Home Massachusetts Massachusetts Issues the First Paper Money in the Western World

Massachusetts Issues the First Paper Money in the Western World


Late in the 17th century, Elisha Hutchinson made a startling announcement: Soldiers fighting King William’s War in French Quebec would be paid in paper money, not metal coin like the Pine Tree Shilling or the Spanish Milled coins then in use.paper money

It had never been done before, not in the western world.  (The Tang Dynasty in China had tried it in the 7th century.) No one knew if the experiment would work, or if the soldiers would accept paper instead of coin. But the government of the Massachusetts Bay Colony had no choice. It didn’t have enough coin in its treasury to pay the troops, who were on the verge of mutiny.

The expedition to Quebec, said Hutchinson, ‘hath run us into debt.’

Paper money wasn’t a new idea in New England. Hutchinson had been part of a scheme a few years previously to form a bank and issue paper money to Massachusetts’ aristocrats. He was a member of the Committee of Finance and part of the colony’s ruling oligarchy. Capt. John Blackwell had come up with the idea for paper money and enlisted Hutchinson and other members of the ruling class: Gov. Joseph Dudley, William Stoughton, Wait Winthrop, Simon Lynde and Elisha Cooke. The idea went for naught.

Paper Money

But on Feb. 3, 1690/91, the Legislature of the Massachusetts Bay Colony issued 40,000 pounds worth of paper money, or bills of credit. The government promised the notes could later be redeemed for coins.

Each note read:

This indented Bill of […] Shillings due from the Massachusetts Colony to the Possessor shall be in value equal to money and shall be accordingly accepted by the Treasurer and Receiver Subordinates to him in all Public payments and for any stock at any time in the Treasury – New England, February the third, 1690. By order of the General Court.

The experiment worked, and the notes were soon in general circulation. By 1714, Massachusetts had issued 240,000 pounds of paper currency. By 1718, the other New England colonies had picked up on the idea. The battle against inflation had begun.

This story updated in 2023.



The Legend of Faneuil Hall’s Golden Grasshopper Weathervane - New England Historical Society August 23, 2017 - 4:54 pm

[…] Shem Drowne was born Dec. 4, 1683 in Eliot, Maine. His father, Leonard Drowne, was a shipbuilder from England. The family left Maine for Boston in 1699 to escape violence following King William’s War. […]

The Candlemas Massacre and the Salem Witch Trials - New England Historical Society February 2, 2018 - 2:39 pm

[…] residents of York may also have seen paper money, the first in North America, issued by Massachusetts to pay for the war with the French and […]

Comments are closed.

Subscribe To Our Newsletter

Join our mailing list to receive the latest artciles from the New England Historical Society

Thanks for Signing Up!

Subscribe To Our Newsletter

Join Now and Get The Latest Articles. 

It's Free!

You have Successfully Subscribed!