North Carolina Colonials
Posted on 3/19/2019
Money in the Colonies of America relied heavily on barter and coins. They were preferred over paper money partly due to paper being hard to redeem at times and having no intrinsic value, which made for easy depreciation.
At the time, Britain, which had dominion over the colonies, held the right alone to mint coins for the colonies. Out of necessity, North Carolina issued bills of credit in 1712 to fund the Tuscarora War. The war was fought between the new settlers of North Carolina from Europe and the original inhabitants, the Tuscarora.
During the war, North Carolina produced handwritten bills of credit; the only Colony to produce handwritten notes. The bills of credit were government debt that were issued out to be redeemed at a later date, allowing whoever turned them in to pay taxes with them. People used these out of convenience and not for their intrinsic value.
The handwritten notes were prone to forgery, and the only counter to the forgeries were the spirals at the top of the note. The spirals were used like a counterfoil where the local issuer held onto the other half of the spirals and could then compare the note to the counterfoil to authenticate. North Carolina issued handwritten bills until 1729.
|1729 North Carolina Colonial Note, 3 Pound - Counterfeit, front.
PMG graded 30 Very Fine Net.
Click image to enlarge.
Along with forgeries, the colony also had to deal with a depreciating currency. A possible cause for depreciation was North Carolina’s habit of re-issuing bonds that were redeemed. The colony thought it was saving money by not destroying the bonds from previous years. They recirculated these notes and saved money by not having to print as many new ones but created an even bigger problem by doing this.
The public began to believe that the colony had long-outstanding debt and the taxes coming in from redemption of bonds were not enough to support the status quo. The public couldn’t gauge how or when the all bonds would actually be retired, and this made the value of the bonds dwindle. After 1748, North Carolina realized this and took steps to destroy redeemed bills on a regular basis.
Wars continued to be fought in the colonies, leading to more and more debt. North Carolina issued bills of credit in 1748 to fund the building of forts after the end of King George’s War. In 1754, North Carolina again produced bills of credit to fund itself for war with the start of the French and Indian War. The War of Regulation pushed North Carolina to issue more bills of credit in 1768 and 1771. Shortly after, the Revolutionary War began in 1775.
On April 12th, 1776, North Carolina called for — and voted on — independence from British rule. Three months later, the 13 colonies voted in the Second Continental Congress, adopting the Declaration of Independence in 1776 on July 4th, forming the United States of America.
|1754 North Carolina Colonial Note, 20 Shillings, front.
PMG graded 30 Very Fine.
Click image to enlarge.
North Carolina issued its final colonial issue in 1785 as a transitional issue. This final issue was used to maintain a militia throughout the state, to help with recovery after the war, and even to help recover cannons from a River in Edenton!
Paper money was transitioned out after the Revolution. The Continental Congress had issued money to help pay for the Revolution, but these notes lost their value drastically during the war and the term "not worth a continental" was used among colonists. The catchphrase rang in the Founding Fathers' ears as they passed the 1792 Coinage Act, establishing the US Mint. The Act would only allow coins for the new nation, and it would be another 20 years for America to consider issuing paper money.
- North Carolina Paper Money. Retrieved from: http://oldnote.org/nccolonialpm/
- Paper Money in North Carolina. Retrieved from https://www.aier.org/article/sound-money-project/paper-money-colonial-north-carolina.
- Working Paper N. 2017-01, The Paper Money of Colonial North Carolina, 1712-1774. Retrieved from https://lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2017/UDWP2017-01.pdf
- Money in the American Colonies. Retrieved from: https://eh.net/encyclopedia/money-in-the-american-colonies/.
- Eighteenth-Century North Carolina Timeline. Retrieved from: https://www.ncmuseumofhistory.org/learning/educators/timelines/eighteenth-century-north-carolina-timeline.
- Acts of the North Carolina General Assembly, 1785. Retrieved from: https://docsouth.unc.edu/csr/index.php/document/csr24-0016.
- Money in Colonial Times. Retrieved from: https://www.philadelphiafed.org/education/teachers/resources/money-in-colonial-times.
- Tuscarora War. Retrieved from: https://en.wikipedia.org/wiki/Tuscarora_War.
- War of the Regulation. Retrieved from: https://en.wikipedia.org/wiki/War_of_the_Regulation.
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