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Promissory Notes

After 1931, and when the trading territory known as The UNITED  KINGDOM became a bankrupt company, the money changed.
Prior to this a 1 pound note entitled you to 1 pound, in weight, of sterling silver (hence pounds sterling), exchanged in the bank anytime you wanted silver instead of the certificate or receipt for the silver which is the note, known as a bill of lading or bill of exchange, as used under admiralty maritime law, originally created in order to make transport of goods overseas easier, due to many losses through sunken ships. 

Because if the goods remain on this side of the ocean and all that is carried across the water is a silver certificate and the ship happens to sink, another certificate or receipt can easily be written up and although the ship and crew may have been lost, the silver or gold was not.

So this was a type of insurance (in-shore-ance) against those type of incidents and so these certificates also became used as a sort of currency (current-sea), and this was also a type of bond or promise to pay, so is in effect a debt... When your employer pays you with bank of England notes, or any type of country's 'promises to pay notes', that's what they are saying, we promise to pay you, we haven't paid you, but we do promise to pay you at some distant future date, which reminds me of that song 'Tomorrow Never Comes', possibly because they will never pay you with any substance, because there is none anymore, that's how it works in bankruptcy, debts are paid with debts. 
 

This is how the national debt is built up, everyone is promising to pay, but the debt keeps building and nothing gets paid, the government borrows money from the bank (instead of creating its own) and has to pay it back at interest, so that adds to the debt and, since everyone is working to earn more promissory notes, how is the debt gonna get paid? 

It can only come from either producing more goods to make profit, repossessing property to sell, from who? From the people that were borrowing money to pay for that property, or it has to make cuts on expenditure, so that's how the government works in relation to national debt and that's why we have yearly inflation and price increases and yearly cuts. 

Getting back to the physical money of exchange, the wording on these bond papers, also known as promissory notes was something like this "I promise to pay the bearer on demand the sum of x pounds sterling silver", accompanied by a signature... seem familiar?

If you look on any money it'll be the same, whether English pound notes, American dollar bills or whatever; a promise to pay and a signature. The only difference now of course is that they aren't redeemable in silver or gold. In the case of American dollars, 1  dollar was also a specific weight measurement, in gold.

But since we are now operating in bankruptcy, with a Fiat currency - one not backed by a tangible substance, it is not the gold or silver that gives the money value, it is the people and their promise to pay or their labour keeping the economy going that gives it value. Your word is your bond (and a bond is a form of money, for instance bearer bond, but this is where the word comes from and what it means) - your promise to pay, your bond, your oath or affirmation, is what creates money.

I also recommend watching the following video, for a good explanation of how the banking system works: