)Another Franklin innovation that helped to thwart counterfeiters was his ability to print leaves and other intricate patterns, which were difficult to reproduce using blocks of lead. To get around the shortage of money, colonial governments printed paper money, and colonists used whatever foreign currency they could get their hands on -- emish dollars, for example. (So a "quarter" of a Spanish dollar was 2 bits. Early American currency went through several stages of development during the colonial and post-Revolutionary history of the United States. Not until after the beginning of the United States would banks become prevalent, starting with the Bank of North America in 1781, chartered by the state of Pennsylvania. M oney, or the lack thereof, was a persistent problem in colonial America. The main concern of the colonists, in the beginning, was finding a means of payment for transactions: money. Although British officials tried to ban this practice with the Currency Acts of 1751 and 1764, they only met with limited success.In order to have a functioning economy, the colonists were forced to turn to other commodities for use as money. The notes often circulated freely throughout the colony, easing the monetary problems of the region and facilitating trade, until they were retired (removed from circulation) at some set future point as they arrived back in the colonial treasury in payment for taxes or fees. In the mid-Atlantic colonies of Pennsylvania, New York, New Jersey, Delaware, and Maryland, where land offices were most successful, the interest from these loans provided colonial governments with adequate funds for the day-to-day costs of government administration, lessening and sometimes even eliminating the necessity of taxation. But since the legislatures did not really know how much money the economy required and probably didn't care, it was easy to simply issue the currency to pay their debts or to finance their operations, especially military operations. That is difficult enough, but suppose you needed that specific thing today and had nothing to exchange until later. The best way to steady the value of paper money is by basing it on land, because the value of land does not fluctuate as easily as commodities or paper currency nor can it be exported to a foreign country. Moreover, because the currency was not standardized, each of the 13 colonies issued currency that varied in appearance and value and was often counterfeited, making it difficult for the people to determine legitimate currency. The Spanish coin known as “pieces of eight” was the most common coin in circulation throughout the colonies, but these were still too rare for the needs of the economy and were often exported as payment to England.
Since the bearer of the receipt had a claim on that exact amount of tobacco, the receipts circulated like currency. But since the lack of gold and silver was precisely the problem in the colonies, colonists instead turned to the one asset they held in abundance: land. Spanish coins, from trade with the West Indies and Mexico, circulated freely in the colonies as legal tender.
The value of the paper was directly equivalent to and convertible into a specific amount of some asset, such as gold or silver. In those areas where money was limited in quantity to the amount of anticipated future tax receipts, fiat money tended to be successful. This automatic stabilization of the paper currency value stabilizes the price level within the colonies.Because currency was not standardized, printers could make counterfeit bills. Prior to the Coinage Act of 1792, which established the dollar, the English pound was the primary form of currency in colonial America. Not until after the beginning of the United States would banks become prevalent, starting with the Bank of North America in 1781, chartered by the state of Pennsylvania. Colonial governments, at times, issued paper money to facilitate economic activities. Under barter, if you have an item to trade, you must first find people who want it and then find one among them who has exactly what you desire. The main concern of the colonists, in the beginning, was finding a means of payment for transactions: money.In colonial times, people bought land from the government, often in the form mortgages. In 1739, he printed bills that deliberately misspelled Pennsylvania, based on the assumption that any counterfeiters would correct the spelling. But tobacco receipts were not easily divisible, and the supply of both tobacco and wampum in circulation could fluctuate widely, making them inadequate stores of value.The experience of the colonies with this fiat paper money varied widely.
An image of a leaf was often used because it had complex veins that could not easily be copied by counterfeiters.
Borrowers could pay back their loans plus interest with the paper money or with harder-to-attain gold or silver.
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