Paper money of the colonies of North America

The pines of Massachusetts

In 1652, despite the prohibitions, a mint in Massachusetts settled, that coined currencies of 12, 6 and 3 pence, the calls pine tree, by the pine that appears in the obverse. They coined themselves with discreet success thousands of pieces, but in 1684 king Carlos 11 ordered the closing of mint. Also in Massachusetts, in 1690, credit, the first paper money of the English colonies began to circulate biles of. values were of 5, 10 and 20 chelines. In the obverse, a written up text by hand needed that they were worth just like the currency of silver, and that they had to be accepted in all the public offices of the colony of Massachusetts, as much for the payment of taxes like in quality of deposit, the emissions of this colony rebel was great successful, because they were not depreciated with the inflation and to that very they were limited: first it did not surpass the 7,000 pounds sterling. Indeed for that reason, its circulation was tolerated by the government English. In fact, one is one of the first experiments of circulation of paper, and its importance would be included/understood shortly after. In all the colonies ofNorth were other ticket emissions, and with time the modalities needed circulation. The value of paper money was established by a specific law that, among other things, imposed the obligation to accept it like payment. Some tickets anticipated a date of lapsing, after which they were retired officers, reimbursing its value. This last one often was guaranteed with mortgages on real estate, like lands or buildings, or covered with merchandize or cattle. Also in these cases, the ignorance of the laws of the economy it caused excessive emissions that, in spite of the guarantees, jeopardized the value of tickets. In order to avoid these disadvantages, its lapsing was promulgated, but this measurement made increase to the distrust and depreciation. Thus, for example, a ticket emitted in Rhode lsland it got to lose 96% of his nominal value. Benjamin Franklin, great illustrated, the inventive one of lightning rods, included/understood the importance immediately of paper money, and propagated its use a traverse of its writings. When it counted only twenty-three years, it was ordered by the government of Pensilvania of the impression of tickets of credit, Franklin suggested to emit bills of credit guaranteed in a 50% by lands. The results were stimulating: the idea of to guarantee in this way the emissions gave a great impulse to the development of the real estate banks in all the colonies. First it was created in Boston in 1740. But the government of London hurried to order the closing of this institution, and soon of imposed the retirement of all bills credit in circulation. This one was one of so many arbitrary measures of English government, that contributed to increase the displeasure, which ended at the war of Independence. The resistance against the British administration increased, among other reasons because it was tried that colonies paid the taxes in effective currency exclusively, thus returning more difficult and odioso still the fulfillment from the obligations paid. The authorities of London acted in this way because they saw with fear and suspects the facilities access to the credit. In effect, in that time those were few that handled to currencies and tickets, since the farmers and the small craftsmen did not have possibilities generally to make contact with enemy with the banks. With time, in America these obstacles were surpassed thanks to the successes of bills of credit and to the development of the banks, that allowed the colonos to buy a parcel of land and to the craftsmen to initiate or to extend their activity. These facilities to obtain credits destined to the investment still represent today a typical aspect of the economy and the mentality Americans, according to who the success is the result of the efforts of individual that, with the help of the banks that trust their programs, she can become rich legitimately. Around these reasons, in America, already in century XIX more money in paper than in metal circulated.

Continental

When exploding the war of Independence, the heads of the rebels created the problem of how immediately to finance the conflict: given the antecedents, the most normal way seemed an extraordinary ticket emission. With the perspective ofperhaps time, seems that he had been simpler to resort to the imposition of tributes, but it agrees to have present that the colonies had rebelled themselves indeed by fiscal reasons, and that therefore measured of this type hardly they had been accepted, It must be considered in addition that the circulating one metallic very chaotic era: next to the English currencies, there were real Spaniards with the columns of Hercules, lamados by this pillar to dollar. In the diverse colonies its value very was differentiated, also because of unequal value of its paper money, reason why to make one appraisal uniforms had been very complicated, the appearance of the new tickets, to which it was called, continental " was decided in Filadelfia in 1775 by the continental Congress, the assembly of the representatives of the ex- colonies. The emission was in charge of the Congress: each one of the states decided to impose the legal course to tickets and to apply the established pains for that rejected the continental ones like payment means. The continental one conferred to all the right to be able to change it by Spanish dollars (8 real ones), the Spanish silver era recognized anywhere in the world. The values were of 1, 2, 3, 4, 5, 6, 7, 8, 20 and 30 dollars. To them tickets were added later of sixth, a third, two thirds and means dollar.

The propaganda military

One is very interesting tickets, in which the symbolic reasons and drawings effectively represent the enthusiasm and the desire of freedom of the ex- colonies. The phrases in Latin urge to maintain the cause (sustine bel abstine in the 5 dollars, perseverando in the 6), and they load the accent in the heroic fight in course (depressa resurgit in the dollar, aut mors aut bollard decorates in the 4 dollars). The bill of 3 dollars do not communicate much confidence, to tell the truth, because exitus in dubio is ***reflxed mng est, but this motto, defeatist did not take in being replaced. The first series appeared in 1 775 and reached an amount of two million dollars. In order to face the financial necessities every time more urgent, the emissions increased of year in year until surpassing in 1779 the 240 million dollars. At the outset, the Congress it jeopardized to change the continental ones by metallic currency at the rate of a dollar of this last one by 40 of paper. , In the end at sight of failure of this disposition, was decided its definitive retirement and the conversion in obligations to the change of 1 by 1 00. The states of the new confederation, born of the independence declaration, continued making circulate own tickets, but absence of a unitary economic policy caused inflationary excesses in a moment and the chaos. As one were invoice tickets tufa, the falsifications were also multiplied, that ended up reducing value to them. Not to sink in the ruin to the families of soldiers, to whom he paid myself with these tickets, were necessary to resort to another paper money guaranteed against the inflation. Strictly speaking, not he dealed with obligation but banknotes, that devengaban an interest of 6%, which was paid with paid attention regularity. During a brief period, at the end of century xvili, in some states these obligations was used like payment means, and its course paid attention with respect to the value of products of feeding them, like the meat and cereals, the skins and the wool. The ticket emissions they continued because the shortage of circulating metalist, accentuated by the disappearance of the species of gold and silver due persisted to devaluation of the continental ones, There where it lacked the change, was used the paper, and a church of New York even emitted his own bills.

The bank of the United States

The fact that each one of the states continued having own monetary systems, made the situation still more chaotic. In Filadelfia, where one still calculated in pounds sterling, chelines and pennies, on 1780 the Bank of Pensilvania was based, that emitted tickets with the value expressed in pennies in relation to the dollar. They were bills of little value, 1 and 3 pennies (pence), and served like substitutes as little abundant change. The bank born in Filadelfia they followed other private local establishments to him, that emitted tickets that they could be defined as "needed", also called, fractional. Often, by inexperience of those who directed them, those organizations broke resoundingly to the few years. After the disaster of the continental ones, a constitutional amendment vowed that prohibited the Congress to emit tickets or currencies, and identical prohibition prevailed for each one of the states. However, the sensible economic progress, that began to pronounce themselves, and the colonization from the territories to the West, they required a solid banking institution that took care not only of credit, but also of the emissions of currency and of paper money. With this purpose, and to proposal of secretary of Treasure, Alexander Hamilton, the Congress instituted a bank power station, the Bank of the United States, with a capital of 1 0 million dollars, subscribed by the own Congress and private shareholders. During twenty years it had the privilege of the ticket emission, demanded the payments and the collections on behalf of government, and took care of control of the private banks of the United States. Their tickets, that were reimbursable at sight in metallic currency, did not take in to achieve great success, because they ended the currency shortage. Numerous branchs were opened, but the control of the small banks state it was seen very prevented. In particular, a intolerable upsetting was considered the faculty that the Congress recognized directors of Bank of the United States, of not accepting tickets of a local bank when they did not consider it trustworthy. Nothing less than Thomas Jefferson commanded this, @partido, in opposition to the central bank, to which the landowners also adhered ofSouth. When he overcame the authorization by twenty years for the ticket emission, this coalition was able to block the renovation. During the war against England, from 1812 to 1814, the small banks were in serious difficulties, and it let itself again feel the necessity of a presence banking strong power station. The Bank of the United States refundo, with an increased capital, and the paper money emissions were started again. But a confrontation of bottom between the industrial industralists and the great retailers existed of This, on the one hand, and the colonos that they advanced towards the West, by another one, and it lead to the deployment of American banking system, that lasted until 1921. To first a strong central bank was to them useful, able to manage credits high and complex financial operations, in as much to the seconds them it everywhere interested the diffusion of small local agencies, specialized in credits in the short term. Only these last ones, in effect, they could guarantee to the pioneering financings fast and easy, by means of ticket emissions. And in fact it had very many, even in more remote places. Around 1860, thousands of types different from tickets, emitted by small banks circulated in the United States the premises, without they lacked the bankruptcies. The life of these organizations closely was bound to the luck of the pioneers.