In This Article Expand or collapse the "in this article" section Currency

  • Introduction
  • General Overviews
  • Reference Works
  • Coins and Alternative Monies in Early America
  • American Revolution
  • Articles of Confederation and the US Constitution
  • Global Money and Finance in the Early Modern Period
  • British Money and Banking, and the Financial Revolution
  • Monetary Theory, Culture, and Debates over Currency and Credit
  • Older Works in the Historiography

Atlantic History Currency
Jonathan Barth
  • LAST MODIFIED: 22 April 2020
  • DOI: 10.1093/obo/9780199730414-0336


Currency is among the most contested phenomena in economic history. Its tentacles extend well beyond the economic realm, influencing politics, war, and society. The reasons are several. Money, for one, is often the most coveted item in a trading community. Men and women, whether for good or for ill, understand that money is a vehicle to acquire things they need or desire: wealth, power, status, influence, or, in many or most cases, a plain and humble state of economic competency. Beyond individual aspirations, however, money serves many other purposes. It facilitates and makes possible economic exchange. Indeed, trade without money would prove so unbearably difficult in a complex marketplace that it would almost invariably result in a collapse of most trade. Finally, and of near or equal importance to its economic function, money and credit finance state action—most notably warfare, but also all other activities undertaken by government. Atlantic currencies, in particular, changed immensely across the 17th and 18th centuries. The outflow of silver and gold bullion and coin from Mexico, Peru, and other Spanish possessions was almost too great to quantify, effecting a global monetary revolution. Its principle coin, the piece-of-eight, was the most tangible symbol of the far reaches of Atlantic commerce. But many peripheral areas of the Atlantic economy did not obtain a suitable quantity of coin to support trade. This was especially true of England’s American colonies, where heavy reliance on imported goods continually drained them of specie. Beginning in 1690 in Massachusetts, and continuing through the rest of the colonial period, England’s colonies in America embarked on an unprecedented experiment in fiat paper currency, known as “bills of credit”: paper currency backed by nothing but the government’s promise to accept it as legal tender. Paper currency became one of the most divisive political issues in colonial British America, with the Crown and then Parliament acting increasingly against it, culminating in the Currency Act of 1764. The paper Continental dollar helped the Patriots win American independence from Britain, but the infamous hyperinflation of the Continental dollar, and the chaos of competing state paper currencies in the 1780s, influenced the delegates to the Constitutional Convention to prohibit states from emitting bills of credit, so that nothing other than gold and silver coin could be legal tender in payment of debts, thus setting the stage for a new and further contested era of American currency and finance in the 19th century.

General Overviews

Monetary history is an old field, dating back to the middle of the 19th century, but it is one that has ebbed and flowed in popularity ever since. Oftentimes it peaks in the aftermath of an economic or financial downturn, when scholarly attention tends to turn more toward economic questions from the past. Michener 2011 is a good place to start for a detailed but accessible understanding of key terms relating to American money in the colonial period, authored by a university economist. Special Issue: Money Matters and Newman and Doty 1976 are useful essay collections that introduce interpretative or methodological approaches to the study of monetary history. McCusker 1978 contains essential information on the currencies and exchange rates of virtually every colony and country involved in the Atlantic trade. Nettels 1934 provides a sound overview of colonial American money in the century before 1720; Brock 1975 is the most complete overview of the colonial paper currency. Hammond 1957 is an epic account of American money and finance from the late colonial period to the Civil War, with an emphasis especially on the early 19th century; Michener and Wright 2006 does the same, but in article form.

  • Brock, Leslie V. The Currency of the American Colonies, 1700–1764. New York: Arno Press, 1975.

    A dissertation completed in 1941 that went unpublished until three decades later. Thorough, systematic, and well-researched history of the paper currencies issued by the British colonies in mainland North America up to the end of the French and Indian War.

  • Hammond, Bray. Banks and Politics in America: From the Revolution to the Civil War. Princeton, NJ: Princeton University Press, 1957.

    Magnum opus and winner of the Pulitzer Prize for History. Hammond was formerly an assistant secretary to the Board of Governors at the Federal Reserve, and he made no secret of his pro-finance, pro–central banking, and anti-populist sympathies. Nonetheless, it is a necessary and timeless read for any historian interested in early American finance. And notwithstanding the subtitle, the book also affords significant attention to colonial paper money.

  • McCusker, John J. Money and Exchange in Europe and America, 1600–1775: A Handbook. Chapel Hill: University of North Carolina Press, 1978.

    By far the most important resource for any historian or economist seeking basic, hard, detailed information and data on early modern currencies. Includes the currencies of the colonies in mainland North America and the Caribbean, as well as of western Europe. Each colony and country receives a valuable narrative section preceding the data table of exchange rates. The introduction succinctly explains the function of bills of exchange in this period.

  • Michener, Ron. “Money in the American Colonies.” In EH.Net Encyclopedia. Rev. ed. Edited by Robert Whaples. La Crosse, WI: Economic History Association, 2011.

    First published 2003. Comprehensive overview of colonial currency by a renowned economics professor. Defines, explains, and elaborates upon such issues as the unit of account, book credit, commodity money, bills of credit, foreign specie coins, bills of exchange, and promissory notes. Includes helpful information on the relevant literature.

  • Michener, Ronald, and Robert E. Wright. “Development of the US Monetary Union.” Financial History Review 13.1 (2006): 19–41.

    DOI: 10.1017/S0968565006000047

    Brief and concise overview of the history of American currency from the first half of the 18th century to the eve of the Civil War. Good starting point for beginners seeking an elemental understanding of the early development of the US dollar.

  • Nettels, Curtis. The Money Supply of the American Colonies before 1720. Madison: University of Wisconsin Press, 1934.

    Classic work in monetary history published in the throes of the Great Depression. A unique text in that it focuses exclusively on currency in the first century of the colonial experience, whereas most other works focus chiefly on the 18th century. Thoroughly researched, the book is also an excellent source for information on the balance of payments and on early colonial efforts to answer the near-constant drain of specie. Reprinted by Augustus M. Kelley Publishers in 1973.

  • Newman, Eric P., and Richard G. Doty, eds. Studies on Money in Early America. New York: American Numismatic Society, 1976.

    A compilation of essays on early American monetary history, including alternative currency substitutes, foreign coins in circulation, money in French Canada, an overview of colonial paper money, and the first coins and mints of the early national period.

  • Special Issue: Money Matters. Common-Place: The Journal of Early American Life 6.3 (2006).

    Special issue of Common-Place that addresses the broader research and methodological approaches in doing monetary history. Stephen Mihm and Mark Peterson co-author the introductory article; other contributors include Wim Klooster (the Dutch appetite for Spanish silver), Joyce Appleby (debates over monetary value in England), Mark Valeri (bills of exchange and usury in early New England), Jennifer J. Baker (colonial money and credit in literary culture), and others.

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