1264: America’s First Paper Money

Summary

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History Daily – Episode 1264: America’s First Paper Money

Date: December 10, 2025
Host: Lindsay Graham

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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.

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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.

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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]

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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 |

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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.

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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 |

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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.

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Transcript

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[Lindsey Graham - History Daily Host/Narrator]

It's the early hours of June 28, 1689, in the Colonial village of Dover, New Hampshire. In a simple one room wood cabin, a woman of the indigenous Penacook 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 Pennecook woman arrived in this English colony asking for shelter. The farmer and his wife were happy to offer her a blanket by the fire for the night, but the Pennecook woman had no intention of sleeping. Thirteen years ago, English colonists captured 400 of the Penacook and sold them into slavery. Many families were separated forever, and the Penicook have never forgotten what the English did. So tonight, it's time for revenge.

The Pennecook 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 only turns over and then resumes snoring, hardly daring to breathe. The Pennecook 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 Penacook 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, 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 Penicook 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 the continent's first paper currency, which was established on December 10, 1690.

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[Lindsey Graham - History Daily Host/Narrator]

From Noiser and Airship. I'm Lindsey 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.

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 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, the 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 that they're 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.

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It's October 16, 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 towards 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 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 blind hold 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 Bard de Frontenac, the governor of Canada colony. Gathering himself, Major Savage delivers his commander's the French must surrender or face an immediate attack. Governor Frontenac snorts and says he has a message for the 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. 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 Morrow. 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. 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.

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[Lindsey Graham - History Daily Host/Narrator]

It's December 10, 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 townhouse. 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 Phip'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 £7,000 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 an 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 a 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 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 its 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 first introduced in Massachusetts on December 10, 1690.

Next on History Daily, December 11, 1963 Three days after being kidnapped, 19 year old Frank Sinatra Jr. Is released by his captors.

From Noiser and Airship. This is History Daily Hosted, edited and executive produced by me, Lindsey Graham Audio editing by Mohammed Shahzid Sound design by Molly Bach Music by Thrum this episode is written and researched by Scott Reeves Edited by Dorian Marina Managing Producer Emily Burke Executive producers are William Simpson for Airship and Pascal Hughes for Noiser.

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