what was the purpose of the currency act

Purpose of the Currency Act The Purpose of the Currency Act of 1764 was to:

• Extend the provisions of the Currency Act of 1751 (New England Currency Act)
• Control the printing and use of colonial paper money (Bills of Credit)
• Appease British merchants who did not trust colonial paper money due to its depreciation in value. ...
• Reduce the national debt

Full Answer

What is the cause and effect of Currency Act?

There was no standard value of currency in the British colonies at the time, and the frequent fluctuations in the economy of Britain due to the wars weren’t helping traders and merchants in the colonies. So on the 1st of September 1764, the Parliament passed the Currency Act. All currencies of all the colonies would now be regulated by the crown.

What is the reason for the Currency Act?

The Currency Act was passed in an effort to control the colonies' printing and usage of paper money, which was causing trouble due to inflation and a confusing system of various valuations and issues from differing colonies.

How did the colonists feel about the Currency Act?

They protested, saying that these taxes violated their rights as British citizens. The colonists started to resist by boycotting, or not buying, British goods. Then, How did the colonists respond to the Sugar Act? American colonists responded to the Sugar Act and the Currency Act with protest. In Massachusetts, participants in a town meeting cried out against taxation without proper representation in Parliament, and suggested some form of united protest throughout the colonies.

What was the effect of the Currency Act of 1764?

• Money in the form of locally-produced commodities, like tobacco, used as a means of exchange.
• Paper money in the form of a bill of exchange or a banknote backed by the value of land owned by an individual.
• “ Specie ” or gold or silver money.

What was the purpose of the Currency Act of 1764 quizlet?

The Currency Act of 1764 was the British ban on printing colonial money in order to alleviate British creditors' fears of being payed in the depreciated currency of the colonists. This act applied to all of the colonies.

What was the purpose of the Currency Act of 1763?

The act prohibited the issue of any new bills and the reissue of existing currency. Parliament favored a "hard currency" system based on the pound sterling, but was not inclined to regulate the colonial bills. Rather, they simply abolished them. The colonies protested vehemently against this.

Why is the Currency Act of 1764 significant?

The Currency Act of 1764 extended the restrictions of the Currency Act of 1751 to all 13 of the American British colonies. While it eased the earlier Act's prohibition against of the printing of new paper bills, it did forbid the colonies from using any future bills for payment of all public and private debts.

What was the Currency Act and how did it affect the colonists?

The act increased duties on non-British goods shipped to the colonies. Currency Act. This act prohibited American colonies from issuing their own currency, angering many American colonists.

What was the effect of the Currency Act?

The Currency Act, passed in 1764 along with the Sugar Act, prohibited the printing and issuance of paper money by Colonial legislatures. It also set up fines and penalties for members of Colonial government who disobeyed, despite the long-standing currency shortage.

Why did the Currency Act make colonists mad?

The Currency Act banned the colonies' printing their own paper money. English merchants had insisted for years that payment in colonial currency left them underpaid for their goods. But colonists insisted that without their own paper money they could not maintain vigorous economic activity.

How did the Currency Act lead to the American Revolution?

The Currency Acts of 1751 and 1764 were one of the causes of the Revolutionary War. The Acts were an attempt by Parliament to limit the colonies' ability to create their own currency. It was both an attempt to solve possible inflation and control the colonies.

What was the Currency Act of 1764 for kids?

At the urging of those merchants, on April 19, 1764, the British Parliament passed the Currency Act. That act prohibited the colonies from printing any new paper money and stated that the paper money already in circulation was to be retired according to a prescribed timetable.

What was the Currency Act of 1764 meant to accomplish Sophia?

What was the Sugar Act of 1764 meant to accomplish? To stabilize customs enforcement by lowering taxes on molasses by half. After the French and Indian War, the British enacted a series of measures that affected the colonies.

What was the purpose of the sugar and currency Acts of 1764?

Enacted on April 5, 1764, to take effect on September 29, the new Sugar Act cut the duty on foreign molasses from 6 to 3 pence per gallon, retained a high duty on foreign refined sugar, and prohibited the importation of all foreign rum.

What was the currency act of 1764?

The Currency Act of 1764 was the second and most impactful of two laws passed by the British government during the reign of King George III that attempted to take total control of the monetary systems of all 13 colonies of British America. Passed by Parliament on September 1, 1764, the act extended the restrictions of the Currency Act ...

What did the Currency Act of 1751 allow the New England colonies to do?

While the Currency Act of 1751 allowed the New England colonies to continue using their existing bills to be used to pay public debts, like British taxes, it prohibited them from using the bills to pay private debts , such as those to merchants.

Why did the New England colonies stop printing money?

The first Currency Act banned only the New England colonies from printing paper money and from opening new public banks. These colonies had issued paper money mainly to repay their debts to for British and French military protection during the French and Indian Wars. However, years of depreciation had caused the New England colonies’ “bills of credit” to be worth far less than the silver-backed British pound. Being forced to accept the heavily depreciated New England bills of credit as payment of colonial debts was particularly harmful to British merchants.

What was the only way the colonies could repay their debts to Britain?

As a result, the only way the colonies could repay their debts to Britain was with gold or silver. As their supplies of gold and silver rapidly dwindled, this policy created severe financial hardships for the colonies.

What was the Quartering Act?

One of the so-called “ Intolerable Acts ,” the Quartering Act forced the colonies to house British soldiers in barracks provided by the colonies. Faced with that expensive possibility, Parliament authorized the New York colony to issues £120,000 in paper bills for the payment of public, but not private debts.

What was the effect of hyperinflation on the colonial currency?

With the amount of printed money growing faster than the overall economy, hyperinflation quickly reduced the buying power of the colonial currency. Forced to accept the depreciated colonial currency as a repayment of debts, British merchants lobbied Parliament to enact the Currency Acts of 1751 and 1764.

What were the three forms of currency used by the colonists?

Lacking a form of exchange that did not suffer from depreciation, the colonists depended largely on three forms of currency: Money in the form of locally-produced commodities, like tobacco, used as a means of exchange.

What was the currency act of 1764?

On September 1, 1764, Parliament passed the Currency Act, effectively assuming control of the colonial currency system. The act prohibited the issue of any new bills and the reissue of existing currency. Parliament favored a "hard currency" system based on the pound sterling, but was not inclined to regulate the colonial bills.

What was the purpose of the notes issued by the colonies?

Some notes paid interest, others did not, some could be used only for purchase and not to repay debt . Some were issued only for public debts and could not be used in private transactions. There was no standard value common to all of the colonies.

Why were merchants uncomfortable with the colonial currency system?

British merchant-creditors were very uncomfortable with this system, not only because of the obvious complexity, but because of the rapid depreciation of the notes due to regular fluctuations in the colonial economy. On September 1, 1764, Parliament passed the Currency Act, effectively assuming control of the colonial currency system.

Why did the colonies not print bills of credit?

Many of the colonies felt no alternative to printing their own paper money in the form of Bills of Credit. But because there were no common regulations and in fact no standard value on which to base the notes, confusion ensued.

What happened to the colonies in 1764?

1764. The colonies suffered a constant shortage of currency with which to conduct trade. There were no gold or silver mines and currency could only be obtained through trade as regulated by Great Britain. Many of the colonies felt no alternative to printing their own paper money in the form of Bills of Credit.

What was the purpose of the Currency Act?

The Currency Act was passed by the British Parliament on September 1, 1764 as part of Prime Minister George Grenville's plan, along with the Sugar Act and the Stamp Act , to reduce the British national debt, pay the costs of having 10,000 troops stationed in the American colonies and rev up the British economy.

How did the Currency Act affect the colonial economy?

The Currency Act created even more trouble for the colonial economy by reducing the average person's ability to perform quick and easy trading of goods and services. Even though the various currencies issued by various colonies had different and unpredictable worths depending on location, the colonists were used to using them as an efficient means of trade.

What did the colonists view the Currency Act of 1764 as?

The colonists viewed this as an unconstitutional usurpation of their natural right to govern themselves instigating, anger toward Parliament that resulted in the American Revolution. You can read the entire Currency Act of 1764 text here.

What was the currency act of 1764?

In 1764, Parliament passed a new version of the Currency Act, which contained two basic provisions. It prohibited all the colonies from issuing any new bills and making them legal tender for the paying of any debts whatsoever. Secondly, it forbade the use of any already issued bills beyond their original expiration date .

Why did the Bankers and their Allies pass the Currency Act of 1764?

The bankers and their allies in Parliament successfully passed the Currency Act of 1764 to remedy the problem. This was done shortly after Franklin's explanation of colonial currency to the Board of Trade and some blame the passage of the Currency Act on his speech to them.

Why did the New England colonies stop printing paper money?

This Act forbade the New England colonies from issuing paper money, in an effort to reduce the inflation caused by the devaluation of these currencies. The Act allowed the printing of paper currency only in certain circumstances. It allowed any paper money already issued to be used for the paying of public debts, such as taxes, only and not for private debts, such as to merchants.

Why did the colonies have a lack of hard currency?

In addition to this, the colonies suffered from a lack of hard currency, meaning physical gold and silver coins, because of the huge trade deficit existing between them and Great Britain.

What is the purpose of the Bank Secrecy Act?

Bank Secrecy Act (BSA) The OCC prescribes regulations, conducts supervisory activities and, when necessary, takes enforcement actions to ensure that national banks have the necessary controls in place and provide the requisite notices to law enforcement to deter and detect money laundering, terrorist financing and other criminal acts and ...

Why is money laundering used?

Criminals have long used money-laundering schemes to conceal or "clean" the source of fraudulently obtained or stolen funds. Money laundering poses significant risks to the safety and soundness of the U.S. financial industry.

What is the BSA amendment?

An amendment to the BSA incorporates provisions of the USA Patriot Act, which requires every bank to adopt a customer identification program as part of its BSA compliance program.

Overview

The Currency Act or Paper Bills of Credit Act is one of several Acts of the Parliament of Great Britain that regulated paper money issued by the colonies of British America. The Acts sought to protect British merchants and creditors from being paid in depreciated colonial currency. The policy created tension between the colonies and Great Britain and was cited as a grievance by colonists early in the American Revolution. However, the consensus view among modern econo…

Economic climate of the colonies

Act of 1751

Act of 1764

Legacy

See also

External links