Tender vs. Currency: A Scottish Tale

Americans frequently get confused and bewildered by the nations of the United Kingdom, i.e., England, Wales, Scotland, and Northern Ireland (though the latter-most is frequently called a province). The issue becomes acute when the unwary learn that England and Scotland have different laws and courts, though U.K. laws apply to both. Wales has been a part of England since 1283, but don't tell the Welsh that. The government of Northern Ireland, though part of the U.K., is shared with the Republic of Ireland. Eeeeeek!

So, what does this have to do with money? Well... before the Act (or Treaty) of Union between England and Scotland, each country had its own currency: the English Pound Sterling and the Scottish Pound Scots. After 1707 the English Pound superseded the Scottish. However, one hears quite frequently in modern Britain the term "Scottish Pound" (and no, I won't get into what Britain is as opposed to the 3 or 4 nations of the U.K.) In fact; here is a pic of one, below an "English" Pound.

The "Scottish" pounds are English (i.e. British) pounds, they just happen to be issued in Scotland. Unlike pounds issued in England, which are issued by the Bank of England and carry the image of the monarch, "Scottish" pounds are issued by commercial banks (in this case, the Royal Bank of Scotland) under license of the Bank of England. They do not bear the image of the monarch. Also, and here's the important and bewildering difference: the Bank of England notes are legal tender, they must by law be accepted to satisfy a debt; the "Scottish" pounds are legal currency (i.e., "real money") but they are not legal tender. The payee is not obliged to accept them as payment. For this reason, many outside Scotland will not accept Scottish notes, not because they consider them bogus or such, but because they do not want to get stuck with them if someone they need to pay refuses to accept them. It's kinda weird. Some ATM's dispense Scottish notes, some British, some offer the choice. If you are using an ATM at, e.g., the Royal Bank of Scotland, the machine will give you RBS issued notes.

 

So when is real money not really money? When it's a Scottish pound note outside of Scotland.  

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