PREVIEW: BANKNOTES AUCTION 25 AUGUST

Sir Edward Hilton Young, later Lord Kennet, played a vital role in establishing a monetary system for Iraq following the creation of the country under the British Mandate at the behest of the League of Nations in 1920.

The country emerged out of the ashes of the Ottoman Empire after World War 1, with the Hashemite Kingdom created under Faisal I in 1921.

In 1931, the year before Iraq gained independence from the UK, The Iraq Currency Board was established in London to determine the currency and oversee its development pending the founding of a National Bank of Iraq.

Sir Edward was chairman, resigning the following year to take up a position as Minister of Health, but returning in 1940 as Lord Kennet to replace Leo Amery, who had resigned to take up a government appointment as Secretary of State for India.

Having settled on the Iraqi Dinar (I.D.) as the unit of currency, which could be divided in to 1,000 Fils, its introduction faced the complication of Britain withdrawing from the Gold Standard, to which it was originally supposed to be pegged, in favour of linking it to the pound sterling.

By the time Lord Kennet returned to the chairmanship of the Currency Board, World War 2 had been underway for months. The amount of currency circulating in Iraq increased, probably due to the population withdrawing cash from banks as a security measure.

It would have helped that the Dinar was backed by sterling, but not when Britain withdrew that support in 1941.

Just as the demand for banknotes rose with the outbreak of war, so that war made it more difficult to deliver the notes after they were printed in Britain, so printing was moved to India.

Despite the measures, shortages continued, especially for notes of large denomination.

Over the years notes were issued under the signature of at least two members of the currency board, leading to a variety of signature combinations. Having signed the earliest notes as Sir Edward Hilton Young in 1931, from 1940 he applied the signature of Lord Kennet, accompanied by five separate variations over the ensuing decade.

The first of these combinations ran from 1940 to 1943 and also featured the signature of Atta Amin, Iraqi First Secretary and Chargé d’Affaires.

Noonans will offer a series of Kennet signed notes in their August 25 Banknotes auction. Among them is the extremely rare 1942 100 Dinars, co-signed by Atta Amin and numbered A029833. In very fine condition, it carries an estimate of £20,000-£26,000.

“The significance of these notes, with their creation and circulation against the background of global conflict, gives them an historic importance that sits well alongside their rarity and attractive design,” says Noonans’ Head of Banknotes, Andrew Pattison.

“Their story illustrates the importance and challenge of establishing a viable currency in the interests of political stability and authority in the early years of a burgeoning nation.”

The Bank Notes of the Iraq Currency Board, by Peter Symes, Murray Hanewich and Layth Al-Muderis, first published by the International Bank Note Society Journal in 2001, gives a detailed account of the board’s hgistory and work.