$20 Colonial Currency - FR RI-289 - July 2, 1780 dated Paper Money

FR RI-289. 20 Dollars. Front and back shown. In the Colonies of British America, there existed three primary forms of currency: specie (coins), printed paper money, and trade-based commodity money. Commodity money was utilized in instances where cash (coins and paper money) was limited. Various commodities, including tobacco, beaver skins, and wampum, functioned as money at different times across numerous locations.

In the Colonies, cash was denominated in pounds, shillings, and pence. The value of each denomination differed from one Colony to another; for instance, a Massachusetts pound was not equivalent to a Pennsylvania pound. All colonial pounds held less value than the British pound sterling. The coins that circulated during the Colonial Era were predominantly of Spanish and Portuguese origin. The widespread use of the Spanish dollar throughout the Colonies resulted in the United States adopting the dollar as its monetary unit, rather than the pound.

Gradually, colonies began to produce their own paper money to act as a practical medium of exchange. In 1690, the Province of Massachusetts Bay introduced "the first authorized paper money issued by any government in the Western World." This paper currency was created to finance a military expedition during King William's War. Following Massachusetts Bay's lead, other colonies issued their own paper currency during subsequent military conflicts.