The Colonial Currency that Funded Freedom
In 1775, the thirteen English colonies on the east coast of North America made the momentous decision to take up arms against the British and assert their independence. However, the financial cost of fighting for freedom was high and required an ingenious solution. This is the story of how America’s Founding Fathers successfully funded the American Revolution, which led to the birth of the United States.
For most of the eighteenth century, the colonies were governed remotely by Britain. With no representation in the British Parliament, they felt increasingly frustrated by the laws, tariffs and taxes imposed on them to control trade and limit their powers of self-government. Over time, they began to see themselves more as American citizens than British subjects, and they felt exploited by British companies that could operate tax-free while their own businesses were burdened with heavy levies. When Britain imposed additional heavy taxes on the colonies to help pay for its wars with France and India, this simmering resentment erupted into armed conflict in 1775.
To crush the rebellion, Britain imposed an embargo and blockade on the colonies in December 1775. As British warships patrolled the Atlantic coast, hoping to force the colonies into submission by disrupting trade, their actions only strengthened the resolve of the colonists, who realised that independence was the only way forward.
Although the armed struggle didn’t officially end until 1783, the historic date that marks the official birth of the United States is 4th July 1776, when the Declaration of Independence was signed in Philadelphia. The 56 delegates representing the thirteen colonies who bravely added their signatures to the bottom of the document became known as the Founding Fathers. All were from diverse backgrounds but risked their lives to boldly declare their independence from British rule. Each knew that they were committing an act of treason - punishable by death if their struggle failed. Benjamin Franklin lightened the tension in the room by remarking, "We must, indeed, all hang together or, most assuredly, we shall all hang separately."
At the time, the colonies lacked a unified army, relying instead on small militias formed to defend themselves against local threats. These militias were ill-equipped to face the well-disciplined and highly trained British Army. The colonists also faced a severe shortage of money, as they depended on British currency and had no silver mines from which to make their own coinage. Traditional means of raising money, such as taxes, were insufficient and unpopular. Instead, they had to rely on foreign coins and commodities like tobacco, beaver pelts, and even nails for currency.
The Founding Fathers knew that a stable currency was essential for maintaining the colonial economies and retaining the support of the public. There was a chronic shortage of coins, especially silver and gold, and so they hit upon the innovative solution of issuing their own paper money to solve their financial crisis.
These paper banknotes, known as Continental Currency, were essentially promissory notes, backed by the promise of future tax revenues and the hope of eventual victory. They were used to purchase supplies, pay soldiers, and finance other essential aspects of the war, with the colonial governments each guaranteeing their value effort.
With no centralised banking authority yet in operation, each colony was highly independent and issued currency to suit the needs of its particular economy. Each experimented with different formats, designs and denominations, which led to a wide variety of notes in circulation. Some retained the British system of pounds, shillings and pence, while others used dollars. Agricultural colonies generally needed smaller denominations for everyday transactions, while commercial centres like Philadelphia or Boston issued larger denominations for business and trade. As inflation rose, higher denominations were introduced to keep up with depreciating currency values.
The banknotes were often adorned with designs that reflected the values and aspirations of the issuing colony, including regional emblems, political symbols and nature scenes. They were printed with great care and featured elegant borders and typography, with each note stating the name of the issuing colony and the denomination. Those issued before independence also included the name of the monarch (King George III) to give the banknotes added legitimacy. Post 1776, the banknotes often included patriotic slogans supporting liberty and freedom.
To help deter forgers, notes would be printed on paper embedded with blue fibres and mica flakes, while some had a jagged cut known as an indented edge that matched a stub retained by the local treasury. As an additional anti-counterfeiting measure, each banknote would also be hand-signed by an authorised official appointed by the colonial government. These prominent local citizens were trusted by the colonial assembly to oversee the issuance of currency and are recognised as patriots of the revolution.
Under the leadership of General George Washington, who would later become the first President of the United States, the banknotes played a crucial role in sustaining the war effort during its most critical phases. They demonstrated the colonies’ resilience in the face of adversity and, without them, the outcome of the American Revolution could have been very different.
Today, surviving examples of Colonial Currency are highly prized by collectors and historians alike. More than mere pieces of paper, they are tangible symbols that tell the story of a nation's fight for freedom and the visionary leaders who made it possible.
