Manx pound

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Manx pound
Punt Manninagh (Manx)
ISO 4217 code none
Treasury Isle of Man Treasury
 Website www.gov.im/treasury
User(s) Isle of Man Isle of Man (alongside pound sterling)
Inflation 3.6%
 Source The World Factbook, 2004
Pegged with variant of pound sterling
Subunit
 1/100 penny
Symbol £ or M£
 penny p
Plural  
 penny pence
Coins 1p, 2p, 5p, 10p, 20p, 50p, £1, £2
Banknotes £1, £5, £10, £20, £50

The Manx pound (Manx: Punt Manninagh) is the currency of the Isle of Man, in parity with the pound sterling.[1] The Manx pound is divided into 100 pence. Government notes and coins, denominated in pounds and pence, are issued by the Isle of Man Government.

Parity with sterling

The Isle of Man is in a sort of one-sided de facto currency union with the United Kingdom, where the Manx government has decided to make UK currency legal tender on the island, and back its own independent currency with Bank of England notes.

Manx government notes may, on demand, be exchanged at par for Bank of England notes of equivalent value at any office of the Isle of Man Bank Limited.[1] All notes and coins which are legal tender in any part of the United Kingdom (ie, Bank of England notes), are all legal tender within the Isle of Man.[1]

Unlike Northern Irish and Scottish notes, the UK places no requirement for the Isle of Man government to back the Manx currency with Bank of England notes or securities. There is no restriction under UK law on the amount of notes and coins they may issue. The currency is not underwritten by the UK government, and there is no guarantee of payment beyond that given by the Manx authorities.[2] However, the requirement in the Currency Act 1992[3] for the Isle of Man Treasury to exchange Manx Pound banknotes on demand for Bank of England notes in practice restricts the issue of unbacked currency, and the aggregate total of notes issued must be pre-approved by Tynwald.[1]

Whilst ISO 4217 does not include a separate currency code for the Manx pound, where code distinct from GBP is desired IMP is generally used.[4]

As legal tender, UK notes and coins (whether from banks in England, Scotland, or Northern Ireland) are generally accepted in the Isle of Man, but Manx notes and coins are not generally accepted in the UK. To assist those travelling, the ATMs at the Sea Terminal, Douglas, and at Isle of Man Airport both issue Bank of England notes only. A number of businesses accept euros.

History

Beginnings

The first Manx coinage was issued privately in 1668[5] by John Murrey, a Douglas merchant, consisting of pennies equal to their English counterparts. These 'Murrey Pennies' were made legal tender by order in 1679, when the Court of Tynwald outlawed the unofficial private coinage that had been circulating prior to and alongside John Murrey's pennies (English coinage was also allowed by this Act).

Devaluation

Due to the difficulty of maintaining the supply of coins on the island, in 1692, the value of the Manx coinage was decreased, with English crowns circulating at 5 shillings 4 pence, half crowns at 2 shillings 8 pence and guineas at 22 shillings. At this time, Tynwald also forbade the removal of money from the island, in an attempt to maintain supply.

In 1696, a further devaluation occurred, with all English silver and gold coins valued at 14 pence for every shilling. Between 1696 and 1840, Manx copper coins circulated alongside first English, and later British silver and gold coins at the rate of 14 pence to 1 shilling. As in England, there were 20 shillings to the pound. Thus, after 1696, £100 sterling was worth £116 13s 4d Manx.

18th century

In 1708, the Isle of Man Government approached the Royal Mint, and requested that coinage be issued for the island. The then Master of the Mint, Sir Isaac Newton, refused. As a result, the first Government issue of coins on Man took place in 1709. This coinage was made legal tender on 24 June 1710. In 1733 Tynwald took the opportunity to prohibit the circulation of any 'base' (not silver or gold) coinage other than that issued by the Government.

19th century

Because of the similarity between Manx and British coins, it was profitable to change shillings to Manx coinage and export them to Great Britain, making a profit of £2 for every £12 in Manx coinage so transferred. This happened on such a scale that by 1830 the island was almost totally deprived of copper coinage.

In an attempt to resolve this problem, a proposal was introduced to abandon the separate Manx coinage in favour of British coins. This was rejected by the House of Keys in 1834 but they were overruled by the British Government in 1839. An Act was passed declaring that "... the currency of Great Britain shall be and become, and is hereby declared to be, the currency of the Isle of Man", and this remains Manx law to this day. There was resentment on Man to this change, with some islanders feeling defrauded, and serious rioting took place in Douglas and Peel. These were known as the 'Copper Row' riots, and were put down by the Manx militia.

The Royal Mint issued a total of £1,000 in copper coins. Following an Act in 1840, these were valued at 12 pence to the shilling. All coins issued before 1839 were declared by this law to no longer be 'current' and were recalled by the Board of Customs and exchanged by the Royal Mint at their original nominal value for the new coinage. After 1839, no further Manx coins were issued, and they gradually became scarce and were replaced in general circulation on the island by the coinage of the United Kingdom. They did not cease to be legal coinage on Man until decimalisation in 1971. Banknotes had been privately issued for the island since 1865.

Decimalisation

In 1971 the United Kingdom moved to a decimal currency with the pound subdivided into 100 pence. The Isle of Man Government, having issued its own banknotes for ten years, took the opportunity to approach the Royal Mint and request its own versions of the decimal coins, which were introduced in 1971.

Coins

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See also: Coins of the Manx pound

Murrey pennies

The 'Murrey Pennies' of 1668 were the first to depict the 'triskeles' symbol and the Island motto "Quocunque Gesseris Stabit" (sic), both of which would continue to feature on Manx coinage until the present day (the motto was corrected to "Quocunque Jeceris Stabit" in the early 18th Century).

Government coins

In 1709, pennies (£300 in total) and halfpennies (£200 in total) were introduced. An additional issue of these coins occurred in 1733 (£250 in pennies, £150 in halfpennies). These issues of coins have the crest of the Stanley family, Lords of Mann, on the obverse (an eagle and child on a cap), together with the Stanley family motto, "Sans Changer". The 1709 issue was a poor quality casting produced in England; the 1733 issue was a higher-quality struck coin produced in Castletown.

An updated issue of Manx coinage was produced in 1758, totalling £400. It replaced the crest of the Stanley family with a depiction of the Ducal coronet of the Duke of Atholl above the monogram letters A.D. (for the Latin, Atholl Dux).

In 1786, a new design of coinage was issued, with the head of King George III (now the Lord of Mann) and the English state motto on the obverse and the triskeles and Manx motto on the reverse. The standard Lewis Pingo portrait of the King was used, the same as on the British coinage, which showed the King with a laurel wreath instead of a crown.

Isle of Man penny, 1839

Further issues occurred in 1798 and 1813. As with the previous coins, they were the same size and material (copper) as the English coins and would easily pass for them, however as Manx pennies were 14 to the shilling they were worth less than their English counterparts.

In 1839, following the revaluation to 12 pence per shilling, the Royal Mint issued copper farthings, halfpennies and pennies which were similar to the previous designs but updated with the head of Queen Victoria. These were the last coins issued for the Isle of Man until 1971.

Decimal coinage

In 1971, ½, 1, 2, 5, 10 and 50 new pence coins were introduced. All had the same composition and size as the corresponding British coins. From 1972 onwards, production of the coinage and commemorative crowns was transferred from the Royal Mint to Pobjoy Mint. The word "new" was removed from the coins in 1976. A 1 pound coin was introduced in 1978, five years before a similar coin was issued in the UK. A 20 pence coin was introduced alongside its UK counterpart in 1982. Similarly, a bimetallic 2 pound coin was introduced alongside the UK version in 1998.

The obverse of Manx coins bears the same portrait of Elizabeth II as UK coins, with the words ISLE OF MAN to the left. Unlike the UK equivalent, the Manx one pound coin does not bear an edge inscription; instead, the edges are partly milled and partly plain in alternating bands.

Banknotes

In 1865, the Isle of Man Banking Company was founded and began issuing one pound notes, with five pound notes introduced in 1894. The bank changed its name to the Isle of Man Bank in 1926. Other banks which issued notes (one pound only) on the Isle of Man were:

Bank Dates
Barclays Bank 1924–1960
Lloyds Bank 1919–1961
Manx Bank 1882–1900
Mercantile Bank of Lancashire 1901–1902
Lancashire & Yorkshire Bank 1904–1927
Martins Bank 1928–1957
Parr’s Bank 1900–1916
London County Westminster and Parr's Bank 1918–1921
Westminster Bank 1923–1961

The passage of the Isle of Man Government Notes Act revoked the banks' licences to issue banknotes as of 31 July 1961.[6] The Isle of Man Government started to issue its own notes, in denominations of 10 shillings, 1 pound, and 5 pounds on 3 July 1961. In 1969, the 10-shilling note was replaced by a 50-pence note in the build-up to decimalization. 20-pound notes were introduced in 1979. In 1983, a polymer 1-pound note was introduced but discontinued from 1988. A 50-pound note was also introduced in 1983. The 50-pence banknote was withdrawn in 1989.

The Isle of Man continues to issue a 1-pound note in addition to the 1-pound coin (in the UK, the 1-pound note has now been discontinued).

The front of all Manx banknotes have a pledge to honour the banknotes (the "promise to pay the bearer on demand") in the name of the Isle of Man Government, and feature images of the Lord of Mann Queen Elizabeth II (not wearing a crown) and the triskelion (three legs emblem) and motto.[7] The triskelion symbol is also used as a watermark. Each denomination features a different scene of the Island on its reverse side:[8]

The Manx 5-pound note is the only known banknote to picture a pub on it. In the bottom left-hand corner of the reverse, the Castle Arms (known as the Glue Pot) is shown opposite Castle Rushen, Castletown.
The Manx 20-pound note features a likeness of fictional character Fonzie, or "The Fonz", from American sitcom Happy Days[citation needed]. The subject of the illustration is the Laxey Wheel, while the character is hidden within a group of bystanders.

Manx Pound and the euro

It is the Manx Government's position that, if the United Kingdom decides to participate in the euro, then it would be likely that the Island would also choose to participate. Primarily this is because most of the Island's trade is with the United Kingdom and other countries of Europe, and the break-up of the existing currency union with the UK would cause economic harm to the Island. There is also concern that the island's economy is not large enough to withstand attack by currency speculators if the Manx pound became a standalone free-floating currency.[9][10]

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"The idea that the Isle of Man could manage its own currency, for example, with all the difficulties and pitfalls this would involve, is not a viable option."

— Jeremy Peat, Royal Bank of Scotland

Tynwald passed the Currency Act 1992[1] as part of preparations for actions to take place on the island in the event that the UK decides to adopt the euro. In such a scenario, the Isle of Man wishes to retain the right to issue its own currency, believing it to be an important public statement of independence. Retaining the island's own coinage also enables the Isle of Man Treasury to continue to benefit from the accrual of interest on the income of the issued money supply. The Currency Act allows for the issue of a Manx euro currency at parity with the euro, referred to as a "substitute euro", which has an Isle of Man inscription on the obverse side of the coins. This proposal would essentially replace the "substitute sterling" with a "substitute euro", as they would function in the same way. Manx versions of the euro coins have already been designed, as have equivalents to the euro banknotes.[11]

While the European Union is not obliged to accept the Manx desire to introduce a special Manx version of the euro, Manx could introduce a currency pegged to the euro (akin to its situation now vis-à-vis the pound sterling, or the relationship between the euro and the Bulgarian lev). There is no precedent for divergent national versions, beyond customising the national side of euro coins in the same way as other eurozone members.

If, after converting to the euro, the exchange rates set by the European Central Bank were to cause economic harm to the Isle of Man, then there would be no eligibility for 'compulsory funding' under Protocol 3 of the Maastricht Treaty, as there would be for the UK.

In March 1998, the Isle of Man Treasury expressed some concern that if Isle of Man adopted the euro along with UK, then the elimination of the risks of currency exchange for the European mainland would increase the attractiveness of the island as a tax haven. This could potentially lead to political pressure from European politicians for Isle of Man to introduce legislation to prevent this from happening. On the positive side, the introduction of a Manx euro was expected to benefit Isle of Man manufacturers and tourism through the removal of the existing currency exchange for customers and tourists from the eurozone. The latter was also believed to increase the level of competitiveness on the Isle of Man, due to an increase in European businesses, which would benefit the Isle of Man economy.[11]

Current IMP exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD JPY USD
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD JPY USD
From XE: AUD CAD CHF EUR GBP HKD JPY USD
From OANDA: AUD CAD CHF EUR GBP HKD JPY USD
From fxtop.com: AUD CAD CHF EUR GBP HKD JPY USD
From Currency.Wiki: AUD CAD CHF EUR GBP HKD JPY USD
The exchange rate is the same as for GBP, British Pounds Sterling. Only XE.com links are available.

See also

Notes

  1. ↑ 1.0 1.1 1.2 1.3 1.4 Currency Act 1992 (an Act of Tynwald) [1]
  2. ↑ http://www.whatdotheyknow.com/request/24900/response/65167/attach/3/Services%209347205%201.PDF.pdf
  3. ↑ http://www.legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/1992/1992-0014/CurrencyAct1992_1.pdf
  4. ↑ LloydsTSB – Countries' currencies and codes
  5. ↑ Book 3 chap 2 part 2 – History of Isle of Man, 1900
  6. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  7. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ Huge Risks Over Euro – Isle of Man Today
  10. ↑ http://www.gov.im/lib/docs/iomfinance/brochures/iominternationalfinancecentreapr.pdf
  11. ↑ 11.0 11.1 http://www.gov.im/lib/docs/treasury/economic/monunion.pdf

References

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  • The Copper Row. J. B. Laughton, The Manx Society
  • A History of the Isle of Man. A. W. Moore, Speaker of the House of Keys
  • Letter X, John Feltham's A Tour Through the Island of Mann, 1798
  • A review of European Economic and Monetary Union, and its Implications. Isle of Man Treasury, March 1998.
  • Council of the EU Decision 2004/548/EC
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