The Security of Banknote Paper

Peter Symes

First published in the Australian Coin Review
Issue Number 441, December-January 2001/02

From the earliest use of banknotes, issuing authorities have realised the need to employ special paper for the manufacture of banknotes. The requirement for specially prepared paper is twofold. Firstly, there is the need to produce paper that is long lasting and, secondly, there is a preference to use a type of paper which is not readily available to the public.

The first issue of paper money was in seventh century China, and the circulation of paper money in China continued for many centuries. The importance of using a specific paper is demonstrated in these issues, as the notes were printed on paper that was especially manufactured from mulberry bark, as opposed to the more common paper which was manufactured from bamboo. The government in China became so possessive about the manufacture of mulberry bark paper that it took over the mills that produced it and forbade the private dealing of the paper. This is the first example of banknote paper becoming a significant security device.

The first banknotes issued in Europe were those of the ‘Stockholms Banco’ of Sweden in 1661 and these notes were printed on white rag paper, probably with a high linen content. Linen rag paper became the standard material for banknotes throughout Europe in the eighteenth century, although later notes were manufactured using a combination of cotton and linen, or just cotton.

Most modern notes use cotton rag fibre. Portals, who supply banknote paper for the notes of over one hundred countries, use cotton rag fibre, whilst Cranes, who supply the paper for U.S. banknotes uses a mixture of cotton, linen and sometimes denim. In 1985 the Canadian notes changed from a paper with a 25% linen content to a total cotton content.

The Bank of England ‘white’ notes were printed on paper made from linen, but when the Nazis tried to counterfeit these notes during the Second World War, they found that they couldn’t reproduce the correct colour. According to Bryan Burke (Nazi Counterfeiting of British Currency during World War II: Operation Andrew and Operation Bernhard, page 21), the linen used for the English notes was made from old linen and not new linen, as the Nazis had originally supposed. Burke reports that the English notes were produced from old mail bags and once the Nazis learnt this, they were able to improve the quality of their forgeries. Until the issue of these forgeries, the quality of paper was regarded by the Bank of England as one of the principal security features of the notes.

Paper produced from linen and cotton has several features which make it different to paper manufactured from timber pulp. The texture of the note is the most noticeable quality, whilst the strength and ability to wear are features which make it attractive to note issuing authorities. From the point of view of security, there is another special quality, the lack of fluorescence. Most paper manufactured from timber pulp, or from a mixture of timber pulp and cotton fibre, will fluoresce (glow a brighter white) when submitted to ultraviolet light. Paper prepared for the production of banknotes, manufactured from cotton or linen, will not fluoresce when submitted to ultraviolet light. (However, it should be noted that the properties which allow paper to fluoresce is due, in some instances, more to the manufacturing process than the nature of the fibre.)

Notes issued on plain paper are often found in emergency issues, as necessity overcomes the desire for a long wearing or secure medium. An example of plain paper being used for banknote production can be found in the first issue of the Republic of Biafra. Such occurrences are uncommon, as a layer of security is removed by the use of plain paper.

Cotton and linen are not the only medium used in the production of banknotes, occasionally more obscure materials are used. One of the stranger materials used for issuing banknotes was sheepskin, which was used for issues of the Cocos Keeling Islands. The skin was processed to become stiff, even though the leather was quite thin, and to the casual observer the ‘paper’ would not be recognised as leather. (In this case it is unlikely that the choice of materials was due to reasons of security.)

There have also been moves away from paper, to the use of plastics. The first banknotes to be printed on plastic came from Haiti, which issued a series of ‘Tyvek’ plastic notes in the early 1980s. Shortly after, in 1983, notes were issued from Costa Rica and the Isle of Man with the same material. However, this experiment proved unsatisfactory, as it was found that the printing lifted from the body of the note, and the various authorities reverted to the use of paper. The release of Tyvek notes was undertaken in an effort to increase the wearing qualities of the notes, and there was not a specific effort to increase the security of the notes through the use of this medium.

Note Printing Australia now manufactures polymer notes for a number of note issuing authorities. It appears that these plastic notes are more successful than their predecessors, as more and more countries adopt the technology. While there are a number of reasons for adopting the Australian technology, from the point of view of security, the ability to create the clear window and a device similar to a watermark are great advantages.


Watermarks were used in paper manufacture long before the issue of the first banknotes in Europe. The first specific watermark for a banknote was that of the 1661 issue of the ‘Stockholms Banco’, wherein the word ‘BANCO’ appeared inside a scroll. From thenceforth watermarks became a standard security feature of banknotes. It is the use of specific watermarks in banknote paper, which is unavailable to the public, that makes the watermark such a valuable anti-counterfeiting device.

The watermark is introduced at the time of paper manufacture, and was originally produced by raised patterns in the paper moulds constructed with copper wire, which impressed the image of the watermark into the paper. The impression affects the moisture levels in the paper during the drying process and gives the watermark its peculiar qualities.

Attempts to forge watermarks can be made by either photography or by use of a press. However, the peculiarities of a genuine watermark lie in the different shades produced by the varying thickness of paper, and when immersed in water, the watermark becomes more distinct. When a note with a false watermark, created by a press, is placed in water, the fibre in the paper swells to the original thickness and the false watermark is lost.

When genuinely watermarked paper is held to the light, the thicker parts of the paper appear dark, and when placed beneath a light the thicker parts appear lighter. A pressed or photographed watermark will not sustain these qualities. Whilst the watermark has essentially remained the same over the years, there have been a number of developments in the manufacture of watermarks. The most notable development is the ‘shaded’ watermark, which was developed by the French company of Johannot of Annonay. The shaded watermark, which was more difficult to reproduce than the simple line watermarks that had been used until that time, appeared in the Bank of England white notes after 1855 and subsequently in many other issues from many countries.

Early watermarks for banknotes were specifically designed to suit individual notes. This practice is still wide spread, and can be seen to perfection in the watermarks of the Bank of England white notes, or in the banknotes of the Bank of Scotland prior to 1960. The Bank of England notes also had a five character reference in the watermark that was determined by the serial number prefix and date on the banknotes. Thus, the watermark carried its own security reference

Some of the individual watermarks are works of art in themselves. The watermark of a complex Celtic pattern that appeared on the higher denomination notes of the Bank of Scotland until the middle of last century was so highly regarded that it had a patent taken out on it. Until the early part of the last century, this patent was noted by the inscription ‘RD. NO. 18970’ in the bottom margin of the notes. These notes were printed on paper produced in small sheets of two or four notes from individual moulds.

With the use of large sheets of paper to print modern notes, there has arisen a cost efficient need to eliminate the aligning of the watermark prior to printing. This has been achieved by using a watermark evenly distributed over the entire sheet, or by producing a continuous (or banded) watermark.

The watermark on the lower denomination Australian decimal paper notes were note specific; that is, there was one image of Captain Cook on each note. On the fifty dollar note, the image of Captain Cook is repeated for the full height of the note and is a continuous watermark. ‘All over’ watermarks are the cheapest alternative and can be seen on many issues, including issues of the East African Currency Board, some of the later issues of the Bank of Scotland, and in the notes of the Faeroe Islands, to name just a few instances.

Despite the use of watermarks that cover the entire sheet of paper and the use of continuous watermarks, many issuing authorities still prefer note specific watermarks.

While the polymer notes produced by Note Printing Australia do not have watermarks, they have managed to create a very similar device by setting an image into one of the polymer substrata during the manufacture of the sheets of notes. In the $10.00 bicentennial note this image is a wave pattern in the top right quadrant of the note, while in the notes of the current issue the image is Australia’s coat of arms. The $5.00 commemorative note uses an outline of the image of Henry Parkes. These images can be clearly seen when the notes are held to the light, and faintly seen when held beneath a strong light.


While not a common feature on modern banknotes, the use of embossing, or ‘Blind Stamps’, was once quite prevalent on banknotes. In much the same way that a watermark creates a distinct image in the paper, an embossed stamp leaves an immutable design on the paper by crimping the fibres of the paper. The benefit of the stamp is that any counterfeiter would have to create the design to be embossed, a task that would be beyond most counterfeiters.

The first record of embossed stamps being used on banknotes is in the third issue of the Stockholms Banco in 1666. The embossed stamps were used to create seals, and were introduced due to the discovery by the Stockholms Banco of forgeries of their first two issues. The seals were created by embossing with steel dies, then filling the back of the embossing with red sealing wax and covering the wax with paper wafers. While the process seems complicated, there are no recorded forgeries of this series.

Although the use of wax seals in banknotes did not continue, the use of embossing did. The very first issue of the Bank of Scotland had the Bank’s seal embossed on them, and they continued with this practice for a number of issues.

Many notes of the eighteenth century used embossed stamps and this device is probably best seen in the ‘Assignats’ of Republican France, although many other early European notes also used the device. Whilst embossing was common in the seventeenth and eighteenth centuries, it lost its popularity during the nineteenth century. However, there were some modern notes that continued the tradition, with the 1939 10,000 kronor of Sweden being a fine example.

Recent developments have seen the re emergence of embossing in an unlikely quarter, with some notes of the Netherlands, Singapore and Israel carrying embossed or raised markings for identification by the blind or visually impaired; although these occurrences should not be considered as security features.

Security fibres

In an effort to create distinctive paper, for the exclusive use in the manufacture of banknotes, paper manufacturers have often embeded material within the paper during its production. Experiments with embedded materials have been going on for many years. One early attempt to embed foreign materials in banknote paper was by Benjamin Franklin, where he embedded pieces of crushed mica in the paper to produce a peculiar finish.

While this particular initiative did not lead to continued success, the use of coloured and fluorescent fibres has been extremely successful. The use of colour fibres was patented by Mr Wilcox of Philadelphia and first used in banknotes of the United States of America from around 1869. The paper is properly called ‘Wilcox paper’ after its inventor, but it is also called ‘granite paper’ because of a similarity of the red and blue fibres to the grain in granite.

The embedded fibres are usually made from natural materials. Wilcox’s original paper had dark blue jute fibres whilst other paper has had silk fibres, such as the Spanish notes at the turn of the century.

While the commonest form of fibre-embedded paper sees the even distribution of fibres all over the notes, there can be many variations. The one thousand mark Reichsbanknote of 1910 has coloured fibres appearing only on the left hand side, at the front of the note, while the Swedish notes of the 1890s had a strip of blue or red fibres at one edge of the note, depending on the denomination. The 1895 1000-pesata notes of Spain had a strip of woven fibres, similar to a bandage, running between the panel used for cutting from the counterfoil and the main note itself.

Depending on the requirements of note issuing authorities, paper manufacturers can change the distribution and number of fibres in the paper. This has in fact been done at various intervals by the U.S. Bureau of Engraving and Printing for their various issues in an attempt to confound forgers.

Fluorescent fibres are relatively new, dating from the 1960s. These fibres are not visible under normal light, but when submitted to ultraviolet light the fibres glow green-white. Most paper, embedded with these fibres, has the threads spread quite sparsely on the notes.

While most fluorescent fibres glow green (or green-white), there are some that glow blue and others that glow red. For example the Argentinian Australs have green fibres, some Brazilian notes have blue fibres, and the notes of Qatar have green and blue fibres. A combination of colours can be seen on the 1984 10,000-pesos of Bolivia, which has green, blue and red fluorescent fibres.

A natural progression with the use of fluorescent fibres is to combine them with coloured fibres. This has been done in the penultimate issue of the British Linen Bank and can also be seen on the Argentinian Australs, amongst others.

A variation on the embedding of fibres in paper was developed in 1906 when the German company of Giesecke & Devrient took out a patent for embedding small printed colour strips in the paper. Examples of paper with these embedded strips can be seen in the 1936 issues of Spain, where the strips have ‘Banco de España’ printed on them.

In 1939 Giesecke & Devrient took out another patent for implanting small printed pieces of metal (sometimes called planchettes) in banknote paper. Examples of banknotes printed on this type of paper can be seen in the 1979 issue of Haiti and, more recently, in the 500-dinar note of Sudan.

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Whether created from paper or from polymer, the material used for banknote manufacture can always be adapted to possess peculiar qualities as a security device. From the mulberry bark of the Chinese to the polymer notes of Note Printing Australia, this has been the case. Inevitably, further developments will be introduced in years to come.

This article was completed in October 2001
© Peter Symes