When English colonists arrived in the New World, they brought their currency with them, the pound, shilling and pence. The original thirteen colonies commonly used British currency and Spanish dollars, but there were not enough coins in circulation to sustain the growing economy. To address this shortage as well as other issues, colonial governments issued their own paper money. In an attempt to manage various currencies, the British Parliament passed several Currency Acts that regulated colonial paper money. With exchange rates fluctuating, terms like “Lawful Money” (signified with the letters L.M.), “Proclamation Money” and “Current Money” were added to paper money, indicating that it conformed to legal statutes.
In 1788 the United State Constitution denied the right for individual states to coin and print money, and in 1792, the Coinage Act inaugurated the era of a national American currency.