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59-672: Early American currency went through several stages of development during the colonial and post-Revolutionary history of the United States. John Hull was authorized by the Massachusetts legislature to make the earliest coinage of the colony (the willow, the oak, and the pine tree shilling ) in 1652. Because few coins were minted in the Thirteen Colonies , which later became the United Colonies and then

118-583: A legal tender at face value, and were issued in denominations of $ 10, $ 20, $ 50, $ 100, $ 500 and $ 1000. Compound interest treasury notes were emissions of the United States Treasury Department authorized in 1863 and 1864 with aspects of both paper money and debt. They were issued in denominations of $ 10, $ 20, $ 50, $ 100, $ 500 and $ 1000. While they were legal tender at face value, they were redeemable after three years with six percent annual interest compounded semi-annually. In

177-445: A seigniorage of one shilling, seven pence for every 20 shillings produced, and in some years, Hull made of profit over £1000. The Massachusetts General Court tried to renegotiate the arrangement to decrease Hull's profits on at least seven occasions. Massachusetts also charged rent on the minting facility until Hull purchased the operation in 1675. Hull had begun minting coins during English Commonwealth period , and in 1661 after

236-474: A ceremony officiated by John Winthrop . In 1648, they joined John Cotton 's First Church in Boston . John and Judith had five children, four of whom died in infancy. They had twin girls on January 23, 1652, both of whom died at age one. On November 3, 1654, they had a son who died after 11 days, and in 1658 they had a second son, Samuel, who lived nineteen days. Their only child to survive to adulthood, Hannah,

295-552: A convenient medium of exchange . On December 10, 1690, the Province of Massachusetts Bay created "the first authorized paper money issued by any government in the Western World". This paper money was issued to pay for a military expedition during King William's War . Other colonies followed the example of Massachusetts Bay by issuing their own paper currency in subsequent military conflicts. The oldest surviving bill bears

354-539: A dowery at her wedding to Samuel Sewall . Hawthorne and other authors exaggerated the dowery, which was actually £500 paid in two installments. Bills of credit Bills of credit are documents similar to banknotes issued by a government that represent a government's indebtedness to the holder. They are typically designed to circulate as currency or currency substitutes. Bills of credit are mentioned in Article One, Section 10, Clause One (also known as

413-549: A grammar school. After immigrating, he attended Boston Latin School for two years, followed by a seven-year smithing apprenticeship, which could have lasted from 1639 to 1646, though Hermann F. Clarke speculates that Hull would have finished his apprenticeship around 1643 or 1644. In December 1646, his father deeded to him a house and garden, where he began practicing the silversmith trade. On May 11, 1647, he married Judith Quincy, daughter of Judith Pares and Edmund Quincy , in

472-577: A lead mine at Point Judith. When the mine proved unprofitable, Hull began raising herds of cattle, sheep, pigs, and horses on the land to be sold in the West Indies. He was also the co-owner of a tract of forest and a sawmill at Salmon Falls in New Hampshire. Valeri characterizes Hull as having belonged to the upper ranks of Boston's merchants, though some traders built larger fortunes and others held larger tracts of land. From 1648, Hull

531-484: A new mintmaster. The coinage was a contributing factor to the revocation of the Massachusetts Bay Colony charter in 1684. Hull first mentioned exporting goods to England in a November 1653 diary entry. Between 1653 and 1660, he exported goods to Europe on at least five different ships, and his mercantile interests increased after 1660. The first record of Hull holding a partial ownership stake in

590-399: A settlement with the heirs of Ferdinando Gorges to acquire the Province of Maine for the Massachusetts Bay Colony. He raised £700 from Boston merchants and acquired an additional £550 from London against his personal credit. Hull was one of Harvard College 's earliest benefactors, donating his landholdings at Point Judith, Rhode Island , to finance scholarships for poor boys as well as

649-598: A ship is from 1664. Between 1665 and 1670, Hull had partial ownership of eight vessels, and from 1670 to 1683, he partially owned 14 vessels and exported goods on more than 50 different ships. He had business agents in England, Jamaica , New Providence , Nevis , Madeira and the Canary Islands . He primarily exported furs, fish and wood from New England forests. He also shipped New England farm products, including flour, salt beef and pork, biscuits and butter to

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708-466: A successful government-managed monetary system. Pennsylvania's paper currency, secured by land, generally maintained its value against gold from 1723 until the revolution broke out in 1775. This depreciation of colonial currency was harmful to creditors in Great Britain when colonists paid their debts with money that had lost value. The British parliament passed several currency acts to regulate

767-580: A sum of £100. Hull died on October 1, 1683. Samuel Willard preached his funeral sermon, and he was buried in the Granary Burying Ground . At the time of his death, his estate was worth approximately £6000. Hull Street in Boston is named for him, because the road was laid through his pasture. In the 1840 story collection Grandfather's Chair , Nathaniel Hawthorne recounts a legend in which John Hull gave his daughter Hannah her weight in pine-tree shillings (approximately 10,000 coins) as

826-678: The American Revolutionary War began in 1775, the Continental Congress began issuing paper money known as Continental currency, or Continentals. Continental currency was denominated in dollars from $ 1 ⁄ 6 to $ 80 , including many odd denominations in between. During the Revolution, Congress issued $ 241,552,780 in Continental currency. The Continental Currency dollar was valued relative to

885-577: The Bretton Woods system , yet Congress retains the power to put more into circulation at any time, and $ 300 million remain in circulation still). Interest-bearing notes are a grouping of Civil War -era bills of credit-related emissions of the US Treasury . The grouping includes the one- and two-year notes authorized by the Act of March 3, 1863, which bore interest at five percent annually, were

944-805: The Constitutional Convention to include the Contract Clause into the United States Constitution, so that the individual states could not issue bills of credit or "make any Thing, but gold and silver Coin a Tender in Payment of Debts." This restriction of bills of credit was extended to the Federal government, as the power to "emit bills" from the Articles of Confederation was abolished, leaving Congress with

1003-831: The Contract Clause ) of the United States Constitution , where their issuance by state governments is prohibited. British colonies in North America would issue bills of credit in order to deal with fiscal crises, although doing so without receiving them as revenue in like amounts would increase the money supply, resulting in price inflation and a drop in value relative to the pound sterling . The documents would circulate as if they were currency, and colonial governments would accept them as payment for debts like taxes. They were not always considered legal tender for private debts. Colonial decisions on

1062-577: The Smithsonian Institution . Examples were selected based on the notability of the signers, followed by issue date and condition. The initial selection criteria for notability was drawn from a list of currency signers who were also known to have attended the 1765 Stamp Act Congress or signed the United States Declaration of Independence , Articles of Confederation , or the United States Constitution . After

1121-505: The restoration of the monarchy , the English government considered the Boston mint to be treasonous. In 1665, Privy Council ordered the mint to cease operations, but the colony ignored the demands. In 1676, Edward Randolph petitioned the English government to close the mint. However, the mint may have continued operations until 1682, when Hull's contract as mintmaster expired, and the colony did not move to renew his contract or appoint

1180-508: The 17th and 18th centuries, the Spanish dollar was one of the few widely accepted denominations by the people, which resulted in it serving as the colonists' interim currency. The prevalence of the Spanish dollar throughout the colonies led to the money of the United States being denominated in dollars, rather than pounds. One by one, colonies began to issue their own paper money to serve as

1239-563: The British parliament, the states began to issue paper money to pay for military expenses . The Continental Congress also issued paper money during the revolution — known as continental currency — to fund the war effort. To meet the monetary demands of the war, state and continental governments printed large amounts of currency, leading to rapid depreciation . By the end of the war, these paper notes became effectively worthless. Additionally, British counterfeiting gangs contributed further to

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1298-494: The Caribbean colonies, as well as other miscellaneous goods. He imported hides for leather, salt, clothing, and alcohol to Massachusetts. He also dealt in mortgages and was a money lender. Hull ordered his ship captains not to sell damaged goods, mistreat sailors, swear, or trade on Sundays. Mark Valeri claims that Hull forbid his associates from the slave trade, but Clarke has identified two occasions when Hull engaged in

1357-619: The United States Treasury issued in 1879. They issued it only in the $ 10 denomination, depicting Benjamin Franklin . Their issuance reflects the end of a coin-hoarding period that began during the American Civil War , and represented a return to public confidence in paper money. Federal Reserve Bank Notes, issued between 1915 and 1934, are bills of credit that are legal tender in the United States. They had

1416-491: The United States, foreign coins like the Spanish dollar were widely circulated. Colonial governments, at times, issued paper money to facilitate economic activities . The British parliament passed currency acts in 1751, 1764, and 1773 to regulate colonial paper money. During the American Revolution , the colonies became independent states. No longer subject to monetary regulations arbitrarily imposed by

1475-405: The absence of efficient investment banks , the hybrid nature of these instruments allowed the government to directly distribute debt by paying the notes out to creditors as legal tender, and then relying on interest-seeking parties to eventually remove them from circulation in order to redeem them with interest at maturity. The Refunding Certificate was a type of interest -bearing banknote that

1534-517: The act in 1773, permitting the colonies to issue paper currency as legal tender for public debts. Shortly thereafter, some colonies once again began issuing paper money. When the American Revolutionary War began in 1775, all of the rebel colonies, soon to be independent states, issued paper money to pay for military expenses. The Thirteen Colony set of colonial currency below is from the National Numismatic Collection at

1593-542: The coins. From June to October, 1652, produced silver coins with a simple design: the stamped letters "NE" for New England on the obverse , and the denomination in Roman numerals on the reverse . In October 1652, the General Court ordered a more complicated design with a double ring of beads to discourage clipping . Although all the coins use the date 1652, they can be broken into three chronological periods based on

1652-524: The collapse of Continental currency, Congress appointed Robert Morris to be Superintendent of Finance of the United States . Morris advocated the creation of the first financial institution chartered by the United States, the Bank of North America , in 1782. The bank was funded in part by bullion coins loaned to the United States by France. Morris helped finance the final stages of the war by issuing notes in his name, backed by his personal line of credit, which

1711-405: The colonies was denominated in pounds, shillings , and pence . The value of each denomination varied from colony to colony; a Massachusetts pound , for example, was not equivalent to a Pennsylvania pound . All colonial pounds were of less value than the British pound sterling . The coins in circulation during the colonial era were, most often, of Spanish and Portuguese origin. For most of

1770-473: The colonies, their hired counterfeiters were able to take advantage of the common people, widening the gaps between socioeconomic classes. The paper bills issued by the colonies were known as " bills of credit ". Bills of credit could not be exchanged for a fixed amount of gold or silver coins upon demand, but were redeemable at a time specified in the future. Bills of credit were usually issued by colonial governments to pay debts. The governments would then retire

1829-423: The colony and may have suffered financial losses from his loans to Massachusetts, which were not settled in his lifetime, but Mark Peterson speculates that the colony may have used some of the £333, 3 s proceeds from the slave trade to partially repay its debt to Hull. Hull's widow and son-in-law, Samuel Sewall, settled the remaining debt with the colony in 1683 after Hull's death. In 1681, Hull helped organize

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1888-529: The currency by accepting the bills for payment of taxes. When colonial governments issued too many bills of credit or failed to tax them out of circulation, inflation resulted. This happened especially in New England and the southern colonies, which, unlike the Middle Colonies , were frequently at war. Pennsylvania, however, was responsible in not issuing too much currency, offering an example of

1947-409: The date "February 3, 1690" and was for 20 Massachusetts shillings , equivalent to one pound. However, as the colonies began printing their own money, location-based socio-economic issues soon followed. Most of these concerns were rooted in each colony having different values of the dollar, confusing any inter-colony transactions. By the time parliament decided to prohibit the printing of paper money in

2006-477: The decreased value. By its conclusion, only a few counterfeiters had been caught and preemptively hanged, for the crime. There were three general types of money in the colonies of British America : the specie (coins), printed paper money and trade-based commodity money . Commodity money was used when cash (coins and paper money) were scarce. Commodities such as tobacco, beaver skins, and wampum , served as money at various times in many locations. Cash in

2065-555: The delegates to the Constitutional Convention to include the gold and silver clause into the United States Constitution so that the individual states could not issue bills of credit or "make any Thing but gold and silver Coin a Tender in Payment of Debts". However, in Juilliard v. Greenman the Supreme Court of the United States settled an ongoing and very heated debate on whether this restriction of issuing bills of credit

2124-438: The depreciation of the currency had, in effect, acted as a tax to pay for the war. For this reason, some Quakers, whose pacifism did not permit them to pay war taxes, also refused to use Continentals, and at least one Yearly Meeting formally forbade its members to use the notes. In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value. After

2183-399: The design of the tree on the obverse: the willow tree, 1652–60; the oak tree, 1660–67; and the pine tree, 1667–82. The last design led to the series being known as pine tree shillings . In 1662, Hull and Sanderson also produced a series of oak tree twopence coins with the date 1662. In total, the Boston mint may have produced as many as 300,000 to 500,000 coins. Hull made

2242-471: The era of the Articles of Confederation. While all states in theory recognized the American Continental as their official currency, in reality, nearly every state issued its own Bills of credit, which further devalued the Continental and led to its eventual collapse as a currency. The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to

2301-528: The idea, which would not have generated profit for him, and on May 26, 1652, the General Court authorized Hull to create Massachusetts coinage in shilling , sixpence and threepence denominations by reminting foreign silver currency. Hull was made Boston "mintmaster" and the colonial government paid for tools and construction of a minting facility on Hull's land, so that he could convert silver bullion and foreign coinage into Massachusetts Bay Colony coins. Sanderson may have been primarily responsible for producing

2360-534: The inhabitants of all the states, before the fraud was detected. This operated significantly in depreciating the whole mass. By the end of 1778, Continentals retained from 1 ⁄ 5 to 1 ⁄ 7 of their face value. By 1780, the bills were worth 1 ⁄ 40 of their face value. Congress attempted to reform the currency by removing the old bills from circulation and issuing new ones, without success. By May 1781, Continentals had become so worthless that they ceased to circulate as money. Franklin noted that

2419-481: The issuance of bills of credit were also frequently the subject of disputes between differing factions within the colony, and with royally appointed governors. Between 1690 and 1750 the matter was regularly debated in the Province of Massachusetts Bay , where merchants and lenders stood to lose value when new bills were issued, and borrowers stood to gain, because they could repay their debts with depreciated bills. The Massachusetts bills were finally retired in 1749 when

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2478-551: The only of Hull's surviving works completed without assistance from Sanderson or an apprentice. From the 1620s through the early 1650s, the Massachusetts Bay Colony's economy had been entirely dependent on barter and foreign currency, including English, Spanish, Dutch, Portuguese and counterfeit coins. In 1652, the Massachusetts General Court asked Hull to weigh, assay , and countermark foreign coins to determine their authenticity and value. Hull rejected

2537-511: The paper money issued by the colonies. The Act of 1751 restricted the issue of paper money in New England. It allowed the existing bills to be used as legal tender for public debts (i.e. paying taxes), but disallowed their use for private debts (e.g. for paying merchants). In 1776, British economist Adam Smith criticized colonial bills of credit in his most famous work, The Wealth of Nations . Another currency act, in 1764 , extended

2596-437: The power "to borrow money on credit." The United States Government has, at numerous times throughout American History , issued Bills of Credit to utilize in place of paper currency. Most instances of this have occurred during wartime. During the American Revolutionary War the Continental Congress frequently issued bills of credit referred to as Continentals. Because of inflation they rapidly declined in value, leading to

2655-618: The proceeds from the sale of Jeofrey and Mary to buy Madeira wine to be imported to Massachusetts. In 1657, Hull and four other men negotiated the Pettaquamscutt Purchase with the Narragansett people in Rhode Island , buying a tract of land on the western shore of Narragansett Bay for £151. Hull acquired land on Block Island and Point Judith , which is named for Hull's wife. He initially tried to operate

2714-472: The province received a large payment in coin for its financial contributions to the 1745 Siege of Louisbourg . The Province of New Jersey issued bills of credit beginning in the 1710s, but successfully managed to avoid significant inflationary effects. Article I, Section 10, Clause 1 prohibits the states from issuing Bills of Credit. The prohibition of states issuing Bills of Credit came in direct response to how states managed their financial policy during

2773-461: The restrictions to the colonies south of New England. Unlike the earlier act, this act did not prohibit the colonies in question from issuing paper money but it forbade them to designate their currency as legal tender for public or private debts. That prohibition created tension between the colonies and the mother country and has sometimes been seen as a contributing factor in the coming of the American Revolution . After much lobbying, parliament amended

2832-503: The same value as other kinds of notes of similar face value. Federal Reserve Bank Notes differ from Federal Reserve Notes in that they are backed by one of the twelve Federal Reserve Banks, rather than by all collectively. They were backed in a similar way to National Bank Notes, using U.S. bonds, but issued by Federal Reserve banks instead of by chartered National banks. Federal Reserve Bank Notes are no longer issued. Legal writers, as opposed to economic historians, incorrectly assume that

2891-524: The slave trade: the first during King Philip's War in 1675, when Hull transported more than one-hundred Native American captives to be sold into slavery in Cádiz and Málaga , and the second on September 16, 1682, when he instructed one of his captains to transport and sell a Black man named Jeofrey and a Black woman named Mary in Madeira. Samuel Eliot Morison notes that Hull instructed his captain to use

2950-583: The soldiers. He was also one of the primary merchants responsible for procuring weapons, ammunitions and supplies from Europe. Among his responsibilities as treasurer during the war, Hull arranged the sale of Native American captives into slavery. Hull recorded the sale of 185 people into slavery in public auctions on August 24, 1676, and September 23, 1676. Some buyers, such as Thomas Smith , purchased as many as 70 captives to resell in European slave markets. Hull used his personal resources to extend credit to

3009-536: The son of blacksmith Robert Hull and Elizabeth Storer. At age eleven, he immigrated to the Massachusetts Bay Colony with his father, mother, and half-brother Richard Storer, departing Bristol on September 28, 1635, and arriving in Boston on November 7. The colony gave Robert Hull a 25-acre farming plot, though he primarily made his living as a smith. In England, Hull received an education at

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3068-500: The states lacked the will or the means to retire the bills from circulation through taxation or the sale of bonds. Another problem was that the British successfully waged economic warfare by counterfeiting Continentals on a large scale. Benjamin Franklin later wrote: The artists they employed performed so well that immense quantities of these counterfeits which issued from the British government in New York, were circulated among

3127-546: The states' currencies at the following rates: Continental currency depreciated badly during the war, giving rise to the famous phrase "not worth a continental". A primary problem was that monetary policy was not coordinated between Congress and the states, which continued to issue bills of credit. "Some think that the rebel bills depreciated because people lost confidence in them or because they were not backed by tangible assets", writes financial historian Robert E. Wright . "Not so. There were simply too many of them." Congress and

3186-535: The unfavorable comparison that something was "not worth a Continental". In 1862, the United States Department of the Treasury began to issue United States Notes as obligations of the United States. United States Notes are examples of Bills of Credit as they used to be inserted by the Treasury into circulation free of interest (production of these notes was halted in 1971 during termination of

3245-688: Was a member of the Ancient and Honorable Artillery Company of Massachusetts . He appears in records as an ensign in 1663, a lieutenant in 1664, and a captain in 1671 and 1678. He first held political office as a selectman for Boston, beginning in March 1657. He became Boston's treasurer in 1658, and held near-uninterrupted office for the next decade. He sat in the Massachusetts General Court as representative for Wenham in 1668, Westfield from 1671 to 1674, and Salisbury in 1679. He

3304-525: Was also extended to the Federal government: By the constitution of the United States, the several states are prohibited from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts. But no intention can be inferred from this to deny to congress either of these powers. John Hull (merchant) John Hull was born on December 18, 1624, in Market Harborough , Leicestershire , England,

3363-422: Was born on February 14, 1657, and married Samuel Sewall on February 28, 1676. Hull employed Robert Sanderson as his assistant in his silversmithing business, and also had apprentices, including Sanderson's three sons, Samuel Paddy, Jeremiah Dummer , Timothy Dwight, and Daniel Quincy . Sanderson's mark is present alongside Hull's on almost all pieces produced by the shop. A set of silver beakers are among

3422-491: Was further backed by a French loan of $ 450 ,000 in silver coins. The Bank of North America also issued notes convertible into gold or silver. Morris also presided over the creation of the first mint operated by the U.S. government, which struck the first coins of the United States, the Nova Constellatio patterns of 1783. The painful experience of the runaway inflation and collapse of the Continental dollar prompted

3481-530: Was treasurer of the Massachusetts Bay Colony from 1676 to 1680. In 1669, Hull left the First Church and became a founding member of the Third Church in Boston . That year, he was part of a group that traveled to England to hire the church's minister. During King Philip's War in 1675 and 1676, Hull loaned the colony approximately £2000 to buy muskets, shot, and saltpeter , and to clothe and pay

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