Currency Acts

The Currency Acts of 1751 and 1764 were one of the causes of the Revolutionary War. The Acts were an attempt by Parliament to limit the colonies’ ability to create their own currency. It was both an attempt to solve possible inflation and control the colonies.

In early British Colonial America, the Americans really didn’t have any gold or silver mines, this the bulk of their revenue came through trade with other countries. Because trading medals has always been impractical, the colonists began coming up with bank notes or notes from loan offices representing money to trade.

During the French and Indian War, more paper money was printed than the Americans had been taked for, and they did not have the gold to back it all. Thus the money depreciated greatly. Merchants had no other option but to accept the deprecated currency. As more bills were printed, causing more confusions as to their worth, merchants and traders became more uncomfortable with accepting American currencies.

The British Parliament, seeing this dilemma, stepped in to take control of the problem. In 1751, the first currency act was passed: The Currency Act of 1751. The Currency Act prohibited the creation of any new currency being made by the New England Colonies, where the troublesome bills were being printed, however, it allowed the current bils to be accepted. The proviso was that the bills were only to be used for public debts, such as to the British government, and no longer allowed to be used for personal debts, like to merchants. The bills were only acceptable for personal debts to be paid in British currency or silver and gold.

The Currency Act of 1764, is simply an extension of the 1751 Act. It prohibited all of the colonies from creating new currency (not just New England) and allowed current paper money to only be used for public debt.  This caused a lot of personal loss in funds and created many problems at a person level for the colonists. <a href=”benjamin-franklin.html”>Benjamin Franklin</a> took it upon himself to travel to Parliament to speak in person on this matter.

In 1770, the Parliament agreed on a compromise. This allowed only New York to print a certain sum of new paper money every year to be used only for public debts. In 1773, the Currency Act was amended completely, extending this privilege to all of the colonies

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