History Daily – Episode 1264: America’s First Paper Money
Date: December 10, 2025
Host: Lindsay Graham
Overview
In this episode, Lindsay Graham takes listeners back to December 10, 1690, charting the dramatic events surrounding the introduction of America’s first paper money in colonial Massachusetts. Set against the backdrop of brutal colonial warfare between the English, French, and various Native American tribes, the episode explains the financial crisis that compelled Massachusetts to innovate with currency—a move that would have lasting global repercussions.
Key Discussion Points & Insights
1. Violent Prelude: The Dover Raid (June 1689)
- [01:10–03:01] A vivid account opens with a Penacook woman aiding a nighttime raid in Dover, New Hampshire, as an act of revenge for prior injustices against her people.
- 23 colonists are killed, and the English blame the French, setting the stage for worsening hostilities and eventual war in North America.
- Notable moment: The narration immerses the listener in the emotional weight of colonial violence and cycles of retribution.
2. Escalating Conflict: English–French Rivalry and Native Alliances
- [07:20–09:54] By early 1690, multiple bloody raids have left English colonists nearly expelled from northern Massachusetts. Both French and English powers leverage alliances with Native tribes, heightening regional instability.
- Sir William Phips, Provost Marshal General, proposes to expand military operations—not just against Native raiders, but directly at French Acadian settlements.
- Quote (Lindsay Graham, 09:12):
“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.”
3. The First Military Expedition and Its Aftermath
- [09:54–11:53] Phips’s fleet captures Port Royal from the French in Acadia with little resistance; soon after, the English renege on their terms and sack the city.
- This relative success goes to Phips’s head, prompting a much bolder plan: to attack Quebec.
4. Disaster at Quebec: Mutiny Looms
- [14:33–18:49] The 1690 expedition to Quebec is a debacle. The French, led by Governor Frontenac, are well-prepared. The English attack fails miserably; soldiers have only worthless letters of credit as pay, and morale collapses, with mutiny just barely avoided.
- Quote (Lindsay Graham, 17:53):
“The men haven't yet been paid. Instead, they have only letters of credit, and rumors soon spread through the fleet that the colony won't now be able to honor its promises...defeat won't just result in embarrassment, it will result in mutiny.”
5. The Radically New Solution: Paper Currency
- [21:58–24:38] In desperation, 86-year-old Governor Simon Bradstreet convenes the General Court. On December 10, 1690, Massachusetts votes to print £7,000 in emergency paper notes—the first government-backed paper currency issued in America.
- Prior to this, only coins—backed by the intrinsic value of precious metals—were accepted; paper currency depended entirely on trust in the issuing authority.
- Initially intended as a temporary fix, paper money’s practicality quickly becomes evident, leading to permanent adoption and eventual expansion across the Atlantic and the world.
- Quote (Lindsay Graham, 23:25):
“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.”
6. Legacy of Paper Money
- Other regions soon follow Massachusetts’s example, including the Bank of England (1695) and, later, widespread adoption through the American colonies and global financial systems.
Notable Quotes / Memorable Moments
-
The gamble of trust:
“Compared to coins, it’s far safer and a more convenient way of carrying cash, especially in large amounts, so paper currency remains in circulation permanently.”
— Lindsay Graham, [23:53] -
On the initial audacity:
“This is a controversial idea…coins have an intrinsic worth…but a paper banknote has only symbolic value.”
— Lindsay Graham, [22:20] -
The desperate urgency:
“He promises that the paper currency will be withdrawn as soon as possible…but reiterates this is the only way to avoid a mutiny.”
— Lindsay Graham, [23:01]
Important Segment Timestamps
| Timestamp | Topic/Speaker | |-----------|-----------------------------------------------------------| | 01:10 | Start of story—Pennecook raid on Dover | | 03:01 | English blame French, leading toward war | | 07:20 | Sir William Phips receives news of further attacks | | 09:12 | Birth of the ‘letters of credit’ solution | | 09:54 | Capture and sacking of Port Royal | | 14:33 | Failed attack on Quebec, mutiny threat | | 21:58 | Massachusetts prints America's first paper currency | | 23:53 | Rapid acceptance and enduring legacy of paper money |
Tone and Style
Lindsay Graham’s narration is vivid, dramatic, and immersive, skillfully blending urgency, skepticism, and reflection. The pacing builds tension as colonial authorities face crisis, highlighting the daring nature of their financial innovation without ignoring its uncertainty or risks.
Summary Table: Key Events
| Date | Event | |------------------|-------------------------------------------------------------------| | June 1689 | Penacook/Narragansett raid on Dover, NH | | March 1690 | Salmon Falls attack, English nearly losing northern Massachusetts | | Late April 1690 | Sir William Phips sacks Port Royal, Acadia | | October 1690 | Catastrophic English defeat at Quebec | | December 10, 1690| First paper money printed in Massachusetts |
Conclusion
This episode compellingly details how desperate colonial warfare and economic crisis forced Massachusetts to invent a radical solution—paper money—that would reverberate worldwide. By combining historical drama with clear explanation of financial innovation, Graham illuminates how trust became the bedrock of the modern economy, all sparked by paper promises issued 335 years ago.