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Ten questions for the Chief Cashier of the Bank of England
Dear Mr Bailey,
I have in my possession a 'banknote' with your name on it, but am unclear as to its meaning. The words "I promise to pay the bearer on demand the sum of five pounds" are followed by the image of your signature, which makes me think it is a contract between you, the signatory, and me, the current bearer. So I write in hope that you might clarify a few questions which arise in me.
1) Which of the following types of legal instrument is this banknote? A promissory note of some 'pounds' from you to me? A bill, which unlike most bills I have used, carries the signature of the debtor rather than the creditor? A contract between you the signatory and me the bearer?
2) I understand that the 'pound', a unit of weight, used to refer to sterling silver, but I don't know what it refers to now. Can you tell me precisely what kind of things the 'five pounds' are that you will 'pay' me, and why I might be desirous of them?
3a) If this banknote is a contract, does that mean it is governed under Statute Law? 3b) If I, as a party to the contract, don't understand the contract, which I clearly do not, does that not invalidate the contract? 3c) In my experience a contract is only valid when signed by hand on the actual paper. What exceptions exist in law that your printed signature is acceptable on a contract and mine is not?
4) I have heard that destroying money is illegal. Does that mean that the bearer of the banknote is not the owner of it?
5) I understand that your organisation was implemented in the LIBOR scandal. To what extent must I the bearer 'trust' you the signatory?
6) At what times and places are you available for me to 'demand' these five pounds? Would I be required to attend you in person to be paid or can the transaction take place online somehow?
7) What enforcement lies behind the bill? I mean what would happen to the bank if, when I demanded these pounds, you failed to deliver?
8) Some advantage must accrue to those who can issue money without first having to earn it. But there must be heavy responsibilities that accompany that privilege. Who ensures that you honour these responsibilities?
9) I hope I'm not getting confused with US law, but I suspect they are similar. I understand that all people are equal under the law and that under the law companies such as the B of E, are 'persons'. How would I go about issuing legal tender?
10) I notice that other central banks issue similar 'banknotes'. The United States bills claim to be 'legal tender', and promise nothing to the bearer, while the European Central Bank bills have nothing at all to say for themselves; they merely carry a signature free of context. Do these pieces of paper mean something different to your banknotes?
I find it hard to imagine how the economy functions when the money itself is so mysterious. I hope you will be able to offer simple direct answers to my simple direct questions. Matthew Slater