When a pound was a pound

The Pound, A Biography By David Sinclair, Century, £15.60

The pound sterling, as witnessed by the agonising and often rancorous debate convulsing British politics over joining the euro, has long occupied a mythical status in the psyche of our neighbours.

Up there with royalty and Yorkshire pudding, it symbolises a continuity with the past and a comforting platform for the future.

In The Pound, A Biography, David Sinclair outlines the ancient beginnings of this venerable currency (introduced, horrors of horrors, by continentals) right up to the present day, taking in religious leaders, the Battle of Bosworth Field, the gold standard, the rise of the dollar and the euro threat.

It goes a long way to explaining the attachment that the British have to the currency. A lot of it is tied up with the power of the empire, when at its height sterling was what the dollar is today, the currency of global trade and and the standard others had to measure up to. The golden era from Victoria's ascension to the start of the first World War is harked back to by Tories and Labour alike and the position of sterling is intrinsically bound up with this epoch.

The debate surrounding the abandonment of the gold standard in 1931 is reminiscent of the euro debate, another uncomfortable reminder of the declining position of Britain in the order of things.

While the really historical sections of the book, dealing with the Romans, Jutes and Angles are very interesting - and full of such titbits as that it was Copernicus who came up with the idea of money supply and sterling as a derivative from the Norman for a small coin - it is the more recent material that is fascinating, when sterling was the currency of choice for the global market.

The first World War and the realisation that the hitherto talismanic gold standard was an unworkable method of indicating value saw Britain quietly withdraw from its operation.

Despite returning to it after the war, the Depression ended such illusions and sterling started on its genteel decline. The final step in this process was when the pound was devalued by 30 per cent against the dollar in 1949, signalling irrefutably Britain's real position despite the illusion generated by the heroics of battling Hitler's Germany. And it seems realpolitik will once again determine its future in relation to the euro.