In 1652, the first mint in the American colonies was established at Boston. The original coins were simple, and had “NE” stamped on them for the New England Colony. Oak, Willow, and Pine Tree Shillings, with a more complex design, were soon minted to reduce counterfeiting.
Pine Tree Shilling
According to the online history, “Colonial Currency,” a project funded by a numismatic endowment at the University of Notre Dame and written by Louis Jordan:
The Massachusetts Bay mint was the first, the most successful, and the longest running of all the colonial minting enterprises. The General Court established a standard of 72 grains of .925 fine sterling silver to the shilling, which represented a 22.5% reduction of the English standard of 92.9 grains per shilling. By minting coins of lesser weight it was hoped they would not be exported out of the Commonwealth.”
Thus, as Jordan observes:
Boston shillings were sought throughout the colonies. Rather than reducing the export of Massachusetts Bay’s small silver supply, the Boston shilling drained it even more! Boston silver was being avidly sought throughout English North America.”
The silver supply became so low that the General Court was forced to take a number of steps to keep silver coming into the mint.
Other problems loomed: the success of the Boston mint also had political implications in England. The minting of silver coins had long been a royal privilege. In 1665 the king’s commissioners requested that the Commonwealth repeal the minting law as the right to produce silver coinage was a royal prerogative that had not been given to the colony.
Rather than closing the mint, Jordan reports, the General Court send gifts (basically bribes) for the King’s navy in the hope of retaining royal favor.
The colony also pleaded to keep the mint open. The gifts and pleading did keep the royal authorities from ordering the mint closed but the king never issued Massachusetts a royal minting privilege.
By 1680, staffers of the mint were nearing retirement. When their contract with the Commonwealth expired there was no renewal. On October 27, 1686 the king issued an Order of Council against the reestablishment of the Boston mint.
But in December of 1690, the Commonwealth was forced to come up with a solution to the financial promises it had made relating to a military action against Canada.
Upon soliciting volunteers for the expedition to Canada, the legislature had promised pay as well as plunder. Unfortunately, they didn’t count on the possibility that the colonists would lose, which they did. But both soldiers and creditors expected payment in full. Jordan observed:
The situation grew serious with the threat of a mutiny by the soldiers. The colony could not expect financial support from Britain nor could they wait the year or two it would take to collect a special tax. Instead, on December 10, 1690 the Massachusetts General Court authorized the issuing of £7,000 in public paper currency. . . . At the time no one realized this was the first public paper money issued in the history of Western civilization.”
A supplemental law of February 3, 1691 removed the £7,000 limit and authorized an additional emission of currency to be printed.
Massachusetts Bill of Credit from 1776, via National Geographic
Eventually, every American colony issued its own paper money. These bills were all called “pounds,” after the British unit of currency, the pound sterling. The value of colonial currencies did not match up, however. A “Massachusetts pound,” for instance, was worth fewer (British) pounds than a “New York pound.” Encyclopedia.com explains that the value of these coins was based on intrinsic value, fineness, and weight, the latter being affected by wear and sometimes by clipping or other forms of mutilation. This made trade between the colonies, as well as Great Britain, very complex.
The problem continued well after the American Revolution.
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