# What did colonists and early Americans use as coins **URL:** \ **Category:** Factual Questions\ **Created:** [November 6, 2018, 4:48pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082 "2018-11-06T16:48:07Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [November 6, 2018, 4:48pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/1 "2018-11-06T16:48:07Z")
I understand that they have used Spanish and spanish colonial coins for commerce. But I don’t know how it worked or how widespread it was. In everyday existence were they common? There are a couple hundred years for this to be an issue. Ben Franklin printed currency at some point. But what kind of coins and change did he, and other founding fathers use in their everyday life, through to the late 18th century? ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [November 6, 2018, 5:18pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/2 "2018-11-06T17:18:18Z")
The colonials used a [motley bunch](http://www.coinfacts.com/colonial_coins/colonial_coins.html) of [coins and tokens](https://coins.nd.edu/ColCoin/ColCoinContents/Contents01.html) from a number of sources. As noted, Spanish coins were commonly used just about everywhere. But remember, American colonials were British subjects, and therefore [British currency and coins](https://coins.nd.edu/ColCoin/ColCoinContents/Contents03.html) were in circulation everywhere. ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [November 6, 2018, 5:20pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/3 "2018-11-06T17:20:53Z")
Pretty much off topic, but I recently read a book about the development of large factories, beginning around 1720 in England. One of the difficulties faced was the lack of cash for payroll, contributing to payment in scrip. I suspect a lot of transactions within a community were “on account,” via IOUs and personal notes. ---
**Author:** ![MrDibble](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mrdibble/32/114_2.png) [@MrDibble](https://boards.straightdope.com/u/MrDibble)\ **Post date:** [November 6, 2018, 5:37pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/4 "2018-11-06T17:37:01Z")
> [@drad\_dog](#): > > Ben Franklin printed currency at some point. But what kind of coins and change did he, and other founding fathers use in their everyday life, through to the late 18th century? They had some [local coinage](https://en.wikipedia.org/wiki/Massachusetts_pound) and [paper money](https://en.wikipedia.org/wiki/Early_American_currency#Colonial_currency) in addition to foreign coins. ---
**Author:** ![Andy\_L](https://avatars.discourse-cdn.com/v4/letter/a/c67d28/32.png) [@Andy\_L](https://boards.straightdope.com/u/Andy_L)\ **Post date:** [November 6, 2018, 5:39pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/5 "2018-11-06T17:39:24Z")
> [@drad\_dog](#): > > I understand that they have used Spanish and spanish colonial coins for commerce. But I don’t know how it worked or how widespread it was. In everyday existence were they common? There are a couple hundred years for this to be an issue. > > Ben Franklin printed currency at some point. But what kind of coins and change did he, and other founding fathers use in their everyday life, through to the late 18th century? Early use of Spanish coinage was common enough to leave its mark in spoken language - both “Pieces of Eight” (the classic pirate parrot cry) and “Two bits” (meaning a quarter) relate to the Spanish dollar which equaled in value to 8 reales. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [November 6, 2018, 5:46pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/6 "2018-11-06T17:46:45Z")
They left a deeper mark than that. The proximate source of the word “dollar” was from Spanish (the ultimate source was from German). ---
**Author:** ![Banksiaman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banksiaman/32/3334_2.png) [@Banksiaman](https://boards.straightdope.com/u/Banksiaman)\ **Post date:** [November 6, 2018, 8:53pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/7 "2018-11-06T20:53:48Z")
The same situation applied in the early years of the New South Wales colony. While British currency was the standard, at least when stating prices there was never enough to go around, but neither was there a fine-grained complex local economy to demand everyone have a pocket full of change. There was a lot of reliance on Spanish currency, which acted as a sort of international standard and had a reliable value as bulion. Gov Macquarie took Spanish dollars and punched a small disk out of the centre, created a donut coin worth 5 shillings and a smaller one worth 15 pence to produce a local coinage. Being abundant and having intrinsic value, rum was also used as a default medium of exchange in the early colony, but I’m sure most credit transactions moved around as mental IOUs, ledgers and promissory notes. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [November 7, 2018, 5:54am UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/8 "2018-11-07T05:54:56Z")
I just wonder what the contents of Ben Franklins pockets were for money. I mean on an everyday level what do we know about the length of use of a coin in the new world. Would you be using coins that were over a hundred years old, in 1760? Would Gold be found ordinarily or was it stowed? Were the triangular and other shaped pieces of 8 common in all colonies as pocket change? If I wanted to buy a coin that had the best chance to have been used by a founding father, what do you think it would be? (Maybe coins were rarer and business was done by IOUs.) I wonder about the colonial issues like brazil, chile, peru, if they would be just aslikely to be found in New England or Philadelphia, say. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [November 7, 2018, 6:42am UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/9 "2018-11-07T06:42:16Z")
> [@Chronos](#): > > They left a deeper mark than that. The proximate source of the word “dollar” was from Spanish (the ultimate source was from German). Where do you find this as the source for dollar, please? Every source I find which refers to the _real de a ocho_ as a “dollar” or “dólar” _español_ is either in English, translated from English, or indicates that the expression was used in English-speaking countries. ---
**Author:** ![GreenWyvern](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/greenwyvern/32/2834_2.png) [@GreenWyvern](https://boards.straightdope.com/u/GreenWyvern)\ **Post date:** [November 7, 2018, 7:10am UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/10 "2018-11-07T07:10:18Z")
> [@Nava](#): > > Where do you find this as the source for dollar, please? Every source I find which refers to the _real de a ocho_ as a “dollar” or “dólar” _español_ is either in English, translated from English, or indicates that the expression was used in English-speaking countries. The word ‘dollar’ doesn’t come from Spanish. Early American colonists were familiar with the German thaler or dollar and they considered the real de a ocho to be a ‘Spanish dollar’ because it was a coin with similar weight of silver. See the [online etymology dictionary](https://www.etymonline.com:/word/dollar#etymonline_v_13908) ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [November 7, 2018, 10:32am UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/11 "2018-11-07T10:32:54Z")
Summary: TL;DR OP is especially interested in small change, but most of the evidence deals with larger payments. The question of “small change” is a mystery to me even in England. In the 1300’s [low-quality ale sold in Britain for less than a penny per gallon](http://medieval.ucdavis.edu/120D/Money.html), but the silver penny was the smallest coin minted. I realize that pennies were cut into halves, thirds and quarters but even so: Was buying a mere pint of ale simply not an option? The best Gascon wine was only 4 pennies per gallon in 1331 London. Two dozen eggs were a penny, a pound of cheese was less than a penny. I was interested enough in this question to to do some Googling, though I’m afraid my summary will just add to the confusion. I’ll post it anyway, because _I_ might want to refer to it — if I left it on my hard disk it would get lost in the muddle! A wide variety of money was in use in the early colonies: (1) Wampum beads (important to the Iroquois people, though they never used their wampum strings as money): > [@](#): > > As wampum had no intrinsic value, anyone could collect some shells and literally produce their own currency. With no central minting operation the quality of these products was often substandard. … [Oversupply and other] difficulties were most notable in New York where the use of wampum lasted longer than in other areas, as fewer alternatives were available. In the New Netherlands colony wampum was legislated at four beads to the stiver, which was the Dutch equivalent of the English penny. However, so many poor quality unstrung beads were put into circulation that in April of 1641 a law was passed prohibiting the use of unpolished beads during the month of May. During that month these poorer beads would be accepted in payment of taxes but only if they were strung and then at the discounted rate of six beads to the stiver. Apparently this action did not remedy the problem for in May of 1650 an ordinance was passed prohibiting the use of loose wampum; this law also further discounted poorly made wampum that circulated on string, so that they traded at the rate of eight beads to the stiver. As more and more wampum flooded the market the value of all beads declined. In 1662 New Netherland revalued white beads to twenty four to the stiver! Although wampum was clearly less desirable as a means of payment, it continued to be used on a limited basis to the end of the century. Kleeberg mentions the items handed over as payment to assist with the repairs of New York’s Fort James on July 14, 1672 included wampum and seawant as well as beaver skins, commodities and even services, such as a day of work as a laborer. It is interesting to note that seawant, that is loose beads, which had been prohibited from daily commerce in 1650, were still used for tax payments. As late as 1693 commuters on the New York and Brooklyn ferry could pay with either two pence in silver or eight stivers in wampum. According to Mossman the last recorded exchange of wampum as money was in New York in 1701. (2) Commodities, e.g. animal pelts, iron nails, liquor: > [@](#): > > As early as 1619 tobacco had been designated as the official currency of Virginia at the rate of 3s per pound for the best grade of tobacco and 1s6d per pound for second quality leaves… In 1698 Maryland passed a law against deceptive packing by making it illegal to pack inferior leaves in the bottom of a hogshead of tobacco while placing higher quality leaves on the top. > > During the depression of 1727 the scarcity of coins and paper currency forced the Massachusetts General Court to establish a long list of twenty five commodities with their legal value for tax payment; the goods ranged from merchantable beef at £3 per barrel, barley or rye at 6s a bushel, peas clear of bugs at 9d a bushel, whale bone six feet long and upwards at 3s6d per pound, cast iron pots and kettles at 48s per hundred weight to good dry tallow at 8d a pound. > > During the Revolutionary War coinage was scarce so many items traded for “pay as money” or outright barter. The most widely used commodity money was Indian corn; dried corn could be kept for months and was versatile in that it could be used either as seed or animal feed for chickens, cows or horses or turned into corn meal. … in 1779 David Mowry purchased a book for five bushels of corn, when a bushel of corn was valued at 12s in silver coins. Shortage of gold and silver coinage was exacerbated by the trade deficit: precious metals were flowing to Britain to pay for the import needs of the colonies. (3) British copper coins: > [@](#): > > By the end of the Seventeenth century the number of inhabitants and, consequently, the number of merchants in major colonial cities had grown to the extent that the use of barter, wampum and other money substitutes was too cumbersome even for small transactions. Local merchants found it increasingly difficult to sell daily staples with money substitutes. For example, bakers could not efficiently sell bread if they needed to count strands of wampum and examine each bead to insure it was not flawed, nor could they be expected to spend time bartering with a customer when there were other individuals waiting to be served. At first this situation was addressed by private initiatives. **British law prohibited the export of regal gold and silver coins** , however there was no law against exporting British coppers (either regal or token coinages). Additionally, the situation in the colonies was well known in England and it was also generally known British coppers traded above their face value in the colonies. For these reasons new settlers as well as English visitors brought some small change copper coins with them when they came to the colonies… > > [In 1698] British coppers passed at twice their face value in New York and Philadelphia, thus a British halfpenny was valued at, and was often referred to as, a penny. On June 21, 1698 a group of fifty three Philadelphia merchants sent a petition to the General Assembly complaining that “great quantities” of lead and pewter farthings and halfpence were being “crowded” upon them… (4) Foreign silver coins: > [@](#): > > By the early 1640’s … foreign silver coins began to enter the Massachusetts economy in significant numbers. On September 27, 1642 the General Court passed an act regulating the value of the Holland “ducatour” of the three guilders at six shillings, while the “rix” dollar and the Spanish American eight reales cob coins were valued at five shillings each. But … > [@](#): > > the most prominent foreign coin was the Spanish American eight reales (the piece of eight), called the “Spanish dollar” by the colonists … were crude “cobs” struck out of a clump of silver, without even a standard shape. The Spanish minted cobs as quickly as possible, primarily as an easy way of inventorying and marking refined silver to be shipped to Spain where it would be melted down for various uses. The cobs had not been designed to be used as circulating currency. However, in the colonies these crude silver coins filled a serious economic void and were regularly used. Unfortunately, because of their irregular shape, many holders of these coins would clip a small piece of silver off the uneven edge of the coin to sell at a later date and then pass the coin off for its full value. As these coins circulated from one person to another they became lighter and lighter. The irregular shape not only encouraged clipping but it also made counterfeiting easier. Of course, counterfeiters would include as much alloy as possible so that the coin would contain less than the minimum required silver content (i.e. fineness). (5) For 30 years beginning in 1652, Massachusetts minted its own silver coins: > [@](#): > > 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. In England, the Boston shilling (as it was called) would be slightly over 22% lighter than the English counterpart and therefore would be valued at about 22% less than the English shilling. Thus, it would seem one was more likely to spend the coin in Massachusetts where it would be worth a shilling (12d) rather than to pay a shilling for it in Massachusetts and take it back to England where it would be worth only about 10d. > > Individuals could bring to the mint anything made of silver, including: silver bars, dishes, candlesticks and jewelry as well as lightweight, counterfeit and even regulation weight Spanish or other silver coins. Anything containing silver was accepted. The items would be assayed and melted down. If it was good Spanish silver of the Spanish authorized .9305 fineness, additional alloy would be added to bring it down to the sterling standard of .925 fineness, conversely poor quality silver would need to have alloy removed. Adding alloy would increase would the mass and weight of the silver thus allowing more coins to be produced while removing alloy would decrease its mass and weight. The refined silver was formed into planchets of about 72 grains each and then stamped into shilling coins. > > [Due to minting fees] the final cost to the individual for each shilling was 12.9d or almost 13d! Although one might accept this as the cost of converting silver plate into usable coin, it appears to be a poor deal for the customer bringing in spendable Spanish silver dollars. However [although] The Spanish silver dollar was valued at 54d (4s6d) in England and held that same value in Massachusetts until 1642 … [To keep silver dollars from leaving the Commonwealth an 11% higher rate was legislated in Massachusetts; and an even higher advantage was obtained by taking the Spanish dollars to the mint.] The British government shut down that mint; soon thereafter Massachusetts was issuing paper money. During the 1700’s copper coins were minted in Connecticut and elsewhere. (6) Paper money issued by colonial governments. Since the [(pdf) Bills of Credit issued by colonial governments like South Carolina’s](https://www.jstor.org/stable/pdf/27527938.pdf) were not generally redeemable into specie, there was often severe inflation and related politics. The use of this paper money in general commerce was only intermittent. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [November 7, 2018, 10:38am UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/12 "2018-11-07T10:38:50Z")
For a lot of those small-price, repeated items, would a tab have been kept? I know it was done so by many food vendors in Spain as late as the 1970s; the tab would be paid between once a month (salaried people) and when a harvest came in (farmers). …Saint Peter don’t you call me 'cos I can’t go I owe my soul to the company store… makes me think of that kind of practice, rather than of something like company scrip. ---
**Author:** ![GreenWyvern](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/greenwyvern/32/2834_2.png) [@GreenWyvern](https://boards.straightdope.com/u/GreenWyvern)\ **Post date:** [November 7, 2018, 1:37pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/13 "2018-11-07T13:37:09Z")
> [@septimus](#): > > The question of “small change” is a mystery to me even in England. In the 1300’s [low-quality ale sold in Britain for less than a penny per gallon](http://medieval.ucdavis.edu/120D/Money.html), but the silver penny was the smallest coin minted. I’m not sure why you think the penny was the smallest coin minted in the 14th century. Farthings were very common. According to [Wikipedia](https://en.wikipedia.org/wiki/Farthing_%28English_coin%29), in the reign of Edward I (1272-1307) 4 million farthings were minted, and more were minted in successive reigns. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [November 7, 2018, 2:01pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/14 "2018-11-07T14:01:34Z")
Thanks for the correction. My flawed memory must have been about the 12th century when, I guess, the penny _was_ the smallest minted coin. But even with farthings one wonders how very small transactions took place. If eggs were six to the farthing, did buyers always buy multiples of six? ---
**Author:** ![GreenWyvern](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/greenwyvern/32/2834_2.png) [@GreenWyvern](https://boards.straightdope.com/u/GreenWyvern)\ **Post date:** [November 7, 2018, 3:48pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/15 "2018-11-07T15:48:30Z")
> [@septimus](#): > > Thanks for the correction. My flawed memory must have been about the 12th century when, I guess, the penny _was_ the smallest minted coin. But even with farthings one wonders how very small transactions took place. If eggs were six to the farthing, did buyers always buy multiples of six? Part of it is, as **Nava** said, that anyone with a fixed address and a reputation would buy on account. Part of it is that eggs were much smaller than modern eggs. 🙂 But mainly it’s that we shouldn’t think in modern terms of individuals buying and cooking food for themselves. That would have been rare. - Either you lived in a family household with cooking facilities, in which case food purchases would be for all the occupants and their servants and dependents. (A person visiting a town would either stay with friends or relatives, or rent a room with a family with meals included.) - Or you lived in a garret or rented room without cooking facilities, in which case you could buy bread and cheese and beer and keep it in your room, or eat at an inn or tavern or cookshop. ---
**Author:** ![Chefguy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chefguy/32/138_2.png) [@Chefguy](https://boards.straightdope.com/u/Chefguy)\ **Post date:** [November 7, 2018, 4:34pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/16 "2018-11-07T16:34:08Z")
> [@drad\_dog](#): > > I just wonder what the contents of Ben Franklins pockets were for money. > > I mean on an everyday level what do we know about the length of use of a coin in the new world. Would you be using coins that were over a hundred years old, in 1760? Would Gold be found ordinarily or was it stowed? Were the triangular and other shaped pieces of 8 common in all colonies as pocket change? > > If I wanted to buy a coin that had the best chance to have been used by a founding father, what do you think it would be? > > (Maybe coins were rarer and business was done by IOUs.) > I wonder about the colonial issues like brazil, chile, peru, if they would be just aslikely to be found in New England or Philadelphia, say. [This site](https://www.apmex.com/category/54210/colonial-coins) lists colonial coins that are within reach. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [November 7, 2018, 4:45pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/17 "2018-11-07T16:45:09Z")
Didn’t the banks issue scrip? Some of it became worthless when the bank failed. It was such an economic climate that led the US govt, when it was formed, to declare any money not produced by the govt to be illegal. This is extremely poor proof, but I recall an historical novel of the era where some sucker had a pocket full of bank scrip, and a con artist convinced him that it was worthless, since he had a “bluebook”-type document that said the bank had failed. The con artist helpfully offered to buy them for 10% of the face value, and after the transaction was completed, but too late, the sucker found out the news was fake, and the money was quite valuable. ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [November 7, 2018, 5:35pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/18 "2018-11-07T17:35:06Z")
> [@septimus](#): > > Summary: TL;DR > > OP is especially interested in small change, but most of the evidence deals with larger payments. The question of “small change” is a mystery to me even in England. . Great research! Thanks. Looking out over the next 100 years or so, I imagine gold would have been rare in daily transactions. But I do wonder how many spanish gold doubloons (2 escudos and more) were around, or were they just held as wealth, and by what classes of people. Many coins just get hoarded. I still wonder what the life span of a circulating coin was through the time period too. I don’t know if we are very sure about how many times a man would pay for something in an average day. Could Franklin have used or saved coins from the 16th century for instance? ---
**Author:** ![drad\_dog](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@drad\_dog](https://boards.straightdope.com/u/drad_dog)\ **Post date:** [November 7, 2018, 5:37pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/19 "2018-11-07T17:37:15Z")
> [@Chefguy](#): > > [This site](https://www.apmex.com/category/54210/colonial-coins) lists colonial coins that are within reach. Thanks. I’ve been looking at these things and wondering how long they were around in circulation, and the geographic migration of a coins life. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [November 7, 2018, 8:36pm UTC](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082/20 "2018-11-07T20:36:54Z")
> [@Musicat](#): > > Didn’t the banks issue scrip? Some of it became worthless when the bank failed. It was such an economic climate that led the US govt, when it was formed, to declare any money not produced by the govt to be illegal. Private banks continued to issue their own banknotes well into the 20th century, although subject to federal regulation from 1863 onwards. See this wiki article, under “Issue of banknotes”: > **[Banknote](https://en.wikipedia.org/wiki/Banknote)** > > A banknote or bank note – also called a bill (North American English) or simply a note – is a type of paper money that is made and distributed ("issued") by a bank of issue, payable to the bearer on demand. Banknotes were originally issued by commercial banks, which were legally required to redeem the notes for legal tender (usually gold or silver coin) when presented to the chief cashier of the originating bank. These commercial banknotes only traded at face value in the market served by the [Next page](https://boards.straightdope.com/t/what-did-colonists-and-early-americans-use-as-coins/824082.md?page=2)