History of Money and Banking Essay

2155 Words 9 Pages
Introduction In the last few years, there has been a significant debate on what has caused America’s economic woes. However, few people choose to look at what has caused economic downturns in the past. Some believe that it is the government and central banking’s job to steer the economy in the right direction. While others believe that it is not their job, but the free market’s. Perhaps it is something in between as a symbiosis between government and the free market working together to get things done. Many questions should be asked such as: what is the history of money and banking in the United States? What has proven sustainable monetary policy and how all this either helped or harmed by government involvement? These are important …show more content…
It was a disastrous policy because it was based on a mercantilist1 ideology. It hurt their economy and caused unrest in the colonies.(Schweikart, 2011) However, the prosperity that American had achieved by the Revolutionary could not have happened was it not for the protection of British military. Monetarily, England would not distribute coniage or allow the colonists to coin their own money. In 1652, there was no king; Oliver Cromwell was the Lord Protectorate. So in 1667, the colonists coined their own money in Massachusetts and called the Pine Tree Shilling since the pine tree was their leading export. They dated it at 1652 when there was no king to authorize it. It is believed they did this until 1674 (Smithsonian Institute, 2013). Thereby, circumventing the “federal government” at that time. There were very few banks during this era of American History. One called the Massachusetts Land Bank, which issued non-redeemable bank notes, based on land, ultimately the bank notes depreciated and then land banking was outlawed in 1741. (Rothbard, 2005) The Colonial era laid the foundation for the upcoming revolution
Revolutionary Era 1763-1788
“After a long train of abuses” and the British intervention in the American economy, the United States revolted. The various “intolerable acts” included various taxes: The Stamp Act, The Molasses Act, Townshend Act, and more. Parliament also

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