Two years before the Salem witch trails, the Puritan Massachusetts elite invented a new type of money, one that was based on its acceptance by the state as legal tender for taxes rather than its gold content or any type of gold backing.

Centuries later, this form of currency - based on trust in government - came to dominate the world.

Why did it happen in Massachusetts? The English empire suffocated the renegade colony with regulations on the polity, property and currency. So, as the commercial and intellectual hub of English America, the Puritan colony took it upon itself, and was well-suited, to evade these regulations. Its revolutionary currency of 1690 made this breakthrough into modern currency - probably the least appreciated contribution of colonial Massachusetts to world history.

“Fascinating!” was the primary comment of multiple members of the audience for this presentation. We hope you find it fascinating, too - we did.

Dror Goldberg is a senior faculty member in the Department of Management and Economics at the Open University of Israel. He holds a PhD in economics from the University of Rochester and a law degree from Tel Aviv University, and previously worked at Texas A&M University. Dror studies the theory, history and law of money, especially of legal tender currency. He is the author of Easy Money: American Puritans and the Invention of Modern Currency, published by the University of Chicago Press in 2023.

For more information, see https://www.drorgoldberg.com

Image: The only surviving specimen of the first issue of Massachusetts legal tender money. Unlike our own bills, this one was vertical. Credit: Peabody Essex Museum

The views expressed are those of the presenter and not necessarily those of the Partnership of Historic Bostons.