Paper Money and the Currency Act, 1751
In colonial America, money--especially currency or coins--was scarce. Despite what many in England had hoped, the first settlers discovered no gold or silver, and, consequently, there was none to mine to send to England or to use to make coins during the colonial period. In addition, many Americans were poor and had little or no cash when they came to America. As a result, much business in colonial America was done through bartering or on credit. In some places, such as Virginia, cash crops such as tobacco were so valuable that the crop itself became the currency. People bought what they needed with tobacco leaves.
Starting around 1690, colonial governments began issuing paper money or bills of credit that had no backing in gold or silver. The issue of paper money coincided with the beginning of a series of wars fought between Britain and France. During King William's War (1689-1697) and Queen Anne's War (1702-1713), seven of the twelve colonies issued paper money to help defray war costs and pay debts. Two more wars between the two European powers that were fought in North America, King George's War (1740-1748) and the Seven Years' or French and Indian War (1754-1763), firmly established the need for paper currency in America. The two wars also firmed English resolve not to allow American paper money to be used to pay debts owed to England. This refusal to accept American paper bills of credit helped widen the rift between the colonies and the mother country that ultimately ended in revolution.
Because specie, or currency, was so rare in America and because paper money was controversial, newspaper articles and advertisements of the
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Publication information: Book title: Debating the Issues in Colonial Newspapers:Primary Documents on Events of the Period. Contributors: David A. Copeland - Author. Publisher: Greenwood Press. Place of publication: Westport, CT. Publication year: 2000. Page number: 142.