01 The Hour
Wednesday
10 December 1975. Turin. Reconstructed to the day.
The first of them was for a hundred lire, and it was made out to the order of the shopkeepers' association of Turin.
A bank in the city issued it that day: an instrument of credit, of the same kind as a cashier's cheque payable to bearer, in a format small enough to hand across a counter, conceived to take the place of the metal coins that had been growing scarce for some time.
Until then the shops had been giving sweets, postage stamps and telephone tokens as change.
02 The Sequence
1965 to 1966 The silver five hundred lire coins had already disappeared from circulation a decade earlier through hoarding. The country had met a shortage of circulating money before, at the end of the Second World War, when the fifty and hundred lire notes ran short.
10 Dec 1975 The first reduced format cheques were issued in Turin, the series opening with a hundred lire piece to the order of the local shopkeepers' association. They were instruments of credit, equivalent to cashier's cheques payable to bearer, conceived to replace the metal coins.
9 Feb 1976 A bank in Biella began issuing its own, to the order of the shopkeepers' association of the Biella district, entirely filled in by printing, first alongside and then in place of the longer format it had been using.
Feb to Mar 1976 The practice spread across the whole country, and took on features beyond the simple level of a service, beginning with small scale advertising. The face values ran from fifty lire to three hundred and fifty.
25 Mar 1976 The public prosecutor at Perugia ordered the seizure, across the whole national territory, of the hundred and the hundred and fifty lire pieces.
26 Mar 1976 The communique from the prosecutor's office set out the ground. In the course of investigations into the issue of small denomination cashier's cheques by certain credit institutions, proceedings were being taken under article 140 of the royal decree of 28 April 1910. It had been found that such cheques could be called cashier's cheques only in appearance, appearing in substance, for explicitly technical reasons, to be new banknotes, whose issue is entrusted to a specific authority.
27 Mar 1976 A Turin daily carried it under a heading that doubles as a description of the day at the counter: from yesterday the banks no longer give mini cheques in place of small change.
28 Mar 1976 The same paper, having alarmed its readers the day before, reported the following day that the pieces already in circulation were perfectly valid.
End of 1978 The paper pieces disappeared when the state mint and printing works was at last able to make good the lack of small change. Between 1976 and 1979 the central bank renewed its banknotes completely, putting a series of four values into circulation.
03 The Hidden Dependency
A bank may not print money. That is the whole constraint, and everything about these pieces of paper is shaped by the work of getting round it.
So they were not issued to nobody in particular. Each one was made out to the order of a named party: the shopkeepers' association of Turin, the shopkeepers' association of the Biella district. In law that is an instruction to pay a specific person. In the hand it is a hundred lire, because an instrument to order, once endorsed, passes to whoever holds it.
The legal form was an order to pay a named party. What made it money was the signature on the back. Four months later the prosecutor wrote down the same observation from the other direction, and called them cashier's cheques only in appearance.
The legal form was an order to pay a named party. What made it money was the signature on the back.
04 What Still Worked
The Goods In The Jar
Before the paper there were sweets, postage stamps and telephone tokens, handed over as change by retailers who had nothing else to give. Small objects of known value, available in quantity behind the counter.
The Pieces Already Out
The seizure stopped the issue rather than the circulation. The papers of 28 March reported that the pieces already in circulation were perfectly valid, which is the only question that mattered to anyone holding one.
The Printing Press
What ended the arrangement was not the law. It was supply. The state mint and printing works became able to make good the shortage of small change, and the substitutes went out of use at the end of 1978.
05 The Document
The Document 26 March 1976
The communique issued by the prosecutor's office the day after the seizure, quoted in a Turin daily on the 27th.
Two sentences of law and one of definition. Proceedings under article 140 of a royal decree of 1910, in the course of investigations into the issue of small denomination cashier's cheques by certain credit institutions. And the finding: that they could be called cashier's cheques only in appearance, since in substance, for explicitly technical reasons, they seemed to be new banknotes, whose issue is entrusted to a specific authority.
06 The Pattern Library
1 When one retail withdrawal channel closes or fails, demand concentrates on whichever channel is left open, and the capacity of that channel sets what a depositor can obtain.
Observed: Northern Rock 2007, Cyprus 2013, India 2016, Greece 2015, United States 1933, Argentina 2001, Lebanon 2019, Worldpay 2026, TSB 2018, Afghanistan 2021, Nigeria 2023.
2 A currency replacement can require physical work on every unit of the estate before the new money can circulate, whether a modification to each cash dispensing machine or a stamp affixed to each note, so the changeover proceeds piece by piece rather than all at once.
Observed: India 2016, Czechoslovakia 1993.
3 Withdrawal limits imposed on a domestic banking system can be written to exempt cards issued outside it, so one machine dispenses under two rules according to where the card was issued.
Observed: Greece 2015.
4 Domestic payment and deposit channels can continue operating while cross-border payment routes fail, with the central bank standing in as the intermediary for payments to and from the country.
Observed: Iceland 2008, Germany 1931.
5 When the institutions that convert payment instruments into cash are closed, wages and checks already received cannot be spent, and merchants and carriers extend their own credit in place of the missing conversion.
Observed: United States 1933, Ireland 1966.
6 A public employer short of the national currency can pay wages in an instrument it issues itself, which then circulates alongside the currency it stands in for.
Observed: Argentina 2001, United Kingdom 1914.
7 Withdrawal restrictions can be imposed by individual institutions and their trade association rather than by statute, so the limit differs from bank to bank and no law governs it.
Observed: Lebanon 2019.
8 A cash withdrawal ceiling is paid only in the denominations the machine is permitted to hold, so a ceiling and a denomination rule set together decide how many notes a withdrawal is, and a ceiling has to be raised alongside the denominations that pay it when the existing notes no longer carry it.
Observed: Zimbabwe 2008, Nigeria 2023, Venezuela 2018.
9 A payment outage can hit card authorisation and merchant funding as separate faults, so acceptance at the terminal is restored while the money owed to the merchant arrives a day late under its own incident notice.
Observed: Worldpay 2026.
10 A retailer that loses electricity can go on trading by taking cash and rationing goods by hand, so the counter outlasts the checkout system that normally prices and settles the basket.
Observed: Texas 2021.
11 A systems migration can leave account records readable but wrong, including presenting one customer's account to another, so a working login is no guarantee that the balance on the screen belongs to the person reading it.
Observed: TSB 2018.
12 The size of a card processing failure can be counted twice, once on first attempts and once after the same card was presented again, and the second count can be about half the first, so part of the recovery runs through the cardholder at the till.
Observed: Visa Europe 2018.
13 A restriction on access to money can be written by purpose as well as by amount, so a balance that cannot be drawn in general becomes payable when it is used for wages, taxes or relief, and the test applied is what the money is for.
Observed: Germany 1931, Brazil 1990.
14 A deposit freeze can be paired with a transferable certificate issued against the frozen balance, so the deposit becomes a claim that can be sold before it is released, at a price the market sets rather than its face value.
Observed: Ecuador 1999, Argentina 2002.
15 A per head issue of a new currency can be distributed through the administration that issues food rations rather than through the banks, so the ration card is the proof of entitlement and the banks are used to collect the old money rather than to pay out the new.
Observed: Germany 1948.
16 When the persons under sanction become the governing institutions of a country, the prohibition reaches ordinary payments that merely touch the state, and access is restored by successive general licences written by activity, so what decides whether a payment can be made is which licence it falls under.
Observed: Afghanistan 2021.
17 One foreign currency can carry more than one price at the same moment inside a single country, the authority setting them by the use the money is put to or by the date a balance was credited, while another price goes on being made outside the official ones.
Observed: Lebanon 2019, Mexico 1982, Egypt 2016.
18 A payment abroad can be made conditional on prior approval by a committee working to a ceiling set for the whole country each day, so what a firm can pay turns on the capacity of the approval process rather than on the balance in its account.
Observed: Greece 2015.
19 Scarce foreign exchange can be rationed through the commercial banks under published guidelines, with the central bank selling only the net requirement at a daily auction and checking compliance through reporting after the fact rather than approving each payment in advance.
Observed: Iceland 2008.
20 A payment instrument issued by a bank in a country under strain can be valid and unusable at the same time, because the counterparty abroad requires a second bank to confirm it, so the trade stops at the confirmation rather than at the instrument.
Observed: Sri Lanka 2022.
21 Notes of a single currency can trade against one another at a discount according to denomination, so the same sum is worth more or less depending on which note it is held in.
Observed: Iraq 2003.
22 A compulsory conversion of deposits can be narrowed by further instruments after it is already in force, so what the measure finally takes is settled by the exceptions rather than by the decree that announced it.
Observed: Argentina 1990.
23 The administration that rations a currency held at an official price can be dismantled in the same announcement that frees the price, so the list of who may buy and the queue behind it end on the day the rate is let go.
Observed: Egypt 2016.
24 When the coin or note the public needs runs short, an instrument made for something else can take its place in small denominations, whether by being declared legal tender or by passing from hand to hand on an endorsement, and the counter that holds it pays it out instead of change.
Observed: United Kingdom 1914, Italy 1975.
25 When the supply of the standard payment instrument runs out during a closure, people write their own in its place, and each one has to be assessed individually by whoever is asked to take it.
Observed: Ireland 1966.
Changed today: Entry 24 was refined and gained Italy 1975. It had been written around an instrument declared legal tender by statute, on the 1914 case alone. Here the substitute was never legal tender and passed by endorsement instead, so the entry now names both routes and keeps the common element, which is the counter paying it out in place of change.