Trade coin (1914–1979)
In the late 19th century, several Chancellors of the Exchequer had questioned the wisdom of having much of Britain's stock of gold used in coinage. Lord Randolph Churchill proposed relying less on gold coinage and moving to high-value silver coins, and the short-lived double florin or four-shilling piece is a legacy of his views. Churchill's successor, George Goschen, urged issuing banknotes to replace the gold coins, saying he preferred £20 million in gold in the Bank of England to thirty million sovereigns in the hands of the public. Fears that widespread forgery of banknotes would shake confidence in the pound ended his proposal.
In March 1914, John Maynard Keynes noted that the large quantities of gold arriving from South Africa were making the sovereign even more important. "The combination of the demand for sovereigns in India and Egypt with London's situation as the distributing centre of the South African gold is rapidly establishing the sovereign as the predominant gold coin of the world. Possibly it may be destined to hold in the future the same kind of international position as was held for several centuries, in the days of a silver standard, by the Mexican dollar."
As Britain moved towards war in the July Crisis of 1914, many sought to convert Bank of England notes into gold, and the bank's reserves of the metal fell from £27 million on 29 July to £11 million on 1 August. Following the declaration of war against Germany on 4 August, the government circulated one-pound and ten-shilling banknotes in place of the sovereign and half sovereign. Restrictions were placed on sending gold abroad, and the melting-down of coin was made an offence. Not all were enthusiastic about the change from gold to paper: J.J. Cullimore Allen, in his 1965 book on sovereigns, recalled meeting his first payroll after the change to banknotes, with the workers dubious about the banknotes and initially asking to be paid in gold. Allen converted five sovereigns from his own pocket into notes, and the workers made no further objection. Conversion into gold was not forbidden, but the Chancellor, David Lloyd George, made it clear that such actions would be unpatriotic and would harm the war effort. Few insisted on payment in gold in the face of such appeals, and by mid-1915, the sovereign was rarely seen in London commerce. The coin was depicted on propaganda posters, which urged support for the war.
Although sovereigns continued to be struck at London until the end of 1917, they were mostly held as part of the nation's gold reserves, or were paid out for war debts to the United States. They were still used as currency in some foreign countries, especially in the Middle East. Sovereigns continued to be struck at the Australian mints, where different economic circumstances prevailed. After the war, the sovereign did not return to commerce in Britain, with the pieces usually worth more as gold than as currency. In 1925, the Chancellor, Winston Churchill, secured the passage of the Gold Standard Act 1925, restoring Britain to that standard, but with gold to be kept in reserve rather than as a means of circulation. The effort failed—Churchill regarded it as the worst mistake of his life—but some lightweight sovereigns were melted and restruck dated 1925, and were released only later. Many of the Australian pieces struck in the postwar period were to back currency, while the South African sovereigns were mostly for export and to pay workers at the gold mines.
By the time Edward VIII came to the throne in 1936, there was no question of issuing sovereigns for circulation, but pieces were prepared as part of the traditional proof set of coins issued in the coronation year. With a bust of King Edward by Humphrey Paget and the date 1937, these sovereigns were not authorised by royal proclamation prior to Edward VIII's abdication in December 1936, and are considered pattern coins. Extremely rare, one sold in 2020 for £1,000,000, setting what was then a record (since broken) for a British coin. Sovereigns in proof condition dated 1937 were struck for Edward's brother and successor, George VI, also designed by Paget, the only sovereigns to bear George's effigy. The 1925-dated George V sovereign was restruck in 1949, 1951 and 1952, lowering the value of the original, of which only a few had hitherto been known. These were struck to meet the need for sovereigns, and to maintain the skills of the Royal Mint in striking them.
The sovereign remained popular as a trade coin in the Middle East and elsewhere following the Second World War. The small strikings of 1925-dated sovereigns in the postwar period were not enough to meet the demand, which was met in part by counterfeiters in Europe and the Middle East, who often put the full value of gold into the pieces. A counterfeiting prosecution was brought, to which the defence was made that the sovereign was no longer a current coin. The judge directed an acquittal although the sovereign remained legal tender under the Coinage Act 1870.
Sovereigns were struck in 1953, the coronation year of Elizabeth II, bearing the portrait of her by Mary Gillick, though the gold pieces were placed only in the major museums. A 1953 sovereign sold at auction in 2014 for £384,000. In 1957, the Treasury decided to defend the status of the sovereign, both by continuing prosecutions and by issuing new pieces with the current date. Elizabeth II sovereigns bearing Gillick's portrait were struck as bullion pieces between 1957 and 1959, and from 1962 to 1968. The counterfeiting problem was minimised by the striking of about 45,000,000 sovereigns by 1968, and efforts by Treasury solicitors which resulted in the sovereign's acceptance as legal tender by the highest courts of several European nations. In 1966, the Wilson government placed restrictions on the holding of gold coins to prevent hoarding against inflation, with collectors required to obtain a licence from the Bank of England. This proved ineffective, as it drove gold dealing underground, and was abandoned in 1970.
The sovereign's role in popular culture continued: in the 1957 novel From Russia, with Love, Q issues James Bond with a briefcase, the handle of which contains 50 sovereigns. When held at gunpoint on the Orient Express by Red Grant, Bond uses the gold to distract Grant, leading to the villain's undoing. The sovereign survived both decimalisation and the Royal Mint's move from London to Llantrisant, Wales. The last of the Gillick sovereigns had been struck in 1968; when production resumed in 1974, it was with a portrait by Arnold Machin. The last coin minted at Tower Hill, in 1975, was a sovereign.
