unofficial private coinage that had been circulating prior to and alongside John Murrey's pennies (English coinage was also not prohibited by this Act). These coins were the first to depict the 'triskeles' symbol and the Island motto "Quocunque Gesseris Stabit" (sic), both of which would continue to feature on Manx coinage until the current day (the motto was corrected to "Quocunque Ieceris Stabit" in the early 18th Century).
[edit] Devaluation
However, because of the difficulty of maintaining the supply of coins on the island, in 1692 the value of the Manx coinage was decreased, with crowns circulating at 5 shillings 4 pence, halfcrowns at 2 shillings 8 pence and guineas at 22 shillings. Tynwald also at this time forbade the removal of money from the island in an attempt to maintain supply.
In 1696 a further devaluation occurred, with all English silver and gold coins valued at 14 pence for every shilling. Between 1696 and 1840, Manx copper coins circulated alongside first English, and later British silver and gold coins of high values at the rate of 14 pence to 1 shilling. As in England, there were 20 shillings to the pound. So £100 Sterling in Manx coinage after the devaluation would have been worth £116 13s 4d before.
[edit] Government coins
In 1708, the Isle of Man Government approached the Royal Mint, and requested that coinage be issued for the island. The then Master of the Mint, Sir Isaac Newton, refused.
As a result, the first Government issue of coins on Man took place in 1709, in penny (£300 total) and halfpenny (£200 total) denominations. This coinage was made legal tender on 24 June 1710. An additional issue of these coins occurred in 1733 (£250 in pence, £150 in halfpence), and Tynwald took the opportunity to prohibit the circulation of any 'base' (not silver or gold) coinage other than that issued by the Government. These issues of coins have the crest of the Stanley family, Lords of Mann, on the obverse (an eagle and child on a cap), together with the Stanley family motto, "Sans Changer". The 1709 issue was a poor quality casting produced in England; the 1733 issue was a higher-quality struck coin produced in Castletown.
An updated issue of Manx coinage was produced in 1758, totalling £400. It replaced the crest of the Stanley family with a depiction of the Ducal coronet of the Duke of Atholl above the monogram letters A.D. (for the Latin, 'Atholl Dux').
In 1786, a new design of coinage was issued, with the head of King George III (now the Lord of Mann) and the English state motto on the obverse, and the triskeles and Manx motto on the reverse. The standard Lewis Pingo portrait of the King was used, the same as on the British coinage, which showed the King with a laurel wreath instead of a crown.
Further issues occurred in 1798 and 1813. As with the previous coins, they were the same size and material (copper) as the English coins and would easily pass for them, however as Manx pennies were 14 to the shilling they were worth less than their English counterparts.
It therefore occurred to some individuals that they could change shillings to Manx coinage, and export them to England, making a profit of £2 for every £12 in Manx coinage so transferred. This happened on such a scale that by 1830 the island was almost totally deprived of coinage.
[edit] British Government coinage
In an attempt to resolve this problem, a proposal was introduced to abandon the separate Manx coinage in favour of British coins. This was rejected by the House of Keys in 1834, but they were overruled by the British Government in 1839. An Act was passed declaring that "...the currency of Great Britain shall be and become, and is hereby declared to be, the currency of the Isle of Man", and this remains Manx law to this day.
The Royal Mint then issued a total of £1000 in pennies, halfpennies, and now farthings, similar to the previous design but updated with the head of Queen Victoria. Following an Act in 1840, these were to be valued at 12 pence to the shilling. All coins issued before 1839 were declared by this law to no longer be 'current' and were recalled by the Board of Customs and exchanged by the Royal Mint at their original nominal value for the new coinage.
There was resentment on Man to this change, with some islanders feeling defrauded, and serious rioting took place in Douglas and Peel. These were known as the 'Copper Row' riots, and were put down by the Manx militia.
[edit] 131 years without insular coins
After 1839 no further Manx coins were issued, and they gradually became scarce and were replaced in general circulation on the island by the coinage of the United Kingdom. They did not cease to be legal coinage on Man until decimalisation in 1971, and examples exist to this day.
From its foundation in 1865, the Isle of Man Bank issued its own banknotes. In 1961, Tynwald revoked the bank's licence to issue banknotes, and the Isle of Man Government started to issue its own banknotes.
[edit] Decimalisation
In 1971 the United Kingdom moved to a decimal coin system. The Isle of Man Government, having issued its own banknotes for ten years, took the opportunity to approach the Royal Mint and request its own versions of the decimal coins. These were denominated in half penny, penny, two pence, five pence, ten pence and fifty pence. The old shilling and two shilling coins circulated for a time alongside the new coins, as they were equivalent to the new five and ten pence coins. As the 1961 banknote issue had included a 10 shilling note, a new 50 pence banknote was also introduced at this time to replace it.
From 1972 onwards, production of the coinage and commemorative crowns was transferred from the Royal Mint to Pobjoy Mint.
The Isle of Man Government introduced a £1 coin in 1978, five years before a similar coin was issued in the UK. A twenty pence coin was introduced alongside its UK counterpart in 1982. Similarly, a bi-metal £2 coin was introduced alongside a UK version in 1998.
A polymer £1 banknote was introduced in 1983 but discontinued from 1988. The 50 pence banknote was withdrawn in 1989.
[edit] References
- The Copper Row. J. B. Laughton, The Manx Society
- A History of the Isle of Man. A. W. Moore, Speaker of the House of Keys
- Graham Lloyd-Jones, Coins Section, Isle of Man Treasury
- Letter X, John Feltham's Tour, 1798
[edit] Modern coins and notes
- See also: Coins of the Manx pound
The modern Manx coinage is similar to UK coinage in terms of coin denominations, sizes and shapes, but carries a unique range of Isle-of-Man-themed reverse designs. The obverse of Manx coins bears the same portrait of Elizabeth II as UK coins, with the words ISLE OF MAN to the left. Unlike the UK equivalent, the Manx one pound coin does not bear an edge inscription.
The Isle of Man continues to issue a one pound note in addition to the one pound coin (in the UK, with the exception of Scotland, the one pound note has now been discontinued). The Isle of Man one pound note shows the triskelion and the Lord of Mann.
The pledge to honour the banknotes (the "promise to pay the bearer on demand") is in the name of the Isle of Man Government.
Other note denominations are five, ten, twenty and fifty pounds – the same as in the UK. The Manx five pound note is the only known banknote to picture a pub on it. In the bottom left-hand corner of the reverse, the Castle Arms (known as the Glue Pot) is shown opposite Castle Rushen, Castletown.
[edit] Manx Pound and the euro
It is the Manx Government's position that, if the United Kingdom decides to participate in the euro, then it would be likely that the Island would also choose to participate in some form. Primarily this is because most of the Island's trade is with the United Kingdom and Europe and the break-up of the currency union with the UK would cause economic harm to the Island, although there is also concern that the island's economy is not large enough to withstand attack by currency speculators if the Manx pound became free-floating.[4][5]
"The idea that the Isle of Man could manage its own currency, for example, with all the difficulties and pitfalls this would involve, is not a viable option."
—Jeremy Peat, Royal Bank of Scotland
Tynwald passed the Currency Act 1992 in preparation for the euro. The Isle of Man wishes to retain its right to issue its own currency, believing it to be an important public statement of independence, and the Act allows the issue of a new Manx currency at parity with the euro - referred to as a 'substitute euro'. Retaining the island's own coinage also enables the Isle of Man Treasury to continue to benefit from the accrual of the interest on the income of the issued money supply.
Manx versions of the euro coins have already been designed, as have equivalents to the euro banknotes for all except the €500 note (the Treasury assume there is no demand for such a high value note).[6]
However, issuing a Manx variant of the local currency might introduce difficulties. Monaco, San Marino, Andorra, and the Vatican City State are all outside the European Union and have adopted the euro as their official currency, and although Monaco, the Vatican and San Marino have local versions of their coins (in common with E.U. Member States), there are no variations on EU banknotes allowed.
Monaco formerly used Monegasque francs at par with the French francs, while San Marino and the Vatican used Sammarinese lira and Vatican lira at par with the Italian lira. Andorra did not have a currency of its own, and used a mixture of French francs and Spanish pesetas.
Before the introduction of the euro, Monaco, San Marino and the Vatican entered into monetary agreement treaties with the European Union, allowing them to mint their own variations of the euro coins.
The euro became the de facto currency of Andorra. Andorra has designed its own euro coins, but has to date not issued them except as a 'pattern set'. This is because the Council of the European Union has stated (2004/548/EC) that it believes that only the European Central Bank has the authority to produce the euro currency, that it would regard alternatives as 'forgeries', and that if an unauthorised issue were introduced then the state responsible would have restrictions imposed on its ability to access the interbank payment systems within the EU. For a small country heavily reliant on acting as an 'offshore' financial centre, the latter would be problematic.
Negotiations for a monetary agreement between Andorra and the EU began in 2004, but have not been fruitful to date. As a precondition to the issue of Andorran euros, the EU has demanded that Andorra comply with all EU legislation relating to banking and finance, effectively ending its role as a 'tax haven'. It is possible that the Isle of Man could face similar pressures, and the island would also face the additional hurdle of the United Kingdom having responsibility for external relations - something that could come into play in the event of a disagreement with the EU over currency.
If, after converting to the euro, the exchange rates set by the European Central Bank were to cause economic harm to the Isle of Man then there would be no eligibility for 'compulsory funding' under Protocol 3 of the Maastricht Treaty.
The Isle of Man Treasury has some concern that use of the island as a 'tax haven' would increase if it were in monetary union with the entire euro zone, and that this could be another cause of considerable conflict between the Isle of Man and the European Union.
References:
- A review of European Economic and Monetary Union, and its Implications. Isle of Man Treasury, March 1998.
- Council of the EU Decision 2004/548/EC
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