Currency Act

Definition

The Currency Act was a series of laws enacted by the British Parliament in the 1760s that restricted the American colonies' ability to print their own paper currency. This was done to address the growing national debt following the French and Indian War and to maintain control over the colonial economy.

5 Must Know Facts For Your Next Test

1. The Currency Act of 1764 prohibited the colonies from issuing their own paper money, forcing them to use only British-issued currency.
2. This act was part of a broader set of policies known as the 'Proclamation of 1763', which aimed to tighten British control over the colonies after the French and Indian War.
3. The Currency Act contributed to growing resentment among the colonists, who saw it as an attempt by the British to limit their economic autonomy.
4. The Currency Act was one of the key grievances listed in the Declaration of Independence, which accused the British of 'cutting off our Trade with all parts of the world'.
5. The restrictions on colonial currency were seen as a way for Britain to maintain its mercantilist policies and extract wealth from the colonies.

Review Questions

• Explain how the Currency Act was connected to the aftermath of the French and Indian War.
  • The Currency Act was enacted in the wake of the French and Indian War, which had resulted in a significant increase in the British national debt. The British government sought to address this debt by tightening control over the colonial economy, including by restricting the colonies' ability to print their own paper currency. This was part of a broader set of policies known as the 'Proclamation of 1763', which aimed to assert greater British control over the colonies and their economic activities.
• Describe how the Currency Act contributed to growing tensions between the colonies and the British government.
  • The Currency Act was seen by the colonists as an attempt by the British to limit their economic autonomy and extract wealth from the colonies. The restrictions on colonial currency were viewed as a form of taxation without representation, as the colonists had no say in the decision-making process. This contributed to growing resentment and a sense of grievance among the colonists, which was ultimately one of the key factors leading to the American Revolution.
• Analyze the role of mercantilism in the British government's decision to enact the Currency Act.
  • The Currency Act was closely tied to the British government's mercantilist economic policies, which sought to maintain tight control over the colonial economy and extract wealth from the colonies. By restricting the colonies' ability to print their own currency, the British government was able to ensure that the colonial economy remained dependent on British-issued currency and subject to British economic regulations. This was part of a broader effort to maintain the British Empire's economic dominance and prevent the colonies from developing their own autonomous economic systems.

Related terms

French and Indian War: A conflict between Great Britain and France for control of North America, which resulted in a significant increase in the British national debt.

Colonial Economy: The economic system and activities in the American colonies, which were largely controlled by the British government.

Mercantilism: An economic policy where a nation seeks to regulate the economy and trade in order to increase its own wealth and power.