British Parliament passed the Sugar Act on April 5, 1764. This was one of the first decisions that indicated the real intention of the British crown to control the colonist. To increase their control further on colonist economy British parliament passed Currency Act on September 1, 1764.
As per the Currency Act British government directly interfered in the paper money production of colonist. The British government also controlled various monetary policies of the colonists. The reason given by the British government was to stop British merchants working in America to get low value colonial currency from the colonists.
Background of the Currency Act
As per the Currency Act of 1751 the colonies were not stopped by the British government to produce their own currency. But till the 1760s many trade restrictions were imposed on the colonist. These restrictions were imposed as a result of the seven year long war and that that British government faces no problem in generating revenue from the colonists.
Flexibility in the Currency Act
Benjamin Franklin was colonial agent working in London. He insisted the British parliamentarians to make changes in the act. Many other colonial agents also wanted to repel the act.
Colonial governments also asked the British government to change the law. First colony to ask for change was New York. New York was having a huge public debt. New York was maintaining a huge army. British crown in 1770 granted the permission to New York to issue £120,000 in paper currency for public but not private debts.
Parliament also granted concessions to other colonies in 1773 and implemented Currency Act of 1764. The law permitted the colonies to issue paper currency as legal tender for public debts but not private debts.
Historical comments on the Currency Act
As per the Historian Jack Sosin “Americans acknowledged the authority of Parliament. And in the final analysis this was all the imperial government wanted.”