An Enquiry into the State of the Bills of Credit (1743)
This pamphlet, written by Governor Shirley or one of his supporters, reviews the history of Massachusetts' bills of credit up to 1743. The narrative is useful and largely accurate, although the praise of Shirley's accomplishments in office is a bit fulsome, as is the disapproval heaped on Belcher, Shirley's rival and predecessor as Governor.
The pamphlet has been reprinted by Andrew McFarland Davis in Colonial Currency Reprints, 1682-1751, Boston: The Prince Society, 1911, volume IV, pp. 149-209.
Into the State of the
Bills of Credit
Of the Province of the
LETTER from a Gentleman in Boston
Merchant in London.
BOSTON, FEB. 7. 1743
A CCORDING to my Promise I now send you my Thoughts upon the State of the Paper Currency in New-England, which for several Years past has been the only general Medium of it's Trade; and for your better Information I have endeavour’d to trace the Account of it from it's first Emission in the Province of the Massachusetts-Bay, where it took it's Rise, to it's present State there, and thereby to discover to you the real Causes of those Mischiefs, it has of late Years produc’d, and the several Expedients try’d by the Massachusetts Government for remedying of them, with the Success which has attended those Measures; And if in doing this, and communicating my own Observations thereupon I shall strike out any Light for redressing the Evils of this Currency, and promoting the united Interests of this Province and her Mother Country in this Particular, which I look upon to be inseparably blended together, I shall obtain the End, I propose in troubling you with this Letter, and hope that will be a sufficient Apology to you for the Length of it.
The first Emission of Bills of public Credit in New-England was of £40,000 made by the Massachusetts Government in the Years 1690 and 1691, and projected upon an extraordinary Emergency to discharge some Government Debts (due upon Debentures) which had been contracted by the old Colony upon the first Expedition against the French at Canada: These Bills were emitted upon Funds of Taxes, (as they are call’d in Contradistinction to the Bills since emitted upon Loans) that is, to be drawn back into the Treasury by Payment of the Duties of Excise, and Impost, and of Taxes upon Polls and Estates real and personal; and were issu’d out in Parcels: The first emitted Parcel, which amounted to £7,000 being a new Thing in the Country, and ill received by the People, were soon brought into Discredit, and suffer’d a Discount from 10 to 20 per Cent; but the next Parcel, which was emitted in the Spring following with the Advantage of being receiv’d at the Treasury at 5 per Cent Advance, soon obtain’d a Currency at Par with Silver: Of these Bills £10,000 was cancell’d and burnt in October 1691, and no Emissions of new Bills were made in the Province 'till 1702 ; But in the intervening Years there were some Re-emissions of the Remainder of the old Bills for defraying the necessary Charges of the Government, to be drawn back into the Treasury by publick Duties and Rates: The last Re-emission was of £9,000 of them in 1701, being the only Bills then extant in New-England, and which were drawn in and burnt the same and next succeeding Year: All these Bills were emitted and re-emitted by Votes or Orders of the General Court, and not by solemn, formal Acts of the Legislature, and were commonly call’d the old Charter Bills, on Account, I suppose, of their having been at first emitted before the granting of the new Charter by King WILLIAM and Queen MARY for incorporating the Inhabitants of the late Colony into the present Province, tho’ not during the Continuance of the old Charter, which was in Reality vacated in 1684 by a Judgment obtain’d in the Court of Chancery upon a Writ of Scire Facias then prosecuted against the Governour and Company of the late Colony.
This Space of Time may, not improperly be distinguish’d as the first Period of the Paper Currency in New-England, both on Account of the small Sum in Bills of Credit, which were then suffer’d by the Massachusetts Government to be current at one and the same Time, and of the Shortness of the Periods limited for drawing the Bills back into the Treasury, which were confined to the Year next succeeding their respective Emissions at farthest.
During this Period I find that all the Bills, except the first emitted Parcel, were receiv’d at the Treasury at 5 per Cent Advance, and passed Current at Par with Silver; and that an Act of the General Court was pass’d in 1699, for compelling the Constables and other Collectors to gather & pay into the Treasury the several Rates committed to their Charge at the Time limited in the Treasurer’s Warrants, by enabling the Treasurer to issue out Executions against the Estates and Bodies of the deficient Constables and Collectors.
In 1702 begun a Series of new Emissions of Bills of Credit in the Province, which were annually repeated, and in such large Sums toward the End of it, that the Bills made and emitted between the Years 1701 and 1713, amounted to 227629£. 16s. 6d. which Space of Time I shall call the second Period of the Paper Currency, and observe upon it,
First, That the Emissions in 1702 and 1703 were of only £10,000 each, and made by formal Acts of the General Court; the Preambles of which declare, That the Government was under a Necessity of emitting those Bills for the present Supply of the Treasury to pay the Soldiers and Seamen employed in His Majesty's Service, and to carry on the War, and defray the other Expences of the Government; and that the Periods for drawing those Bills back into the Treasury were confined to the Years next succeeding those of their respective Emissions; but that the Emissions of the subsequent Years grew by Degrees immoderate, particularly two of 'em made within the Year 1711, one of them of £40,000, and the other of 48623£. 16 s. 8 d. both amounting to the Value of about £63,000 Sterling; that all these Bills were emitted and re-emitted upon bare Votes or Orders of the Court with less and less Ceremony, and were to be drawn in by two, three, and sometimes four Parcels; and that the Periods for drawing them in were gradually protracted from the first to the sixth Year after their respective Emissions.
Secondly, That all the Bills of this Period were emitted upon Funds of Taxes for defraying the necessary Charges of the Government, except the Sum of 48,623£. 16 s. 8 d. in 1711, which was emitted upon Loan to particular Merchants to enable them to furnish her late Majesty’s Land and Sea Forces then rendezvous’d at Boston, in order to proceed upon the Canada Expedition, with Provisions and other Necessaries for that Purpose, which they had undertaken to do upon the Credit of Bills drawn by the Officers on the Government of Great Britain; so that in Effect this Emission of Province-Bills was lent to her Majesty’s Government at Home for the Service of that Expedition.
Thirdly, That during this Period the Bills of Credit continued to be receiv’d at the Treasury at 5 per Cent. Advance, and maintain’d their Value at Par with Silver.
Fourthly, That in the Year 1712, to support the Value of the Province Bills, which appeared to be in some Danger of depreciating by the growing Scarcity of the Silver Currency, which was now reckon’d to be reduc’d to the Proportion of little more than a Third of what the Paper Currency amounted to, a Law was pass’d that no Debtor, who should tender Payment of any Debt contracted since October 1705, or to be contracted before the last Day of October 1715, (except in the Case of Specialties and Contracts in Writing) in Province-Bills, should be liable to have an Execution levy’d or serv’d upon his Estate or Person; which Tender of Bills, tho’ it would not discharge the Debt, yet it did what was tantamount, by taking away the Remedy which the Creditor had before for the Recovery of Silver Money, and so compell’d him to accept the Bills.
The Author of the Discourse concerning the Currencies of the British Plantations in America, to whom this Province in particular is oblig’d for his accurate and very judicious Enquiry into the Effects of Paper Money, and the proper Regulation of it, dates the first depreciating of the Bills of Credit in New-England in the Year 1714; some others I find place it in 1711; To avoid the Extreme of both Accounts I shall date it in 1713. in which Year the Price of Silver in Bills of Credit rose from eight Shillings to eight Shillings and four Pence per Ounce, and Exchange between London and New-England from 40 to 50 per Cent. Advance in Favour of the former: From this Year the Bills continu’d to depreciate gradually in the Manner exhibited in the following Table.
Within this Period, which I shall distinguish by the Name of the third Period of the Bills £458,000 was emitted upon Funds of Taxes, for defraying the necessary Charges of the Government, and £260,000 upon four Loans made chiefly for increasing the Paper Medium; the first of these Emissions upon Loan was of £50,000 in 1714, to be let out by a Committee nam’d in the Act to the Inhabitants of the Province in certain Proportions according to their Discretion, upon real Security at 5 per Cent. the Principal to be repaid by equal Proportions within five Years to the Commissioners, who were to be accountable to the General Court for both Principal & Interest, which last was by the Act appropriated to the Support of the Government; the second Emission upon Loan was in 1716, of £100,000, with the same Appropriation of the Profits, and under the like Regulation, except that it was to be distributed among the several Towns in Proportions limited by the Emission-Act for each Town, and let out to the Inhabitants of the respective Towns by different Committees nam’d for each County in the Act; the Principal to be repaid in ten Years after the Date of the Mortgages, upon which it was to be lent; the third Emission upon Loan was of £50,000 in 1720, to be distributed among the several Towns, in Proportions limited in the Emission-Act, by Committees to be chosen by the Inhabitants of the respective Towns; the Improvements and Profits to be wholly for the Benefit of the several Towns, and the Principal to be drawn in by five Taxes of £10,000 each upon Polls and Estates in 1726, and the four succeeding Years; and in the Year 1727, there was a Re-emission of £60,000 upon Loan, under the like Regulations with the last Loan as to the Distribution of it, and drawing the Bills back into the Treasury in 1734, and the four next succeeding Years; and the Towns were oblig'd to pay 4 per Cent. per Annum for their respective Dividends of the £60,000 into the Treasury, which was appropriated to the Support of the Government; and two per Cent. more was to be paid by the Borrowers for the Benefit of the Towns.
All the Bills of the £48,000 Loan in 1711 were drawn in and burnt long since; but there is still outstanding of the £50,000 emitted in 1714 about £2000, with the like Arrear due for Interest; of the £100,000 Loan in 1716, about £7000, of the £50,000 Loan in 1720, £16, and of that of £60,000 in 1727, about £500; All which Sums are well secur’d, and may be expected to be drawn in within five or six Months.
I shall further observe upon these several Loans, That the first of ’em in 1711 was at least excusable, if not a laudable Instance o£ the Province’s Zeal for his Majesty's Service; but that the four subsequent Loans, which had not the same Reason for their Emission, very much contributed by the largeness of their Sums and long Periods to depreciate the Bills of Credit in general, and in Conjunction with the Rhode-Island Loans, whose Bills begun now to obtain a general Currency in this Province, even to lessen the real Quantity of that Medium of Trade, which they were design’d to increase; And that the Massachusetts Government has long been so sensible of the Country's Error in making these Loans, that they would not, I am persuaded, be in Danger of relapsing into it, Tho’ they should be under no Restraint from His Majesty’s Instruction to his Governour.
In this Period also these further Particulars are observable,
First, That the Bills continu’d to be taken at the Treasury at 5 per Cent Advance ’till 1718, ever since which Year that Allowance upon the Payment of the Bills has been taken off by the General Court under a Notion that it did not contribute towards supporting the Value of the Bills.
Secondly, That the Silver and Gold Currency now decreas’d more and more every Year, and about the Year 1726 quite vanish'd, and coin'd Silver and Gold became from that Time mere Merchandize.
Thirdly, That the Periods for drawing back the Bills emitted upon Funds of Taxes into the Treasury were more and more protracted, ’till by the Year 1721 they were lengthen’d out to the Distance of thirteen Years from their respective Emissions.
Fourthly, That the Instances of the Assembly's postponing the Apportionment of the Taxes for drawing in the Bills according to their limited Periods were very rare, and the Bills were generally actually drawn into the Treasury till 1721, since which Year large Sums of the Bills emitted upon Funds of Taxes were suffer’d by the Government to be outstanding beyond their stated Periods for want of Executions being issued out against the deficient Collectors of the Taxes according to the Province Law beforemention'd, so that by the End of the Year 1730 £164,755 5s. 5d. was outstanding by that Means.
Lastly, That the before-mention’d Province Law for making Bills of Credit a Tender proved in its Operation, during this whole Period, extremely injurious to such Creditors, as had not ascertain’d the Value of their outstanding Debts either in Sterling or Proclamation Money by special Contracts: For by Force of it all other Creditors were oblig’d to accept of Province Bills according to their nominal Value, Penny for Penny, in Satisfaction of their Debts, tho’ the Bills were greatly depreciated between the Time of the Debts being contracted and the Payment of them, so that great Losses ensued continually to the British Merchants trading to New-England, by suffering large Discounts upon their Debts, and to Widows and Orphans within the Province in particular: It also proved mischievous in this Respect, that as the Debtor was by Means of the Act a Gainer by the depreciating of the Bills, and the longer his Debt was outstanding the more the Value of it was diminished, he was tempted to use every Artifice to keep his Creditor out of his just Due, to which he was also encouraged by the Fees of the Court of Judicature's being so lessen’d through the depreciating of the Bills in which they were payable, and the Law’s being grown so cheap that the People were habituated to suffer themselves to be sued for indisputable Debts, and an Insensibility of the Discredit of it so much prevail’d, that it was not uncommon even for Persons of some Circumstances and Character to suffer judgments to be given against ’em by Default to the Superiour Court of Judicature merely for Delay, whereby Law-Suits were scandalously multiply’d, and a litigious Spirit promoted among the lower Sort of People.
This Law first expir’d in 1715, was afterwards reenacted in 1716, expir’d again in 1722, and was then reviv’d and continu’d to October 1730, and upon every Trial of it produc’d the same Mischiefs, so that its pernicious Effects could not be in the least doubted.
Hitherto His Majesty’s Governours were under no Restraint from his Royal Instructions as to the Bills of Credit current in the Province, except that they were enjoin'd the Observation of the Act of the sixth of Queen ANNE for ascertaining the Value of foreign Coins, and so were more excusably betray'd into suffering Emissions upon Loans, and immoderate Sums to be outstanding beyond their stated Periods: But in December 1730 I find that Governour BELCHER communicated to the Council and House of Representatives his Majesty's 16th and 18th Instructions to him, by the former of which he was forbid to pass any Act for issuing out Bills of Credit without a suspending Clause, except only for the annual Support and Service of his Majesty's Government; and was ordered to take especial Care that no more than £30,000 of such Bills should be ever current at one and the same Time; and by the latter of ’em he was especially directed to take Care that the Bills of Credit issued should be call'd in and sunk according to the Periods and Provisions of the respective Acts, by which they were issued; and his Excellency then complain’d in his Speech to the Assembly that the Bills of Credit, according to the then Course and Manner of ’em, were a common Delusion to Mankind, and wish’d some better Way might be seasonably thought of either by the Legislature or the People in Trade, whereby they might be supply'd with a better Medium than what then pass’d; and when an engross’d Bill for reviving the Act to prevent the Oppression of Debtors and make the Bills of Credit a Tender, then lately expir’d, was laid before him for his Consent, two or three Days after he rejected it with this Message to the House of Representatives, that he had not sign’d the Bill, inasmuch as he did not think it for his Majesty's Service or the Good of the Province.
This seem’d to afford a promising Prospect, among other Regulations of the Bills, that the great Quantity of ’em then outstanding beyond their stated Periods would be soon drawn in, and those Bills, whose Periods were not yet arriv’d, would be duly call’d in and sunk upon their Arrival; and that now an End would be put to the several Mischiefs, which had been occasion’d by the late Law, which made the Bills a Tender; But the Royal Instructions seem not to have had their proper Influence: For upon comparing the Quantity of Bills, which were outstanding beyond their limited Periods in 1730 with those which were outstanding in 1741, it appears from the Accounts of the Province Treasurers given in from Year to Year to the General Court, that the
former consisting wholly of Bills of the old Tenor did not exceed the Sum of £164755 5s. 5 d, and that the latter, which consisted of Bills of the old and middle Tenor, being all computed in Bills of the old Tenor, amounted to £390,863 14 s. 7d. and exceeded the former Sum one third Part in their Value --- and the latter Part of the Prospect soon vanish’d upon his Excellency’s consenting to the Revival of the late Law for preventing the Oppression of Debtors and making the Bills of Credit a Tender, without any Provision for securing to Creditors the Value of their future Debts against the depreciating of the Bills, whereby were reviv’d for ten Years longer the same Mischiefs, which the Province had so long felt before under the Effects of the same Law, and the British Merchants so justly complain’d of.
During this Administration, which I shall call the fourth Period of the Bills, the General Court in 1733 re-emitted £76,500 in old Tenor Bills of the same nominal Value with the Bills extant at the Time of reviving the before-mention’d Law in 1731 for making ’em a Tender, but of a less real Value by 20 per Cent. and in 1734 made another Re-emission of Bills of like nominal but less real Value by 60 per Cent, and in 1735 another Re-emission of Bills, of like nominal but a less real Value by 160 per Cent; all which Bills, tho’ so much depreciated at the Time of their respective Re-emissions below the Value of the Bills in 1731, were by Force of the before-mention’d Province Law made a Tender for the Payment of Debts contracted in the Year 1731, at which Time Bills were of a much higher Value, so that the making of those three Re-emissions of depreciated Bills, without providing that Creditors should have an Allowance for their being sunk below the Value of Bills in 1731, was the same Thing in Effect, as if the Government had pass’d a Law in each of those Years that the Creditors upon simple Contract (and such all Creditors in Trade generally are) should be oblig’d to accept in Satisfaction of their Debts contracted in 1731 20, 60, and 160 per Cent. less than the real Value of ’em; Which Observation will hold in a something less Degree with Respect to the Debts contracted in 1732, 1733, and 1734
This with Regard to the Governour seems to have been a most unparallel’d Proceeding, viz. that he should not only give his Consent to an Act, the passing of which he had but five Months before publickly declar’d to the Assembly would be neither for his Majesty's Service nor the good of the Province, without making the least Provision for preventing the Act’s former mischievous Effects for the future, but also go on from Year to Year with his Eyes open to consent to the Emission of such Bills, as at the very Time of their being emitted were, not a Delusion, as his Excellency was pleas’d in his before-mention’d Speech to call the Bills in general, but a palpable, gross Imposition (to say no worse of ’em) upon the Creditor.
This Law had also the same pernicious Influence, which it had before, with respect to habituating Debtors to suffer themselves to be sued for indisputable Debts, and to appeal from judgments obtain’d against ’em upon their own Defaults to the Superior Court merely for Delay; and as the Fees of the Courts of Judicature were further lessen’d (during the Continuance of this Law) by the depreciating of the Bills, so this Sort of Actions multiply’d in Proportion, to the great Hurt and Scandal of the Country; insomuch that the Number of such Suits within the Province was increas’d during this Administration, viz. between the Years 1730 and 1742, to near double what it was before.
In the Year 1736 the Government emitted £9000 in Bills of a new Form and Tenor, which afterwards obtain’d the Name of the middle Tenor Bills, by which I shall here distinguish ’em. - - - - These Bills were emitted upon Funds of Taxes to be drawn back into the Treasury in 1741, with this Difference between them and the old Bills, that by their Tenor they were not to be accepted in Payment for the Duties of Impost, Tonnage of Shipping, and Incomes of the Light-House, whereas the old Bills were by their Tenor to be accepted by the Treasurer and subordinate Receivers in all publick Payments whatsoever; and by this Emission-Act six Shillings and eight Pence of the middle Tenor Bills were made equal in Value to one Ounce of Troy Weight, Sterling Alloy. - - - And for better supporting the Value of these Bills Provision was made by the Act, that if any of ’em should happen not to be paid into the Treasury at their limited Periods, but be outstanding in the Hands of private Persons, the Possessors might at any Time after the last Day of December 1742 bring ’em to the Treasury and receive in Exchange for every six Shillings and eight Pence one Ounce of Silver or the like Value in Gold, and proportionably for a greater or less Sum; and the Treasurer was thereby order’d to exchange ’em accordingly. - - - - And for raising a Pound of Silver and Gold for that Purpose, as well as for exchanging the Bills of the old Tenor, which were before emitted and should be outstanding in the Hands of private Persons after December 1742, it was further provided by that Act that the Duties of Impost and Tonnage of Shipping, together with the Incomes of the Light-House, should be paid in Silver at six Shillings and eight Pence per Ounce, or in Gold of a proportionable Value, from and after the Session of the General Court in May then next following, and until the End of the Session in May 1742.
Two Things are observable in this Act, 1st. That it excludes the old Tenor Bills, as well as those of the middle Tenor, from being receiv’d in Payment for the Duties of Impost, Tonnage of Shipping, and Incomes of the Light-House: This the Government had a Right to do with Respect to the middle Tenor Bills, because it was agreable to the Form and Tenor of ’em; but it was repugnant to the Tenor of the old Bills, by which they were to be accepted in all publick Payments; and this the Merchants in the Time of it loudly complain’d of as an Act of Injustice to the Possessors of the old Bills, and a manifest Breach of publick Faith; as indeed it must be acknowledg’d to have been And it seems an extraordinary Project for raising the Value and Credit of the Bills to make Use of an Expedient, which had a direct Tendency to lessen their Credit; For what sure Dependance could there be upon the Faith of an Act, (made for the securing the Redemption of ’em six Years after) which was itself a present Instance of the Violation of the Publick Faith with regard to the old Tenor Bills.
2dly. That at the Time of emitting the middle Tenor Bills the Price of Silver in Bills of the old Tenor was twenty six Shillings and eight Pence at least per Ounce, notwithstanding which twenty Shillings in old Tenor Bills (which would not purchase more than three Quarters of an Ounce of Silver) was by that Act made equal in all publick Payments to six Shillings and eight Pence of the middle Tenor Bills, which by the Act is valued as equal to an Ounce of Silver; and that the stating of this Proportion between the Value of these Bills, which was as one to three, when the true Proportion between ’em was one to four, (six Shillings and eight Pence being only a fourth Part of twenty six Shillings and eight Pence) had not the least Effect to raise the Value of the old Tenor Bills, (which I suppose it might be intended to do) but on the contrary to sink that of the middle Tenor Bills one third Part or 33 and a third per Cent. below their Denomination, and the Value, at which they were stated by the Act in Silver and Gold; For from the Time of their being first issued out of the Treasury six Shillings and eight Pence in those Bills would not purchase more than three Quarters of an Ounce of Silver, nor pass in private Payments for more than twenty Shillings in Bills of the old Tenor, (which still retain’d their former depreciated Value) and so vice versa twenty Shillings in the old Tenor Bills passed in common Currency equal to six Shillings and eight Pence in Bills of the middle Tenor.
In the Year 1737 two further Sums of £20,000 and 6,000 in Bills of the middle Tenor, and in 1738 another Sum of 6,000 in the same Tenor were emitted; for drawing back all which Bills into the Treasury in the Years 1738, 1739 and 1740, three several Taxes of equal Value with those Emissions were rais’d and apportion’d by the several Emission Acts, and such of these Bills also, as should not be paid into the Treasury for Taxes at their limited Periods, but remain in the Hands of private Persons after December 1742, were made exchangeable at the Treasury for Silver and Gold at the same Rates with the middle Tenor Bills of the first Emission; and it’s very remarkable, that notwithstanding it had been found by Experience that the Bills of the first Emission were depreciated 33 and a third per Cent, as is before-mention’d, by stating the Proportion between them and the outstanding Bills of the old Tenor as one to three, or valuing six Shillings and eight Pence of the middle Tenor Bills at twenty Shillings only of the old Tenor Bills, yet the Government continued to state the same Proportion between the middle Tenor Bills of these three other Emissions, and the Bills of the old Tenor, not only in all publick Payments, as was done by the Act in 1736, but all private Payments; which had the same Effect to depreciate the middle Tenor Bills of these three last Emissions successively, as the stating of the same Proportion had before to depreciate those of the first Emission, without raising the Value of the old Tenor Bills in the least.
And thus the Government persever’d to mis-state the Proportion between the Value of the old and middle Tenor Bills, even when the Period limited for exchanging the outstanding middle Tenor Bills for Silver and Gold at the Treasury was within less than two Years and an Half of it’s Arrival; the Consequence of which was, that this Error cost the Country in December 1742 the Value of £42,000 old Tenor, to pay the Difference between the false Proportion of six Shillings and eight Pence middle Tenor for twenty Shillings in the old Tenor, and the true Proportion of six Shillings and eight Pence in the former for twenty six Shillings and eight Pence in the latter.
In the Year 1740, during the same Period, an Act of the General Court was pass’d at their May Session for emitting £80,000 in Bills of the old Tenor, which were not made redeemable with Silver & Gold, as the Bills of the middle Tenor were; and a few Days after pass’d an Order at the same Session in July directing the Treasurer to issue out such of the Bills (which had been drawn into the Treasury) both of the old and middle Tenor, as were not worn and defac’d, in lieu of the new Bills, which were to have been struck off, and emitted by Virtue of that Act; and about £17,000 in Bills of the middle Tenor (which had been drawn back into the Treasury by public Payments) were issued out by the Treasurer accordingly; and the same Proportion of one to three was stated between the Bills of the middle Tenor re-emitted by Virtue of this Order, and the Bills of the old Tenor, whereby these re-emitted middle Tenor Bills were a second Time depreciated 33 and a third per Cent in like Manner, as all the other Bills of the same Tenor had been from Time to Time, by stating the same Proportion between them and the old Tenor Bills.
These £17,000 Bills indeed having been once drawn into the Treasury and afterwards re-emitted in lieu of Bills, which the Government had not stipulated to exchange for Silver and Gold, were not exchangeable at the Treasury for those Species, as the other middle Tenor Bills, which should be outstanding upon the Foot of their Emission Acts after December 1742 would be, yet as these non-redeemable Bills had no Ear-mark given ’em upon their Re-emission to distinguish ’em from the redeemable Bills, with which they must necessarily be so blended in common Currency, as that the one could not be discriminated from the other by December 1742, it was evident that this Re-emission of the £17,000 non-redeemable Bills must lay the Government under this Dilemma, either to admit the Demands of the Possessors of the outstanding non-redeemable Bills in 1742, and exchange ’em for Silver in the Country's Wrong, or else to reject the Demands of the Possessors of the outstanding redeemable Bills, who could not possibly make it appear that the Bills in their Possession were not Part of the non-redeemable Bills; which would be an Act of great Injustice with Regard to them.
In December following when the Time for exchanging these Bills was advanc’d six Months nearer, the General Court pass’d an Impost Act, whereby the Duties of Impost, Tonnage of Shipping, &c. that by the before-mentioned Act in 1736 were made payable ’till the End of May Session 1742 in Gold and Silver only, which was to remain in the Treasury as a Fund for exchanging such of the redeemable Bills as should be outstanding after December 1742, were from thenceforward made payable in Bills both of the old and middle Tenor, so that twenty Shillings in the former, and six Shillings and eight Pence in the latter were from that Time accepted by the Impost Officer in Payment for those Duties in lieu of six Shillings and eight Pence in coin’d Silver, or Gold of a proportionable Value: And the Treasurer was by that Clause of the Act impower’d and directed to purchase Silver and Gold with the Bills thus paid in --- By this Means the Fund provided in 1736 for the Security of the Possessors of the redeemable Bills, and to enable the Treasurer to exchange ’em after December 1742 was from that Time necessarily lessen’d at least one third Part, or 33 and a 3 d per Cent. as to the Duties to be collected from December 1740 till the End of May Session 1742, (that being the Difference between the Value of the Bills and of the Silver to be purchas’d with ’em) so that the passing of this Act was in Effect destroying the Fund in Part, and so far repealing that Clause of the Act of 1736, which rais’d it for the Redemption of the outstanding redeemable Bills in 1742, and ought to have been held inviolable, especially by the Governour who is forbidden by His Majesty’s Instructions to consent to the repealing of any Act (and consequently any Part of an Act) without inserting a suspending Clause in the Act, which repeals it, to prevent it’s taking Effect, ’till his Majesty’s Royal Pleasure shall be known upon it.
The Reason given in the Act for this Proceeding was that the Payment of the Duties of Impost, &c. in Silver and Gold had a Tendency to raise their Price within the Province: Whereas it is most manifest that such Payment of the Duties had a direct contrary Tendency by promoting the Importation of Silver and Gold into the Province by Masters of Vessels liable to the Payment of those Duties, who arrive here from Countries where there is a plenty of Silver and Gold: And on the other Hand the Treasurer’s purchasing Silver and Gold within the Province with Bills must have as manifest a Tendency to raise the Price of Silver and Gold in it, and not only to depreciate the Bills in general, but to keep many of the middle Tenor Bills outstanding beyond December 1742.
It is not improbable that the repeated Complaints of the Merchants might have a considerable Weight with the Government in Favour of the old Bills for admitting them to be receiv’d in Payment of the Duties of Impost, &c. for the future, according to the Tenor of ’em, tho’ such Motive could not with a good Grace be express’d in the Act, since that would have been a tacit Acknowlegement, that the Exclusion of ’em from being accepted the three former Years was a Wrong done to the Possessors: But whatever Necessity the Government might apprehend it self to be under, with Regard to the old Tenor Bills, of breaking into the Fund rais’d for the Redemption of ’em by the beforemention’d Act of 1736, it was certainly under none with Respect to the middle Tenor Bills; and the admitting of them, contrary to their very Form and Tenor, to be receiv’d for those Duties in lieu of Silver or Gold, in Diminution of the Fund, was as manifest a Breach of the publick Faith as the excluding of the old Tenor Bills was at first.
In August 1741, Governour BELCHER’s Administration ended, and the present Governour’s succeeded it, at which Time there was outstanding beyond their stated Periods for want of Executions being issued out, according to the Province Law, against the deficient Collectors of the Taxes, to compell ’em to bring in their several Rates pursuant to the Treasurer’s Warrants, 267,964£. 14 s. 7 d, in Province Bills of the old Tenor, and 40,664£. 6 s. 8 d. in Bills of the middle Tenor, both which Sums computed in old Tenor make together 390,863 £. 14 s. 7d; and at the same Time were outstanding further Sums in Bills of the old & middle Tenor amounting in the whole to the Value of £106,525 old Tenor, for drawing back which last mention’d Sums into the Treasury Taxes ought to have been apportioned in May 1739 and 1741, pursuant to their respective Emission Acts, but were postpon’d by the Assembly during Governour BELCHER’s Administration; so that those Bills were, when he quitted the Chair, outstanding without any Fund of Taxes for sinking ’em.
In October 1741 (there being considerable Arrears of Wages due to the Officers and Servants of the Government) the House of Representatives and Council pass’d a Supply Bill, to which the Governor refus’d his Assent, and pointed out to the Assembly in a Speech the several exceptionable Matters contain’d in it; and, among other Amendments, particularly recommended to ’em. to make Provision for the speedy drawing in of the £106, 525 old Bills, and securing to Creditors the full Value of their future Debts against the depreciating of the Bills of Credit; which last he press’d upon ’em. in such Terms, as in Effect to make it a Condition of his Consent to the Bills continuing to be a Tender: As to the Arrear of £390,863 14s. 7d. in Bills outstanding beyond their limited Periods, which had been, during the late Administration, occasion’d by the Neglect of His Majesty's 16th and 18th Instructions, which Governour BELCHER had communicated to the Assembly, as I have before mention’d, it was in the Governour’s Power to draw that in without the Aid of the Assembly, as fast as the Circumstances of the People would admit of levying so heavy a Sum, by causing Executions to be issued out by the Treasurer, pursuant to the Province Law in that Case already provided in 1699----- This Recommendation from the Governour had it’s proper Influence upon the Assembly in their November Session following, when a Bill was pass’d for the Supply of the Treasury, in which Provision was made for drawing in, within the Years 1742 & 1743, the outstanding Bills of Credit, for which no Fund of Taxes had been yet rais’d, and a Clause was therein inserted impowering the Treasurer, in Case the General Court should not apportion the Taxes for drawing in the Bills at the Times limited by the Act, to issue out his Warrants for assessing and levying ’em in the same Proportions, which the last Tax-Act had apportion’d the Taxes of the several Towns in; whereby it was put out of the Power of the Assembly to post-pone the drawing of the Bills in further: And the same Clause having been repeated in all the subsequent Supply Acts, an effectual Method seems now to be establish’d for preventing all future Postponing by the Assembly.
The Bills emitted by this Act were of the same Form and Tenor as to the Valuation of ’em, in Respect of Silver and Gold, with those of the middle Tenor; but the Proportion stated between them and the Bills of the old Tenor was as one to four, instead of the former Proportion of one to three, by which Means they escaped the Fate, which all the Emissions of the middle Tenor Bills had shar’d, of being depreciated 33 and a 3d per Cent below their Denomination, and still keep the same Difference in Value between themselves and the old Tenor Bills: and it is evident beyond all reasonable Doubt that if the Proportion of one to four had been stated from the Beginning between the several Emissions of the middle Tenor Bills, and the Bills of the old Tenor, it would have saved the Province at least the £8,000 new Tenor Bills, which it was oblig’d in December 1742 to pay the Possessors of the middle Tenor Bills for the Difference between the two Proportions, so that it must have been an inexcusable Error indeed if the Government had still persever’d in a Mistake, which had been so thoroughly prov’d by the Experience of near five Years.
An Objection has indeed been made against raising the Denomination of the Bills from that of the old Tenor to either that of the middle or new Tenor Bills, founded upon a Notion that it has occasion’d the Rise of the Price of Silver, and of Provisions; but it is a Mistake to imagine that any Denomination of the Bills of Credit whatsoever can affect the Price of Silver, or of any other Commodities in the Province; for besides that one does not appear to have the least Relation to, or Connection with the other, this single Fact seems to be a full Confutation of that Notion, viz. That the greatest Rise of the Price of Silver, that ever happen’d in the Province within the same Compass of Time, was that between the Years 1733 and 1735, when it rose from twenty Shillings per Ounce in Bills of the old Tenor to twenty-seven Shillings and six Pence, that is near 34 per Cent; and that happen’d before the Emission either of the middle or new Tenor Bills, and when no other Bills were current but those of the old Tenor: And on the other Hand, for about five Years next after the Emission of the middle Tenor Bills, the Price of Silver continu’d very near at a Stand - - - - -As to the Price of Provisions; That must of Necessity follow the Rise of the Price of Silver and all other Commodities in general; For otherwise how is it possible for the Husbandman to subsist? The Rise of Provisions does not indeed keep even Pace with that of the Price of Silver, which generally rises by Starts, and then keeps at a Stand for some Time, but gradually as the Countryman feels the Effects of the Rise of Silver in the Prices of all other Commodities and Necessaries of Life, which he is oblig’d to purchase; And thus it happen’d that the utmost Extent of the Rise of Provisions, which necessarily follow’d the great Rise of Silver and depreciating of the Bills between 1733 and 1735, did not discover itself ’till after the first Emission of the middle Tenor Bills in 1736, and so what was really the Effect of the Rise of the Price of Silver, (which necessarily depreciates the Bills of Credit, and by Degrees influences the Price of all other Commodities) is imputed by Mistake to the different Denomination of the Bills of the middle Tenor and new Tenor from that of the old Bills; that is, to the mere Difference of Sound in the several Denominations; which is a groundless Notion, even tho’ the Price of Provisions sold at Market had been usually computed in Bills of the middle or new Tenor, but must entirely vanish, when it is consider’d that the Price of ’em has been constantly computed in Bills of the old Tenor, ever since the Emission of the middle and new Tenor Bills, just as it was before their Emission, and with no more Regard to or Consideration of either the middle or new Tenor Bills, than if they had never been emitted.
And it may be further added as a strong Reason for the Governour’s preferring Bills of this Denomination, that it is the most conformable to the Act of Parliament of the 6th of Queen ANEE, and her said late Majesty’s Proclamation for ascertaining the Value of foreign Coins; and to his Majesty’s Instruction to his Governour, which strictly enjoins him the Observation of that Act; and it seems rather to be wonder’d at that the Province Act made in 1740 for emitting £8,000 in Bills of the old Tenor was ever consented to after the Assembly had been brought to conform to the Act of Parliament and his Majesty’s Instruction for four Years, than that Emissions of Bills of the old Tenor should be continu’d.
In the same November Session, a few Days after passing the beforemention’d Supply Bill, the Assembly pass’d another Bill entitled an Act to ascertain the Value of Money, and of the Bills of public Credit of this Province, &c. Whereby among other Things it was provided, that if the Bills then to be emitted, or other Bills thereafter to be made, should be depreciated below the Value, at which the Bills then issued were emitted, or the Bills afterwards to be issued should be emitted, in such Case the Justices of the respective Courts of Judicature should give Judgment for so much Silver, as the true Debt should appear to be, and in want thereof for so much in said Province Bills, with the Addition of so much more, as would make Amends for the depreciating of the Bills from the Value, at which they then were or should be afterwards stated; and that there might be one certain uniform rule, by which the several Courts should proceed in making up their Judgments, it was provided that the General Assembly should once in every six Months determine the Rates, that the said Bills commonly pass’d at in Proportion to Silver and Bills of Exchange payable in London; and upon their failing to do it, that a Committee of the Members of his Majesty’s Council should do it; and in Case of their Failure, that the Justices of the Superior Court of Judicature, in their several Terms in the County of Suffolk, should appoint five able and sufficient Men to consider and report the true Value of the Bills, as they would produce in Silver or Bills of Exchange to the best of their judgment, &c.
This was the first Act of it’s Kind, which was ever pass’d in the Province, and being a new Thing and likely to prove unpopular in the Execution of it, neither the General Court nor the Members of his Majesty’s Council, nor the Judges or the Superior Court of Judicature, seem’d fond of carrying it into Execution; which was omitted to be done ’till the Governour call’d upon the Judges by his Letter to ’em for that Purpose, at their February Term in 1742, to do it; and
by his special Directions the Act was accordingly then carried into Execution by their appointing a Committee to value the Bills, &c. and so has continued to be done in the same Channel (which is the most proper one for it) according to the Amendments made by a subsequent Act pass’d in 1743, and will no doubt continue to be executed.
The Effect of this Act, as it was pass’d at first, was that the Debtor was obliged to pay the Creditor, over and above the nominal Sum of his Debt, so much as the Bills were depreciated from the Value, at which they were first emitted; which upon the experience of it proved inconvenient and oppressive to the Debtor, by compelling him to pay the Creditor in the first and only Instance of it’s having been then carried into Execution seven and an half per Cent. more than was his just Due; wherefore in May 1743 the Assembly upon the Governour’s Message to ’em recommending the following Amendment of it, viz. That the Creditor should be allow’d only so much, as the Bills should be depreciated below the Value, which they were of at the Time of contracting the Debt, amended it accordingly: And thereby the true Point of justice between the Debtor & Creditor, which is that every Debtor should pay, and every Creditor receive the full Value of his Debt, and no more, was establish’d upon a firm Basis, all possible Overreaching or Oppression of the Debtor avoided, and the perpetual Execution of the Act well secur’d, which it would have been very difficult to have preserv’d upon the Terms, in which the Act was fram’d at first.
And this is all that the Governour could possibly do for preventing the mischievous Effects of the Bills; and it is evident that this Provision in the Act would effectually secure to every Person the Value of that Part of his Estate, which is outstanding in Debts, and be an adequate Remedy for the chief Mischiefs, that arose before from the depreciating of the Bills, and check that litigious Spirit, which was grown to a considerable Head for want of such an Act, if Creditors shall think fit to take the Benefit of it: In the Country they generally have; but in Boston the Shopkeepers, who have long tasted the Sweets of the depreciating of the Bills, are averse to complying with it voluntarily, and the Merchants their Creditors are tender of forcing ’em into it, by demanding an Allowance for the depreciating of the Bills in a Court of Law; and so it has had little or no Effect there; But all that Government can do, is to provide the Remedy, and to put it into the Power of the Creditor to recover the full Value of his Debt.
However this Act together with Alteration made in the Fees of the Courts of Judicature in January 1741, by which they were rais’d to double what they were before the last Act for preventing the Oppression of Debtors and making the Bills a Tender expir’d in November preceeding, seems to have had a very considerable Influence for retrenching the former excessive Number of Law Suits, which has by this Means been reduced near one Half, and in the Superior Court, with Respect to indisputable Debts and Complaints upon Defaults, near two third Parts.
At their May Sessions in 1742 the General Court found that the late Settlement of the Boundary Line between this Province and New-Hampshire, whereby some whole Towns, which were before tax’d towards the Support of the Massachusetts Government, were now included within the Limits of New-Hampshire Government, and that other Towns under the same Situation were intersected by the Line, had made a new Valuation of the Estates of the several Towns throughout the Province necessary, before they could apportion the Taxes laid on that Year; and as the settling of a new Valuation Act is generally an Affair of some Length and Difficulty in the House of Representatives, and could not be compleated before the Governour’s intended Interview with the Eastern Indians that Summer, that Affair and the Apportionment of the Taxes for that Year was put off ’till the next Meeting of the Court on the first of September, to which short Day they were adjourn’d chiefly for that Purpose; But upon their Meeting then they could make so little Progress in it, before the Season of the Year necessarily call’d the Country-Members Home, that they rose again without compleating the new Valuation, but with a firm Resolution to come fully prepared to go through the Valuation and Tax-Act by the End of November, to the 18th of which Month they were adjourn’d; But at their Meeting then also the Zeal of the several Representatives for the Interest of their respective Towns so increas’d the Difficulties and Contests in settling the Valuation, that tho’ the Committee for that Business attended it with the utmost Diligence and Assiduity, yet it was not finished ’till January, and then the Assembly instantly proceeded to make their Tax-Act for 1742, so that by this unforeseen Accident the Appointment of the Taxes for that Year was inevitably delay’d about five Months beyond the Time limited by the before-mention’d Act in 1741, and the Time for paying the Taxes into the Treasury about three Months, it being impracticable for the Treasurer by issuing his Warrant to cause that Tax to be assess’d and levy’d according to the Proportion settled by the last preceeding Tax-Act, as the Province had been since the making of that Act dismember’d of some Towns, which were included in that Tax, so that the same Apportionment of the Taxes for the Year 1742 would have produc’d a Deficiency in the levying of ’em; for which Reason a new Apportionment was necessary to be made by the General Court; But at the next May Session, the Assembly punctually apportion’d the Taxes for the Year 1743, so that they made two heavy Tax-Acts within the Space of five Months: Which fully shews that the Delay in the former Year was not in the least affected, but proceeded intirely from the Difficulties, which the House of Representatives had in agreeing upon the new Valuation.
In the Beginning of the November Session following the Governour in his Speech reminded the Assembly of the Engagements, they were under to the Possessors of the middle Tenor Bills; and press’d them to make a proper Provision for answering their Demands, and order’d the Treasurer to lay before them for that Purpose the State of the Treasury; upon which it was discover’d that in Consequence of the repeated Mistakes, which I have before-mention’d, upwards of £42,000 in Bills of the middle Tenor had been hoarded up by some money’d Men and was outstanding, and that there was no more than about £2,900 in Silver and Gold in the Treasury to redeem them.
At this Time the middle Tenor Bills, which were current, pass’d at 33 and a 3d per Cent less than the Rhode-Island Bills of the same Tenor and equal Denomination with themselves, tho’ the middle Tenor Bills were within eight or nine Weeks of the Time limited for their Redemption, and the Rhode-Island Bills were not redeemable at all with Silver and Gold, and the Period for drawing them in was at 18 Years Distance; so that according to the common Rule of Discount the Rhode-Island Bills were of less Value than the middle Tenor Bills 60 per Cent at least: This is a demonstrative Proof of what little Expectation the People in general had that the middle Tenor Bills would be exchang’d at the Treasury, or rather of the general Persuasion, which prevail’d that the Possessors of those Bills would have no Satisfaction from the Government; And indeed the Re-emission of £17,000 of these Bills in 1740, which were not intitled to be redeem’d at the Treasury by the Stipulation of the Government, and their being so intermix’d with the redeemable Bills of the same Tenor, that the Redeemables could not be distinguish’d from the Non-redeemables, had in the Opinion of Persons most judicious and knowing in the Temper of the Assembly laid such an Obstacle in the Way of the Redemption of any of the Bills, that very little or no Success was then expected from the Governour’s Application to the House of Representatives; and it is plain that the Council apprehended it to be a Matter, which much labour’d in the House, from their pressing Message to it upon that Subject; and accordingly by the journals of the Court it appears that it was the sixth Week of the Session before the House could be brought to a Resolution to make any Satisfaction to the Possessors of the middle Tenor Bills; and then they pass’d a Vote that for the future in all publick Payments twenty Shillings in Bills of the middle Tenor should be receiv’d as equal to twenty Shillings in Bills of the last Emission, (that is those emitted since the present Governour’s coming to the Administration, which tho’ of no more than equal Denomination with the middle Tenor Bills pass’d for about 33 and a third per Cent. more in publick and private Payments than they did) and so pro rata for a greater or less Sum; the Effect of which was that the middle Tenor Bills should be receiv’d in all publick Payment, at near 34 per Cent. more than they had been receiv’d at before: But the Benefit of this Vote extending only to such Possessors of the middle Tenor Bills, as had publick Payments to make, the Governour on the next Day of the Court’s Sitting press’d the House to provide for making Satisfaction to all the Possessors in general; and the House immediately voted that the Treasurer should be directed to exchange to all Persons whatsoever Province Bills of the last Emission for Bills of the middle Tenor, that is to say, a twenty Shilling Bill of the last Emission for a twenty Shilling Bill of the middle Tenor, and so pro rata: And an Act of the General Court was soon afterwards pass’d for apportioning and assessing a Tax of £8,000 in Bills of the Tenor and Form last emitted, to make good the Deficiency of the Funds of Taxes for drawing in the outstanding Bills, which was occasion’d by making this Satisfaction to the Possessors of the middle Tenor Bills.
I find this is the first Instance of the Massachusetts Government’s making a Recompence to the Possessors of any of the Bills of Credit for their being depreciated below the Value, at which they were first emitted; and it prov’d in the Time of it’s Transaction an exceeding critical Event, and was then esteem’d no small Point gain’d to have gone this Length towards procuring Justice for the Possessors of the Bills, and saving the Credit of the Province from the Danger, it was brought into of being irretrievably lost: For as to the Province’s purchasing a sufficient Quantity of Silver and Gold for exchanging the £42,000 outstanding Bills, it was not practicable, had the Assembly been disposed to have done it, between the beginning of the November Session, and the Time of the Redemption of the Bills; and the £2,900 in the Treasury, which would not have exceeded 9 d. in the Pound when divided amongst the Possessors of all the outstanding Bills intitled to be exchanged by the before-mention’d Acts, was too trifling a Distribution to be thought of; so that Province Bills seem to be the only Equivalent, that could be given in Exchange for the middle Tenor Bills by the Time limited for the Possessors of ’em to make their Demands; and that was given ’em according to the full Valuation of Silver in Bills of the last Emission, as it was set by the Assembly in 1741 at the Time of the Emission of the Bills, and since which the Price of Silver had not really risen, tho’ this Payment was in Fact 7 and an half per Cent. less in Value than the House of Representatives estimated it at, and than the real Price of Gold and Silver then was; But this Affair had so long labour’d in the House of Representatives, and it’s Success had proved so doubtful, that it was thought a Point of Prudence for the Governour to pass the Order, and not to run the Risque of losing all by rejecting-it, and committing the Consideration of the Matter a second Time to the lower House, whose Sentiments appear’d upon the transacting of this Affair not to be unalterably establish’d for making any Allowance to the Possessors of the Bills------- And indeed when it is consider’d that the Possessors had receiv’d these Bills at their depreciated Value, and gain’d from the Province a Profit of 33 & a third per Cent. for hoarding ’em up five or six Months, or perhaps some few of ’em a little longer; and that those Bills of the middle Tenor, which were redeemable at the Treasury, were so blended with the £17,000 of ’em, which the Government had not stipulated to redeem, that none of the Possessors could be certain which of the two Sorts of Bills his were; and that in such Case there was some Room for the Assembly to have disputed the Redemption of the £17,000, which had been once sunk and re-emitted by Mistake, and to have insisted that the Possessors (since it could not be determin’d which of ’em had the redeemable Bills and which the non-redeemable Ones) should make an Allowance (upon an Average among ’em all) for the £17,000 non-redeemable Bills, according to the several Quota’s of Bills in each Man’s Possession; I say when these Circumstances of the Bills are consider’d, and that nevertheless the Government submitted to redeem all of ’em in the Manner, they have done, there seems to be no great Reason for the Possessors to impeach the Justice of the Assembly in this Particular, or to be dissatisfy’d with the Terms, which were procur’d and consented to for ’em ; And indeed in the Time of the Transaction they appeared to be very well satisfy’d with it.
Soon after the Alteration made by the late Act for ascertaining the Value of Money and Bills of Credit, &c. in Favour of Creditors with Regard to future Debts, the Judges of the Superior Court and two or three of the Inferior Courts took Occasion from thence to alter their Rules for chancering of Forfeitures upon old Bonds and Mortgages condition’d for the Payment of a Sum certain in Bills on this Province, or for the Payment of a Sum either in those Bills or lawful Money; which gave Rise to some Contests between the House of Representatives and the Council, and a general Discontent of the Debtors, as well as many others throughout the Province. --- Ever since the Publication of the Law for preventing the Oppression of Debtors in 1712 ’till that Time, all Debts due upon Bonds and Mortgages of the beforemention’d Tenor were understood and consequently intended both by the Creditor and Debtor, at the Time of contracting the same, to be payable in Bills of Credit on this Province, according to their nominal Value, whether such Bills should rise or fall in their real Value, between the Time of contracting the Debt and the Payment of it; and the several Courts of Judicature had made the same Construction of those Bonds and Mortgages, and govern’d themselves accordingly in entring up Judgments, and awarding Executions for such Debts; and this general Understanding of the Rule of Law, and the uninterrupted Practice of the Courts of Judicature had influenc’d and govern’d Men in their Dealings, Contracts, Purchases & Dispositions of their Estates at their Death during the above-mention’d thirty Years: As to the Creditor, who plac’d out his Money at Interest, and consequently chose what Kind of Security his Debtor should give him; if he made his Election to have his Debt ascertain’d and not to stand the Chance of the Rise or Fall of the Bills in their Value, he took his Bond or Mortgage with Condition for the Payment of so many Ounces of Silver, or a Sum certain in Sterling Money, or in Proclamation Money only; If on the other Hand he had an Opinion, that the Bills of Credit were more likely to rise than fall in their Value, he took a Bond or Mortgage with Condition for the Payment of Bills of Credit only, or for the Payment either of lawful Money or of Bills of Credit; and the Debtor (who is oblig’d to give such Security as his Creditor insists upon) under the Sanction of the settled Practice of all the Courts of Judicature upon such Securities did not scruple to give his Bond or Mortgage condition’d for the Payment of Bills of Credit or of lawful Money, tho’ the Money was at the Time of giving the Mortgage double, treble or four Times the Value of the Bills and Sum lent him; and in such Case there never had been any Instance of more than the nominal Sum of the Bills express’d in the Condition of the Bond or Mortgage, and Interest due upon ’em in like Bills being ever paid, or demanded in a Court of Judicature ’till 1742, when the judges of the Inferior Court for the County of Suffolk, and of the Superior Court of judicature alter’d their establish’d Rule of chancering such Bonds and Mortgages, and made the same Allowance to the Creditor for the depreciating of the Bills in the Case of old Debts, as the before-mention’d late Law had provided should be made with Respect to future Debts.
Upon this Case I would observe, First, That some of those Creditors who chose to take the before-mention’d Security for their Debts, had a View of an exorbitant Gain in it arising from the general Persuasion, which prevail’d for a long Time, that by the Year 1741 all the old Bills would be drawn in; and that the rest of the Creditors had at least an Opinion that the Bills could not well fall lower, but were more likely to rise than fall in their Value; and it seems not to be doubted, but that if the Bills had during this Course of Time sometimes risen as well as fall’n in their Value, and Creditors and Debtors had promiscuously been sometimes Gainers sometimes Losers by the before-mention’d Contracts, every Person would have thought it just that the Gainers on both Sides should have had the Benefit of their Contracts, so that all the Difficulty in the Case arises from the Loss’s having almost perpetually happen’d on one Side.
Secondly, That this Departure of the Courts of Judicature from their settled Practice was going contrary to the known Intent of the Parties at the Time of contracting the Debt, which is not only the principal Rule of Equity, as it is settled in the English Courts of Judicature, but likewise the general Rule of Justice universally establish’d in all Communities, and governing themselves by the accidental Event of the Contracts, which was novel and unsafe to be introduced into the Provincial Courts in any Instance.
Thirdly, That this new Rule was also liable to great Objections on Account of it’s being necessarily attended with Injuries and Wrongs in the following Cases, viz.
Many Debtors, who under the Sanction of the late settled Rule of Practice upon the Province Law, had accepted the Payment of Debts due to themselves upon the like Securities in depreciated Bills of Credit, would by having the Rule shifted upon ’em be compell’d to pay their own Debts in Bills of an higher Value.
And Persons who had purchas’d Lands subject to old Mortgages before this late Alteration of the Practice of the Provincial Courts, and had only an Allowance made in the Purchase Money for those Incumbrances according to the depreciated Value of the Bills, would be compell’d by the Mortgagees to pay for the Redemption of those Lands more than what they were allow’d in the Purchase of ’em for the Incumbrances by the Mortgageors.
And for these and other Mischiefs too long to be enumerated here, and which would befall other Persons in the Community besides Debtors, if this new Rule of Practice in the Courts of Judicature was to take Place in all Cases, it was impossible for the Legislature to provide an adequate Remedy.
Fourthly, That as many of the old Debts would be doubled, some trebled, and some few augmented almost fourfold by, this new Rule of the Courts of Judicature, it seem’d unavoidable that some of the poorer Sort of Families in the Province would be wholly broke up and ruin’d by it; which Consequences so alarm’d the House of Representatives, that upon the Petitions of two of the Debtors they pass’d a Vote for nullifying these Judgments of Court; but they miscarry’d in Council: And at the Close of the Session in April 1733 a Bill was unanimously pass’d by the House of Representatives, and concurr’d by the Council, and lay’d before the Governour for his Consent, the Purport of which was to declare by Way of Explanation of the several Acts for preventing the Oppression of Debtors, that the beforemention’d Bonds and Mortgages were not Specialties within the Exception of those Acts, according to the true Intent and Meaning of ’em at the Time of their being pass’d: But I find by the Governour’s Speeches upon this Occasion, that tho’ he was of Opinion that in the Beginning the Creditor had the Rule of Law on their Side, yet he thought the Law had been -so long otherwise understood, and practis’d upon by the Courts of Judicature, that the general Error in that Case had obtain’d the Force of Law, according to the receiv’d Maxim in the Courts of Law, Communis Error facit Jus: And as he was of Opinion that the Courts of Judicature’s departing from their establish’d Rule of Construction in this Case, and breaking thro’ the real Intent of the Parties would be of mischievous Consequence to the Community, he join’d with the Assembly in recommending it to the Judges of the Superior Court of Judicature to re-consider at their next Court the Judgments, which they had made up on old Bonds or Mortgages of the before-mention’d Tenor (which were only two in Number) and in their future chancering of old Bonds and Mortgages of that Tenor to observe the Intent of the Parties according to their former Rule of Construction; and in the mean Time Execution was stay’d in those two Cases, one of which was of the Value of about £l00, and the other of about £ 5 10 s. Sterling ---- And for redressing the Creditors upon such Securities, to whom the General Court had given a just Expectation by their before-mention’d Act in 1736, that the outstanding Bills of the old Tenor should be exchang’d at the Treasury in 1742 for Silver at the Rate of one Ounce of Silver for every twenty Shillings in Bills, whereby they might be induced to let their Bonds and Mortgages lie, depending upon the Bills in which they were payable being finally redeem’d in Silver at the above-mention’d Rate, he recommended it to the Assembly as a Point of Justice to make good to the Creditors the Assurances given ’em in 1736, that the outstanding Bills should be of the aforesaid Value in 1742; and this the Governour urg’d upon ’em in his second Speech as what the publick Faith of the Province was pledg’d to those Creditors for the Performance of by the Act in 1736, and other subsequent Acts pass’d in 1737, 1738 and 1740, in all which the Value of the Bills of the old Tenor was stated as equal to Silver at twenty Shillings per Ounce both in publick and private Payments; and that the Government was bound to maintain ’em to be of the same Value in 1742, at which Time it had stipulated by those several Acts that they should be redeem’d at the aforesaid Rate, and had actually begun to raise a Fund for that Purpose; and insisted that these Assurances from the Government amounted to a Warranty to the Possessor of the Bills, that they should in 1742 be of the Value, at which they had been stated by the several Acts; and I might add to the Governour’s Argument, especially as they had been made a Tender in Law by the Act pass’d in 1731: And his Excellency finally propos’d that the Government should make Good to those Creditors, who had receiv’d no Recompence of any Kind from their Debtors for the depreciating of the Bills, the Difference between the present depreciated Value of ’em, and the several Values, they were of when the respective Debts were contracted, not exceeding in such Valuation of the Bills the Rate of twenty Shillings for one Ounce of Silver; and propos’d a Committee to be instantly rais’d for the Execution of that Affair.
What Effect this Recommendation from the General Court to the Judges of the Superior Court of Judicature will have, with respect to their judgments in future Cases of the same Kind, is not certain, such Recommendation not being binding upon ’em; the two Cases recommended to ’em for their Re-consideration fail’d of obtaining it for want of being brought properly on before them at the appointed Term; and upon the Debtor’s petitioning the General Court to be reliev’d further, the Prayer of it was granted by the Assembly but was not consented to by the Governour; and so the Creditor and his Execution upon the first Judgment: As to the several Judgments, which had been made up in the Inferior Courts upon Bonds or Mortgages of the same Tenor, and from which there was no Appeal to the Superior Court of Judicature, the Recommendation of the General Court did not reach to those Cases; and tho’ one or two subsequent Petitions for Relief in ’em had been preferr’d to the General Court and succeeded in the Council and House of Representatives, yet as the Debtors had neglected to appeal and prosecute their Remedy at Law in the Superiour Court, and so had acquiesc’d in those judgments, the Governour refus’d his Assent to the Vote of the Assembly.
And whatever Influence the Governour’s Determination in the Case consider’d as it stood between the Creditors and the Government, which I find the Governour press’d the Consideration of afterwards in a Message and Speech to the Assembly, may have; or however this Affair may end, it seems upon the whole, that the Satisfaction propos’d by his Excellency for the Creditors is more plainly due to ’em from the Government than from the Debtors; is more safe and salutary for the Publick, and more consistent with the Rule of Justice, than to exact it from the Debtors by a new devis’d Rule of Construction by the Courts of Judicature, which is contradictory to the real Intent of the Parties in the before-mention’d Securities, as well as to the former settled Rule of the Courts, which had led Debtors in to give such Securities, and which by augmenting the Debts immoderately must necessarily distress many Families in the Province, especially of the poor labouring Sort, and also work many Injuries and Wrongs contrary to the Maxim of Law, Lex non facit Injuriam : All which Considerations seem to be of no small Weight in the Scale of Government.
Upon the Inspection of the State of the Treasury, which had been laid before the Assembly in November 1742 by Order of the Governour, when the Redemption of the middle Tenor Bills was brought under Consideration, the beforemention’d Arrear of Bills outstanding beyond their stated Periods for want of Executions having been duly issued out against the deficient Collectors of the Taxes, pursuant to the Province-Law, was fully discover’d by the Governour: And upon the last burning of Bills in May 1743 it appear’d that 132,394£ 18 s. 2 d. of ’em had been drawn in and consum’d, and that the remaining 258,468£ 16 s. 5 d. was outstanding; whereupon the Treasurer was order’d forthwith to issue out Executions against the deficient Collectors of the Taxes in general throughout the Province to compel ’em to bring in the Remainder; whereby the whole 390,863£ 14 s. 7 d. may be expected to be drawn in by May 1744
This I find is the first Instance of issuing out Executions in general in such Case; Executions had been before issued in particular Cases, where Collectors were in Arrear and suspected of Insolvency; but they had never been issued out against all the deficient Collectors in general, and merely for the Sake of drawing the Bills into the Treasury, tho’ his Majesty’s two before-mentioned 16th and 18th Instructions seem very explicit, and to have been expresly fram’d for that Purpose.
The Payment of this large Arrear must, it is evident, be as much felt by the People as if it had been a new Tax, and more burthensome to ’em than if the several Parts of it had been collected, when they first became due; and this happened too at a Time, when the Circumstances and extraordinary Charges of the Government requir’d higher Taxes to be laid upon the succeeding Years, than had been usually rais’d within these last twenty-five Years;
yet the Assembly has granted ’em with the utmost Unanimity, and the People have cheerfully born ’em; and if the publick Charges should not be increas’d by a French War, as there is no Reason to doubt but that the present Governour will direct the same Method of drawing in the Bills by general Executions against all deficient Collectors of Taxes to be pursu’d, and the Assembly will continue to raise equal Taxes with those, they have granted since the Year 1740, whilst the Exigencies of the Government require it, the current Quantity of the Massachusetts Bills will be reduc’d within £30,000 Sterling by the End of the Year 1746, and not one Bill of that Government will be extant, except what is issued for the Service of the current Year to be drawn in the same or next succeeding Year at farthest, by the End of the Year 1753; and in the mean Time the Quantity of Bills current at one and the same Time will be annually lessening, so that there is now a fair Prospect of some End of those Grievances, which, instead of being diminish’d, have increas’d more since the Arrival of his Majesty’s two before-mention’d Instructions, which the late Governour communicated to the Assembly, till the Year 1741, than they ever did within the same Compass of Time before.
And this is the utmost, that can be done by the Massachusetts Government either for Remedying the mischievous Consequences of the depreciating of the Bills, under which Creditors had suffer’d for these last thirty Years, and the Community in general had been much hurt, or to prevent the depreciating itself, which indeed would be plucking the Evil up by the Roots------ As to the first, the putting it into the Power of the Creditor to demand and have of his Debtor a full Allowance for the depreciating of the Bills between the Time of the contracting and Payment of the Debt, which the Act for ascertaining the Value of Money, &c. has done, is (with respect to Debts owing within the Province) an adequate Remedy for the malignant Effects, tho’ not all the Inconveniences of the depreciating of the Bills, whenever the Creditor shall think fit to take the Benefit of the Act; but to cure the depreciating itself intirely is not in the Power of this Government; For tho’ I find that the depreciating of the Bills has been generally imputed to immoderate Quantities of ‘em having been current at one and the same Time, and their long Periods, as the only Causes of it, yet I think it is evident that it is primarily owing to this single Circumstance of the Trade of the Province. viz. That the Quantity of Silver and Gold and Bills of Exchange to be purchased within it, and in one or other of which the Ballance of Trade between the Province and Great Britain (which is ever greatly in Favour of the latter) must necessarily be paid from Time to Time, is not sufficient to answer the demands for ’em for that Purpose, occasion’d by the Shortness of the Province’s other Returns to Great Britain; in which Case the Price of Bills of Exchange and of Silver and Gold in Bills of Credit, with which only they are to be purchas’d, like that of all other Commodities, which are much in Demand and very scarce at Market, is necessarily rais’d by Means of the Buyers outbidding each other; and as such Demands for Silver and Gold and Bills of Exchange for paying the Ballance of Trade due to Great Britain frequently recurs more or less in the Province, the Price of ’em will upon every Occasion rise in Proportion to those Demands without any fix’d Bounds, or (to speak more properly) the Bills of Credit will more and more depreciate; on the other Hand when the Quantity of Silver and Gold, and Bills of Exchange to be bought at Market is sufficient to answer every Purchaser’s Occasions, it is Manifest that the Price of ’em will continue at a Stand, let the Quantity of the current Bills of Credit be what it will, because the only Reason which can be assign’d for any general Merchandize or Commodity’s advancing in it’s Price (except in the Case of a Monopoly or some unlawful Combination) is the Scarcity of it, which induces the Purchasers to raise the Price of it by outbidding each other, especially if some of ’em are under a Necessity of buying it at any Rate, which is the Case of several Purchasers of Gold or Silver or Bills of Exchange in the Province for Returns to Great Britain: Further, if even the Ballance of Trade against the Province should increase in any Year, when there happen’d an Increase of the Paper Currency, yet if there should also happen to be an Increase of the Quantity of Silver and Bills of Exchange in the same Year sufficient to pay that Ballance, it’s plain that the Price of Silver and Bills of Exchange would not be rais’d that Year even by the joint Increase of the Ballance of Trade, and of the Quantity of the Bills of Credit: And on the contrary if the Ballance of Trade should happen to decrease in any Year, when there should happen to be a Decrease likewise of the Paper Currency, yet if there should happen to be a less Quantity of Silver and Gold and Bills of Exchange in the same Year, than will satisfy that Ballance, it is evident that the Buyers, who are in want of it to make Returns to Great Britain, will outbid each other for ’em, and so the Price of Silver and Exchange will necessarily rise that Year; or (to speak more properly) the Bills of Credit will depreciate, notwithstanding the Decrease of the Ballance of Trade and of their own Quantity; so that if these Observations are just, it is evident that the Rise or Fall of the Price of Silver and Gold and Bills of Exchange, in which consists wholly the rising or depreciating of the Bills of Credit, does not primarily depend upon the Increase or Decrease of the Quantity of the Paper Currency, but singly upon the Proportion, which the Quantity of Silver and Gold and Bills of Exchange to be bought at Market bears to the Demands which there are for ’em, to make Returns to Great Britain; and that the Increase or Decrease of the Quantity of Bills of Credit can’t affect the Price of Silver and Gold and Bills of Exchange any further, than as it checks or inlarges the Trade of the Province with Great Britain, from whence arise the annual Demands for Silver and Gold and Bills of Exchange to pay off the Ballance, which is ever in favour of the latter.
If indeed an Increase of the Bills of Credit sets in at the same Time with an Increase of the Ballance of Trade, and a Decrease of the Quantity of Silver and Gold, and Bills of Exchange in the Province, the Increase of the Paper Currency at such a Conjuncture will contribute exceedingly to raise the Price of Silver and depreciate the Bills of Credit Thus in the Year 1734, when the Act of Parliament for laying the present Duty upon the Importation of foreign Melasses first took Place, which abridg’d the Trade of the Province in one of its most considerable Branches for a short Time, and there happen’d also some Failure of its Cod and Whale Fishery, both which occasion’d a great Deficiency in its Returns that Year, and there was the usual Importation of English Goods, and no Increase of the Silver and Gold generally imported into the Province, and of the Bills of Exchange to be purchas’d there, and about the same Time there happen’d a large Increase of the Paper Currency by a new Emission of Rhode-Island Bills and a Scheme of Notes commonly call’d Merchant’s Notes, this Conjunction of Circumstances caus’d Silver to rise from twenty Shillings, to twenty seven Shillings and six Pence per Ounce, and consequently the Bills of Credit to depreciate above one third Part of their former Value; in which immoderate Fall of ’em the great Increase of their Quantity had no small share as a secondary Cause; But during the five next succeeding Years the Price of Silver and Exchange, and the Value of the Bills kept nearly at a Stand; not because the Quantity of the Paper Currency was diminished; For on the contrary it greatly increas’d within that Time; But as the immoderate depreciating of the Bills had occasion’d excessive Losses to the British Merchants upon their outstanding Debts in this Province, it very much discourag’d and lessen’d the Importation of English Goods in the five next succeeding Years, and the Province by Degrees soon retriev’d it’s Melasses Trade, and the like Failure of their other Branches of Trade did not happen, so that by Means of lessening the Importation of Goods from England and of the Increase of the Quantity of their Returns, the Ballance of Trade in Favour of Great Britain was so much diminished that the Demands for Silver, and Gold, and Bills of Exchange to discharge it did not exceed the Quantity, which was to be had of ’em in the Province within those five Years, and so their Price kept very near at a Stand, and consequently the Bills of Credit depreciated very little within that Time.
I shall illustrate this Observation with one Fact more: I find that in the Year 1712 there was current in the Province 179038£ 15s. 9d. in Bills of the old Tenor, which then were equivalent to 716153£ 3s. 0d.. in Bills of the same Tenor and Denomination, according to their present depreciated Value, which Sum exceeds the Quantity of all the Bills of Credit now current in the Province; and yet the Bills of Credit continu’d at Par with Silver till the Year 1713, and were not in the least depreciated by their immoderate Quantity, tho’ £88,000 of it, which was then equal to £352,000 was emitted within the Year 1711, and the Bulk of the Remainder was all issued in the Compass of a few Years before; which seems to be a full Demonstration that the depreciating of the Bills from 40 to 495 per Cent. Advance, (the middle Price of Exchange at this Day) is not primarily owing to the immoderate Quantity of the Emissions of the Paper Currency in the subsequent Years; tho’ I doubt not but it has frequently contributed towards it at such particular Conjunctures, as I have before mention’d. - - - - The true Account of the Matter is this; The Trade of the Province had till this Time been in very flourishing Circumstances; the Massachusetts-Bay formerly supply’d not only the rest of New-England, but the Colonies of New-York, the Jerseys, Pennsylvania, and other Parts of the Continent, even as far as South Carolina, with the chief Part of their English and other European Goods, and carry’d on a very large Cod-Fishery at Canso, and a considerable Whale-Fishery in it’s own Bay, supply’d the English West. Indies wholly with Lumber and live Stock, and Jamaica and Barbadoes with great Part of their Wines from Madeira and the Cape de Verd Islands, drove a large Trade to the Bay of Honduras, Surinam, Newfoundland, Holland, the Streights and the Mediterranean; by all which it was furnish’d with a Variety of Returns to England besides Silver and Gold and Bills of Exchange in great Abundance; and with these Advantages it had a Silver Currency of it’s own Coinage; But as it wholly lost some of these Branches of Trade, and others in Part, the Cod Fishery in particular by the Encroachments of the French upon the Canso Fishery; and the Trade of Newfoundland by their Encroachments on the British Fishery; and their Whale Fishery was much decay’d by the Whales being beat off the fishing Ground ’till the last Year, when they in some Measure return’d into the, Bay; The Ballance of Trade with Great-Britain has by Degrees not only drain’d the Province entirely of it’s Gold and Silver Currency, so that those Species are become a mere Merchandize, but has of late Years constantly exceeded the Quantity of Gold and Silver imported from Time to Time into the Province from the West-Indies, and the Bills of Exchange to be purchas’d within it so much, that by raising the Price of ’em from Time to Time it has depreciated the Bills of Credit by Degrees to their present fall’n Value.
The preceeding Account of the Difference between the nominal Sum and real Value of the Bills of Credit current in this Province in 1712, and the nominal Sum and Value of Bills now current will furnish us with the following Observations. First, That tho’ the nominal Sum of the Bills of Credit now current in the Province, computed in Bills of the same Tenor and Denomination with those which were current in the Year 1712, vastly exceeds the nominal Sum of the Bills then current, yet their real Value or Quantity is much less than that of the Bills, which were current in that Year, so that the immoderate Emissions of Bills since that Time, instead of increasing, have much diminish’d the Medium of Trade; which is one very remarkable Mischief of the excessive Quantity of ’em. Secondly, That it is impossible absolutely to fix the Value of the Bills of Credit under the present Circumstances of the Trade of this Province, and that the utmost, which can be done for the Creditor, is to secure to him the Value of his outstanding Debts against the depreciating of the Bills. Thirdly, That this demonstrates how unfit Bills of public Credit are to serve as a Medium of Trade in New-England, and the great Wisdom of His MAJESTY’S Royal Instruction to the Governours of his two Provinces there restraining ’em to Emissions of Bills for the necessary Support of his Government only, and to a limited Sum of ’em even for that Purpose. Fourthly, That notwithstanding his Majesty’s two Provinces of the Massachusetts-Bay and New-Hampshire are by Virture of his Royal Instructions to the respective Governours of ’em limited in their Emissions of Bills of public Credit, as to the Sums allow’d to be current at one and the same Time, and such Sums to be only for the necessary Support of his Majesty’s Government within those Provinces, yet as the Bills of public Credit emitted by the two Colonies there will always from the Circumstances of the Trade between them, and the Province of the Massachusetts-Bay, obtain a general Currency within that Province (notwithstanding the utmost Endeavours of the Massachusetts Government to prevent it) and -the two Colonies are at Liberty to emit such Quantities of Bills upon Loan, as are not only sufficient to supply themselves with a Medium of Trade within their own Government, but also with a surplus Stock to purchase whatever Merchandizes they want from the Province of the Massachusetts-Bay, or to lend any Sums to the Inhabitants of that Province upon personal or real Security, the Inhabitants of the four Governments in New-England consider’d collectively will be at Liberty to supply themselves with what Quantity of Paper Medium they please, notwithstanding the Restrictions laid on the particular Governments of the two Provinces; for tho’ neither the Province of the Massachusetts-Bay nor of New-Hampshire should be permitted to issue out one Bill, yet they would be supply’d with whatever Sums they desired from the Colony of Rhode-Island in particular, five Sixths of whose Bills, to the amount of at least £350,000 old Tenor, are already circulating within the Province of the Massachusetts-Bay; and His Majesty’s Instructions to his Governours of his two Provinces, tho’ the most exact Obedience should be paid to ’em, would wholly lose their intended Effect as to remedying the Mischiefs arising to the British Merchants in particular from an unlimited Paper Currency in New-England.
And I think, Sir, upon the whole, that were the same Regulations of the Paper Currency to be extended to the two Governments of Connecticut and Rhode-Island as I have before-mention’d to have been made in this Province; and those two Colonies were to be limited in their Emissions of Bills with Respect to the Sums allow’d to be current at one and the same Time within each of ’em, in which Case I shall suppose the whole Sum allow’d among all the four Governments would not exceed the Value of £60,000 Sterling at the most, and those Sums to be restrain’d to the necessary Support of his Majesty’s Government, and secur’d to be drawn in by Funds of Taxes equal to the Sums emitted, in the same or next succeeding Year at furthest, and the Bills of all the four Governments to have the Advantage of being receiv’d at their respective Treasuries at 5 per Cent. Advance, it would go far towards restoring a Silver and Gold Currency, (the only proper Medium of Trade) in New-England, would prevent in a great Measure, tho’ not absolutely, the depreciating itself of the Bills of Credit and bid fair for curing all their mischievous Effects.
Since I began this Letter the Governour made a Speech to the Assembly on the 9th Instant upon the Subject of the Bills of Credit of the Colonies of Rhode-Island & Connecticut, setting forth the pernicious Effects of ’em with Regard to this Province, which as it seems to have had a remarkable Influence upon the Members of the Assembly and the People in general, I shall here transcribe: Viz.
Gentlemen of the Council and House of Representatives,
THE chief Occasion of my calling you together at this Time is to lay before you, for your Consideration, the State of the Province with Respect to the Bills of Credit on the neighbouring Governments: ----- Of these there may be reckon’d to be now current among us the Sum of £ 400,000 computed in Bills of the old Tenor, viz. £350,000 of it in Bills of the Colony of Rhode-Island, and £50,000 in those of the Colony of Connecticut: Upon this Sum the Inhabitants of this Province have by the general depreciating of the Bills from £450 to 485 per Cent Advance, which seems to be the middle Price of the present Exchange, lost within these nine Months £25,000 old Tenor, which the Inhabitants of the two Colonies have gain’d (some small Deduction for the Bills of this Government, which may be current within the Colonies, only excepted) --- And on looking back to the Year 1734, in which the Bills of Credit depreciated a third Part of their whole Value, I find that the Province then lost upon £320,000 of the Bills of those two Colonies, which may be computed to have been at the Time current in it, upwards of £106,000 old Tenor, (such Deduction as I have beforemention’d only excepted) --- and whoever would make a minute Calculation of -the Losses sustain’d by this Province from Time to Time upon the several Depreciations of the Bills of the two before-mention’d Governments current among us, will, I doubt not, find ’em amount to £180,000 old Tenor at least: This of it self would be a grievous Loss to the Community, was it to stop here; but as we may very reasonably expect further large Emissions of these Bills, and (if we may judge by our present Proportion of those already extant, what our Share of their future Emissions will be) that five sixths of the Rhode-Island Bills, and more than half of those of Connecticut, or at least some other large Proportion of ’em will center in this Province; and that under the present Circumstances of our Trade, and of the Bills of these Colonies, the depreciating of the Bills in general will continue to be unavoidable, how insupportable to this Community must it’s growing Loss be?
The Loss already sustain’d by it’s Inhabitants, like other general Losses of a Community, may not have been sufficiently regarded by ’em, especially as the Bills of this Government have depreciated pari passu with the Bills of the Colonies, and all of ’em have had a promiscuous Currency among us, so that the Loss arising upon the Bills of the Colonies have not been separated and distinguish’d from that, which arises upon the Bills in general; but it is evident that every Person must share in it more or less, and the Debtors, who are subject by the late Province Law to make an Allowance to their Creditors for the depreciating of the Bills, must feel it in a particular Manner.
I have hitherto, Gentlemen, only observ’d to you the Loss arising to the Province by the depreciating of the Bills of the two Colonies in our Hands, which must be sustain’d, tho’ the Bills should be finally redeem’d from the Possessors: But what just Grounds have we to conceive any such Expectations? Or with what are they to be redeem’d ? The present Emissions of the Rhode-Island Government may be reckon’d to amount in the whole to about £440,000, £70,000 of which appears to be sufficient for the Medium of their own Trade, and to defray the Charges of their Government: The £350,000 current in this Province is a surplus Stock, with which the Inhabitants of the Colony have purchas’d European Commodities from the Merchants & Traders of this Province: Is there any Prospect of finding Vent for this immoderate Sum by the Purchase of any Merchandizes within their Colony? This can’t be expected ’till the whole Trade of this Province shall be transferr’d to them; and it may be a Question whether even Part of that would be easily accepted by ’em; for it is certainly more eligible for ’em to purchase British Manufactures in Boston with their Colony Bills, than to remit their own Substance for ’em to Great-Britain: I will suppose, and doubt not but that the Government of Rhode-Island will call upon the Borrowers of these Bills to discharge their Bonds, when their distant Periods shall arrive; but can we reasonably depend upon their compelling their own Inhabitants to redeem the Bills outstanding in this Province with their Houses, or Lands, or any other Part of their Estates ? May they not rather assist ’em with further Emissions of Bills to enable ’em to pay off their old Debts to the Rhode-Island Government: And will not the Consequence of that be to augment the Quantity of their Colony Bills, which the Inhabitants of this Province have already current among ’em, in so excessive a Degree as that the Province must at last sink under the Loss arising to it by ’em: The Circulation of the Bills among our selves may possibly hide the pernicious Effects of ’em to the Province for some Time; But can it be reasonably thought that a Circulation of Bills without any Prospect of their Redemption by the Government that emitted ’em, and with very little other Value to this Province at the bottom, than what they receive by the Circulation it self in the Province, should not fail in a few Years; and what a Scene of Distress and Ruin that would produce in the Province I need not tell you.
These, Gentlemen, are Matters, that demand your closest Attention, and the most speedy Redress: What will it avail the Province for this Government to take due Care of the Regulation of it’s own Bills, if it must still be exposed to be ruin’d by the immoderate Quantities of the Bills of it’s Neighbours, emitted for no other visible Purpose, than to be sunk in this Province; whereby they have it in their Power to become Masters of whatever Share of our Substance and our Trade they shall be pleas’d to take in exchange for their Bills.
As to the proper Method for procuring the Redemption of the Bills of these two Government already introduced among us, or preventing the Introduction of more of ’em into the Province, I should be glad if I could suggest to you any Thing, which it may be in the Power of this Government to do further than what they have already done: In 1738 an Act with a considerable Penalty in it was pass’d for preventing the Bills of any of the neighbouring Governments, which had been emitted since the first Day of May in the same Year, or should afterwards be emitted, from being utter’d in this Province, unless they were made redeemable by lawful Money upon good Security within ten Years after their first Emission, and it should so appear by the Tenor and upon the Face of the Bills: But this you are sensible, Gentlemen, had not any Effect to check the Currency of ’em among us before September last, when a Proclamation was issued with the Advice and Consent of his Majesty’s Council to inforce the Observation of it upon all His Majesty’s Subjects within this Province in general, and the civil Officers within it in particular: This I hope may have had it’s proper Effect upon the Officers, but doubt much whether it has had any upon others: And in, June last a Committee was appointed by the General Court on Behalf of this Province to treat with such other Gentlemen, as might be appointed by the three neighbouring Governments on their Parts, in order to project some Measures for preventing the further depreciating of the Bills of Credit of the respective Governments, or otherwise to consider of some Method for bringing ’em to a Period in such Manner, as should be just and equal, and most for the Interest of the Inhabitants of these Governments: And I am informed by Mr. Secretary that he sent Letters of Advice concerning this Matter to the several neighbouring Governments, desiring their Concurrence in these Measures, but without having receiv’d any Answer from ’em. - - - - If any Thing can be still further done for remedying these Mischiefs by this Government, I shall readily concur with you in it.
Whatever some Persons may perswade themselves, it is certainly an Error to think that any of His Majesty’s Colonies have the Privilege conferr’d upon ’em by Charter to make Money; Coinage is an undoubted Part of the Royal Prerogative, and the Practice of striking Bills of publick Credit to pass in Lieu of Money stands solely upon the Royal Indulgence, and is warrantable no further than it is necessary for the Support of His Majesty’s Government within the Colony or Province, that uses it: The Bills of this Government, which have been issued within these last tenYears, stand indeed upon a different Foundation from that of the Bills of the two beforemention’d Colonies: They have been emitted by formal Acts of the Legislature, which have receiv’d the Sanction of His Majesty’s Royal Approbation: And they are no less distinguish’d from those of the two Colonies by their Quality, having been emitted only to defray the necessary Expences of Government, and being secured to be drawn back into the Treasury generally at such reasonable Periods, as the Circumstances of the People would bear, by sufficient Funds of Taxes, which is the proper Government Method for raising publick Money: The whole Arrear of Bills lately outstanding beyond their stated Periods are now drawing in by Executions issued in general against all the deficient Constables and other Collectors of Taxes through out the Province, and will be very speedily sunk: And the sinking of the Bills of the new Tenor, whose Periods are not yet arriv’d, at the Time limited by their Emission Acts, are by a late Provision made in the Acts themselves secured from all Danger of being postponed: The Government has now secured to Creditors the full Value of their outstanding Debts against the future depreciating of it’s Bills, and has lately paid the Possessors a very large Sum in Satisfaction for the past depreciating of ’em.
And I should think, Gentlemen, if it was even possible that the saving of this Province from the great Loss which it must sustain, unless the Redemption of that immoderate Sum in the Bills of the two Colonies already Current in it is procured, and from the further Loss which it must incurr by their future Emissions of Bills, unless they are limited in ’em, could seem a small Matter in your Eyes, that it would still be a Point of Prudence in you to concert proper Measures for vindicating, in Case of a Parliamentary Inquiry into the Mischiefs which I have mention’d to you, the justice of this Government and the Credit of it’s Bills from all possible Imputation of those Abuses, which the other Governments may possibly be deem’d to have committed in their Emissions; and by a proper Representation of the different Circumstances of the Bills of this Government from those of the two Colonies to secure ’em from the Danger of being involv’d in the Censure and Condemnation, which the Colony, Bills may be expos’d to the Danger of. ----- But these Measures I shall leave to your own Determination; and you may depend upon my ready Concurrence with you in any Thing, which shall appear to be for the real Interest of the Province upon this Occasion, &c.
The Departure of the Vessel, by which this will be convey’d to you, will not permit me to delay the closing of it, till I can inform you what particular Resolution the Assembly will come into upon this Occasion: But it is apparent by their Proceedings hitherto, that the Governour’s Speech has open’d the Eyes of all the Members to discern the pernicious Consequences of the immoderate Quantity of Bills of Credit in general, and seems to have intirely wean’d their Affections from the Connecticut and Rhode-Island Bills in particular, to prevent the mischievous Effects of which they seem to be bent upon finding some Method out before they rise; But what the result of their-Deliberations will be must communicated in my next.
In the mean Time I must observe, that this sudden Change of the Sentiments of the Assembly in general, some few Gentlemen in it only excepted, who were before appriz’d of the ill Consequences of the Use of Bills of Credit further than the necessary Charges of his Majesty’s Government requir’d, and the weaning of their Affections so far from a Paper Medium of Trade at once, must be very much attributed to the Governour’s opening the Eyes of the Debtors in particular with Respect to their Share in the several Mischiefs he had pointed out in his Speech: Had he made the same Speech to ’em before he had introduced the late Law pass’d for obliging the Debtors to make an Allowance to their Creditors for the depreciating of the Bills and carried it into Execution among ’em, it may well be questioned whether his Excellency could have wro’t the same Conviction in ’em, or at least have had the same Influence upon ’em, whilst they themselves were Gainers by the depreciating of the Bills: But as the Tables are now turn’d upon ’em by the late Province Law, the plain unavoidable Consequence was to engage their most hearty Endeavours for fixing the Value of the Bills, and putting an End to the immoderate Quantities of ’em usually circulating before within the Province, so that the present Crisis of the Paper Currency within all the four New-England Governments may be as justly imputed to the Effect of the before-mention’d Law introduced into this Province for securing the Value of outstanding Debts, as to the Influence which this Representation of the other Mischiefs enumerated in the Governour’s Speech, and which the Members of the Assembly had not seen before in the same strong Light, might have: And had not both together made a very deep Impression indeed upon ’em, they would never have been brought into the same unanimous Disposition for redressing the Mischiefs in some Way or other, which at present appears in ’em.
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