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Why did Massachusetts Invent Modern Currency?

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  • Dror Goldberg

    (Texas A&M University)

Abstract

"In 1690 Massachusetts issued what seemed to be a private-type credit instrument. In fact it was the first inconvertible, legal tender paper money. The unique political considerations of that inter-charter period did not allow the provisional government to support the money in standard ways, such as backing by land, an explicit full legal tender status, or general forced use of the money. The legislature relied instead on the history of local monetary law as an indicator that these features were not necessary, and it also used a seemingly irrelevant commodity money act as a partial substitute. That act – so far ignored by historians – explains precisely the market discount on the notes."

Suggested Citation

  • Dror Goldberg, 2007. "Why did Massachusetts Invent Modern Currency?," Working Papers 7011, Economic History Society.
    • Handle: RePEc:ehs:wpaper:7011
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    References listed on IDEAS

    as
    1. Steele, Ian K., 1986. "The English Atlantic, 1675-1740: An Exploration of Communication and Community," OUP Catalogue, Oxford University Press, number 9780195039689.
    2. Sylla, Richard, 1982. "Monetary Innovation in America," The Journal of Economic History, Cambridge University Press, vol. 42(1), pages 21-30, March.
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    JEL classification:

    • N00 - Economic History - - General - - - General

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