Fr. MD-44 $1 Note

The dollar's history begins with the Fr. MD-44 America’s first $1 Note.

Specifications

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Background
The U.S. dollar couldn’t be more in the news lately, what with brain trusts inside and outside of government recommending the U.S. abandon the paper dollar, like its neighbor Canada and several other countries already have done. It might be a good time to look back BEFORE this country had a dollar to its collective name, and how it came about that we have a dollar to kick around now.

Money was scarce when colonists assembled from various walks and climes on the shores of the new world. Some had fled persecution and the law with few possessions. Others flocked seeking good fortunes. While still others were forcibly dragged across the ocean in indentures or worse yet chains. What all shared principally was a lack of cash.

Barter was problematic. Exchanges required both parties wanting what the other offered. Thus mutually agreeable trade goods were necessary. In 1619 the Virginia legislature fixed a legal tender value for wampum, or beads made of shells. Massachusetts followed in 1637, defining the value of wampum at six to the penny. Produce and notes secured by tobacco were also used.

The few coins that trickled into the colonies were largely underweight, heavily circulated, clipped or even counterfeit: Dutch stuivers, Portuguese joes, English shillings, and Spanish reales. In 1642 the Massachusetts General Court established values for Spanish and Dutch coins. Lest anyone should plead poverty as a way to escape the tax man, Massachusetts also established standard prices for specific farm products for use as commodity money to pay assessed taxes.

History
Several colonies experimented with contract coinage, and after December 1690, when Massachusetts floated paper currency to pay for the costs of a military expedition, all the English colonies in what was to become these United States issued paper notes.

What all these notes had in common besides being speculatively fiat was that they were all denominated according to the English system of pounds-shillings-pence. The middle Atlantic colony of Maryland was no different from its brethren in many respects. However the colony founded by the Calvert family under a royal charter, Maryland -- named for the wife of King Charles I, the Queen Henrietta Maria -- was the first proprietary government in America.

Lord Baltimore was granted a virtual fiefdom, granted powers to coin money, establish courts, make war and peace. However, the charter also required laws be made by the proprietor and the freemen of the colony, so the root of democracy was planted. Religious toleration was practiced. Cecil Calvert, son of the original charter owner, proved an able and just governor. The colonial assembly flourished.

Maryland economy was tobacco based, and tobacco became the primary medium of exchange for settlement of debts including taxes. The colony’s first paper money issue was 90,000 pounds authorized by the Assembly in 1733 to create a Loan Office and put to the torch poor quality tobacco from coming to marketplace. Printing plates were engraved in England, and notes issued on fine laid paper with a MARYLAND watermark.

Other emissions followed in 1740, 1748, 1751, and 1756 as needs arose. One time it was a military expenditure, another time to replace old notes, and for other needs. All issues were denominated in shillings and pence. These issues were small, totalling only an additional 45,000 pounds. Notes were payable in bills of exchange in London at four shillings six pence sterling for one dollar. Issues were to be retired by tax collections.

At its Nov. 1, 1766, session the Maryland Assembly authorized an additional issue of paper money. This time more than 39,000 pounds of new money to the amount of $173,733 was to be issued in bills denominated as dollars and parts of dollars, Value was established at the aforementioned rate 4s. 6d. sterling to the dollar. Notes were dated Jan. 1, 1767, and issued in values of $1/9, $1/6, $2/9, $1/3, $1/2, $2/3, $1, $2, $4, $6 and $8.

“This issue constituted the earliest governmental use of the DOLLAR as an official unit of monetary value in the world,” according to paper money historian Eric P. Newman in his classic book “The Early Paper Money of America.”  And thus, the Maryland $1 bill of Jan. 1, 1767, like the one shown is the first American dollar and the great grand daddy of the George Washington Federal Reserve dollar that the change mongers want to stop printing in the name of efficiency and cost savings.

To facilitate the transition from pounds to dollars each of these dollar-denominated notes also had its equivalent value expressed in small characters on its back. For example, the dollar note shown says beneath the nature leaf printing (which was a counterfeit deterrent) “ONE DOLLAR. Equal to 4s. 6d. Sterling” The other values of this series similarly had their English equivalents expressed from 6d. to 36 shillings.

The “word dollar in 1767 was new only as an official monetary unit,” Newman notes. However, the term was well established as a derivative of the German word thaler, which represented a large silver coin dating from the 15th century. In the colonies the Spanish ocho reales was commonly labeled a “Spanish dollar” or a “Spanish milled dollar” when that technology was introduced into coinage. Furthermore, Dutch Lion dollars displaying a rampant feline became a trade coin familiar to the colonies through the establishment of the Dutch trading center at New Amsterdam (New Yorke). Sometimes these underweight dollars were called “dog dollars.”

Newman explains how the conversion from pounds to dollars came about. The “English words dollar, Spanish dollar and Spanish milled dollar were sometimes used as. . . accounting language in America, being a basis for bills of exchange calculations.” The act of the Maryland assembly had repudiated previous issues as of April 1, 1766, and furthermore did not extend legal tender status to these new dollar notes. Legal tender status would have been required if these notes had been denominated in pounds-shilling-pence.

Not being legal tender meant those offered the new dollar notes could reject them, but since the notes of the old issue which had been legal tender were now declared worthless, the new notes achieved circulation anyway.

To reinforce the value of the dollar notes, $1 and $2 bills featured illustrations of representative Spanish dollars as a design. This can be seen on the face of the $1 note shown, where conspicuously two hands point to a small cut of a Spanish dollar. This was also the first use of coin illustrations on paper money in America.

Maryland’s new notes were denominated in dollars, Newman explains, to divorce the new money from unfavorable exchange values of its earlier issues. The 1767 Maryland dollar notes proved a stable medium and a great success. Additional issues followed. With the Revolution, however, the bills of exchange in London which served as collateral for the paper money became unavailable, and ultimately the Maryland dollar notes became worthless.

But not before the message of issuing of dollar-denominated notes had spread. Maryland’s invention of dollar-denominated currency also proved presciently patriotic, when in the course of human events it became time for the colonies to sever their relationship with the Crown, and venture forth together.

When notes were authorized for the United Colonies by the Continental Congress May 10, 1775, these bills were in dollar values. Other legislatures followed this practice: New York (1775), North Carolina (1775), Georgia (1776), Rhode Island (1776), South Carolina (1776), Virginia (1776), Massachusetts (1780), New Hampshire (1780), New Jersey (1780), and Pennsylvania (1780). Today Maryland’s (and America’s first paper dollar) is an historical treasure at a couple hundred bucks.