Peter Symes
First published in the Australian Coin Review
Issue Number 436, July 2001
Serial numbers were first used on banknotes to reckon for every note issued. For such a simple device the serial number has developed some complex features, most of which could not have been considered by the issuing authorities that first used them. Today, while still retaining their original function, serial numbers are an integral part of the modern banknote, providing security and identity to the notes on which they are printed.
The earliest known banknotes are the Chinese notes issued some nine centuries ago. The notes of the Jin dynasty (1115–1234 AD) are amongst the earliest notes, and each of these notes was numbered with two Chinese characters. One thousand of the most common Chinese characters were used in a sequence of pairs that allowed for up to one million notes of each denomination to be numbered. From this early record, it can be seen that the numbering of notes is an important aspect of issuing paper money. While this may be seen as stating the obvious, it should be remembered that while banknotes carry a serial number, coins do not. Coins, of course, were intended to have an intrinsic value, while paper money did not.
When banknotes were first introduced in Great Britain, each banknote was numbered, but the number was added by hand when the note was issued, along with the date and sometimes the payee. The numbering served the very simple purpose of accounting for each note that was issued, although even in those early days there was an element of security. Typically, the notes were bound in a book with each note having a counterfoil, much like the modern cheque book. When the note was issued, the cashier would enter the date and the number on the note, obtain the necessary signatures and enter the details of the note in the note register, which is why many seventeenth and eighteenth century British banknotes have ‘Entd.’ (Entered) next to the signature of the cashier.
Before issuing the banknote, the cashier would ensure that the serial number of the banknote, and sometimes the date of issue, were repeated on the counterfoil. He would then cut the note from the counterfoil, quite often cutting through a decorative panel. Some cashiers took particular care to make a decorative cut.
When the banknote was presented to the bank for payment, the cashiers could ensure that the note was genuine by retrieving the relevant book of counterfoils and, by reference to the serial numbers, match the edge of the counterfoil to the edge of the banknote. On ensuring the note was genuine, the note was retired by accounting for its return in the banknote register. Notes of this era were generally not reissued.
For many years there was only one serial number on the banknotes, as this was all that was required to match the note against the counterfoil. However, before long many banknotes began appearing with two serial numbers on them. The initial reason for this is not certain, but undoubtedly one of the reasons for this measure in Great Britain was the practice of halving the notes for secure transportation of the notes. When sending notes over a distance, the banknotes would be cut in half, with one bundle of half notes sent on one stage-coach, and the second bundle sent at a later date. So, if a bundle of notes was stolen, the notes could not be presented without their other half. Of course, the use of two serial numbers meant that the halves of each note could be matched to ensure the full note was being presented.
In some countries, this process was extended to the use of four serial numbers. However in this case, the use of four serial numbers was usually done where there was a practice of quartering the notes to use each part as a fraction of the original note.
As the number of banknotes in circulation increased, the use of counterfoils disappeared and, as technology improved, the serial numbers were added by a numbering machine. The use of the numbering machine may initially appear to be a simple procedure, but such machines leant themselves to a strange form of security. The creation of a font and the pieces of type for the numbering machine required the different skills of several tradesmen. Therefore, it was not long before security printers were devising fonts for their serial numbers that were peculiar to the security company. This meant that it was unlikely that a single forger could replicate a specific font for a numbering machine.
By creating special fonts, the security printers were adding their own signatures to the notes. While technology has moved on, and the creation of a specific font is no longer as great a challenge, there still exist specific fonts that can identify security printers.
The importance of the serial number as a security device has increased over recent years, and the principal reason for this is that the serial numbers are usually added in a separate process. This allows specific measures to be taken that can result in increased security.
For a number of years the main security feature of the serial number was the use of special inks. The inks were either magnetic or fluorescent. The magnetic inks allowed the notes to be subjected to a magnetic field while being processed in sorting machines, with the note being tested for the retention of the magnetic field by sensors while still being sorted. In a similar process, banknotes with serial numbers printed with fluorescent ink could be submitted to ultraviolet light within the sorting machine and if the serial numbers fluoresced they could be identified as genuine.
Within the last twenty years, changes to serial numbers have become quite dramatic. Firstly, the numbers began to be printed in different colours. Typically, one serial number would be printed in black ink and one would be printed in red ink, although other colours, such as blue, are used. This innovation was soon accompanied by the repositioning of the serial numbers. Serial numbers have traditionally been printed horizontally, but notes began to appear with one serial number printed horizontally and one vertically. Usually, the vertical serial number is printed with the characters of the serial number printed one above the other. However, in some cases the second serial number is printed along the edge of the note, so that the note would have to be rotated 90 degrees to read the second serial number.
In many cases where vertical and horizontal serial numbers are used, the serial numbers were also printed in different colours. A further development is the ‘tapered’ serial number, where each letter or number in the serial number increases in size. It is now common to find all three features – positioning, colour and tapering – used in the serial numbers of a banknote.
One of the more intriguing uses of colour in serial numbers can be found on some of the recent Bank of England banknotes, such as the £5.00 note, Standard Catalog of World Paper Money (SCWPM) No.385. On the Bank of England notes, one of the serial numbers is printed in multiple colours. This process is not as simple as each character being printed in a different colour, rather some characters are printed with more than one colour. On the £20.00 note, the two colours are green and purple, with some characters being green, some purple, while others are part green and part purple.
A feature that has been in use for a number of years is the use of different fonts for each serial number on a banknote, such as can be seen on the current Australian banknotes. By using separate fonts for each serial number, the ability of the forger to produce two different fonts becomes tested. Again, this feature can be mixed with one of the other variations, such as differing colours.
The change in fonts can also be a little more dramatic than simply introducing a second typeface, it can involve varying the entire script. Because so many countries first introduced their banknotes while under colonial rule, their banknotes were usually printed by the colonial power. This typically meant that the serial numbers used Latin letters and western numerals for the serial numbers. However, for many years serial numbers on the banknotes of numerous countries have used characters from local alphabets, such as Arabic, Thai and Bengali.
In a twist to this change, some countries are now producing banknotes that have different character sets for each serial number. An example can be found on the current banknotes of Kuwait, where one serial number is in Latin letters and western numerals, while the other serial number is in Arabic.
The use of different scripts has been taken to another dimension by some authorities who now use bar codes on the banknotes. The notes issued by the Dutch since 1989 are examples of a series that has this feature. In this instance a tight link can be seen between the notes and the sorting machines used by the banks and the issuing authorities. While it is obvious that the sorting machines used by the Dutch are designed to read bar codes, the connection between the serial numbers and the sorting machines has existed for many years for many issuing authorities. However, while the manufacturers of sorting machines may have had to adapt to the serial numbers used by the security printers in the past, they are now developing a partnership with the issuing authorities, and perhaps even driving the design of the serial numbers.
Another example of serial numbers specifically designed for sorting machines can be seen in the recent issues of the United Arab Emirates. On these notes the numerals are specifically designed for character recognition by sorting machines. While the use of bar codes and specific fonts for character recognition are isolated developments, they may become more prevalent in the future.
When reading a serial number, it is worth noting the structure of the serial number, particularly the serial number prefix. Many issuing authorities have taken the decision to identify each series of notes in a specific manner, and in many cases the individual denominations have their own identifying letters. Oman is a country that uses letters of the Arabic alphabet to indicate the series to which the notes belong. Kuwait, on the other hand, uses one letter of the prefix to indicate the series and one letter to indicate the denomination.
The serial number prefix is used by many authorities to indicate the year in which the notes were produced. In the Faeroe Islands, the serial numbers have two parts. The first part consists of a string of characters that has the year of issue contained in it. An example might be ‘A0743A’, where the ‘74’ indicates ‘1974’. In a similar manner, the first two numerals of the serial numbers on the notes of the West African States indicate in which year the notes were issued. This convention has been used on Australian notes for many years, with the year being identified in the second two characters of the serial number.
Serial numbers also tell us about replacement notes. Typically, the prefix uses special characters to identify replacement notes. These are usually the last letter in the sequence being used, such as the ‘Z’ in serial numbers that use the Western alphabet. Where the prefix is not used, devices such as asterisks or an additional letter at the end of the serial number identify the replacement notes.
Finally, serial number prefixes tell us a little about the number of notes issued. An inspection of the notes of the Falkland Islands issued in the 1960s, shows a serial number consisting of a single letter prefix followed by four numerals. With such a serial number, there can never be many notes issued and as the Falkland Islands has a population of only a couple of thousand people there would never be a great demand for the notes. On the other hand, some recent issues for Bangladesh have had a serial number consisting of a two character prefix followed by eight numerals. Such serial numbers are required for a country that has 118 million people.
The progression of a serial number prefix can also show the increased number of notes in circulation, or at least the increase in notes issued. The first issues of Pakistan carried no serial number prefix, but after the first million notes were printed, a single letter prefix was introduced. After the sequence for each letter was exhausted, a two letter prefix was adopted. By understanding the serial number, it is possible for the collector to determine home many notes were issued and, consequently, how rare a note might be.
In reviewing the use of serial numbers, it is worth taking a quick look at the serial numbers on Australia’s banknotes. The 5-dollar note has only one serial number. This is an indication of its low value, as the cost required to give it two serial numbers does not justify the investment. The 10- and 20-dollar notes have two serial numbers, printed in the same colour, but each note has its two serial numbers printed in different fonts. The 50- and 100-dollar notes not only use different fonts, they also have their serial numbers printed in different coloured inks. From these observations it can be seen that many features of the modern serial number can be associated with a cost. As the value of the note increases, the cost of the additional security features becomes justified. However, as technology improves, the cost of security features often fall, only to be replaced by a newer and more expensive feature. As it is almost impossible to consider a banknote without a serial number, it is just a matter of time before a new feature is introduced to the serial numbers on many banknotes.
Completed in January 2000
© 2000 Peter Symes