Currency Act (1764)

Also known as Grenville’s Continental Currency Act, this bill was passed by Parliament in 1764. It was enacted to control the rapidly increasing intercolony inflation plaguing the British Empire as a direct result of the French and Indian War (1754–1763) and to reduce the massive provincial debts accrued during the war, mainly in Virginia. Written primarily at the prompting of British merchants with the hope of preventing individuals in the American colonies from paying debts with depreciated colonial currency, the act prohibited all of the colonial governments from issuing paper money as legal tender. All currency already circulating was supposed to be immediately retracted by the colonial governments through the use of recall dates on any outstanding issues of circulating currency. Institution of the act created serious monetary shortages in the colonies at the exact time that Grenville’s Sugar Act cut off the flow of specie into the colonies from the West Indies trade. Although following on the heels of the Sugar Act, the Currency Act added little to colonial irritation until after the colonies had united in protest against the Stamp Act. Incidentally, currency scarcity was a continual problem in the colonies. British currency was so limited that most colonies in the New World had to depend instead on Spanish milled dollars or to simply print their own currency. The imbalance of trade between England and the colonies prevented the acquisition of hard currency from outside sources. While usage of paper currency printed within the colonies sometimes led to inflation and hardship for creditors, its lack was a privation for everyone. Interestingly, prior to the Currency Act, Parliament had issued numerous prohibitions against the issuance of paper money in the colonies, but none aroused much opposition. The most significant of these prohibitions had been the Currency Act of 1751, but it applied solely to New England. Seeing the Currency Act as tantamount to reducing the colonial economy to one of barter, many colonials believed the act (like the Stamp Act) was part of a systematic attempt by factions within Parliament to “enslave” the colonies. Since the act was not a means of taxation, the colonists did not try to nullify it as a measure beyond the power of Parliament, as they did with the Sugar Act. Instead, they closed all local courts in the colonies. To some extent, the court closures were the most effective action possible, since they often raised the value of money, while limiting the payment of debts by preventing their collection, thus reducing demands for money. With most creditors of colonial debtors being British merchants, court closures ensured the participation of these individuals in the repeal of the Currency Act, the Stamp Act, and the Sugar Act. Solomon K. Smith See also: Banks and Banking; Currency. Bibliography Greene, Jack P., and Richard M. Jellison. “The Currency Act of 1764 in Imperial-Colonial Relations.” William and Mary Quarterly, 3rd series, 18 (1961): 485–518. McCusker, John J., Russel R. Menard, and Peter J. Albert. The Economy of Early America: The Revolutionary Period, 1763–1790. Charlottesville: University Press of Virginia, 1988. Morgan, Edmund S., and Helen M. Morgan. Stamp Act Crisis: Prologue to Revolution. Chapel Hill: University of North Carolina Press, 1995. Currency Act – Issue of Paper Currency as Legal Tender for Public … Currency Act of 1764 Words and Text *** Dodging the Check : The Colonial Williamsburg Official History …

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