Bank-Notes. For our present purpose we include in this description all paper substitutes for metallic currency whether issued by banks, governments or other financial institutes.

Early bank-notes were simply printed forms in which the amounts were written by hand. They were usually for large amounts (£40 and upwards) and were printed upon water-marked paper; and, although no precautions were taken in the engraving to prevent fraudulent imitation, forgeries were comparatively rare. But, when at the end of the 18th century small notes for £1 and £2 were put in circulation, forgery became rife, as many as 352 persons being convicted of this crime in England in a single year; and from that time to the present a constant trial of skill has been going on between the makers of bank-notes and the counterfeiters. Engine-turned ornaments and emblematical figures or views introduced in the engraving, in conjunction with special water-marks in the paper, held the forgers somewhat in check until the discovery of photography put into the hands of the counterfeiter a most dangerous weapon, by the aid of which complicated patterns and vignettes could be perfectly reproduced. To prevent such reproduction Henry Bradbury in 1856 introduced anti-photographic bank-note printing, in which the essential portions of the note were printed in one colour and over this another protective colour was placed.

A photograph of a note printed in this way presented a confused mingling of the two colours; but with the advance of photographic knowledge means were found of obtaining a photograph of either colour separate from the other, and it consequently became necessary to introduce a third colour and to secure a special photographic relation between the three colours to prevent their separation.

Photography, however, although the most dangerous weapon of the counterfeiter, is not the only means of imitation available, a fact which is sometimes overlooked. A note may be perfectly secure against photographic reproduction, but from the absence of other necessary features may be easily copied by an engraver of ordinary skill. There are two systems of engraving employed in bank-notes: - (1) line-engraving in which the lines are cut into the steel or copper plates; and (2) relief-engraving in which the lines stand up above the plate as in wood-engraving. In the former, adapted to the process called plate-printing, the ink is delivered from the lines in the plate to the paper pressed upon it; in the latter, adapted to surface-printing, the ink is spread upon the face of the lines and printed as in typography. Plate-printing gives by far the finer and sharper impression, but as there is a perceptible body of ink transferred to the paper from the cut lines, it has been supposed that an impression from plate would be more easily photographed than one from surface where only a film of ink is spread upon the top of the raised lines.

But surface-printing being much less sharp and distinct than plate-printing, imperfect copies of notes for which that process is used are the more likely to escape detection. The plates upon which the early notes were engraved being of copper quickly wore out and had to be constantly replaced. The result was great difference in the appearance of the notes, those printed from new plates being sharp and clear, while others, printed from old plates, were pale and blurred. These differences were a great assistance to the forger, as the public, being accustomed to variations of appearance between different genuine notes, were less apt to remark the difference between these and counterfeits.

In the early part of the 19th century, Jacob Perkins (1766-1849) introduced into England from America what is known as the transfer-process, in which the original engraving on steel is hardened and an impression taken from it on a soft steel cylinder, which in its turn is hardened and pressed into a soft printing-plate. By this means as many absolutely identical plates can be produced as may be required, and being hardened they will yield a very large number of prints without any appreciable deterioration. Another method of securing uniformity is the multiplication of plates by electro-deposition, the surface of the copper-electrotype plates being protected by the deposit of a film of steel which effectually prevents the wearing of the copper and can be renewed at will.

The water-mark of the paper, on which formerly reliance was placed almost exclusively, puts a difficulty in the way of the counterfeiter, but experience has shown that in ordinary circumstances it does not in itself afford adequate protection. The means by which it can be imitated are well known, and, since a distinct water-mark is incompatible with strong paper, the life of a water-marked note is much shorter than that of one printed upon plain paper. The best bank-note paper is made from pure linen rags and was formerly made by hand. Machine-made paper is however now largely used, as it possesses all the strength of hand-made and is much more uniform in thickness and texture.

In documents which pass current as money it is obviously the duty of the bank or government issuing them to take all reasonable means to prevent the public from being defrauded by the substitution of counterfeits; and a bank whose circulation depends upon the confidence of the public must do so in its own interests to insure the acceptance of its notes. This principle is now recognized by all issuing institutions, but in practice there is room for improvement in the issues of many important establishments, partly because of the disinclination of the directors of a bank to change the form of an issue to which the public is accustomed, partly because of the difficulty of deciding what is really a secure note, and in certain cases because, owing to exceptional circumstances, an issue may be practically immune from forgery although the notes themselves present little or no difficulty in imitation. The features essential to the security of an issue are (1) absolute identity in appearance of all notes of the issue; (2) adequate protection by properly-selected colours against photographic reproduction; and (3) high-class engraving comprising geometric lathe work and well-executed vignettes.

In addition it is important that the design of the note should be striking and pleasing to the eye, and the inscription legible.

The notes of the Bank of England are printed in the bank from surface-plates in black without colour or special protection except the water-mark in the paper. They are never reissued after being once returned to the bank, and their average life is very short, about six weeks, so that a dirty or worn Bank of England note is practically never seen. This arrangement, coupled with the difficulty of negotiating forged notes in England, the lowest denomination being £5, accounts for the comparative immunity from forgery of the bank's issues.