June 18, 2019 Tuesday
Bedtime Story
Moneys Pre-American Revolution
The paper money in circulation in 1775
within the Thirteen Colonies was not only vast (albeit certainly not as vast as
today of course which stands at $1.7 trillion as of January 31, 2019 according
to the Board of Governors of the Federal Reserve System) and varied ranging
from the Spanish Dollar to the British pound sterling to even some local paper
currencies such as Massachusetts pound or Pennsylvania pound and many more.
The Smithsonian Institute (there are
actually 20 of them all over the country) maintains an exemplary record of them
and those interested can actually go and have a look at them.
Once they had declared themselves
independent and the American War of Independence had started all these old
currencies had become worthless (simply because a new nation had been born out
of coalition for thirteen old colonies which got to share common currency just
like a common boundary and a common government) and some new common currency
had to be conjured up.
(By the way, the Federal Reserve clearly
states as of today that “Federal Reserve notes are not redeemable in gold,
silver or any other commodity.”)
A new currency was, besides everything
else, more so urgently needed to fund the increasing cost of the revolution
much like in the case and course of the American Civil War.
Continental currency worth $241,552,780 was
issued by the Continental Congress that were denominated in dollars ranging
from $1/6 to $80 with all sorts of bizarre denominations in between.
As the Revolution progressed the value of
this currency went on decreasing rapidly that even led to the origin of the
famous phrase of those times “not worth a continental”.
Historian Robert E. Wright wrote:
“Some think that the rebel bills
depreciated because people lost confidence in them or because they were not
backed by tangible assets.
No so.
There were simply too many of them.”
Much to the surprise of most of you modern
readers the leading world currency during the time of the American Revolution
was the Spanish Dollar which was actually a silver coin of 38 mm diameter and
which was minted in the Spanish Empire from 1497 onwards following the monetary
reform.
So when the revolutionaries of the Thirteen
Colonies printed their Continental currency it was promised that the bearer of
the currency would be entitled to an equivalent amount of Spanish Dollar, the
international and the most respected currency of those times.
Yet as the Revolution progressed the value
of this new paper currency began to decline and by 1790 after the end of
American Revolution even with the colonies emerging as the victors the
Continentals had lost its value by 90% and it was almost never redeemed in
silver Spanish Dollar.
Moreover the new American government came
out of the Revolution laden with serious debts.
Stay tuned to the voice of an
average story storytelling chimpanzee or login at http://panarrans.blogspot.com
Good night Mon Ami and my fellow cousin ape.
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Another great educator and a teacher that I am aware of is
Professor Subhashish Chattopadhyay in Bangalore, India.
While I narrate stories, Professor Subhashish an electronic
engineer and a former professor at BARC, does and teaches real mathematics and
physics.
He started the participation of Indian students at the
International Physics Olympiad.
Do visit him here:
All his books can be downloaded for free through this link:
For edutainment and English education of your children, I
recommend this large collection of Halloween Songs for Kids:
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