During a siege coins and precious metal invariably go into
hiding, in secret hoards, and cities under siege have often turned to a form of
fiat money, usually paper money.
In 1574 the Spanish laid siege to the city of Leyden in the Lowlands. The
city needed all the metal it could muster to manufacture arms, and even
collected the metallic coinage to contribute to the effort. The burgomaster of
Leyden issued small pieces of paper to take the place of coinage. These scraps
of paper money predate by nearly a century the permanent introduction of paper
money in Europe.
Several cities issued siege notes during the wars of the French Revolution
and Napoleon. In 1793 the royalists in Lyons, France, revolted and took control
of the city. The republican forces laid siege. The royalists printed crude notes
on cardboard with the expression “The Siege of Lyon” and distributed them as
money. In the same year Austria laid siege to the German town of Mainz, then
under French control. The French authorities printed up a paper currency with
the expression, “Siege de Mayence Mai 1793 2e de la Rep. France.” In 1796 the
city of Mantua in Italy issued a siege currency when the city came under siege
by Napoleon. Colburg, Prussia, issued siege currency in 1807 under the pressure
of a Napoleonic siege. Also, several Italian cities issued siege currencies
during the uprisings of 1848.
In 1884 the British government dispatched General Charles George Gordon to
the Sudan to evacuate Egyptian forces from Khartoum, which was about to be
overrun by Sudanese rebels. Gordon reached Khartoum in February 1884 and a month
later the rebels laid siege to the city. The siege lasted until 26 January 1885
when the rebels took the city and killed the defenders, including Gordon.
Gordon’s death after a colorful career and heroic struggle made him a martyr,
and the siege of Khartoum became one memorable episode in the history of the
British Empire, the stuff of Hollywood movies.
One of the less well-known aspects of the siege of Khartoum was the issuance
of a siege paper money. On his arrival, Gordon found the treasury of Khartoum
empty, and within a few weeks Gordon issued emergency notes. Each note bore
Gordon’s signature. The first 50,000 notes he signed by hand, and the rest bore
his printed signature. Gordon’s signature accompanied a statement on each note
saying that he (Gordon) was “personally responsible for the liquidation, and
anyone can bring action against me, in my individual capacity, to recover the
money.” The total value of the notes was approximately 168,500 Egyptian pounds.
About 2,000 specimens of these notes have survived, mostly in the hands of
collectors.
The exigencies of sieges have forced governments to experiment with fiat
money, helping to make way for the ascendancy of fiat paper money in the
twentieth century.
See also:
Inconvertible Paper
Money,Pontiac’s Bark Money
References:
Beresiner, Yasha. 1977. Paper Money.
Weatherford, Jack. 1997. The History of Money.