Introduction to Early Massachusetts Currency
December 10, 1690 - 1750
The First Emissions
Faced with an immediate need to pay expenses relating to a military action against Canada during King William's War, on December 10, 1690 the General Court authorized the issuing of £7,000 in public paper currency. This was the first public paper money issued in the history of Western civilization. Previously all currency had an intrinsic value of gold, silver or copper, much like the value of commodity items used for bartering. Now for the first time, the money itself had no intrinsic value other than the value of the paper on which it was printed. Rather, the value of the money came from the fact that it was backed by the colony. It was legislated as being equivalent to the denomination printed on the bill and would be accepted as the equivalent of hard currency by the colony. Within a few months it was further legislated that the paper money would be accepted by the government for tax payments at a 5% premium and that on demand bills could be turned into the treasury for the equivalent in hard currency, if the colony had such hard currency available.These printed bills were consecutively numbered as a means of registration and indented at the top. Indenting meant a portion of the bill was cut with sharp blade along a border design, usually in a wavy line. For this emission the top border was used. As the bills were individually indented no two cuts would be exactly alike. The small border stub, that was cut off by the indenting, was retained by the government with the serial number from the note being recorded on it (see our 1733 Maryland remainder note with the stub intact). The theory was that when the note was finally returned to the government the serial number on the note and the stub would be matched. The cut along the top of the note should perfectly fit with the unique wave pattern cut on the stub. This assured the government they were not accepting a counterfeit note. The body of the note contained an official text stating the notes would be "...accepted by the Treasurer & receivers subordinate to him in all publick payments and for any Stock at any time in the Treasury..." Below was the seal of Massachusetts Bay Colony depicting an indian saying "Come over & help us." To the right of the seal were the signatures of three members of the committee supervising the emission. Denominations were 5s, 10s, 20s and £5. Another issue of £33,000 followed in February, then from November of 1702 through 1750 several emissions were printed.
For a more detailed discussion of the first currency emission click here.
Middle and New Tenor notes
At first Massachusetts notes were accepted at par with specie, which was predominately the Spanish American silver 8 reales, called a Spanish "dollar" by the colonists. In Massachusetts the Spanish dollar was valued at 6 shillings. In 1690 for every 6s of paper money one could obtain a Spanish silver dollar. As more paper money was put into circulation individuals would no longer accept the paper as equal to specie. By 1737 so much paper money was in circulation it took 22s6d in paper money to equal a Spanish dollar. To rectify this problem the Commonwealth decided to revalue its paper money. Starting with the issue of February 4, 1737 Massachusetts introduced a new series of notes, called New Tenor money, that was legislated to have three times the value of equivalent denomination notes from earlier emissions. However, as more notes were printed inflation continued and the value of both types of notes continued to drop. Once again, another adjustment to the currency was legislated. For the issue of January 15, 1742 the notes were to have four times the value of equivalent denomination notes from Old Tenor emissions. At this time the emissions from 1737-1740 became known as Middle Tenor or Three Fold Tenor, while the 1742 and later emissions became known as New Tenor (or four fold Tenor). In effect Massachusetts had three different types of currency circulating at once; in 1742 a Spanish dollar was valued at 24s9d in Old Tenor bills, 8s3ds in Middle Tenor bills or 6s2d in New Tenor notes. Unfortunately inflation continued so that by 1749 a Spanish dollar was valued at 45s in Old tenor bills, 15s in Middle tenor bills or 11s3d in New Tenor notes. As individuals might make a purchase using all three varieties it was essential for merchants to know the current inflation rates and to keep a conversion chart handy (various charts were printed for this purpose)!
The Currency Reform of 1749 and the Restrictions of 1751
In the hopes of remedying this bad situation in 1749 the British government sent Massachusetts Bay Colony two tons of Spanish silver coins and ten tons of British coppers (primarily 1749 dated halfpence) as reimburse for assistance they provided to the Lewisburg expedition on Cape Breton Island, Nova Scotia, during the French and Indian War (equivalent to £183,649 2s7 and 1/2d sterling). With hard currency available Massachusetts Bay passed the currency reform act of 1749. This required the redemption of all outstanding notes between March 31, 1750 and March 31, 1751 after which time all emissions became invalid and only "coined silver" at the rate of 6s per Spanish dollar could be accepted in payment of debts. There was a penalty of £50 for receiving silver at a higher rate or for accepting notes from neighboring states. The colonists thought this reform had remedied the situation. With the problem solved Massachusetts thought there was no problem in printing a new emission. In 1750, within a year of the reform, Massachusetts Bay printed an emission of fractional notes with the motto "Restitut rem" (The situation has been restored) in the bottom margin. Apparently Parliament did not take stock in the motto and viewed this act as once again heading down the road to inflation. Soon thereafter, on September 21, 1751, the British Parliament in London passed an act severely restricting Massachusetts Bay from issuing paper money. No further emissions were printed in Massachusetts until the "Soldier's notes" emission of May 25, 1775 printed by Paul Revere to pay the soldiers who were soon to fight at the Battle of Bunker Hill on June 16th.
Selected examples of early Massachusetts paper currency based on black and white photographs published in Eric Newman, The Early Paper Money of America, 3rd edition, 1990 are found on the following page. Included is an example from the first issue of 1690, examples of Middle and New Tenor notes, and an example of the final pre-revolutionary issue from 1750. For additional information and sources go to "The Leslie Brock Center
for the Study of Colonial Currency" at http://etext.lib.virginia.edu/users/brock/ (clickable from our introduction page).
