"Managing Silver Money on the Periphery of the English Empire: Massachusetts Bay, 1640-1715"

Massachusetts Bay Colony is well known as the first colonial government in British North America to issue paper bills of credit in 1690. The literature’s emphasis on Massachusetts as an early issuer of “paper money” has obscured the colonial government’s prior history as a monetary authority, and resulted in an imperfect rendering of the nature of the bills of credit and of the role of silver in the colonial economy. At the end of the seventeenth century, urban colonists in New England had a better-quality silver coinage than the English population, one based on a coin of their own, the New England silver shilling, and the larger-denomination Spanish American silver piece of eight.
This paper brings the Massachusetts government’s history and experience as a manager of silver money back into the narrative of colonial monetary history. The Massachusetts colonists accumulated expertise in the economics of silver money through their experience in minting coin (1652-82), which they brought to bear in future debates with London during the Dominion period (1686-89), after the new charter (1690s), and after the issuance of Queen Anne’s Proclamation (1704). These debates show that the Massachusetts Assembly, and leading merchants, consistently pursued policies designed to keep silver coin in use as currency – even as they were issuing bills of credit. Silver coins remained in circulation in the urban core until the first decade of the 18th century.
To make the case that silver money mattered to the colonists, and to the colonial economy, I call up evidence from the history of the Massachusetts mint, data on silver prices and sterling bill rates, merchant account books, legislative debates, and silversmith business transactions.