King William’s War and the first paper money issued in America

May 14, 2021 | By Jim Stovall | Filed in: history, journalism.

The little-known King William’s War (1688-1697) was but one of a series of conflicts in colonial history that pitted English settlers in New England against French settlers in Canada. It was a war of raid and retaliation, and its brutality was frequent and shocking. Tragically, its result was simply the status quo that had been in place before the conflict began.

The war did contain 1 major historical marker, however. It resulted in the Massachusetts Bay Colony government issuing the first paper money in America.

Central to this story is a man named William Phips, who was born in what is now the state of Maine in 1651 and who spent the first years is life working on his father’s sheep farm. He then was apprenticed to a shipwright, and he married a wealthy widow who taught him how to read and write.

His work as a shipbuilder brought him into contact with many people and their stories. One of those stories had to do with a ship that was carrying gold from Mexico to the mother country of Spain and had sunk in the Caribbean. Phips found financial backing for an expedition to search for the sunken treasure, and although his first expedition was a failure, a second expedition had the incredible good fortune of actually finding the ship.

As a result, Phips was given £16,000 and a knighthood. Despite his newfound wealth and status, Phips was known as a man who spoke easily, honestly, and without any pretense, and people had come to trust him.

When the conflict broke out between the New Englanders and the French Canadians, the English asked the Crown for money and material to support their efforts to defend themselves and to retaliate against the French. The Crown ignored their request. The Massachusetts Bay Colony government then stepped in to underwrite a two-pronged invasion of Canada.

Phips led one of the forces of the invasion, but the whole thing turned out to be a disaster. Part of the reason for the failure was a smallpox epidemic that spread through the invading militia. None of the war aims of New Englanders came to fruition, including the one that had the invaders raiding the Canadians’ treasury. As the force was returning home, those in power knew that the soldiers that they had sent out would expect to be paid.

There was no hard currency available, so the government began printing paper bills of credit. It was the first time that paper money had been issued in the American colonies.

When the soldiers returned home, they were none too pleased to find that their payment was in something other than hard currency. Phips prevented the situation from becoming a crisis when he expressed confidence in the paper money and even purchased many of the notes himself. With that start, paper currency soon proved to be a convenient and efficient way of handling and exchanging money, and it has been with us ever since.

King William’s War continued for several more years, but it mostly consisted of New England towns defending themselves against forays by the French Canadians. The war ended inconclusively in 1697, but a few years later, the conflict was ignited once again oh, this time being dubbed Queen Anne’s War.

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