Currency Act

The Currency Act or Paper Bills of Credit Act is one of several Acts of the Parliament of Great Britain that regulated paper money issued by the colonies of British America. The Acts sought to protect British merchants and creditors from being paid in depreciated colonial currency. The policy created tension between the colonies and Great Britain and was cited as a grievance by colonists early in the American Revolution. However, the consensus view among modern economic historians and economists is that the debts by colonists to British merchants were not a major cause of the Revolution. In 1995, a random survey of 178 members of the Economic History Association found that 92% of economists and 74% of historians disagreed with the statement, "The debts owed by colonists to British merchants and other private citizens constituted one of the most powerful causes leading to the Revolution."

Economic climate of the colonies

From their origin, the colonies struggled with the development of an effective medium of exchange for goods and services. After depleting the vast majority of their monetary resources through imports, the first settlers strained to keep money in circulation. They could not find a suitable medium of exchange in which the value did not depreciate. The colonists generally employed three main types of currency. The first was commodity money, using the staple of a given region as a means of exchange. The second was specie, or gold or silver money.