A classic magician’s trick is to conjure an object out of thin air. The audience is shown an empty container. With the tap of a wand or a dramatic flourish, the container now contains an object such as a bottle or a bunch of flowers. This chapter will show how banks can do the same thing with money and, more specifically, the public currency. The public currency is the authorised yardstick and means of transfer of notional value in a monetary community, usually a nation-state. As we saw in the previous chapter, public currencies are strongly identified with rulers and centres of power.

Unlike with the traditional forms of money in Chapter Two, whose origin is generally unknown, rulers such as Alexander the Great and Charlemagne consciously created and named their chosen currency. We also saw how Chinese rulers set up new money systems, including some based upon paper. Public currency is therefore not just coin. It is anything the ruling authority declares to be money that the people accept and use.

The emergence of modern banking in the fourteenth century saw two new additions to the family of money things: banknotes and bank accounts. This chapter will explain how these became synonymous with the public currency. The process is illustrated by the banknotes discussed in the Introduction and Chapter One.

The dollar bill, the pound note and the euro note look superficially the same. They are each based on numbers: one dollar, five pounds, ten euros. They all operate in the same way. They are fiat money. None is convertible into any other form of money, other than into another currency (euros to dollars, dollars to pounds). The money is not valuable in itself. It is just a piece of paper. When held in a bank account the dollar, pound or euro is not even a piece of paper. Yet it works as money all the same. It is used as a standard measure for comparing value and as a means of transferring that value from account to account.

Despite their similarities, differences between the currency notes reveal the way control of public currencies has passed from the era of rulers to the era of banks.