Colonial Currency - Water Works
Posted on 1/27/2015
In 1690 the Massachusetts Bay Colony started a currency revolution. King William’s War in Canada was being waged for France’s remaining mainland territories in North America; and Massachusetts Bay sent a military expedition to participate in the conflict. How did the colony pay for it? The first public paper money issued. Early American currency was the first publicly sponsored and authorized paper money issued by any government in the western world. Shortly after South Carolina and other colonies followed suit and America’s Colonial Currency as we know it today was born.1
The currency issued by the colonies quickly took hold. The traders of the time quickly saw the advantages of paper money, much like the Chinese traders had since the 13th century - metal coins were too bulky and dangerous to transport over long distances. The notes would generally circulate among neighboring colonies and be accepted in trade.2
There was only one problem with the colonies issuing paper money; England had never given them the permission to issue a circulating medium. But, the colonies were very clever and they found a loophole. Instead of calling it “money” the notes were termed “bills of credit” essentially making the paper notes terms of borrowing instead of currency.3
Hundreds of varieties of colonial notes exist; many depict regional vignettes such as the “Cod Fish” notes of Massachusetts and the “Butterfly” of North Carolina. But there is one that particularly stands out because it is so unusual looking – the “Water Works” notes of New York City.
The Water Works notes started a currency revolution of their own. They were the first paper money to be issued by an American city (August 25, 1774). Albany New York followed shortly after and issued its own notes on June 22, 1775.4 These notes laid the ground work for broken bank currency of many American cities and towns that began to see circulation in the early 19th century.
The Water Works notes saw four issues (August 25, 1774; August 2, 1775; January 6, 1776; March 5, 1776) and four denominations (1s, 2s, 4s, 8s). The 4s of 1774 was issued in error as it was never authorized; however, the 6d of 1774 was authorized but never printed.5 The first and part of the second series have backs with white paper. The majority of the second, third and fourth series saw notes with white paper on the front and coarse dark paper on the backs.
The vignette on the backs of these notes is quite striking. It depicts a steam operated water pump that was proposed to New York City by a man named Christopher Colles. Colles was a visionary and inventor and often proposed very ambitious projects; such as a series of canals linking the eastern seaboard to western North America. The steam pump pictured on these New York City notes was a water delivery system for the city. Water would be pumped from the river, placed in a reservoir, then pumped to whom ever needed it.
Colles water delivery project received funding and was under construction in 1775 until the British invasion of the city in 1776. The project never restarted, much to Colles’ dismay.
These Water Works notes not only signify a currency revolution but also a societal one. The government of New York City recognized the need to have water pumped into homes and businesses and was willing to invest money into infrastructure - essential to any modern society. If the project had been completed it would have raised the standard of living and quality of life for all those who dwelt in the city beyond any level known among the colonies. Massachusetts Bay, with a simple bill of credit issued in 1690, started a currency that not only facilitated the growth of the colonies through trade, but that also gave us some of the greatest pieces of American history available to collectors today.
1. Eric Newman, The Early Paper Money of America 5th Edition (Wisconsin: Krause, 2008), 9-10. 2. Newman, The Early Paper Money of America 5th Edition, 10. 3. Newman, The Early Paper Money of America 5th Edition, 10. 4. Newman, The Early Paper Money of America 5th Edition, 284. 5. CNewman, The Early Paper Money of America 5th Edition,284.