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+1 vote
24 views

And did how did the country deal with a change, if there was one?

in Education by (2,927,870 points)

4 Answers

+2 votes
 
Best answer

In Colonial times, the American colonies used the British pound.  When the Revolutionary War began, the Continental Congress printed its own money.  This money was known as Continental Currency, or its shorter form, Continentals. They were promissory notes called "bills of credit," but they could not be exchanged for gold or silver.

Since there was no precious metal backing the currency, the currency devalued quickly.  The Continental Congress wasn't the only entity issuing "money;" the colony/states were doing it as well.  Eventually, there were more than 240 million in Continental money, and that was just "too much" for anyone to really trust.  That led to a phrase that hasn't really endured to today, but it was popular in the late 1700s and early 18000s: "not worth a Continental."

Add to this the fact that the British employed master forgers to created millions of counterfeit Continentals... wow!

By 1782, it was pretty desperate, so a wealthy Colonist named Robert Morris (there is a Robert Morris University in Pittsburgh, by the way) developed a system of regulating money based on France's guarantee, or what was known then as "Specie."  He named the institution the Bank of North America.  Morris issued money in his OWN name, backed by his own money, to keep the nation's finances afloat. 

Eventually, Morris oversaw the creation of the first government mint, which issued gold and silver coins for which the paper "specie" could be redeemed.  They named these coins "hard specie."  At that point, paper "money" was retired until the Civil War. 

by (746,560 points)
0

Was it an instant change? Did they continue yo use the GBP for a time after independence? 

0

I suppose it was used for some transactions.  After all, the pound, like the franc and the peso, are legitimate forms of "money."  However, with the introduction of "American money," I would theorize that everyone wanted "our money" after independence was achieved.

Alexander Hamilton was the one who REALLY put the U.S. monetary system into place, though.  That's why his picture is on the $20 bill.  Here's more about that:

Hamilton proposed a national bank. Congress approved the idea in 1791. The bank had $10 million in capital. It could lend the government money and pay off state debts. Hamilton’s system also created a federal system to collect taxes.

But not everyone accepted Hamilton’s views. Many of President Washington’s advisors – called his cabinet – opposed Hamilton.

Opponents expressed many objections to Hamilton’s Bank of the United States. Generally, members of Congress from the northern states supported the idea, while those from southern states opposed it.

Another political leader, Thomas Jefferson, said the Bank exceeded the powers of the Constitution.

Hamilton defended the Bank. He argued for a broad interpretation of the Constitution. He thought it permitted the federal government to do what it needed to do to strengthen the country’s economic system.

Hamilton largely won his political arguments. He became the leader of nation’s first political party, called the Federalist Party.


+3 votes

Good question, and I don't know.  But it was probably the british pound.  They were british colonies.  And no real government was formed at the time.  I think, if memory serves me, that the states went through a period where each state coined currency.  Eventually the ensuing confusion was eliminated by a national currency.


by (1,447,350 points)
+2 votes

The colonies used British money, but I’m not sure how or when the change to the US dollar happened. That would be interesting to find out. 

by (2,343,260 points)
+1 vote

Continental currency. Going back to Columbus he traded items with the indigenous people he named as Indians. The items being clothing caps, glass beads etc.

My grandfather carried a US paper currency that was larger than what we have now and required a larger wallet.

Anytime there was a change in currency some people resisted change and some embrace change much like today.

by (748,880 points)
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