Cold Open

It’s the early hours of June 28th, 1689, in the colonial village of Dover, New Hampshire.

In a simple, one-room wood cabin, a woman of the indigenous Pennacook tribe creeps past the sleeping bodies of an English farmer and his wife. She stops briefly by their bed, checking to make sure they’re deeply asleep. Then she keeps moving, silently, toward the cabin’s locked door.

Yesterday evening, the Pennacook woman arrived in this English colony asking for shelter. The farmer and his wife were happy offer her a blanket by the fire for the night—but the Pennacook woman had no intention of sleeping. Thirteen years ago, English colonists captured 400 of the Pennacook and sold them into slavery. Many families were separated forever, and the Pennacook have never forgotten what the English did. So tonight, it’s time for revenge.

The Pennacook woman tiptoes through the darkness... but kicks over a pot that’s been left near the fire. The noise seems deafening in the quiet of the night and she freezes, desperately thinking of an excuse to explain why she’s up and creeping around the cabin in the dark.

But the Englishman and his wife don’t wake up. Instead, the farmer onlyl turns over and then resumes snoring. Hardly daring to breathe, the Pennacook woman hurries to the door.

Slowly, she slides the bolt back and eases the door open. Then she peers out. After a moment, she sees there’s movement in the darkness. Three Pennacook warriors emerge from the trees, their faces chalky in the moonlight, the metal of their sharpened knives glinting beside them. One pats the woman on her shoulder before slipping past her into the cabin. She waits and watches by the doorway.

From the other room, there is a thud, a gasp, and then the Englishman’s snoring stops.

By the end of this nighttime raid, 23 colonists in Dover are dead. The English are outraged by the attack, but soon conclude that another power must have persuaded the Pennacook to carry out the slaughter. England’s old enemy, the French, are blamed, and the fallout from this raid will result in war in North America. But this conflict will threaten to bring the local economy to its knees until the English colonists come up with a radical solution: the continent’s first paper currency, which was established on December 10th, 1690.

Introduction

From Noiser and Airship, I’m Lindsay Graham and this is History Daily.

History is made every day. On this podcast—every day—we tell the true stories of the people and events that shaped our world.

Today is December 10th, 1690: America’s First Paper Money.

Act One

It’s March 1690 in Boston, Massachusetts, nine months after the deadly Raid on Dover.

40-year-old Sir William Phips sits in his parlor as a dusty messenger breathlessly reports news from the north. As Provost Marshal General, Sir William is in charge of protecting Massachusetts Colony. But only a few minutes ago, this messenger arrived with disturbing intelligence: the town of Salmon Falls has been attacked, and dozens of colonists are thought to be dead.

For the past few decades, relations have been tense between the English and French colonies in North America. The English colony of Massachusetts borders the French colony of Acadia, and just like their countrymen in Europe, the English and French colonists are often at war with each other. But unlike in Europe, there’s a third power at play here. Native American tribes already live on the land that European settlers have claimed, and the French have encouraged their native allies to harass English settlements close to the border.

Over the past year, Native American forces have killed English colonists in a nighttime raid on Dover. They’ve destroyed an English fort at Pemaquid and now, they’ve attacked Salmon Falls. It means that the English have almost been completely thrown out of the northern part of Massachusetts Colony. And unless Sir William does something about it, he’s sure that the French will soon move in and seize the land that the English have lost.

When his messenger finishes the report, Sir William immediately heads toward the mansion occupied by Simon Bradstreet, the Governor of Massachusetts. There, Sir William offers to lead a military expedition to the north. Sir William knows that Governor Bradstreet has already planned an offensive against the Native Americans attacking the English in Massachusetts. But this latest setback has spurred Sir William to propose a second and more ambitious venture. He wants to attack the French colonists, the real power behind these deadly raids.

But there’s an obstacle to Sir William’s idea: the cost. Massachusetts can’t afford to put two separate armies in the field if they have to pay for both in advance. So, Sir William and Governor Bradstreet come up with a novel way around the colony’s lack of ready funds. The soldiers who join Sir William’s campaign against the French will not be paid with coin - instead, they’ll be paid with bits of paper. These “letters of credit” will be paid by the colonial government when the campaign is over. The hope is that the plunder captured from the French will more than cover the cost of these promised wages. And effectively, the plan will allow Massachusetts to put two armies in the field for the price of one.

A few weeks later, in late April 1690, Sir William sets sail from Boston with a fleet of five ships and more than 400 militiamen. After a two-week voyage, they moor outside Port Royal, the capital of France’s Acadia Colony. Sir William sends an emissary to demand the French surrender, and to his surprise, they immediately accept. He soon realizes why. As he rides into Port Royal at the head of his army, Sir William can see that the city’s defenses are crumbling. The palisade is in a state of disrepair. There are no cannon mounted on the walls. The French colonists clearly weren’t expecting a fight, and Sir William’s expedition has caught them by surprise.

Pleased that he’s taken the city without firing a shot, Sir William negotiates a settlement with the Governor of Acadia. The two men agree that the colonists will surrender all supplies belonging to the French crown. And in return, the English will leave the people of Port Royal unharmed, and their personal property left alone.

But as Sir William leaves Port Royal and returns to his ships, he spots French soldiers removing stores from the fort. He thinks they are trying to hide their supplies before the English can seize them. Furious that the French have immediately gone back on their word, Sir William announces that the deal is off. He tells his soldiers to enter Port Royal at once and take whatever they want, no matter who it belongs to. Over the next few hours, the English soldiers proceed to ransack the city. They steal private property. They burn crops and kill livestock. They even pillage the fort’s chapel, seizing its valuable chalices and decorations.

Then, after days of disorder, Sir William will set sail and return to Massachusetts. There, he’ll receive a hero’s welcome, and his success in the North and the praise of his fellow Englishmen will only embolden Sir William. Soon, he’ll try to replicate his successful raid on Port Royal with another attack on the French. But this time, the results will be very different.

Act Two

It’s October 16th, 1690, on the St. Lawrence River outside Quebec, five months after the sack of Port Royal.

On the deck of an English warship, 50-year-old Major Thomas Savage offers a salute to his commanding officer. Sir William Phips wishes him luck in return. Then, Major Savage carefully descends a rope ladder down the side of the ship and climbs into a small rowboat waiting at the bottom. Two sailors man the oars. And as soon as Major Savage is settled in his seat, they push away from the English flagship and are soon cutting across the water toward shore.

After capturing the French city of Port Royal without a fight, Sir William Phips returned to Massachusetts and immediately began preparing for a second expedition. Sir William hoped to deliver a knockout blow to the French in North America by targeting Quebec, one of the largest settlements on the continent and the capital of the French colony of Canada. He knew taking Quebec would be harder than conquering Port Royal, so Sir William assembled a far larger fleet this time. 32 ships and over 2000 militiamen joined the venture, which again was financed using paper letters of credit.

And only a few hours ago, this English fleet dropped anchor outside Quebec, and Sir William has now dispatched Major Savage to demand the French garrison’s surrender.

But unlike in Port Royal, the colonists in Quebec have had plenty of time to prepare for the attack. They’ve also heard all about how the English sacked Port Royal even after its governor surrendered, so they have no intention of giving up without a fight.

And as Major Savage reaches the outskirts of Quebec, he can see that new defenses have been built over the past few weeks. The wooden palisade has been strengthened, and metal cannon poke out menacingly from behind stone fortifications.

But before Major Savage can take in any more of the defenses, a party of French soldiers hustle out of a gate in the palisade and then seize him. They turn Savage around and blindfold him before marching him into the city. Major Savage knows that he’s been blindfolded to stop him gathering intelligence on Quebec’s manpower and defenses, but it’s still unsettling, and the French jeer and pelt him with rotten fruit as he’s guided through the streets.

Finally, his blindfold is ripped off and the sudden bright light makes him wince, but when his eyes adjust, Major Savage sees a smartly dressed French officer glaring. The man introduces himself as Louis de Buade de Frontenac, the Governor of Canada Colony. Gathering himself, Major Savage delivers his commander’s message - the French must surrender or face an immediate attack. Governor Frontenac snorts and says he has a message for the English - he’ll hang Major Savage from the palisade for everyone in the fleet to see. Major Savage’s stomach lurches and, for a few minutes, it looks like the Governor’s threat will be carried out. But then a clergyman pulls Frontenac aside. It’s the Bishop of Quebec, and he talks the angry Governor down. Major Savage is eventually freed and hurries back to the English fleet. Frontenac may have been convinced to spare Major Savage, but his message is still clear enough. The French will not surrender.

After Savage returns to the English flagship and reports on what happened, Sir William orders his soldiers to attack. But the English prove unable to secure a foothold on the banks of the St. Lawrence River. They’re harassed by French musket fire before they can even reach land, and soon the larger cannon let loose too, pounding the English fleet and forcing the ships to retreat.

Eventually, Sir William Phips must admit defeat. He has no chance of capturing Quebec. And after agreeing to a prisoner swap with Governor Frontenac, the humbled English force sails away.

As they head back to Boston, the mood among the English soldiers is bleak. But it’s not just their defeat on the battlefield that’s affecting morale. The men haven’t yet been paid. Instead, they only have letters of credit, and rumors soon spread through the fleet that the colony won’t now be able to honor its promises.

Sir William only prevents a rebellion by swearing that the soldiers will be paid as soon as they return to Boston. But that will only delay the problem. The colonial authorities will have to come up with a solution quickly. Otherwise, Sir William’s defeat won’t just result in embarrassment - it will result in mutiny.

Act Three

It’s December 10th, 1690, in Boston, Massachusetts, six weeks after an English fleet was defeated at the Battle of Quebec.

86-year-old Simon Bradstreet grunts in pain as he lowers his aching joints into his seat in Boston’s Town House. Although he’s one of the oldest men in Massachusetts, Simon is not enjoying a relaxed retirement. He’s the Governor, and he’s here today to preside over the colony’s General Court.

When Sir William Phips’s fleet returned to Boston, the militiamen on board were on the verge of mutiny because they had not been paid. And the failure to take Quebec means that Massachusetts doesn’t have enough cash to settle the soldiers’ letters of credit, so Governor Bradstreet has been forced to come up with a radical solution.

Calling the meeting to order, Governor Bradstreet asks the delegates to authorize the printing of £7000 in emergency paper currency to pay the soldiers. This is a controversial idea. Banknotes of a kind have been used in China since the 7th century, but more than a thousand years later, they are yet to catch on in the West. Coins have intrinsic worth thanks to the precious metals they’re made from, but a paper banknote has only symbolic value. It is effectively a promise to whoever possesses it that the banknote can be exchanged at some point in the future for real currency. But it only works as money if everyone in the community believes in this promise.

Governor Bradstreet can tell from the concerned expressions around him that the delegates are reluctant to agree. But he promises that the paper currency will be withdrawn as soon as possible but reiterates this is the only way to avoid mutiny. Then looking over the members of the court, he calls a vote. To his relief, they agree to print the paper money.

But despite Governor Bradstreet’s promise that it would only be an emergency measure, the people of the colony soon see the advantages of using paper money. Compared to coins, it's a far safer and a more convenient way of carrying cash, especially in large amounts. So, paper currency remains in circulation permanently.

Slowly, other countries and territories will follow Massachusetts’ example. In 1695, the Bank of England in London will introduce it's own banknotes. And in the 18th century, the War of Independence will spur the other American colonies to introduce a common paper currency of their own. Eventually, banknotes will become commonplace all around the world - an unremarkable part of everyday life far removed from the emergency measure they were intended to be, when they were introduced in Massachusetts on December 10th, 1690.

Outro

Next on History Daily. December 11th, 1978. A group of masked men rob a warehouse at JFK airport, making off with cash and jewelry worth millions.

From Noiser and Airship, this is History Daily, hosted, edited, and executive produced by me, Lindsay Graham.

Audio editing by Muhammad Shahzaib.

Sound design by Mollie Baack.

Music by Thrumm.

This episode is written and researched by Scott Reeves.

Edited by Dorian Merina.

Managing producer, Emily Burke.

Executive Producers are William Simpson for Airship, and Pascal Hughes for Noiser.