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According to local folklore, the term originates from an incident in which a monkey was hanged in Hartlepool. During the Napoleonic wars, a French ship of the type chasse marée was wrecked off the coast of Hartlepool. The only survivor was a monkey, allegedly wearing a French uniform to provide amusement for the crew. On finding the monkey, some locals decided to hold an impromptu trial in the town square; since the monkey was unable to answer their questions, and many locals were unaware of what a Frenchman may look like, they concluded that the monkey was in fact a French sailor. Just to make sure, the animal was thus sentenced to death and hanged in the town square on the Headland.
An alternative theory is put forwards alongside the above on the "This Is Hartlepool" town guide. 
It states that; "Then there are some who point to a much darker interpretation of the yarn. They say that the creature that was hanged might not have been a monkey at all; it could have been a young boy. After all, the term powder-monkey was commonly used in those times for the children employed on warships to prime the cannon with gunpowder."
The Monkey Song 
The earliest mention of the hanging appears in a popular song, by comic performer, Ned Corvan, "The Monkey Song":
In former times, mid war an' strife,
The French invasion threatened life,
An' all was armed to the knife,
The Fishermen hung the Monkey O!
The Fishermen wi' courage high,
Seized on the Monkey for a spy,
"Hang him" says yen, says another,"He'll die!"
They did, and they hung the Monkey O!.
They tortor'd the Monkey till loud he did squeak
Says yen, "That's French," says another "it's Greek"
For the Fishermen had got drunky, O!
"He's all ower hair!" sum chap did cry,
E'en up te summic cute an' sly
Wiv a cod's head then they closed an eye,
Afore they hung the Monkey O!
Given that "only after Corvan's appearances in Hartlepool is there strong evidence for the development of the Monkey story", the song seems a plausible origin for the myth.
See also 
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