Money to burn
Cynics have often claimed that governments seem to have money to burn. True enough: the world’s governments incinerate hundreds of tons of worn-out notes every week.
Coins in circulation may last decades, until the image becomes worn or the denomination changes, but small-value notes change hands so rapidly that they perish in a few months. Even high-denomination notes last no more than two or three years.
Britain’s method of destroy old notes is typical. The notes are withdrawn in two ways, under the supervision of the Bank of England’s Banking Department.
At each of its five branches (Birmingham, Bristol, Leeds, Manchester and Newcastle) and its printing works in Essex, the Bank of England has note-sorting machines which decide whether notes are fit to be reissued. If they are not, it shreds them into 1/25in (1mm) squares. Every week, the Bank’s shredders destroy £50 million-worth of used notes.
The country’s 13,000 High Street banks also sort out badly worn notes, and send them under guard to either the Bank of England’s head office in London or to one of its main branches. Each bank is credited with the value of the delivery. The notes are then taken by armoured Bank of England truck to the Bank’s printing works. There, an incinerator with a temperature of 3600°F (2000°C) burns £135 million-worth – 15 million notes weighing 12.5 tons – every week. The ash is then ground up in a mill and inspected to ensure that no trace of a note remains.
Every year, therefore, the Bank destroys almost 1000 tons of notes with a face value approaching £10 billion, an amount replaced by new notes from its printing works.
However secure the operation, there are always risks. In the Great Train Robbery of August 1963, a gang seized £2.6 million in used notes from a well-guarded train. The thieves were eventually caught and convicted, but the fact that the money was due to be destroyed, and thus in a sense had ceased to exist, added a bizarre touch to the crime.
The business of destroying used money may not always remain necessary. For its bicentenary in 1988, Australia issued a new $10 bill made of plastic, which is practically indestructible in everyday use. It will survive boiling, washing and burial in soil.
If the new money works, paper currency could well be replaced by plastic currency, with considerable savings in cost and substantial gains in security.