Pennsylvania on Paper Money Basis When
Bills of Credit Are Issued
March 2, 1722–23
The first bills of credit, or paper-money, issued in the English American colonies were put forth by Massachusetts, in 1690, to pay the troops who went on an expedition against Quebec, under Sir William Phipps.
It was Governor Sir William Keith who first introduced the people of Pennsylvania to the pleasures and benefits of an irredeemable paper currency.
There had been great and long-standing complaint about the deficiency of a circulating medium, for the use of wampum had ceased, and foreign coin had never become plenty. The course of exchange ran heavily against the Province, and those who possessed money made enormous profits by the purchase and sale of bills.
The merchants of England did not ship bank-notes or coin to the Provinces. They paid for the produce which they purchased here with English goods, and settled the balances by shipments of sugar, rum, etc., from Barbadoes and other places in the West Indies, and by Negroes and indentured servants.
There seems to have been more hard money in Philadelphia than in New England, for Franklin, a paper-money man, notes in his autobiography how his fellow-workmen in Boston were surprised when he returned to his brother’s place in 1724 from Philadelphia. Franklin displayed a handful of silver, which was a rare sight, for they only had paper-money in Boston.
When Franklin first visited Philadelphia, in 1723, he noticed with surprise the free circulation of metallic money among the people of Pennsylvania. The whole of his own money then consisted of a Dutch dollar and a shilling’s worth of coppers.
But this condition soon changed for James Logan, in writing to the Proprietaries late in 1724, says, “No gold or silver passes amongst us.”