CHAPTER IX.

ATTEMPTS AT ADJUSTMENT OF DEBTS.

Before resuming the chronological narrative of the currency question, it is important that we should devote a short time to the consideration of the adjustment of debts, a subject which had been full of perplexities from the beginning of the issue of paper money, but which during the inflation under Shirley became practically incapable of any just solution.

We have seen that in 1742, Shirley took great pride in the passage of two laws, in the shaping of both of which he believed that his influence had been paramount. The first of these, the supply bill, has already been considered. The second, the act for ascertaining the value of money, belongs to a class of legislation, which requires for its clear comprehension, that it should be examined independently from the question of emissions. The various struggles that took place in Shirley's time in connection with the interpretation and enforcement of this act, are so confusing in their details, and yet at the same time so important in their bearing upon events, that even if the general subject were not entitled to separate consideration, the narration of the facts associated with this attempt to protect creditors would compel independent investigation.

For nearly thirty years the act for the relief of, and to prevent the oppression of debtors, originally passed in 1712, had by various extensions been maintained as the law of the land. Practically, as has already been said, it made old tenor bills a legal tender. Shirley was thoroughly opposed to the principle embodied in this law, which by the terms of the last extension was, when he assumed office, about to expire. He charged that through the instrumentality of this act injustice had been done to creditors in the past, particularly to British merchants, who had through the depreciation of the bills continually suffered large discounts in the adjustment of their accounts. He included also among the sufferers, widows and orphans residing in the province, whose estates were injured in a similar way. He gave figures showing the advance, during certain periods, in the rate of exchange between bills of credit and sterling money, and pointed out the injustice of compelling creditors to accept the depreciated bills in settlement of their debts. With a certain amount of confusion in his attempts to express the discount, he asserted that it "was the same thing as if the government had passed a law in each of those years that creditors in trade should be obliged to accept twenty, a hundred and ten, and a hundred and sixty per cent. less than the real value of their debts."(1)

So long as Shirley entertained these views it was impossible to secure by legislation any further extension of this act. There were, however, several abortive efforts made, in one direction and another, to secure a settlement of the question underlying the act, before a final agreement was reached between the house, the council, and the governor. Two days after Shirley delivered his inaugural address, and probably before his views were thoroughly appreciated, a committee was appointed by the assembly to consider what should be done in view of the fact that the act for the relief of debtors was about to expire, and in the same month an act for ascertaining the value of paper currency within this province and fixing a medium to supply the place of it, was matured in the council, but unanimously rejected by the house. In a supply bill which was enacted by the assembly but rejected by the governor in October, 1741, a complicated scheme was incorporated for the adjustment of outstanding debts. They were to be classified in three divisions: I. Those contracted prior to October 31, 1729; II. Those contracted between that date and October 31, 1735 ; III. Those contracted subsequent to the last date. The act contained a provision for the emission of a new note on a sterling basis, and in the scale for the adjustment of debts this note was recognized, but taking old tenor bills as the measure, debts of the first class were to be settled in these bills, on the theory that silver was then worth 20s. an ounce. For the second class, the bills were rated in a similar way as equal to silver at 24s. an ounce, and for the third the rate was fixed at 28s. 6d. an ounce.

We are indebted to this act for a lengthy message of disapproval from Shirley, in which, after mentioning his objection to the bills proposed to be issued, both on account of their form and that they were made a legal tender for debts, he argued that the payment of taxes in commodities laid the province open to prejudicial combinations on the part of those who could control their prices, and then went on to review the situation in detail, and point out the progress of the depreciation of the bills of public credit. He disapproved of the scale proposed for the adjustment of debts, and stated that between 1712 and 1730, exchange had risen from 50 per cent. premium to 250 per cent., and now it was 450 per cent. He also disapproved of the combination of the equitable part of the bill with a supply bill. It will be seen that the basis for the adjustment of debts contracted after 1735, in the proposed bill, corresponded closely with what Shirley says the premium was. The message was an able document and doubtless had weight with the assembly,(2) for they did not in this case, as they had frequently done with other governors, grimly assert that they had done the best that they knew how to furnish a supply to the government, and put forth the claim that it was not their fault if there were no funds, but in due course of time, they matured a bill in consonance with Shirley's views. They also detached the subject of the adjustment of debts from the supply bill and enacted in January, 1741-42, the second of those bills which Shirley thought of so much value to the province.

The act for ascertaining the value of money, etc., provided that all coined silver of sterling alloy should pass at the rate of 6s. 8d. per ounce, Troy weight. All private trade and dealings where no other lawful money or thing was expressly contracted for, were to be considered as intended to be in and for the money aforesaid. That is to say, silver coin at 6s. 8d. per ounce was to be the basis of private contracts unless something else was specified.

The effect of the foregoing was, however, modified by subsequent sections which provided that the province bills emitted for the supply of the treasury that year should be taken on the basis of the above rate of silver. For five years from the last day of March, 1742, all debts where no special method of payment was provided, were to be deemed to be upon a silver basis. A debt of six shillings and eight pence could be paid with an ounce of silver, or with six shillings and eight pence in the bills emitted that year, or in so much of the province bills thereafter to be emitted as would purchase an ounce of silver. Special provision was made for the depreciation of the bills. In case they should pass at a lower rate than that set by the act, an allowance was to be made to the creditor, and the depreciation was to be estimated once in six months by the General Assembly or if they should fail to do so, then by a committee composed of the eldest councillors from the several counties, and if they also should fail in their duty, then the superior court of judicature was to appoint a jury for the purpose. The price of silver and the cost of bills of exchange were to be the means of determining the depreciation. Grants made by the assembly payable in sterling money, which were to be settled out of the money which should be raised under the supply act of this year, were to be paid at the rate of 5s. 2d. sterling for 6s. 8d. of the bills emitted. It will be seen that if the normal rate of exchange was 133, this conversion was based upon silver at 6s. 10 d. per ounce.

Hutchinson(3) thus describes this act "This was a scheme to establish an ideal measure in all trade and dealings, let the instrument be what it would. The act which passed the court declared that all contracts should be understood payable in silver at 6s. 8d. the ounce, or gold in proportion. Bills of a new form were issued, 20s. of which expressed in the face of the bill three ounces of silver, and they were to be received accordingly in all public and private payments, with this saving, that, if they should depreciate in their value, an addition should be made to all debts as much as the depreciation from the time of the contract to the time of payment. How to ascertain the depreciation from time to time was the great difficulty in framing the act. To leave it to a common jury would never do. There was some doubt whether a house of representatives would be wholly unbiased. At length it was agreed that the eldest counsellor in each county should meet once a year and ascertain the depreciation. Later, speaking of the operation of the law, he says,(4) that "the counsellors appointed to estimate the depreciation never had firmness enough in any instance to make the full allowance, but when silver had rose 20 per cent, or more, an addition was made of four or five only. The popular cry was against it, and one year when Nathaniel Hubbard, Esquire, the eldest counsellor for the county of Bristol, a gentleman of amiable character, and who filled the several posts he sustained with applause, endeavored to approach nearer to a just allowance than had been made in former years, he felt the resentment of the house, who left him out of the council next election. In short, the act neither prevented the depreciation of the bills, nor afforded relief in case of it, and was of no other service than to serve as a warning, when an act was passed for establishing a fixed currency a few years after, to leave nothing to be done by any person or bodies of men, or even future legislatures, to give the act its designed effect, but in the act itself to make full provision for its execution in every part."

The act for the relief of debtors had expired October 31, 1741. The section in the new act defining the method in which the new bills might be used in the adjustment of debts did not go into effect until April 1st, 1742. In the supply bill passed July 1, 1742, this gap was covered by a provision that debts contracted prior to October 31, 1741, payable in old tenor, and also any debt contracted in. the interval between that time and April 1, 1742, where the parties had not expressly agreed otherwise, could be discharged by the new bills in the proportion of one to four, old tenor. This provision as to the reception of the bills in payment of debts was reenacted in the supply bills of January, 1742-43, and November, 1743.(5)

The act for ascertaining the value of money seems to have made the debtor class of the community restless, and their efforts for relief began to crop out in various schemes for legislative interference. In December, 1742, an "act to enable debtors to discharge all specialties and express contracts in writing, with province bills according to equity and good conscience" , was put through the preliminary stages, but finally failed of passage.(6) In April, 1743, an "act for the equitable payment of bonds and debts contracted before the last day of October, 1741", was bandied about between the board and the house,(7) it being evident from the record that there was a wide difference of opinion between the two bodies as to the character of legislation required in this direction. On the 19th of April, the bill being then in possession of the council at the stage of engrossment, the house sent up to the board asking that it be sent down to them. On the receipt of the bill, they passed a resolve, in the preamble of which they called attention to the fact that under the direction of the superior court of judicature, a committee had established the value of an ounce of silver in bills of the last form at 7s. 2d. It did not appear it was said that there had been any such depreciation of the bills of public credit.(8) It was, therefore, unanimously resolved by the house that all debts contracted between March 31, 1742 and March 31, 1743, specialties and contracts excepted, should be deemed and adjudged equal to the real value only that such bills passed at when such debts were or should be contracted. If the bills should depreciate then an allowance should be made. This was sent up to the Board, but met with a unanimous non-concurrence. The council then voted that a committee should be ordered to prepare the draft of a bill for explaining such clauses of any of the acts of this province then in force as related to the payment of debts contracted prior to October 31, 1741, in bills of this province. In this action the house concurred, and as a result of the discussions which then took place an act in explanation of sundry acts of this province relating to the payment of private debts contracted before the 31st day of October, 1741, was agreed upon, and on its final passage on the 21st of April, just before the close of the session, this bill appears from language used by Shirley to have received the unanimous approval of the assembly.

Notwithstanding this fact, Shirley stated that the matter was too important for him to give his approval without making some investigation of the subject. He would announce the result of his examination at the next session. This he did on the 27th of May, immediately after the opening of the General Court at the May session. He had in the meantime made a thorough research into the practice of the courts in entering up judgments, and the message, in which he set forth the results of his investigation, though perhaps unnecessarily verbose and more in the nature of an attorney's brief than a state document, was, nevertheless, a paper of considerable merit, containing much information of value. He intimated that it was impossible to explain away the obvious meaning of a statute by a palpable misconstruction, and while he felt constrained to withhold his consent from the act as passed, he pointed out certain features which met his approval.(9)

On the 8th of June, a resolution was passed by the assembly and approved by the governor, which seems to have been based upon the facts set forth in the governor's speech, in which it was asserted that from 1712 to 1742, it had been the uninterrupted practice of the courts in chancering penalties upon all bonds and mortgages, the conditions of which were the payment of bills of credit or lawful money,(10) to make up judgments for the nominal sum expressed in the conditions of such bonds with the addition of interest due thereon ; and the executions awarded on said judgments had been levied by the sheriffs for the value of the nominal sum, in bills of credit of the old tenor. After the passage of the supply bills of July, 1742, and January, 1742-43, some of the judges, in making up judgments on bonds and mortgages, made allowances for depreciation from the time the debts were contracted. It was, therefore, resolved by the General Court that this course if pursued would be attended with manifest injustice and oppression. The courts were consequently empowered to reconsider such judgments and were recommended to return in the future to their former practice in such cases.(11)

On the 27th of May, 1743, Shirley said to the assembly, "I think the General Court in 1736 gave the creditors an expectation that the outstanding bills of the old tenor should be exchanged at the treasury in 1742 for silver at the rate of one ounce for every twenty shillings in bills." In discussing the question of who was entitled to relief, he drew a distinction between hoarders of bills and ordinary creditors. Again, on the 10th of June, 1743, he adverted to this subject in a general review of the currency question and of the effect of the depreciation upon debtors and creditors. He approved of the action taken in chancering bonds and mortgages, but thought the province should make good the loss to creditors. He called attention to the various clauses in the acts authorizing the emission of bills, under which liability on the part of the province to maintain the bills at certain standards might be implied. The acts of 1736-37-38 he said made twenty shillings old tenor equal to one ounce of silver, but in 1741, the assembly had reduced this value one-quarter.(12) He thought creditors entitled to some protection against such legislation. He admitted that at the very time that some of these acts fixed the value of silver in old tenor bills at 20s. an ounce it was actually worth 27s., but he thought by some means an equitable adjustment could and ought to be made.(13)

In the quotation from Hutchinson, relative to the operation of the act for ascertaining the value of money, we have seen that he attributed to the committee of councillors, unwillingness to recognize the actual extent of the depreciation when they were called upon to determine the rate, and that there was doubt whether the house of representatives would have been unbiased. The resolution already referred to, passed by the assembly, April 19th, was embodied in an act in June of that year.(14) An examination of this act will forcibly recall this suggestion.

In the preamble, the facts set forth in the house resolution were repeated. It was asserted that the judges of the superior court, in pursuance of the law, had made inquiry as to the depreciation, by a committee appointed for the purpose, that this committee had lodged a certificate in the secretary's office to the effect that seven shillings and two pence of bills of the last form and tenor were equal to one ounce of silver, whereby an addition of six pence was made upon every debt of six shillings and eight pence. No such depreciation, it was said, had taken place. The bills were of as much value for the purchase of exchange when the certificate was filed as they ever had been. The trouble lay with the debtor who had not strictly followed the law. Every debt of six shillings and eight pence was declared by the law to be equal to one ounce of silver, and the debtor ought to have regarded his debt as payable in lawful money. Public bills, being as a matter of fact, the only medium of common trade, there would be continual danger of the computation of debts according to the depreciated value of the bills, whilst the real measure was deemed by law to be lawful money.

It was, therefore, enacted that debts contracted since March 31st, 1742, or that should be contracted after the date of the act, were to be deemed equal to the value at which the bills passed when the debts were contracted. Depreciation which took place between the time of contract and time of payment was to be allowed by the courts, so that the payment should be equal in value to the debt when contracted.

Perhaps this abstract of the act and its preamble may not seem clear, but the preamble can be interpreted in such a way as to render the law intelligible. It will be observed that the discount of the bills is not denied. The assertion is that it did not take place within the period covered by the certificate. If the statement had been made that the rate of silver March 31, 1742, was 7s. 2d. per ounce in these bills, then it would have been clear that under the clause in the law covering the question of depreciation debtors ought not to pay sixpence additional on each 6s. 8d. of their debts. In effect, the assembly says in this preamble, that there has been no discount, because the bills are available for just as much in the purchase of exchange as they ever were, and they then go on to say, the debtor must remember that an ordinary debt is measured by the silver which the bills would have purchased when the debt was contracted, and it must be settled by the payment of enough bills to procure the same amount, no matter what the depreciation may be.

It will be remembered that the act of emission fixed the value of the bill by saying that 6s., 8d. in the bills were equal to an ounce of silver, and this must have determined the courts in fixing the amount of depreciation, whereas, if what the assembly allege in this preamble is true, then the bills must have fallen to the lower rate at once. For proof that this conjecture is true we may refer to a message of Shirley's to the house on the 30th of May, 1743. He was discussing the values set upon the bills by a committee of the superior court of judicature at the February term in Suffolk county; 137, l0s. in bills was said to have been equal on the 28th of February to 100 sterling, and 7s., 2d. was then equal to an ounce of silver.(15) He added that the bills were of no greater value than this at the time of the passage of the act, notwithstanding the fact that they were rated therein at 6s., 8d. They were, therefore, rated in the act at 7 per cent, above their current market value. It was the intention, he said, that the depreciation should be estimated from the current value of the bill and not from the rate stated in the act.(16)

Under the act which we are now considering the duty was thrown upon the courts of making the allowance for depreciation. The method of doing this was not necessarily changed. The act was in addition to and explanation of the former act.

From what has already been said it will be apparent that an agreement between the two houses as to how the depreciation should be determined had not been reached without a struggle. The journals of the two bodies furnish us with still further details of this contest, an examination of which may, perhaps, be worthy of our attention. On the 16th of February, 1743-44, the house resolved that whereas it was near six months since the value of public bills in silver or bills of exchange had been fixed under the provisions of the act for ascertaining the value of money, a committee ought to be appointed to consider the rate at which province bills then commonly passed, in proportion to bills of exchange or silver and lay before the court the evidence which governed their conclusion. Under the law as it then stood, the performance of this duty rested primarily with the assembly. This action of the house was, therefore, a mere announcement of a determination to perform a duty imposed upon the representatives which, however, was probably dictated by a desire to secure a better rating of the bills than had been accomplished by the methods of estimating the depreciation which had actually been employed. In this action the board concurred on the 17th.(17) On the 21st of February the house instructed the secretary to inform the justices of the superior court that such a committee had been appointed, and on the 25th of February a report was presented which proved to be acceptable to the council, but was rejected by the house. Still another report of a committee appointed to ascertain the value of money was presented March 3, 1743-44. In this latter report the value of the ounce of silver was fixed at 7s., 6d. in the new province bills. 142, l0s. of these bills were said to be equal to 100 sterling.(18) Again the council agreed with the report and adopted an order that this should be the rule by which judgments should be made up in the courts, and again the house non-concurred, and this time they voted that however much the bills of the neighboring provinces had depreciated, bills of this province, in consequence of the fact that the time for their redemption was drawing near had not lessened in value and they resolved that the actual rate of silver in these bills was 7s., 2d. an ounce and 137, l0s. in bills equal to 100 sterling.(19) With this the council unanimously non-concurred and on the 8th a conference was appointed to be held on the 9th. This, however, apparently failed to accomplish anything in the way of bringing the two bodies to an agreement as the council on the 10th, after the conference voted to adhere to their position. The house thereupon voted to refer to a joint committee the question of the rate at which province bills then commonly passed in the province in proportion to gold and silver and bills of exchange on London. On the 13th such a committee was appointed and on the 14th a report was submitted in which it was stated that the rate set by the former committee was just and this the council unanimously approved.(20) The house, however, continued recalcitrant and after having rejected the report of the committee they passed an order asserting in the preamble that the bills of credit of this province had in no degree depreciated since March 31, 1742. The house had determined a rule for the courts in which the board had non-concurred and there was no probability of agreement, they therefore voted that the eldest councillor of each county do forthwith meet as a committee and determine the rates of said bills of credit as the law directs, and that a certificate under their hands, or the hands of the major part of them, be lodged in the secretary's office accordingly. Whatever the intention of the house may have been in making this proposition, the council would not agree to it, but voted that the affair be left to the determination of the eldest councillors in each county, according to the directions of the law in that case made and provided, and that they be desired to meet forthwith in the said affair. To this the house in turn would not assent, but on the 16th the two bodies agreed upon a resolution in which after the language of the act which set forth the manner of proceeding was recited in the preamble, a vote followed that the said councillors do forthwith proceed to determine the affair as the law directs, and that a certificate under their hands or the hands of the major part of them be lodged in the secretary's office accordingly. It is hardly worth our while to waste any time in searching for all the points concealed beneath the language of the several orders above given and hereinafter recited. The temporary solution of the point seemed to consist in referring the determination of the matter as the law should direct to the councillors themselves, but it is obvious that the hint given by Hutchinson, which has already been referred to, was involved therein, and it is probable that a knowledge of the opinions of the individual councillors who were eligible to serve on this committee would help us to interpret the action of the two bodies.

A committee was appointed December 21, 1744, to inquire into the present value of the bills. They reported that in the bills issued since 1741, an ounce of silver was rated at 7s. 6d. and 100 sterling was equal to 142, 10s. in said bills. This was adopted by the council and accepted by the house.(21)

January 11, 1745-46 the house renewed this contest by sending up a vote that the eldest councillor in each of their counties where any of his Majesty's council inhabit be directed to ascertain the present value of the bills of credit of the province agreeably to the law in this case provided. Apparently nothing came of this for on the 25th of June a committee was appointed to ascertain the value of the bills. On the 28th of the same month the house in consequence of the failure of this committee to report, renewed its vote appointing the eldest councillors to perform that duty. On the 23rd of July they sent up to the council to ascertain if they had acted in the matter and learned that no action had as yet been taken. The next day the board voted that, whereas the six months since the last stating of the value of the bills of credit had expired on the 23rd, and some of the councillors appointed by law to state the value of the bills in case of failure of the General Court to do the same were then absent, it should be the duty of John Osborne, Esq., the eldest councillor then in Boston, to forthwith convene the other eldest councillors of the respective counties at Boston and appoint a day as soon as conveniently might be for their meeting in the said affair, that so a rule might be by them determined for the procedure of the courts in making up their judgments according to law.

There was something in this vote that the house did not like and they sent up a messenger to the council with instructions to state to the board the provisions of the law bearing on the question and to add thereto a statement that the house desired that the eldest councillors then in town should notify the other councillors to convene as soon as might be to perform this duty. The record of this conflict between the two houses ends here, but it is probable that in some manner a rate was fixed for the rule of the courts in making up judgments.

On the 2d of February, 1746-47, a committee was appointed to ascertain the value of the bills and this committee, Feb. 13, fixed the rate the same as the last which had been determined, but a question was raised on the next day as to the validity of the action of the council because some of the committee were then absent. The matter came up again March 26, 1747, and a vote of the council then passed was sent down to the house. In the preamble to this vote the council asserted that at the time of the last establishment of the value of the bills, February 18, all the councillors entitled to act were not present. For this reason the action then taken was perhaps not legal. Moreover they went on to say, the agents of the province at the court of Great Britain were then soliciting the reimbursement of the great expenses to which the province had been put in the reduction of Cape Breton. The result of this application would soon be known and in case it was favorable, it might reasonably be expected that the bills of public credit would greatly advance in value. For these reasons, justices were ordered in making up judgments at any time before August 1st, not to allow for depreciation otherwise than they had been wont in conformity with the several settlements of the value of bills preceding that of February 18th. The house would not agree to this in the form in which it came to them but on the 31st, the council having in the meantime solicited them to reconsider their action, they voted: That whereas the determination of value on the 18th of February was of doubtful legality, they would remove the doubt by voting that it was void and of no effect, and as the success of the solicitation of the province agents for a reimbursement of the charges of the late expedition might very much affect the value of bills, and the event of such solicitation was daily expected, they would therefore order the justices in making up judgments before August 1st next, to allow for depreciation, in like manner and not otherwise than they had been wont to allow in conformity to the settlement of said bills last preceding the before mentioned of the 18th of February.

June 18, it was voted that the judges should proceed in making up judgments on the same basis until the 18th of February next, but on the 27th of June, 1747, Shirley refused his assent to this vote. No further action was taken until August 13th, when a committee was appointed to see what they thought necessary to do under the case after August 18th. On the 15th this committee was ordered to report forthwith and on the 18th their report was received and accepted.

On the 19th the house voted that they had taken the laws for the more equal payments of private debts into consideration. The rates of silver and bills of exchange were governed by the extravagant prices paid for bills of exchange to make remittances. The price of produce bore no proportion to them. If no special agreement had been made the judgment upon a debt should be for the sum appearing to be due, but for as much as such as had debts contracted before the last day of March 1747, on which they might expect an allowance for depreciation because of the laws in their favor and the difference in value between bills then and now, it was therefore ordered that on debts contracted before March 31, 1742, on which not more than six per cent. interest had been received, for every 100, 10 should be allowed for depreciation. In a similar way for those contracted after that date and before March 31, 1745, 7, l0s. should be allowed on every 100. On debts contracted after this last date and before March 31, 1747, 5 should be allowed on every 100. This was finally adopted August 25, with an amendment, the details of which are not given.

On the 28th of August, Shirley again interposed and refused his assent to this determination of values. He assigned certain technical reasons, each of which would have been fatal to the legislation if insisted upon, but none of which would in any probability have been mentioned except for the fact that in his judgment the protection afforded to the creditor by existing laws was by this action arbitrarily set aside. He then alluded to the neglect of the committees appointed by law to ascertain the value of the bills, to make a just allowance for their depreciation from time to time during the past four years or thereabouts as it was their duty to have done.

On the 8th of September the subject was again committed and a report was received on the 19th of October which was adopted in the House on the 20th. The governor gave his consent to the scheme on the 27th.

On debts contracted prior to March 31, 1742, 15% was allowed for depreciation.

On debts contracted between that date and March 31, 1744, 12% was allowed for depreciation.

On debts contracted between that date and March 31, 1746, 7%, was allowed for depreciation.

On debts contracted between that date and March 31, 1747, 5% was allowed for depreciation.

No allowance to be made for depreciation where more than 6 per cent. interest was charged.

A report was adopted March 3, 1747-48 bearing on this subject, but we have no details. These are to be found, however, in a report dated November, 9, 1748.(22) It did not meet with Shirley's approval, being so unjust in its operations in his opinion, that it would be better to leave the matter in the hands of the courts. It will, however, serve to show the opinion of the assembly as to the depreciation. The allowances were as follows:

On debts contracted before March 31, 1742, 20%.

On debts contracted after March 31, 1742, and before March 31, 1744, 16%.

On debts contracted after March 31, 1744, and before March 31, 1746, 10%.

On debts contracted after March 31, 1746, and before March 31, 1747, 6%.

No allowance to be made if more than 6 per cent. interest charged.

A committee was appointed February 24, 1747-48, to determine the value of the public bills, but we have no report of its action.(23)

A review of the rates which had been fixed from time to time by the committees will enable us to judge of the consistency of the Assembly. These will be found in tabular form on the opposite page.

The pressure in behalf of the debtors found expression in January 1744-45, in the passage of an act in addition to the act for ascertaining the value of money and of the bills of public credit of the province. The fact that certain creditors exacted more than six per cent, from their debtors was attributed to an effort on the part of such creditors to provide in this indirect way for the depreciation of the bills. Other covert methods of accomplishing the same result were enumerated, and in cases where the fact could be established that the creditor had received from the debtor compensation of this character, it was ordered in the first section of the act that no further allowance was to be made to such creditor.

TABLE OF RATES

Date. Province bills since 1741. Sterling Equiv. Silver rate Reference
1742-3 137 10s. 100 7/ 2 Mass. Arch., vol. 102, no. 287.
Sept. 2, 1743 140 100 7/ 4 Mass Arch., vol. 102, no. 307;

Suffolk Files 57,651

March 2, 1743-4 142 10s. 100 7/ 6 Mass. Arch., vol 102, no. 338;

Suffolk Files, 59,742

Dec. 27, 1744 142 10s. 100 7/ 6 Mass. Arch., vol. 102, no. 358;

House Journal, at date.

June 28, 1745 142 10s. 100 7/ 6 House Journal, at date.
July 25, 1745 142 10s. 100 7/ 6 Mass. Arch., vol. 102, no. 359.
Jan. 9, 1745-6 142 10s. 100 7/ 6 House journal, at date.
Jan. 24, 1745-6 140 10s. (sic.) 100 7/ 6 Mass. Arch., vol. 102, no. 359.
Aug. 8, 1746 142 10s. 100 7/ 6 Ditto, no. 360.



On the other hand, it was asserted that some legislation was necessary to protect creditors from loss caused by the depreciation of bills since March 31, 1742. To cure this defect in the law special provision was made in the second section of the act.

The third section was devoted to the benefit of the debtor class. It was asserted that there was a prevailing apprehension that bills of credit of the new tenor were to be esteemed as lawful money. Consequently, many persons had given bonds to pay lawful money where nothing but public bills had been received, and in such cases, nothing but bills had been expected by creditors in payment of the debt. Notwithstanding these facts some of the courts of the province had made up judgments on such debts for lawful money only, and had construed the same not to be payable in public bills, whereby the debtor had been capable of discharging the execution only with silver. The extreme scarcity of silver practically put the debtor in the creditor's hands in such cases. This oppression the government ought to prevent. It was, therefore, enacted that for the space of five years from the date of the first emission of the new tenor bills in 1741-42 judgment should be given only for bills in cases where silver was not given or received.(24)

If when Shirley assumed the reins of government, creditors needed protection against the depreciation of the currency, they certainly needed it all the more when the rise in silver was stimulated beyond all control under the reckless issues made in behalf of the military ventures of the province after 1744. The sympathies of the assembly were, however, with the debtor class, and in 1747, all efforts on the part of the province to protect creditors against depreciation were withdrawn.

The clause in the act for ascertaining the value of money, in which it was in substance provided that ordinary debts were to be adjudged as equal in amount to the silver which could be purchased with the bills in which the debt was nominally estimated, expired by the terms of the act on the last day of March, 1747. In September, 1747, an act was passed in addition to and explanatory of this act, and the other legislation to which it had given rise.(25) In the preamble it was asserted that provision in the former act had been made for determining the depreciation of the bills only through silver and bills of exchange which were made the standard. This rule, it had been found by experience, did not work well. The value of the bills could not properly be estimated by the value of any one or two particular "commodities or merchandizes", such as bills of exchange and silver then were, within this and the other colonies. It had been found that the prices of these two "commodities" were liable to be very suddenly and immoderately increased by a few persons for the sake of serving their own interests, whereby bills of credit had often been much depreciated with respect to bills of exchange or silver, though, at the same time, they had preserved their value with respect to all other "commodities and merchandizes" in the province. To prevent this inconvenience in the future, it was provided that in any valuation of the bills of public credit thereafter made for the above purposes(26) consideration must not only be had of silver and bills of exchange, but also of the prices of provisions and other necessaries of life. Regard was also to be had to fluctuations caused by the plenty or scarcity of the articles considered. More specific regulations were made with reference to the committee of councillors who were to determine the depreciation, and inasmuch as dilatory creditors might postpone making demands upon their debtors and thus compel the maintenance of this committee for an indefinite period, a limit was set to the time when the depreciation was to be allowed on judgments on debts incurred within the period covered by the original act. The rule respecting the allowance to be made for the depreciation of bills of public credit was restrained to debts contracted within the period mentioned in the act and was not to extend to any other whatsoever.

In other words, the act was not only not extended, but limitations were put upon its future operations and the method of estimating the depreciation was altered by the inclusion of provisions and other necessaries of life with silver and exchange as standards.

The enormous changes in the values of the bills of credit produced by their rapid depreciation during the years 1746 and 1747, rendered the equitable adjustment of the relation of debtors and creditors more and more perplexing. An act which was passed for this purpose January 27, 1748-49, was disallowed by Shirley and in his speech to the assembly April 8, 1749, he recommended that the matter be left to the courts of judicature. Again at the close of the session, on the 22nd of April, 1749, the assembly made another attempt to legislate upon the subject. Shirley at that tune. informed them that the bill had come before him too late for him to sign it. On the 24th of June, 1749, the governor referred the assembly to his former speeches and messages on the subject. He said with regard to debts contracted since October 31, 1747, that the price of good private bills of exchange payable in London was at that time at the rate of 1,100 in bills of credit of the old tenor for 100 sterling. He was satisfied that there had been no depreciation of the currency since that date notwithstanding the recent exorbitant rise in

provisions.(27) He thought debtors could be protected by passing a bill to prevent the courts from making any allowance for the bills of credit on debts contracted since October 31, 1747, specialties and express contracts excepted. He did not approve of any action looking towards the future. This was what he had in view in his speech of the 26th of October, 1748, and he was ready to join in passing an act which would give more ample relief to the debtors within that period than what was provided in that bill. This allowance he said was 10 per cent, on debts contracted between the last day of October, 1747, and the last day of March in the same year. During this period he claimed that there had in reality been no depreciation at all. It would seem as if by "March in the same year" in the above connection Shirley must have meant March, 1748.(28)

The assembly went forward with the consideration of a bill on this subject and apparently did not pay proper attention to his advice, for on the 29th of June, 1749, he refused his consent to a bill for ascertaining the allowance to be made by courts of judicature in rendering judgments on suits for debts payable in bills of credit. The money for the reimbursement of the expenses of the Cape Breton expedition had by this tune been paid over, and was on its way to the province.

Between 1730 and 1745, the price of silver was influenced more by the circulation in this province of the bills of the neighboring governments, than by the local issues of the province itself. The restraints imposed upon Massachusetts Bay and New Hampshire, kept the amount of the emissions of these provinces within some sort of bounds, and had it not been for the contributions to the currency from the other governments, the price of silver during this period would have been more nearly proportioned to the amount in circulation of the bills issued by Massachusetts Bay. As it was, silver was disproportionately high during all this period. The fact has already been stated that in January, 1738-39, an attempt was made by legislation to prevent the circulation in this province of the bills of the neighboring governments.(29) "This law," Shirley said, "was particularly calculated to prevent the currency of the Rhode Island bills here but it had not the least effect before my coming to the administration."(30) In January, 1742-43,(31) an attempt was made to secure legislation on the subject, and on the 22d of June, 1743, the assembly appointed a committee to confer with representatives from the neighboring governments with a view of preventing the depreciation of the bills.(32)

On the 9th of February, 1743-44, Shirley communicated to the assembly an estimate of the losses incurred by the community through the circulation of these outside bills and said that up to that time no answer had been received to the proposition for a conference which had been submitted on the 22d of June. He had stated to them on the 9th of September, 1743, that there were according to the estimate of competent persons 400,000 in bills of the other governments in circulation in this province, and he proceeded at this time to say that of these, 350,000 were contributed by Rhode Island and 50,000 by Connecticut. He estimated the emissions of Rhode Island at that time at 440,000, while 70,000 he thought would have been abundant for that colony.

March 17, 1743-44, a second attempt was made to prevent by legislation the evil of a currency from outside and uncontrollable sources.(33) It was asserted in the preamble of the act then passed that bills of the neighboring governments were then and had been the principal medium of trade and commerce in the province that some of those governments, more especially that of Rhode Island, had frequently made extravagant emissions of their bills, which by depreciating all bills current had worked great injustice to the inhabitants of the province. The circulation of Rhode Island bills issued since 1742, and of the bills of other governments hereafter to be issued, was prohibited in this province under severe penalties. The act was to continue in force for two years. In September, 1746, its operation was extended for three years longer.(34)

On the 10th of January, 1745-46, a memorial of sundry merchants of Boston was presented to the house, in which the danger from the currency of Rhode Island bills, notwithstanding the law then in force, was fully set forth. The petition of the merchants for relief was refused on the 15th of that month. In June, however, the house took the matter up again and on the 5th, the question being submitted whether a committee should be directed to prepare a bill for the revival of the act to prevent the great injury arising to the inhabitants of this province by the frequent and very large emissions of bills of public credit of the neighboring governments, it was voted in the affirmative so far as the Rhode Island bills were concerned, but in the negative as to the bills of Connecticut and New Hampshire. Some sort of a bill must have got through the house at that time, for August 14th, they sent up to the board to see if action had been had upon it. The reply was that there had not.

To a certain extent the law makers themselves of this province were responsible for the circulation within its borders of the bills which it was now sought to eliminate from the currency. These bills had repeatedly been recognized as a part of the circulating medium in the various acts which had been passed against counterfeiting, altering and mutilating public bills. The first of these acts, passed in August, 1704, was limited in its operation to the protection of bills of credit of this province.(35) The penalty for making or uttering was that the culprit should be branded in the right cheek with the letter F and should pay double damages or suffer imprisonment. For altering bills it was the same as that for the offence of forgery,(36) to which was added triple damages to the person upon whom altered bills had been passed. In June, 1711, the same penalty was imposed for counterfeiting or altering the bills of the neighboring governments,(37) and in the preamble of the act it was asserted that this action was taken because these bills had obtained currency here, therefore the falsifying or counterfeiting them would prove of pernicious consequence, would hurt and obstruct her Majesty's service, would interrupt mutual and reciprocal trade and commerce and would cause loss and damage to private persons. In December, 1715, a reward was offered to informers who should secure the conviction of counterfeiters of bills of this province.(38) In November, 1720, the penalty for counterfeiting the bills of this and the neighboring provinces was changed to death.(39)

In January 1735-36, signs of the reaction against the bills of the foreign governments appear in a new law against counterfeiting public bills from which the bills of the neighboring governments are excluded. The penalty is death without benefit of the clergy.(40)

There is nothing in the preamble of this act to explain why the bills of the neighboring governments were not included, but there must have been some reason for this action and it would be natural to conclude that it was because the assembly was no longer desirous of protecting this outside currency. In the bill passed in February, 1736-37, to prevent the sub-division of public bills for purposes of making change, bills of the neighboring governments were included with bills of this province in the prohibition.(41) To a certain extent this militates against the conclusion drawn above, but it does not alter the fact that the explanation there suggested is not only plausible but under the circumstances, natural.

The action taken by the assembly in February, 1736-37, in the attempt to protect the bills of neighboring governments from mutilation was the last effort of that body which could be interpreted as in any way favoring the circulation of bills of the neighboring governments, although the subject was before the house June 4, 1743, and a committee was appointed to prepare a bill to prevent the counterfeiting of bills of this and the neighboring governments. Nothing came of this, however, and the next steps were those already referred to, in which the attempt was made absolutely to prohibit the circulation of all the recent issues of the neighboring governments.


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Footnotes

1. Palfrey's History of New England, vol. 5, pp. 102-103, note.

2. Mass. Bay House Journal, Oct. 14, 1741.

3. History of Massachusetts (ed. 1795), vol. 2, p. 361.

4. History of Massachusetts (ed. 1795), vol. 2, p. 362.

5. Acts and Res. Prov. Mass. Bay, vol. 3, pp. 11, 32, 115.

6. Mass. Bay House Journal, Dec. 24, 29, 31.

7. Mass. Bay House Journal, Jan. 7, 1742-43, April 6, 1743 April, 7, 8, 12, 14, 19, 1743.

8. Mass. Arch., vol. 102, no. 289, Mass. Bay House Journal, April 19, 1743.

9. Mass. Bay House Journal for April and May, 1743.

10. Lawful money down to 1737 must have been the piece of eight of 17 dwt. at 6s. Silver in this money was rated at 7s. 3f. an ounce. The new tenor money was said to be equal to silver at 6s. 8d. per oz. It would seem as if this must have furnished a definition for lawful money at this point, but the situation is further complicated at a later date by the piece of eight being rated at 6s. in the same act in which the ounce of silver is declared to be worth 6s. 8d.

11. Acts and Res. Prov. Mass. Bay, vol. 3, p. 68; Mass. Arch., vol. 202, no. 293.

12. This is Shirley's method of stating the fact that the first new tenor bills were receivable one for three of old tenor, the second one for four.

13. This fact was stated by one of the pamphleteers of the day as follows: "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 public payments to six shillings and eight pence of the middle tenor bills, which by the same act is valued equal to an ounce of silver." An enquiry into the state of the bills of credit of the province of the Massachusetts Bay, etc., etc., 1743, p. 15.

14. Acts and Res. Prov. Mass. Bay, vol. 3, p. 80.

15. Mass. Arch., vol. 102, no. 287.

16. See quotation from An enquiry into the state of the bills of credit, etc., ante, p. 182, n.

17. Mass. Arch., vol. 102, no. 332.

18. Report dated March 2, Mass. Arch. vol. 102, no 338.

19. Mass. Arch., vol. 102, nos. 338 and 339.

20. Mass. Arch., vol. 102, no. 341.

21. Mass. Bay House Journal, Dec. 27, 1744. The same rates adopted June 28, 1745, and January 9, 1745-46. See House Journal of these dates.

22. Mass. Arch., vol. 102, no. 393.

23. Mass. Arch., vol. 102, no. 370.

24. Acts and Res. Prov. Mass. Bay, vol. 3, p. 212.

25. Acts and Res. Prov. Mass. Bay, vol. 3, p. 373.

26. That is to say, to ascertain the allowance to be made for depreciation on debts contracted during the period covered by the original act for ascertaining the value of money.

27. It will, perhaps, be remembered that the house had, in August, 1748, insisted on measuring the value of the bills in produce as well as exchange, because exchange had risen more than produce. Shirley now takes the reverse position.

28. The 25th day of March next succeeding fell in 1747, old style, but the last day was in 1748.

29. Acts and Res. Prov. Mass. Bay, vol. 2, p. 965.

30. Palfrey's History of New England, vol. 5, p. 106, note.

31. Mass. Arch., vol. 102, no. 280.

32. Mass. Arch., vol. 102, no. 313.

33. Acts and Res. Prov. Mass. Bay, vol. 3, p. 122.

34. Acts and Res. Prov. Mass. Bay, vol. 3, p. 307.

35. Acts and Res. Prov. Mass. Bay, vol. 1, p. 556.

36. Double costs and damages, and also to be set upon the pillory in some market town or other open place, and then have one of his ears cut off, also imprisonment for one year.

37. Acts and Res. Prov. Mass. Bay, vol. 1, p. 673.

38. Acts and Res. Prov. Mass. Bay, vol. 2, p. 25.

39. Ibid., vol.2, p. 186.

40. Ibid., vol. 2, p. 785. The act to prevent the currency of the New Hampshire merchants notes, Ibid., vol. 2, p. 743, seems to have been justifiable through the inherent weakness of the notes themselves.

41. Acts and Res. Prov. Mass. Bay, vol. 2, p. 827.


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