Banknotes
China - First paper money in the world, the Ming dynasty, 1st issue, 1375
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The first paper money appeared during the Tang dynasty in China, in the 7th century, in order to relieve the traders from transporting such great amounts of metal currency of low value. The Paper Money Museum shows a Chinese note from the Ming dynasty (1368-1699). This note had the same value as 100 bronze coins, which weighed 3.5 kg
At the top of the note, Chinese characters read: "Da ming tong xing bao chao", written from right to left, which means "Note of the Treasury of the Great Ming Dynasty ". The caption with 2 characters "yi guan" (a cord) heads the picture of a cord with 1,000 coins, grouped into 10 groups of 100 coins. Below are the penalties that will be inflicted on forgers.
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The Bank of Brazil
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The first paper money of Brazil is featured because it is so important. The Bank of Brazil was created by King John VI in 1808 and was the first Portuguese Bank, since at that time Brazil was a Portuguese colony. The high costs of establishing the Portuguese court in Brazil were the immediate reason for creating this bank, the fourth issuing bank to appear in the world, preceded only by the Bank of Stockholm (1656), Bank of England (1694) and the Bank of France (1700).
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The Bank of Lisbon
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The first Bank to exist in continental Portugal was the Bank of Lisbon, which was created in December 1821 with commercial and issuing functions. It began operation with a capital of 5 million escudos. In March 1825 a branch was approved in Oporto and in 1846 the Bank of Lisbon merged with the Companhia Confiança Nacional, giving rise to the Bank of Portugal. Queen Mary II came to the throne in 1834. Some of the main measures taken by her government were to introduce steam into industry, make primary education compulsory, introduce the decimal monetary system and create the Bank of Portugal.
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The paper used in the production of the first notes was supplied by the Alenquer Factory, and later bought in England. The Bank of Lisbon notes are extremely beautiful. They were designed by the famous painter Domingos Sequeira (shareholder of the Bank) who insisted on putting all his art on to them.
Issuing Banks in the North
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The monopoly of the Bank of Lisbon was broken, in 1834, with the Banco Comercial do Porto, which obtained authorisation to issue banknotes. Later on, other issuing Banks appeared in the North, such as the Banco Aliança, the Banco Comercial de Braga, the Banco União do Porto and the Banco do Minho. They issued notes from 1835 until 1889. Obviously, so many issuing banks meant that it was extremely difficult to control the issue of notes. |
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Other issuing organisations
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In addition to the Bank of Lisbon and the banks in the North, there were other entities which also issued paper currency. The União Comercial and the Empreza da Estrada de Lisboa ao Porto are two such examples of this phenomenon, which lasted several years. The origin of this phenomenon is interesting. The documents (notes) began with the custom of giving them to clients as “receipt” of cash advances, to pay for future orders: these amounts earned interest. Since they obtained authorisation to be transmitted to third parties and repaid, they were considered “notes”.
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The Bank of Portugal
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On 19 November 1846, the Bank of Portugal was created. It started out as just a bank, without the monopoly on note-issuing. From the start of its activity, it became one of the State’s main creditors and, in 1887, an agreement was established granting it the functions of State banker and general treasurer. Nevertheless, many banking institutions, including the issuing banks of the North, resisted this monopoly for several years. |
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The first notes of the Bank of Portugal were a continuation of those of the Bank of Lisbon. Printed in a single colour, on a white background, they were very easy to copy.
In order to make use of the paper already in existence at the Bank of Lisbon, the Bank of Portugal printed its notes, for over 28 years, with the watermark of the former issuing Bank (until 1875).
Until 1892, the notes issued by the Bank of Portugal were handwritten. The notes could be reimbursed (in copper, silver or gold), which could only be done at the Bank of Portugal branches in Lisbon, Oporto and Faro. In the case of Oporto and Faro, they had an identifying stamp.
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The first great Portuguese revolution of the 20th century led to the fall of the monarchy and the implantation of the Republic, on 5 October 1910. The first President of the Republic was Manuel de Arriaga. The Implantation of the Republic led to the minting of new notes and coins, but without interrupting the decimal system. The monetary system was remodelled and the escudo was introduced as the currency, substituting the real. In 1911 the standard currency became the escudo.
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For a period of almost 20 years, the reis notes circulated simultaneously with those of the escudo, merely with the word REPÚBLICA written over them. There were notes of 500, 2500, 5000, 10,000, 20,000, 50,000 and 100,000 reis).
The escudo was almost given the name LUSO and there were even models made with the inscription “Luzo”. The name escudo appeared when King Afonso V had the first escudos minted. They were given this name because they bore the crowned escutcheons.
The years between the 2nd World War (1939-1945) and the 1980s were an important period in the History of Portugal.
Unlike in other European countries, the war did not bring about the fall of the dictatorship. The Portuguese colonies did not obtain independence. The colonial war dragged on for many years. The 25th of April 1974 brought democracy, decolonialisation and a huge challenge to the Portuguese people: to make up for the economic and social differences between Portugal and the rest of Europe.
During the New State and the revolution of 25th April 1974, the Bank of Portugal continued to issue notes, normally portraying historic figures.
The highest value note in circulation was the 10,000-escudo note.
The last issue was in May 1996 and was made to commemorate the Portuguese Discoveries and the 150 years of issues by the Bank of Portugal.
The following notes were issued:
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1000$00 |
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These notes circulated until 1 March 2002, when the Euro became the single currency of the “Euro Zone”.
The Nacional Ultramarino Bank
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King Luis I became known as the “Numismatic King”. On 16 May 1864 he signed the decree that would create the Banco Nacional Ultramarino, whose first chairman was Francisco de Oliveira Chamiço. The Banco Nacional Ultramarino was one of the most important entities in the harmonisation of the monetary system in the Portuguese colonies. After the first notes issued by the local Treasuries, the B.N.U. gained the status of issuing bank for the colonies. Their economic potential, and the fact that other countries coveted those territories, led the Portuguese authorities to centralise the issuing of money. |
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In 1865, the BNU opened a branch in Luanda and put its first issue into circulation – "emissão tipo Succursal de Loanda". These notes expressed in "reis", circulated together with the notes of the Treasury of the Province of Angola, which continued in circulation until 31/12/1900.
The first notes issued to circulate in all Portuguese territories overseas were hand-written (with the exception of Guinea and Timor). In March 1909, the issues for the five African colonies were made uniform, with the effigy of the navigator Vasco da Gama. From then onwards, the notes had the same values, the only differences being in the indication of the province. This series was called the “VASCO DA GAMA ISSUE”.
From 1910 the BNU issues were expressed in escudos. In 1926, with the Currency Board, they become "Angolares". These continued in the paper money of the Bank of Angola until the Organic Law of 1953, when all values have to be expressed in escudos (currency unification).
Alves Reis, a nearly-perfect fraud
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From 1925 he was the talk of the town. Politicians, soldiers, lawyers, journalists and even the average man in the street wondered how such daring could have been possible.
This year saw the end of the saga of Alves Reis, the greatest swindler in Portuguese history, when groups of two 500-escudo notes, plate 2, with the same serial number, were discovered in Oporto. For a year, he carried out one of the most famous frauds in the history of Europe, known as the Banknote Case. In 1924, using forged documents he managed to convince the English firm that normally made the notes for the Bank of Portugal, Waterlow & Sons, to supply him with 200 thousand 500-escudo notes, plate 2, dated 17 November 1922, with the figure of Vasco da Gama, made from a specimen from Marang, a company also involved in the fraud. Artur Virgílio Alves Reis, born in Lisbon, in September 1896, and from a middle-class family, would end up being charged with, among other things, conspiracy and note forgery.
He spent 20 years in prison (1925-1945) and his lawsuit filled 75 volumes and 32 appendices. |
