Colonial Scrip
Encyclopedia
Early American currency went through several stages of development in the colonial and post-Revolutionary history of the United States. Because few coins were minted in the thirteen colonies
that became the United States in 1776, foreign coins like the Spanish dollar
were widely circulated. Colonial governments sometimes issued paper money
to facilitate economic activity. The British Parliament
passed Currency Act
s in 1751, 1764, and 1773 that regulated colonial paper money.
During the American Revolution
, the colonies became independent states; freed from British monetary regulations, they issued paper money to pay for military expenses. The Continental Congress
also issued paper money during the Revolution, known as Continental currency, to fund the war effort. Both state and Continental currency depreciated
rapidly, becoming practically worthless by the end of the war. Had the British Crown not illegally counterfeited hundreds of millions in Continentals, that currency depreciation would not have occurred to the extent it did.
To address these and other problems, the United States Constitution
, ratified in 1788, denied individual states the right to coin and print money. The First Bank of the United States
, chartered in 1791, and the Coinage Act of 1792, began the era of a national American currency.
in the colonies of British America
: commodity money
, specie (coins), and paper money
. Commodity money was used when cash
(coins and paper money) was scarce. Commodities such as tobacco
, beaver
skins, and wampum
served as money at various times and places.
As in Great Britain, cash in the colonies was denominated in pounds, shillings, and pence. The value varied from colony to colony; a Massachusetts pound, for example, was not equivalent to a Pennsylvania pound. All colonial pounds were of less value than the British pound sterling
. The coins in circulation in the colonies were most often of Spanish and Portuguese origin. The prevalence of the Spanish dollar
in the colonies led to the money of the United States being denominated in dollars rather than pounds.
One by one, colonies began to issue their own paper money to serve as a convenient medium of exchange
. In 1690, the Province of Massachusetts Bay
created "the first authorized paper money issued by any government in the Western World". This paper money was issued to pay for a military expedition during King William's War
. Other colonies followed the example of Massachusetts Bay by issuing their own paper currency in subsequent military conflicts.
The paper bills issued by the colonies were known as "bills of credit
". Bills of credit were usually fiat money
; that is, they could not be exchanged for a fixed amount of gold or silver coins upon demand. Bills of credit were usually issued by colonial governments to pay debts. The governments would then retire the currency by accepting the bills for payment of taxes. When colonial governments issued too many bills of credit, or failed to tax them out of circulation, inflation
resulted. This happened especially in New England
and the southern colonies, which unlike the middle colonies
, were frequently at war.
This depreciation
of colonial currency was harmful to creditors in Great Britain when colonists paid their debts with money that had lost value. Adam Smith
criticized colonial bills of credit in his famed 1776 work The Wealth of Nations
. According to Smith, the inflationary nature of the currency was a "violent injustice" to the creditor; "a scheme of fraudulent debtors to cheat their creditors" (Book II, Chapter II). As a result, the British Parliament
passed several Currency Act
s to regulate the paper money issued by the colonies. The Currency Act of 1751 restricted the emission of paper money in New England
. It allowed the existing bills to be used as legal tender
for public debts (i.e. paying taxes), but disallowed their use for private debts (e.g. for paying merchants).
Another Currency Act in 1764 extended the restrictions to the colonies south of New England.
Unlike the earlier act, this act did not prohibit the colonies in question from issuing paper money, but it did forbid them to designate their currency as legal tender for public or private debts. This prohibition created tension between the colonies and the mother country, and has sometimes been seen as a contributing factor in the coming of the American Revolution
. After much lobbying, Parliament amended the act in 1773, permitting the colonies to issue paper currency as legal tender for public debts. Shortly thereafter, some colonies once again began issuing paper money. When the American Revolutionary War
began in 1775, all of the rebel colonies—soon to be independent states—issued paper money to pay for military expenses.
began in 1775, the Continental Congress
began issuing paper money known as Continental currency, or Continentals. Continental currency was denominated in dollars from 1/6 of a dollar to $80, including many odd denominations in between. During the Revolution, Congress issued $241,552,780 in Continental currency.
Continental currency depreciated
badly during the war, giving rise to the famous phrase "not worth a continental". A primary problem was that monetary policy was not coordinated between Congress and the states, which continued to issue bills of credit. "Some think that the rebel bills depreciated because people lost confidence in them or because they were not backed by tangible assets," writes financial historian Robert E. Wright
. "Not so. There were simply too many of them." Congress and the states lacked the will or the means to retire the bills from circulation through taxation or the sale of bonds.
Another problem was that the British successfully waged economic warfare by counterfeiting Continentals on a large scale. Benjamin Franklin
later wrote:
By the end of 1778, Continentals retained from 1/5 to 1/7 of their face value. By 1780, the bills were worth 1/40th of face value. Congress attempted to reform the currency by removing the old bills from circulation and issuing new ones, without success. By May 1781, Continentals had become so worthless that they ceased to circulate as money. Franklin noted that the depreciation of the currency had, in effect, acted as a tax to pay for the war. In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value. Continental bills are now very rare, and are sought after by collectors.
After the collapse of Continental currency, Congress appointed Robert Morris to be Superintendent of Finance of the United States
. Morris advocated the creation of the first financial institution chartered by the United States, the Bank of North America
, in 1782. The bank was funded in part by specie loaned to the United States by France. Morris helped finance the final stages of the war by issuing notes in his name, backed by his own money. The Bank of North America also issued notes convertible into specie.
The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention
to include the gold and silver clause into the United States Constitution
so that the individual states could not issue bills of credit, or "make any Thing but gold and silver Coin a Tender in Payment of Debts."
Thirteen Colonies
The Thirteen Colonies were English and later British colonies established on the Atlantic coast of North America between 1607 and 1733. They declared their independence in the American Revolution and formed the United States of America...
that became the United States in 1776, foreign coins like the Spanish dollar
Spanish dollar
The Spanish dollar is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497. Its purpose was to correspond to the German thaler...
were widely circulated. Colonial governments sometimes issued paper money
Paper Money
Paper Money is the second album by the band Montrose. It was released in 1974 and was the band's last album to feature Sammy Hagar as lead vocalist.-History:...
to facilitate economic activity. The British Parliament
Parliament of Great Britain
The Parliament of Great Britain was formed in 1707 following the ratification of the Acts of Union by both the Parliament of England and Parliament of Scotland...
passed Currency Act
Currency Act
The Currency Act is the name of several acts of the Parliament of Great Britain that regulated paper money issued by the colonies of British America. The acts sought to protect British merchants and creditors from being paid in depreciated colonial currency...
s in 1751, 1764, and 1773 that regulated colonial paper money.
During the American Revolution
American Revolution
The American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
, the colonies became independent states; freed from British monetary regulations, they issued paper money to pay for military expenses. The Continental Congress
Continental Congress
The Continental Congress was a convention of delegates called together from the Thirteen Colonies that became the governing body of the United States during the American Revolution....
also issued paper money during the Revolution, known as Continental currency, to fund the war effort. Both state and Continental currency depreciated
Depreciation (currency)
Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system. It is most often used for the unofficial increase of the exchange rate due to market forces, though sometimes it appears...
rapidly, becoming practically worthless by the end of the war. Had the British Crown not illegally counterfeited hundreds of millions in Continentals, that currency depreciation would not have occurred to the extent it did.
To address these and other problems, the United States Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
, ratified in 1788, denied individual states the right to coin and print money. The First Bank of the United States
First Bank of the United States
The First Bank of the United States is a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.-Banking History:...
, chartered in 1791, and the Coinage Act of 1792, began the era of a national American currency.
Colonial currency
There were three general types of moneyMoney
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
in the colonies of British America
British America
For American people of British descent, see British American.British America is the anachronistic term used to refer to the territories under the control of the Crown or Parliament in present day North America , Central America, the Caribbean, and Guyana...
: commodity money
Commodity money
Commodity money is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money....
, specie (coins), and paper money
Paper Money
Paper Money is the second album by the band Montrose. It was released in 1974 and was the band's last album to feature Sammy Hagar as lead vocalist.-History:...
. Commodity money was used when cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...
(coins and paper money) was scarce. Commodities such as tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
, beaver
Beaver
The beaver is a primarily nocturnal, large, semi-aquatic rodent. Castor includes two extant species, North American Beaver and Eurasian Beaver . Beavers are known for building dams, canals, and lodges . They are the second-largest rodent in the world...
skins, and wampum
Wampum
Wampum are traditional, sacred shell beads of the Eastern Woodlands tribes of the indigenous people of North America. Wampum include the white shell beads fashioned from the North Atlantic channeled whelk shell; and the white and purple beads made from the quahog, or Western North Atlantic...
served as money at various times and places.
As in Great Britain, cash in the colonies was denominated in pounds, shillings, and pence. The value varied from colony to colony; a Massachusetts pound, for example, was not equivalent to a Pennsylvania pound. All colonial pounds were of less value than the British pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
. The coins in circulation in the colonies were most often of Spanish and Portuguese origin. The prevalence of the Spanish dollar
Spanish dollar
The Spanish dollar is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497. Its purpose was to correspond to the German thaler...
in the colonies led to the money of the United States being denominated in dollars rather than pounds.
One by one, colonies began to issue their own paper money to serve as a convenient medium of exchange
Medium of exchange
A medium of exchange is an intermediary used in trade to avoid the inconveniences of a pure barter system.By contrast, as William Stanley Jevons argued, in a barter system there must be a coincidence of wants before two people can trade – one must want exactly what the other has to offer, when and...
. In 1690, the Province of Massachusetts Bay
Province of Massachusetts Bay
The Province of Massachusetts Bay was a crown colony in North America. It was chartered on October 7, 1691 by William and Mary, the joint monarchs of the kingdoms of England and Scotland...
created "the first authorized paper money issued by any government in the Western World". This paper money was issued to pay for a military expedition during King William's War
King William's War
The first of the French and Indian Wars, King William's War was the name used in the English colonies in America to refer to the North American theater of the Nine Years' War...
. Other colonies followed the example of Massachusetts Bay by issuing their own paper currency in subsequent military conflicts.
The paper bills issued by the colonies were known as "bills of credit
Bills of Credit
Bill of credit is a phrase from Article One, Section 10, Clause One of the United States Constitution. It refers to a document similar to a banknote that is issued by a government and designed to circulate as money. Because the framers of the Constitution sought to limit the issuance of currency,...
". Bills of credit were usually fiat money
Fiat money
Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.Fiat money originated in 11th...
; that is, they could not be exchanged for a fixed amount of gold or silver coins upon demand. Bills of credit were usually issued by colonial governments to pay debts. The governments would then retire the currency by accepting the bills for payment of taxes. When colonial governments issued too many bills of credit, or failed to tax them out of circulation, inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
resulted. This happened especially in New England
New England
New England is a region in the northeastern corner of the United States consisting of the six states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut...
and the southern colonies, which unlike the middle colonies
Middle Colonies
The Middle Colonies comprised the middle region of the Thirteen Colonies of the British Empire in Northern America. In 1776 during the American Revolution, the Middle Colonies became independent of Britain as the states of New Jersey, Pennsylvania, New York and Delaware.Much of the area was part of...
, were frequently at war.
This depreciation
Depreciation (currency)
Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system. It is most often used for the unofficial increase of the exchange rate due to market forces, though sometimes it appears...
of colonial currency was harmful to creditors in Great Britain when colonists paid their debts with money that had lost value. Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
criticized colonial bills of credit in his famed 1776 work The Wealth of Nations
The Wealth of Nations
An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, is the magnum opus of the Scottish economist and moral philosopher Adam Smith...
. According to Smith, the inflationary nature of the currency was a "violent injustice" to the creditor; "a scheme of fraudulent debtors to cheat their creditors" (Book II, Chapter II). As a result, the British Parliament
Parliament of Great Britain
The Parliament of Great Britain was formed in 1707 following the ratification of the Acts of Union by both the Parliament of England and Parliament of Scotland...
passed several Currency Act
Currency Act
The Currency Act is the name of several acts of the Parliament of Great Britain that regulated paper money issued by the colonies of British America. The acts sought to protect British merchants and creditors from being paid in depreciated colonial currency...
s to regulate the paper money issued by the colonies. The Currency Act of 1751 restricted the emission of paper money in New England
New England
New England is a region in the northeastern corner of the United States consisting of the six states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut...
. It allowed the existing bills to be used as legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....
for public debts (i.e. paying taxes), but disallowed their use for private debts (e.g. for paying merchants).
Another Currency Act in 1764 extended the restrictions to the colonies south of New England.
Unlike the earlier act, this act did not prohibit the colonies in question from issuing paper money, but it did forbid them to designate their currency as legal tender for public or private debts. This prohibition created tension between the colonies and the mother country, and has sometimes been seen as a contributing factor in the coming of the American Revolution
American Revolution
The American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
. After much lobbying, Parliament amended the act in 1773, permitting the colonies to issue paper currency as legal tender for public debts. Shortly thereafter, some colonies once again began issuing paper money. When the American Revolutionary War
American Revolutionary War
The American Revolutionary War , the American War of Independence, or simply the Revolutionary War, began as a war between the Kingdom of Great Britain and thirteen British colonies in North America, and ended in a global war between several European great powers.The war was the result of the...
began in 1775, all of the rebel colonies—soon to be independent states—issued paper money to pay for military expenses.
By colony
| Colony/state | Paper money first issued in: |
|---|---|
| Connecticut pound Connecticut pound The pound was the currency of Connecticut until 1793. Initially, the British pound circulated along with foreign currencies. This was supplemented by local paper money from 1709. Although the local currency was denominated in pounds, shillings and pence, it was worth less than sterling, with 1... |
1709 |
| Delaware pound Delaware pound The pound was the currency of Delaware until 1793. Initially, the British pound and foreign coins circulated. This was supplemented from 1723 by local paper money... |
1723 |
| Georgia pound Georgia pound The pound was the currency of Georgia until 1793. Initially, the British pound circulated. This was supplemented from 1735 with local paper money denominated in sterling, with 1 pound = 20 shillings = 240 pence.... |
1735 |
| Maryland pound Maryland pound The pound was the currency of Maryland until 1793. Initially, the British pound circulated along with foreign coins. From 1733, this was supplemented by paper money, known as "Proclamation Money". Although this was denominated in pounds, shillings and pence, they were worth less than sterling, with... |
1733 |
| Massachusetts pound Massachusetts pound The pound was the currency of the Commonwealth of Massachusetts and its colonial predecessors until 1793. Like the British pound sterling of that era, the Massachusetts pound was subdivided into 20 shillings, each of 12 pence, but the Massachusetts and British pounds were not equivalent in value... |
1690 |
| New Hampshire pound New Hampshire pound The pound was the currency of New Hampshire until 1793. Initially, the British pound circulated, supplemented from 1709 by local paper money. These notes were denominated in pounds, shillings and pence but were worth less than sterling, with 1 New Hampshire shilling = 9 pence sterling... |
1709 |
| New Jersey pound New Jersey pound The pound was the currency of New Jersey until 1793. Initially, the British pound and some foreign currencies circulated, supplemented from 1709 by local paper money. However, although the notes were denominated in pounds, shillings and pence, they were worth less than sterling, with 1 New Jersey... |
1709 |
| New York pound New York pound The pound was the currency of New York until 1793. Initially, the British pound and some foreign currencies circulated, supplemented by local paper money from 1709... |
1709 |
| North Carolina pound North Carolina pound The pound was the currency of North Carolina until 1793. Initially, the British pound circulated, supplemented from 1709 by local paper money. Although these notes were denominated in pounds, shillings and pence, they were worth less than sterling, with 1 North Carolina shilling = 9 pence sterling.... |
1712 |
| Pennsylvania pound Pennsylvania pound The pound was the currency of Pennsylvania until 1793. It was created as a response to the global economic downturn caused by the collapse of the South Sea Company. Initially, the British pound and certain foreign coins circulated, supplemented from 1723 by local paper money, called Colonial Scrip... |
1723 |
| Rhode Island pound Rhode Island pound The pound was the currency of Rhode Island until 1793. Initially, the British pound and foreign coins circulated, supplemented by local paper money from 1710. Although these notes were denominated in pounds, shillings and pence, they were worth less than sterling, with 1 Rhode Island shilling = 9... |
1710 |
| South Carolina pound South Carolina pound The pound was the currency of South Carolina until 1793. Initially, the British pound circulated, supplemented from 1703 by local paper money. Although these notes were denominated in pounds, shillings and pence, they were worth less than sterling, with 1 South Carolina shilling = 8 pence sterling.... |
1703 |
| Virginia pound Virginia pound The pound was the currency of Virginia until 1793. Initially, the British pound sterling circulated along with foreign currencies, supplemented from 1755 by local paper money... |
1755 |
Continental currency
After the American Revolutionary WarAmerican Revolutionary War
The American Revolutionary War , the American War of Independence, or simply the Revolutionary War, began as a war between the Kingdom of Great Britain and thirteen British colonies in North America, and ended in a global war between several European great powers.The war was the result of the...
began in 1775, the Continental Congress
Continental Congress
The Continental Congress was a convention of delegates called together from the Thirteen Colonies that became the governing body of the United States during the American Revolution....
began issuing paper money known as Continental currency, or Continentals. Continental currency was denominated in dollars from 1/6 of a dollar to $80, including many odd denominations in between. During the Revolution, Congress issued $241,552,780 in Continental currency.
Continental currency depreciated
Depreciation (currency)
Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system. It is most often used for the unofficial increase of the exchange rate due to market forces, though sometimes it appears...
badly during the war, giving rise to the famous phrase "not worth a continental". A primary problem was that monetary policy was not coordinated between Congress and the states, which continued to issue bills of credit. "Some think that the rebel bills depreciated because people lost confidence in them or because they were not backed by tangible assets," writes financial historian Robert E. Wright
Robert E. Wright
Robert E. Wright is a business, economic, financial, and monetary historian and the inaugural Rudy and Marilyn Nef Family Chair of Political Economy at Augustana College in Sioux Falls, South Dakota...
. "Not so. There were simply too many of them." Congress and the states lacked the will or the means to retire the bills from circulation through taxation or the sale of bonds.
Another problem was that the British successfully waged economic warfare by counterfeiting Continentals on a large scale. Benjamin Franklin
Benjamin Franklin
Dr. Benjamin Franklin was one of the Founding Fathers of the United States. A noted polymath, Franklin was a leading author, printer, political theorist, politician, postmaster, scientist, musician, inventor, satirist, civic activist, statesman, and diplomat...
later wrote:
By the end of 1778, Continentals retained from 1/5 to 1/7 of their face value. By 1780, the bills were worth 1/40th of face value. Congress attempted to reform the currency by removing the old bills from circulation and issuing new ones, without success. By May 1781, Continentals had become so worthless that they ceased to circulate as money. Franklin noted that the depreciation of the currency had, in effect, acted as a tax to pay for the war. In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value. Continental bills are now very rare, and are sought after by collectors.
After the collapse of Continental currency, Congress appointed Robert Morris to be Superintendent of Finance of the United States
Superintendent of Finance of the United States
The post of Superintendent of Finance of the United States was one of three executive offices created by the Congress of the Confederation in 1781. Another office, Agent of the Marine, was also create was not directly filled but devolved on to the Superintendent.The only person to hold the office...
. Morris advocated the creation of the first financial institution chartered by the United States, the Bank of North America
Bank of North America
The Bank of North America was a private business chartered on December 31, 1781 by the Congress of the Confederation and opened on January 7, 1782, at the prodding of Superintendent of Finance Robert Morris. This was thus the nation's first de facto central bank. It was succeeded in its role as...
, in 1782. The bank was funded in part by specie loaned to the United States by France. Morris helped finance the final stages of the war by issuing notes in his name, backed by his own money. The Bank of North America also issued notes convertible into specie.
The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention
Philadelphia Convention
The Constitutional Convention took place from May 14 to September 17, 1787, in Philadelphia, Pennsylvania, to address problems in governing the United States of America, which had been operating under the Articles of Confederation following independence from...
to include the gold and silver clause into the United States Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
so that the individual states could not issue bills of credit, or "make any Thing but gold and silver Coin a Tender in Payment of Debts."
See also
- Economic history of the United StatesEconomic history of the United StatesThe economic history of the United States has its roots in European colonization in the 16th, 17th, and 18th centuries. Marginal colonial economies grew into 13 small, independent farming economies, which joined together in 1776 to form the United States of America...
- Federal Reserve NoteFederal Reserve NoteA Federal Reserve Note is a type of banknote used in the United States of America. Federal Reserve Notes are printed by the United States Bureau of Engraving and Printing on paper made by Crane & Co. of Dalton, Massachusetts. They are the only type of U.S...
- History of economic thoughtHistory of economic thoughtThe history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day...
- History of the United States dollarHistory of the United States dollarThe history of the United States dollar covers more than 200 years.-Early history:The history of the dollar in North America pre-dates US independence. It began with the issuance of Early American currency called the colonial script, whereby the issuance of currency was equal to the goods and...
- Monetary policyMonetary policyMonetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
- Money creationMoney creationIn economics, money creation is the process by which the money supply of a country or a monetary region is increased due to some reason. There are two principal stages of money creation. First, the central bank introduces new money into the economy by purchasing financial assets or lending money...
- United States dollarUnited States dollarThe United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
Further reading
- Brock, Leslie V. The currency of the American colonies, 1700–1764: a study in colonial finance and imperial relations. Dissertations in American economic history. New York: Arno Press, 1975. ISBN 0405072570.
- Ernst, Joseph Albert. Money and politics in America, 1755–1775: a study in the Currency act of 1764 and the political economy of revolution. Chapel Hill: University of North Carolina Press, 1973. ISBN 080781217X.