The Full Wiki

More info on Paper Bills of Credit Act 1763

Paper Bills of Credit Act 1763: Wikis

Advertisements
  

Note: Many of our articles have direct quotes from sources you can cite, within the Wikipedia article! This article doesn't yet, but we're working on it! See more info or our list of citable articles.

Encyclopedia

From Wikipedia, the free encyclopedia

The Paper Bills of Credit Act 1763, also, more commonly known as the Currency Act was an Act of the Parliament of Great Britain (citation 4 Geo. III c. 34) which prohibited the American colonies from issuing paper currency as legal tender. Additionally, Britain had coined almost no silver or copper between 1760 and 1816 and discouraged any American attempts to do so. The colonies were continuously running trade deficits with Britain and shipping gold and silver to Britain was the only way to balance the excess of imports over exports.[1] British merchants engaged in credit sales to the colonies, but the severe British financial crisis of 1762 to 1772 caused British merchants to call in colonial debts.[1] The credit crisis of 1772 caused the bankruptcy rate to double. The inability to provide liquidity by the issuing of paper currency made the monetary contraction more severe. New York City property values and the importation of slaves both fell by one-half.

This Act offset the economy of the colonies and was widely opposed. It hurt trade by removing the circulating medium and went a considerable way in creating the dissatisfaction in the Colonies that eventually led to the American Revolution.

The colonies created their own money, called Colonial Scrip, before this happened. This money was government-issued fiat currency and had little or no inherent value, as Colonial Scrip was not backed by a Gold or Silver Standard. Some Colonies, such as Pennsylvania and New York, were responsible and issued only enough notes to keep trade healthy, thus keeping the notes at par with gold. Other Colonies had different systems with less discretion and had inflation issues.

Parliament gave permission, in some cases, for colonies to issue limited amounts of paper currency.[2] In 1770, the Province of New York was permitted to issue 120,000 pounds of paper currency.

Contents

Other Acts

An earlier Currency Act (the Paper Bills of Credit, American Colonies Act 1750) limited the amount of currency the American colonies could produce.

The Gold Standard Act of the United States (1900) is sometimes called the "Currency Act."

See also

References

  • Nash, Garby, The Urban Crucible, The Northern Seaports and the Origins of the American Revolution, 1986, ISBN 0674930584
  • Laumitz-Schurer, Leopold, Loyal Whigs and Revolutionaries, The making of the revolution in New York, 1765-1776, 1980, ISBN 0-8147-4994-1

Footnotes

  1. ^ a b Nash, pg. 204
  2. ^ Laumitz-Schurer, pg. 87

External links

Advertisements

Advertisements






Got something to say? Make a comment.
Your name
Your email address
Message