Lethse (currency)

Lethian pound (INP)

State	United Kingdom of Isselmere-Nieland
Institution	25 June 1562
Issuing Body	Union Bank of Isselmere-Nieland
Currency Code	INP
Symbol (Local)	IN£, £ or l.
Valuation Local NSD	1 IN£ = 100 pence 1 IN£ = $1.8432

The lethse or officially the Lethian pound (IN£ or £) is the currency of the United Kingdom of Isselmere-Nieland, established after the Act of Consolidation, 1562 united the then sovereign kingdoms of Isselmere and Nieland as the state currency, replacing the Isselmerian pund or pound (Is£) and the Nielander króna or crown (NKr). Today, the lethse operates on a floating foreign exchange rate and domestically is valued at 100 Isselmere-Nielander pence (p).

History

With both the pund and the króna beset by rampant counterfeiting and debasing in the prelude to the personal union of the two crowns in 1523 as well as the need to mint coins bearing the likenesses of both monarchs, Queen Hortense I and King Maximilian, the Isselmerian Convention of Estates and the Storting of Nieland decided upon an entirely new currency. The inability of the legislatures to agree upon either a name for the new currency or even the lesser denominations as well as the death of Maximilian in 1524 delayed the question of a unified currency and of political union for a further thirty-nine years.

The coming coronation of Queen Hortense II and King Henry I in 1562 brought the matter to the fore once more, as did the Queen's Nielander Royal Treasurer (Kónunglégur gjaldkeri), Hengest Torvaldsson. Torvaldsson revealed to the queen that the value of the króna had fallen precipitously to eight to the pund, the product of the continued debasement of the currency, trade imbalances, and the flight of both capital and magnates to Isselmere.

Realising that the dreadful plight of the Nielander currency spelled disaster for the pund as well, Hortense II addressed the Storting through the office of her betrothed, the Lord High Commissioner for Nieland, Henry of Oltmark, demanding that the legislature renounce the króna in favour of a new currency held jointly with Isselmere. To gain the support of the members, Henry went far beyond his purview and stressed that the Convention of Estates would absorb Nieland's debts and that the new currency would be valued at five króna.

In Daurmont, Hortense II struggled to convince her Isselmerian Chancellor of the Exchequer, Sir Berthold Haskell, that establishing a new currency was in the larger kingdom's best interest. Eventually, she managed to persuade the chancellor and the Isselmerian legislature in a royal audience at Pechtas Castle by relieving from them the burden of paying for the royal wedding.

Officially, the lethse was a one troy ounce gold coin with the same worth as a pound of silver, valued at twenty shillings (scillingis or sc.) of twelve pence (pengst, a combination of pence and pengar). Currency debasement practised by either desperate or corrupt kings and minters, particularly during the religious troubles of the seventeenth-century, meant that the actual value of the coin was far less than that.

Valuation

The original sub-divisions of the Lethian pound were many and troublesome. As noted above, the basic sub-divisions were the scillingis (sing. scilling) and the pengst (sing. penny) at twenty per pound and twelve per scilling, respectively. Beneath the penny were the arhe or eighth at eight to a penny, and the farthing or firthing at four a penny. There was also a halfpenny coin as well. Above the penny were twopence and sixpence coins with their easily discernable valuations, as well as the gróst or groat at four pence. Beyond the scilling were the rose or two scillingis bit, the mark at four shillings, and the half-crown at ten.

The first lethses bore the profiles of Queen Hortense II and King Henry I facing one another on the obverse with the new state's coat of arms on the reverse. The new pound coin was supposed to have been made of pure gold and was, as one might expect due to its high value, rarely used as a unit of exchange. In practice, the coin was often of lesser metals merely festooned with gilt of varying thickness depending upon the needs of the monarchy for ready funds and the scrupulousness of the chartered minters. The coin was not very popular within either kingdom except among financiers and merchants, but persistent royal pressure upon the Parliament ensured its acceptance by the end of Hortense II's reign.

New era

In 1693, King Alexander II, tired of scandals involving the uncertain value of the currency and at the behest of the burgesses and merchants established the Union Bank of Isselmere-Nieland. Alexander II gave the new central bank an exclusive charter over the royal mint and granted it sole responsibility for issuing bills of exchange. Consequently, the first Governor-General of the Union Bank, Sir Edward Pritchard, endeavoured to reduce the variety of coins it was required to emit, reducing the burden upon it and the monarchy.

From 1693, the Union Bank ceased the coining of arhes and required their return upon collection at city gates to the new Royal Mint on Ocherage Lane. The farthing and the groat were spared from numismatic extinction, both finally disappearing from legal currency in 1857 to counter debts and inflation incurred by the Crimean War. Coins of higher value were not spared. The Union Bank discontinued both the rose and the mark in favour of the new five shilling castle, which was immediately christened the rook by its opponents in Parliament who suspected Sir Edward of continuing to debase the currency for his own profit.

Stabilisation

The long and relatively peaceful reign of Alexander II (r. 1684-1723) enabled the lethse to gain pace on other European and world currencies. Between the late seventeenth- and early twentieth-centuries, the value of the lethse stabilised somewhat, surpassing that of the Scottish pound (12 pounds Scots = 1 pound sterling = 9 lethses) before 1707 and eventually rising to about the value of the US dollar by 1914 (5 USD/INP = 1 GBP).

Until 1914, there were one and two lethse coins, but demands from war industries led the Union Bank, on behalf of the Liberal Democrat government, to introduce pound- and two-lethse notes to conserve vital metal resources. Again, there was resistance to the new notes from the populace, but the United Kingdom's involvement in the First World War (1914-1918) on the side of the British Empire distracted political opposition by the Conservative Party and rallied popular support behind the government of the day. By the end of the War, so many changes had been wrought upon Isselmere-Nielander society that the dismay caused by the new notes was entirely forgotten.

Depression

The onset of the Great Depression in 1929 led to a run on the lethse, reducing its value to seven in one pound sterling. Faced with protectionism all around it, the United Kingdom implemented its own broad range of tariffs and duties, crushing the import market and further weakening the economy. By 1931, the lethse had dropped to ten lethses per pound sterling. This collapse finally prompted the government to abandon the gold standard, ending the state's two-centuries long affair with the precious metal.

After the lethse became a fiat currency and the government spurred local industry with subsidies as well as the continuation of high tariffs and taxes except on domestic investment, it stabilised, regaining the value of five lethses to the pound sterling by 1935.

Denominations

The present-day lethse and its lesser values are a joint product of the His (or Her) Majesty's Treasury and the Royal Mint, as well as the latter's governing body, the Union Bank. The Metric and Decimalisation Act, 1971 established the current valuation that has not been altered since.

In 1986 following the promulgation of the Constitution Act, the Royal Mint introduced the lethse and two-lethse coins. Unlike previous changes in currency, the new coins were well-received.

The new lethse coin are of a nickel-steel core and bright yellow brass covering, two centimetres in diameter with ridged edges inscribed with the royal motto, Pro Deus quod nostrum populus (Latin, For God and Our people), bearing the profile of the current monarch (at the time of coining) on the obverse and the coat of arms on the reverse.

The two lethse coin is bi-metallic, with a nickel-steel centre and a yellow brass outer ring, with the royal motto inscribed in the official languages (English and Anguistian only until 2005, with Nielander since) on its smooth edges.

Notes

Higher denominations come in pound notes. At present there are five, ten, twenty, fifty, one hundred, five hundred, and one thousand, with the last two rarely circulating. The notes tend to bear a likeness of the reigning monarch, of his or her predecessors, or of notable Isselmere-Nielanders, although there has in recent years been the tendency of introducing greater degrees of abstraction into the designs.

Following Australian and Austrian examples, Isselmere-Nieland introduced polymer banknotes in 2002. These notes are of biaxially-oriented polypropylene (BOPP) and are equipped with visible foil security bands, embedded security threads, as well as optical variable devices and inks (OVD and OVI) to hinder counterfeiting by photocopying.