During the early days of colonial Maryland, getting your hands on coined or printed money was quite a challenge. This scarcity meant that many transactions were recorded using pounds of tobacco as a form of payment. However, when it came to formal monetary systems, Maryland, like other colonies, adopted the British system. This system revolved around sterling and current money, with its intricate divisions of pounds, shillings, and Pence Money.
The English monetary system was structured as follows:
- One pound (£) equaled 20 shillings (s).
- One shilling (s) was made up of 12 pence (d).
- And each penny (d) could be further divided into 4 farthings.
Farthings, being such small denominations, were often represented as fractions of a penny, for example, 5 ½ pence instead of 5 pence and 2 farthings. When people wrote down sums of money, especially in inventories, they used periods to separate pounds, shillings, and pence. So, if you saw ‘143.l8.10’, it meant 143 pounds, 18 shillings, and 10 pence.
Let’s look at a simple example of how they added these amounts. Imagine adding 143 pounds, 18 shillings, 10 pence to 10 pounds, 9 shillings, 9 pence:
143. 18. 10
+ 10. 9. 9
-----------
153. 27. 19Initially, you get 153 pounds, 27 shillings, and 19 pence. But, because there are only 12 pence in a shilling, you need to adjust. Subtract 12 pence from 19, leaving 7 pence, and carry over 1 shilling to the shillings column. Now you have 28 shillings. Since there are 20 shillings in a pound, subtract 20 shillings from 28, leaving 8 shillings, and carry 1 pound to the pounds column. This gives you a final total of 154 pounds, 8 shillings, and 7 pence (154.8.7).
Besides tobacco and sterling, various forms of money circulated in Maryland. Foreign coins, particularly the Spanish dollar, were common. Due to the shortage of smaller coins, the Spanish dollar was often physically cut into eight pieces to create change. By 1732, Lord Baltimore finally agreed to issue paper currency, which was backed by Maryland’s tobacco export revenues invested in the Bank of England. The widespread use of the Spanish dollar even influenced Maryland currency, with some notes in 1770, like the two-dollar note, featuring images of two Spanish milled dollars. A merchant’s estate inventory from 1751 illustrates this monetary diversity, listing Spanish currency as “gold currency” and detailing debts in tobacco, sterling, Maryland currency, and Virginia currency. The value of Maryland currency compared to sterling fluctuated, but as merchants had to pay for British imports in sterling, store goods were inventoried in sterling, with an added 75% to reflect their value in current money.
Then came Continental money, paper currency from the Second Continental Congress starting in 1775. Though initially meant to be redeemable for gold or silver, it rapidly lost value after the Revolution due to excessive printing without sufficient reserves.
In 1784, Thomas Jefferson, then in the House of Representatives, championed a simpler dollar-based monetary system for the United States using decimals for easier calculations. The Coinage Act of 1792 established the dollar as the unit of US money, with dimes as tenths and cents as hundredths. Half-dimes appeared in 1792, followed by copper cents and half cents in 1793, and gold and silver dollars in 1794. However, silver and gold dollars didn’t remain in circulation for long because their bullion value soon exceeded their face value due to international market price changes. The Bank of Maryland, chartered in 1790, and other banks issued paper money redeemable for coins. Until the 1830s, the money supply mainly consisted of banknotes, foreign gold and silver coins, and smaller domestic silver and copper coins. The U.S. government didn’t issue its own paper currency until 1861.
Maryland’s records reflect a gradual and uneven transition from “pounds” to “dollars.” Tax assessments in Montgomery County were in pounds in 1793, 1798, and 1804, but switched to dollars by 1813. Land records also show this shift, with a deed in 1801 using dollars, while another as late as 1816 still listed prices in pounds. This historical overview highlights the journey from the complexities of pence money and the sterling system to the more straightforward dollar system we use today.
