Some say money is the root of all evil, but as evil as it may be it connects people together. In Colonial America there were many different social groups of people populating the undiscovered lands of the New World. These people were the Spanish, the French, the Dutch, and the English. The Indians already inhabited the lands. Each individual group had their own type of monetary system. When the Congressional Congress created a monetary system for America, it created an individualized American identity. No longer were the America n people using a money system that was native elsewhere; American’s were using a monetary system that they could call their own.
The Congressional Congress did not come up with the idea of creating a money system of their own on a whim; it took years of being oppressed by the British government for them to create the idea. Britain had put the colonies through a lot of hard times in which led the colonies to distrust the mainland and led to the idea of rebellion. “To a very large extent the condition of the currency in America before the Revolution was shaped by commercial and political contacts with England.”
In the 15th Century when the colonies in America were first being established the money being used was still of European currency. “The colonists did most of their financial reckoning in pounds, shillings, and pence.” But the British colonies were not the only colonies in the New World; there were Spanish, Dutch, French, and many others. Each group had their own type of currency, the Spanish dealt with gold and silver, the Dutch dealt in copper ieschens and silver stivers, and the French dealt with bullions. The Native Indians also inhabited the lands and they had their own forms of money which consisted of lignite and coal money, ivory and bone money and many other forms.
“In particular, a colony’s paper money was not the only money available. International monies, gold and silver specie coins, also flowed in and out of a colony and were used as money.” With all the different cultures who immigrated into the New World, all monies were being used simultaneously with each other. Different colonies used different methods to obtain money. The Southern colonies, such as the Carolinas, “produced commodities that furnished substantial direct returns to England.” The Northern and Middle Colonies “had to resort to a roundabout trade to acquire the products, bills of exchange, or specie with which to pay for their imports from the mother country.”
“The medium of exchange was less imperative in some trading colonies than in others: it was less when the trade with England was direct and greater when the trade was indirect.” When the colonies were trading with England, they traded goods for money which could be used most places within the New World. When the colonies traded with others, not the motherland, it was a harder trade because the money or goods that were traded were not always compatible with the area they lived in. “Colonies, by contrast, used the same money of account as the mother country. A colonial exchange transaction consisted of paying some premium in colonial currency for the delivery of a certain sum in the metropolis or vice versa.”
“It is evident that with money, the supplies of which were subject to the power of a distant sovereign and an apathetic ministry, the orderly development of the Colonies was impossible.” The Colonies could not come up with an individualized identity without their own money system. For as long as they were under the control of the British government, they used their money and were regulated the same as the British, and most times had harder taxes to deal with due to the problem that the representatives of the colonies lived in England and didn’t understand what hard times the colonists were experiencing.
“Money and taxes were closely intertwined during 1714-39. Many of the tax measures enacted during this period were dedicated to retiring...
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[ 2 ]. Curtis P. Nettles, “The Money Supply of the American Colonies Before 1720”, Reprints of Economic Classics, Sentry Press, New York, New York, 1964:162.
[ 3 ]. Alexander Del Mar, “The History of Money in America: From the Earliest Times to the Establishment of the Constitution”, Burt Franklin, New York, New York, 1968: 55.
[ 7 ]. Farley Grubb, “Theory, Evidence, and Belief—The Colonial Money Puzzle Revisited: Reply to Michener and Wright”, Econ Journal Watch 3, no. 1 (January 2006): 49.
[ 8 ]. Leslie V. Brock, “The Currency of the American Colonies 1700-1764: A Study in Colonial Finance and Imperial Relations”, Arno Press, New York, New York, 1975: 3.
[ 10 ]. (Grubb 2006) John J. McCusker, “Money and Exchange in Europe and America, 1600-1775: A Handbook”, The University of North Carolina Press, Chapel Hill, North Carolina, 1978: 18.
[ 11 ]. Alexander Del Mar, “The History of Money in America: From the Earliest Times to the Establishment of the Constitution”, Burt Franklin, New York, New York, 1968: 94.
[ 12 ]. Alvin Rabushka, “Taxation in Colonial America”, Princeton University Press, Princeton, New Jersey, 2008: 520.
[ 13 ]. Curtis P. Nettles, “The Money Supply of the American Colonies Before 1720”, Reprints of Economic Classics, Sentry Press, New York, New York, 1964:162.
[ 14 ]. Leslie V. Brock, “The Currency of the American Colonies 1700-1764: A Study in Colonial Finance and Imperial Relations”, Arno Press, New York, New York, 1975: 7.
[ 16 ]. David Lee Russell, The American Revolution in Southern Colonies, McFarland & Company Inc. Publishers, Jefferson, North Carolina, 2000: 26.
[ 17 ]. Edmund & Helen Morgan, The Stamp Act Crisis: Prologue to Revolution, University of North Carolina Press, 1962: 39.
[ 21 ]. David Lee Russell, The American Revolution in Southern Colonies, McFarland & Company Inc. Publishers, Jefferson, North Carolina, 2000: 36.
[ 23 ]. Henry Phillips, “Historical Sketches of the Paper Currency of the American Colonies, Prior to the Adoption of the Federal Constitution,” Burt Franklin, New York, 1969: 1-14
[ 24 ]
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