British Pound of Sterlings

To understand the reason, and perhaps necessity, for the conception of the Currency act of 1764, one must have a grasp of the economic situation in the American colonies prior to 1764. The currency used in the American colonies has always revolved around, specie or the two types of paper currency, legislatively issued legal tender or land bank notes (Finkelstein 39). Foreign specie was far more common than British specie, due to an export prohibition of British specie and an unfavorable balance of trade between the American colonies and Britain that drained whatever British specie

There was pushback from the Federal Government, President Grover Cleveland included, wanted to keep the money supply fixed in gold, held in the hand of the government (Doc D). Monopolization of the wealth supply was pandemic in the United States in the late

The penny, also known simply as the one-cent coin, was first made about 230 years ago in 1787. The first penny ever made was 100% copper and it was heavier and larger than the usual penny today. The design itself was suggested by the famous Benjamin Franklin ("A Brief History of the U.S. Cent”). Lately, people have talked about the idea of abolishing the penny, but others disagree. The penny should not be abolished.

The U.S. dollar peaked in value in 2000-2001 and has been in a significant decline ever since. There was a relatively brief period in 2008 when the dollar rebounded quite sharply due to the worldwide financial crisis and economic meltdown, when there was a global rush to the safety of U.S. treasury securities. But since then, the dollar has resumed its long-term downtrend. In the recent years the dollar has been improving relative to other currencies, becausee of the decline in those other currencies.

Another problem plaguing the economy of Britain was that the Americans continued to issue a large amount of paper bills. The British felt the effective way to halt the issuing of the bills was to put in place a Currency Act. They saw the paper money as "greatly depreciating

All of this ties back into the original problem with pennies. Fiat currency cannot itself be worth more than the value it is given. It would make absolutely no sense to take a dollar worth of gold and make it into a 50 cent coin. If this was done, people would just use the coin as gold, not the 50 cent piece it was supposed to be. When the material fiat money is made out of is worth more than the government proclaimed value, the purpose of that currency has failed and it has turned back into commodity currency.

It was one of the earliest monetary policies to institute the circulation of paper money on a national level. Customers would deposit their gold coins for storage into a bank for a small fee. In return, they received bank receipts, which were then used as paper money in place of valuable elements like gold. The idea of using bank notes as paper money quickly gained popularity because they were, of course, much easier and more convenient to transport and exchange than heavy gold coins.

In 1864, the first pennies were made. In 1909, they were made with Abraham Lincoln’s face printed into it, in honor of his 100th birthday. That was 108 years ago, and pennies are still going around today, with the same president still printed on. However, many U.S. officials are saying the penny should be obsolete. More believe that the little copper and zinc coin should stay as a piece of U.S. money. This essay will give evidence on both sides, supporting them equally in their arguments on why the penny should stay, or go.

After World War II, the Bretton Woods Agreement established the gold standard and two support institutions called the International Monetary Fund (IMF) and the World Bank. This would lead to a shift, away from the gold standard, to more relaxed systems. The idea of currency purely backed by gold was slowly being shifted to a trust based currency. These institutions purpose was to regulate the economies by injecting or taking money in a process called sterilization. Sterilization is to protect certain countries from a going bankrupt. If a country goes bankrupt, it chain a chain reaction of bankruptcies. So, in order to maintain balance, currencies need to be stable enough, so that it can be in debt without having to declare bankruptcy. The idea is

Ever since the Bretton Woods agreement in 1944, the U.S dollar became the world’s currency. Bretton Woods agreement was basically an agreement on which every country currency would be back up by the dollar, due to the fact that after WWII United States was the only one with the biggest gold reserve in the world. Although it was proposed as a good idea it had its flaws for one even though it help the U.S and other countries there was simply not enough gold to continue backing up the dollar value. Which lead to President Richard Nixon to abolish the gold standard economy. His abolish of a gold standard economy lead to a new proposal on which the dollar would be back by.

A law has passed in 1764 known as the Currency Act to resolve the currency scarcity and lack of proper economic structure. It is design to illegalize any new model dollars, not even reprint already used money. Additionally, it simply demolishes the colonial cash by having a more “hard currency” network using pound sterling. A huge repercussion occur, when there is a massive trade deficit and it only made the overall economy much more dire. This policy not only damages the merchant, but it also did not financial help the British troop to get the economic resources they need.

In 1764 The Currency Act was passed. The act banned the use of paper money in all colonies. In passing this, the British government was attempting to stop inflation and create uniform currency. This Act made paper money worthless. The British government didn't give the colonies enough time to exchange their money and it’s lack of process created chaos and inconsistency. Britain should have given the colonies more time to trade their money since it was Britain's idea to make such a tremendous adjustment to their system (Martin, The Events That Led to the American Revolution).

The first main cause was the Great War for Empire of 1754-1796. It is often referred to as the Seven Years War though it really lasted nine years. This was a war between the British and French. This war caused King George III to lose an enormous amount of money. Parliament quickly replace salutary neglect with imperial administration (A. 133). The enactment the Currency Act of 1764 barred colonies from using paper money as legal tender. The Currency Act ensured that merchants would be paid in good money, boosting their profits and British wealth. (A. 135)

At the end of World War Two, the Bretton Woods system was established for world currencies. This system involved countries fixing their currencies to the US Dollar, which in turn was tied to the value of gold at a fixed exchange rate of $35 per ounce. As this was a fixed exchange rate system it effectively forced countries to pursue a certain monetary policy, in order to keep their currency pegged to the Dollar and in turn the value of gold.

This view is in contrast to Kindleberger’s stance that after WWI it was important to get the exchange rates fixed at equilibrium levels and it was the collapse of interwar gold standard that brought about the world depression.