MSTORY or IONEY IN THE STATES. The situation in which the early colonists in America found themselves was such that they could draw little from the monetary experience of the mother country. During the colonial peri od they took from the mother country the desig nations pounds, shillings, and pence. Having no mines, their stock of money had to he im ported, and since they drew more 1.% en t h from England than they could export to that country, it was quite impossible to accumnlate a unmet:try stock in this way. The little that was brought over by the colonists soon found its way back to the mother country. and. in the early days espe cially, resort was had to various shifts to remedy the dearth of money. Various articles of food and produce were made receivable for taxes and other purposes. Of these the most widely known was the tobacco currency of Alaryland and Vir ginia. ln some of the colonies resort was had to the NV/1101/11111 eurrency of the Indians. But far more important in their effects were the measures taken to prevent coin from leaving the country and the issue of paper money. One of the early devices resorted to was to give the English dn. reney a higher 110111111:11 value than its face Value. It was argued that, if in the colonies a shilling piece circulated as one ;111d a half shillings. it would not be exported. This process of rating coins had been used fropiently in England for the gold coinage. The different colonies acting in dependently rated the shilling at different values, and the result was a series of eolonial pounds differing from each other and from the English pound. In 1i011 a proclamation of Queen Anne put n stop to this practice and fixed the nominal value of the pound in each of the colonies at the existing rate. While the money of account was for each colony a colonial pound. the :lethal money in circulation was a motley collodion of coins of English. French. Portuguese, and Span ish origin. The Spanish dollar was the most widely known and circulated. and it thus became the term by which the currencies of the colonies were compared. In retail trade the shilling as a division of the dollar has persisted to our own day. Furthermore, as the Spanish1 11 1Ma r was common to all the colonies, it was the term in which later the common obligations were ex pressed by the Continental Congress, and thus became the basis of our national coinage.
Of even greater importance in fixing the Inoue tary habits of the people was the issue of paper money. The first issue was in 1690 in Massachu setts, and was made to meet the expenses of an expedition against the French in Canada. The notes were received with reluctance by the peo ple, and fell to a discount, which was removed by an act of the Colonial Legislature, which placed a premium on them, as compared with coin, in the payment of taxes. Then South Carolina issued bills in 1712, and in the first half of the eighteenth century all the colonies followed these examples. Issued at first to meet extraordinary expenses of the governments, the public clamor for more money became so great that notes were issued later without any such plea in extenuation. In the situation of the colonies the plea for more money to make trade easy was urged with pe culiar force. lit Massachusetts a series of issues had taken place; and in 1749 exchange upon Lon don, which was normally 133 pounds colonial for 100 pounds sterling. had risen to 1100 pounds for 100 pounds sterling. Parliament having voted £138,649 to reimburse the colony for its share in the expedition against Louisburg, this suns was used by the colony to redeem its paper issues at the rate of 11 to 1, and from that time onward Massachusetts was on a specie basis. Some of the colonies, as for example Rhode Isl and, North and South Carolina, had issued paper money far more extravagantly than Massachu setts; while others, notably Pennsylvania. had pursued a more conservative policy. In the latter colony there were two kinds of bills, exchequer and loan bills. The first were issued by the colonial treasury in anticipation of taxes, but the amount outstanding is said not to have exceeded the probable receipts of two or three years. There were no sudden issues of large quantities and the amount of the issue was kept fairly uniform. The loan bills were issued to individuals on landed security, plate, or other valuable assets. With such security there was comparatively little danger of an overissue. and the records show that there were comparatively few had debts.