In 1690 the treasury of the colony was so nearly exhausted that the Great and General Court decided to issue promises to pay, the first paper money minted by any Colony. The values were ten shillings, one pound and five pounds. The occasion for this issue was primarily the expenses of Governor Phips's expedition against Quebec, which was thriftily expected to more than pay costs. The French and Indians, however, were too strong for Sir William, and the colonial treasury was faced with costs to the amount of £50,000, instead of the anticipated loot. These "Colony" or "Charter bills" obtained a wide circulation and were called in annually and redeemed and reissued as need arose, but after a few years, confidence in them decreased and before long they passed at a discount as great as 30 per cent.
In 1722, Massachusetts tried to relieve the scarcity of small change by issuing five hundred pounds worth of tokens of the value of one, two and three pence. They were printed on parchment to make them more durable but apparently were not a success as there were no more printed.
As the years went by, monetary conditions became more and more unstable, and in 1740 an attempt was made to establish a bank in the hope of placing the currency on a firmer basis. The fight lay between a silver bank with bullion behind its notes and a land bank issuing notes guaranteed by mortgages and manufactured articles. These notes were to come due in twenty years and at that time the holders instead of receiving coin might be forced to take their pay in cast iron, bayberry wax, leather, cordwood, or other articles of trade that might be difficult to dispose of. One of these notes preserved in the cabinets of the Massachusetts Historical Society has written on its back, in old-time handwriting, "A Land Bank bill reserved as a specimen of ye mad humour among many of ye people of ye Province, 1740."
Money matters now went from bad to worse. The value of silver was called tenor. In 1740 silver was worth six shillings, eight pence per ounce and in 1746 seven shillings, sixpence, and the buying value of bills varied from year to year.
"Imagine having to keep in mind the relative values of bills of old tenor, with silver at 6/8, or middle tenor; or new tenor firsts at 6/8, but passing current at 7/8; or new tenor seconds, all of which were laboring under fluctuating but constantly increasing rates of depreciation, while there were also to be remembered Connecticut bills of new tenor at 8/. and Rhode Island bills at 6/9 an ounce, and also £110,000 worth of private bills of the issue of 1733, which were worth a third more than the Colony bills, and also £120,000 in notes issued in 1740, "on a silver basis," to stifle the land bank and equivalent to cash, and in addition "public bills of the four promises at 29/. an ounce," whatever that means, and you will not wonder that there was confusion worse confounded."[66]