3 February 1690: America’s first paper money is issued
On this day in 1690, the Massachusetts colony began circulating the first paper money on North America, printed to finance England’s war against France.
To some people, paper money isn't worth the paper it's printed on. It simply isn't money in any real sense. But to everyone else, a wad of folding stuff is what they desire.
It first made an appearance, as far as we know, during the Tang Dynasty in China in the 7th century. It lasted in one form or another for 650 years or so, but was abandoned around the middle of the 15th century, after the inevitable inflationary booms and busts got too tiresome to deal with.
Over two centuries after China abandoned paper money, the West began experimenting with it.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In 1689, Massachusetts was still an English colony, and used the pound as currency. Back home in England, the Glorious Revolution had recently taken place. England was a protestant nation once again, and business carried on as usual. Business as usual, of course, meant war with the French.
The Nine Years' War had spread out of Europe and in to the American colonies. One of the many troubles with war, of course, is that it is an expensive undertaking, and often requires novel financial solutions. Paying for war with France is responsible for the creation of the Bank of England and the imposition of income tax, for example.
So to pay for its troops, Massachusetts decided it would print paper notes to give to the soldiers in lieu of pay, which could be redeemed later. And on this day in 1690, they went into circulation.
Initially, a note of six Massachusetts shillings would buy you one Spanish dollar. But it didn't take long for inflation to get a grip. By 1737 so much money was floating around it was virtually worthless. To buy a Spanish dollar by then, you would need 22 shillings and sixpence.
Nevertheless, other colonies, such as Pennsylvania, followed suit. But it would be another 107 years before the Bank of England printed its first pound note (again, to finance war with France).
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.
Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin.
As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.
-
8 of the best houses for sale with libraries
This week: the best houses for sale with libraries – from a five-storey Georgian townhouse in Bloomsbury, London, to a 15th-century property with a library in a medieval tower in Lozère, France
By Natasha Langan Published
-
Investors pull money from UK equities as government warns of “painful” Budget
The government’s post-election honeymoon period has been short-lived, and investors are shying away from UK equities as a result
By Katie Williams Published
-
31 August 1957: the Federation of Malaya declares independence from the UK
Features On this day in 1957, after ten years of preparation, the Federation of Malaya became an independent nation.
By Jasper Spires Published
-
13 April 1960: the first satellite navigation system is launched
Features On this day in 1960, Nasa sent the Transit 1B satellite into orbit to provide positioning for the US Navy’s fleet of Polaris ballistic missile submarines.
By Ben Judge Published
-
9 April 1838: National Gallery opens in Trafalgar Square
Features On this day in 1838, William Wilkins’ new National Gallery building in Trafalgar Square opened to the public.
By Ben Judge Published
-
3 March 1962: British Antarctic Territory is created
Features On this day in 1962, Britain formed the British Antarctic Territory administered from the Falkland Islands.
By Chris Carter Published
-
10 March 2000: the dotcom bubble peaks
Features Tech mania fanned by the dawning of the internet age inflated the dotcom bubble to maximum extent, on this day in 2000.
By Chris Carter Last updated
-
9 March 1776: Adam Smith publishes 'The Wealth of Nations'
Features On this day in 1776, Adam Smith, the “father of modern economics”, published his hugely influential book The Wealth of Nations.
By Ben Judge Last updated
-
8 March 1817: the New York Stock Exchange is formed
Features On this day in 1817, a group of brokers moved out of a New York coffee house to form what would become the biggest stock exchange in the world.
By Chris Carter Last updated
-
7 March 1969: Queen Elizabeth II officially opens the Victoria Line
Features On this day in 1969, Queen Elizabeth II took only her second trip on the tube to officially open the underground’s newest line – the Victoria Line.
By Ben Judge Last updated