the early monetary rebellion in America

from The Lost Science of Money by Stephen Zarlenga:

“In 1652 Massachusetts defied the English Crown and allowed John Hull to open a mint that produced the ‘tree coinage’ … Willow, oak and especially pine trees featured on the coinage. The Massachusetts Assembly made the coinage legal tender in the country.”  (Who says ‘money doesn’t grow on trees!) p 366

“… in 1690 Massachusetts embarked on a radical experiment and began to issue ‘Bills of Credit’, a form of paper money not backed by any physical thing.”

“Rather than being a debt instrument, a promise to pay, they were in fact a promise to receive – and thus an advanced money form.” P 367

“At first, this paper money was not legal tender but everyone accepted it, and though Massachusetts did not intend the bills as money, they immediately began circulating as money, ending the colony’s distress.” P 367

“Other colonies copied Masschusetts, emitting similar bills of credit. It was not unusual for the bills on one colony to circulate in another. Invariably they transformed life in the colonies, improving industry and commerce, helping to build real infrastructure. The colonists accepted, welcomes and even demanded them for use as money.” pages 368-9

“The London group ‘The Lords of Trade and Plantation, charged with overseeing the colonies, harassed the colonists’ paper money systems ...” p 374

“In 1727 the Lords of Trade began a series of monetary repressions. They ordered bills of credit [in Massachusetts, to be withdrawn, and no new ones to be issued…” p 374

“… governor after governor did not enforce the Crown’s desires. English creditors pressed for harsher sanctions, which passed in a 1751 Act, but proved hard to enforce outside New England.” p 375

“More than anything else it was the Lord of Trades monetary suppressions that led to the Revolution.” p 377

Alexander Del Mar: “… the narrow-minded and selfish London merchants and bankers … would not permit the colonies to have their own monetary systems … accordingly orders were sent to America to put down the colonial money and enforce the falsely named ‘national’, but really private (English) money … it was the enforcement of this policy that brought on the revolution.” p 377

“On May 10, 1775, the first Continental Congress assembled at Philadelphia. Skirmishes with the British had occurred in Massachusetts. One of Congress’s first concrete Acts (June 22) was to issue $2 million in bills of credit – Continental Currency.”

“ … the Continental Currency and the Revolution were inseparable.”

In July 1776 the Continental Congress issued the Declaration of Independence, the greatest written document of the nation. They also issued a proclamation declaring that anyone refusing to accept the Continental Currency was a public enemy …” p 380

“Counterfeiting was standard British procedure and used as a military weapon …” p 388

“The Revolution established the Articles of Confederation as governing document of the land in 1781. Its key monetary provision was in Article 9, giving Congress the power to ‘emit bills of credit’ – fiat paper money like the Continental Currency. But there were merchants (we didn’t have bankers yet) who wanted this power for themselves. They grasped for it before, during and after the Revolution.” P 389

“Robert Morris (1734-1806) of the firm of Willing and Morris became the richest merchant in America, from revolutionary war profits.” p 389

“He then attempted to not only privatize the monetary power in the United States, but to actually personalise it … First he transformed the Bank of Pennsylvania into the Bank of North America, a bank of issue which could create money … “ p 390

“When Pennsylvania moved to restart its excellent money system, the Bank of North America under Morris and Willing tried to block her in order to monopolize the issue of money.” p 391

“His program on government borrowing also foreshadowed Hamilton’s Federalist program. Morris preached that paper money had to be convertible to gold and silver and that the money system must be based upon the “interest and influence of the monied men.” p 391

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