Discussion of currency reform in Douglass's Summary
William Douglass, author of the Discourse and Postscript, also wrote a contemporary history. Perhaps it is surprising, in light of Douglass's hard money views, that he did not approve of the currency reform. In part, the explanation is political: Douglass disliked Governor Shirley, and the currency reform had been a cooperative effort managed by Thomas Hutchinson and Governor Shirley. Douglass was politically aligned with a group of Boston merchants who supported the previous governor, Governor Belcher. They had many reasons for opposing Shirley: religious, ethical, political and economic. Belcher was a dissenter, while Shirley was an Anglican. Shirley's supporters had used underhanded methods to discredit Belcher and obtain his dismissal. Once in power, Shirley aligned himself with former land bankers. The land bankers and merchants shared a deep-seated mutual antagonism. The merchants viewed the land bankers as wild-eyed inflationists, while the land bankers resented the heavy-handed methods Belcher and the merchants had used to crush the land bank. When King George's war began, Shirley used his influence with the land bankers in the assembly to lead the colony into several costly military expeditions. Financing the expeditions with newly printed money fueled inflation. The expeditions also brought high taxes, which combined with the loss of men, crippled the colonies commerce. Shirley's enemies were taking their complaints to London, and they felt they were making headway, and that Shirley would shortly be dismissed in disgrace. Douglass's Summary was written, in part, as an anti-Shirley diatribe to be used in this endeavor.
When the currency reform was enacted, Douglass and his merchant friends were deeply suspicious. What were Shirley and his inflation-loving land-banker allies up to, they wondered? Whatever it was, they were sure it was no good. Some felt Shirley would reform the currency as a way to save himself from being dismissed. Others suspected financial skullduggery. Douglass's innuendoes regarding Bollan should be interpreted as reflecting such suspicions: Bollan was Shirley's son-in-law. Others felt that the currency reform was a ruse, and after it had served its political purpose, Shirley would find a way to renege.
Most of the following excerpt, which comes from one of Douglass's many discursive footnotes, must have been originally composed in early 1749 (1748 under the old calendar) immediately after the currency reform was adopted. From what is written, the reimbursement money had not yet arrived in the colony, which definitely places it before September of 1749. Moreover, Douglass writes about agent Palmer is if he is living: Palmer died in the summer of 1749. The final paragraph of this excerpt comes from another footnote that appears much later in the text, and it seems to have been composed in 1750, after the actual implementation of the reform had begun.
Comments on the Currency Reform
contained in William Douglass's
Summary, Historical and Political,
of the first Planting, progressive Improvements,
and present State of the British Settlements
[Vol I, pp. 510-12, footnote]
It is arrogant, in some Measure seditious, and a great Sin against the divine Institution of Society; for any Person or Persons, to exclaim against the Acts of Legislature; the following are only some private Speculations, concerning the negotiating of the late Cape-Breton Expedition Reimbursement Money, and the sudden Transition from an immense base Paper-Currency, to that good and universal Medium of Silver Money.
1. The late Act for receiving and negotiating our Reimbursement Money granted by the Parliament of Great-Britain, Impowers Sir Peter Warren, Mr. Bollan, and Mr. Palmer, or two of them, the said Bollan to be one; perhaps giving the Negative to Mr. Bollan, may disgust the other two Gentlemen, so as to prevent their acting, and consequently occasion a further Delay of the Reimbursement; did not, Mr. Bollan's being formerly appointed sole Agent in this Affair, disgust his Fellow Provincial Agent Mr. Kilby, a Gentleman of Knowledge and Spirit in transacting of Business; and occasion a Memorial of Merchants and others, Sept. 21. 1748, to the Treasury of Great-Britain, to delay the Remittance of the Reimbursement Money, for Reasons therein specified? This Delay is a Damage to the Country after the Rate (I mean the Interest of the Money) of 11,000£. Sterl: or 110,000£. Old Tenor per Annum; as if some Debtors Managers, studied Methods to delay the Melioration of the Denominations of our Currencies, by clogging the Affair.
2. The Amount of our Provincial Debt (that is of our publick Bills, or Paper Currency) Anno 1748 was about 2,405,000£. Old Tenor; by this Act a Part of it 712,000£. is to be sunk by very heavy Rates upon a reduced poor people, in the Years 1748 and 1749; and the remaining 1,693,000£. Old Tenor, is to be redeemed or exchanged by the Reimbursement Silver; Commissions, Freight, Insurance, and some petty Charges being first deducted.
I use the Words, a poor reduced People, 1. In Conformity to sundry Expressions used at several Times by the House of Representatives, in their Messages to the Governor, "with publick Taxes we are burdened almost to Ruin." -- "the Province is at a prodigious daily Charge beyond their Strength, which has involved us in a prodigious Load of Debt, and in a manner exhausted our Substance." -- "Although the same Disposition remains, yet we are in a manner incapable to promote (the British Interest) it for the future." 2. The Loss of about 3000 robust, labouring young Men by Expeditions; Major Little lately Commander of the Massachusetts-Bay Reinforcements sent to Annapolis in Nova-Scotia, in his Book published in London 1748, concerning the Nature of the present Trade of our Northern Colonies, writes, that by multiplied Expeditions they had lost 7000 Men, and many Thousands perverted to Idleness: here I may, by Way of Amusement observe, that according to the Estimates of Political Arithmeticians, in all well settled Countries the Numbers of Males and Females are nearly equal (some are very particular, and suppose 18 Male Births, to 17 Female Births) therefore as we have lately by Expeditions lost about Three Thousand young Men, there remains with us a Ballance of Three Thousand young Women, good Breeders, but idle in that Respect; the Ballance may be transferred to settle Nova-Scotia, under the Cover of some Regiments of Soldiers, that must be disbanded, which in the Interim may be transported to Nova-Scotia, cantoned, and continued in Pay for two or three Years, with Portions of Land, at an easy Quit-rent; thus the French Settlers, our perfidious Subjects may be elbowed out. 3. The inconceivable Decay of our Trade and Business: Fishery and Ship-building are the most considerable Articles: formerly from Marblehead our principal Cod-Fishery-Port, there were about 160 Fishing Scooners, upon the Stocks in Boston 7000 Ton of Top-sail Vessels, at present not much exceeding 2000 Tons. 4. Some of our Townships, and consequently their Proportion of Taxes, have lately by the Determination of the King in Council, been set off to the neighbouring Governments of New-Hampshire and Rhode-Island. 5. The late sudden and considerably enhanced Pay of the three Negatives of the Legislature, notwithstanding Exchange, Silver, and Necessaries of Life (Cloathing growing cheaper) being nearly at the same Price Anno 1747 and 1748.
3. Our Combination of Debtors who formerly were for postponing of Paper Money, all of a sudden inconsistently with their proper Character, quicquid id iest timeo, are for sinking all Paper Currency in the Space of a Year or two; we may without Breach of Charity suspect their hurrying the Province into a State of Confusion, that they may fish in troubled Waters; perhaps as Paper-Currency arrived by Degrees, to a vast Sum, and great Depreciation; it would be more natural to sink it gradually in the Space of half a Dozen, or half a Score of Years; and by Act of Parliament (not by precarious Instructions) no more Paper-Money to be emitted, a Governor consenting to any such Emissions to be rendred incapable and mulcted. Notwithstanding that I always was a professed Enemy to all Paper, as being a base fallacious, and fraudulent Contrivance of a Currency, I cannot avoid thinking that this is the most salutary Method.
4. The honest and honourable Way of paying a Bill, is, according to the Face of the Bill, that is, all Bills with us of 6s. in the face of the Bills, should be paid in a Piece of Eight; whereas by the Act 1748, a Piece of Eight shall be received in Payments for 11s. 3d. New Tenor; thus these Bills in their own pernicious Nature, from Anno 1742 to 1748 have suffered a Discount of about 10s. in the Pound: Mr. S--l--y in a Speech or Message in Relation to the first Emission of these New Tenor Bills insinuates, that he had contrived Bills which could not depreciate: But notwithstanding, these Bills have greatly depreciated in passing through several Hands, and as it is impossible to adjust the Proportion of Depreciation in each of these Heads, it is unreasonable that the last Possessor should have the Allowance of the successive Depreciations: Therefore the Assembly in Equity have allowed the Possessor only the current Value, but here the Assembly seem to allow themselves to be Bankrupts at the Rate of 10s. in the Pound, from 1742 to 1748. Perhaps if a Piece of Eight had been in the new Projection enacted equal to 12s. New Tenor, which is 48s. Old Tenor, the general Price amongst Merchants; it would have been no Injustice to the Possessors, it would have prevented their being hoarded up, and the Reimbursement Money would have paid off about 6 per Cent more of our Debts, that is, cancelled so much more of our iniquitous Currency. N.B. Perhaps, the stating of a Piece of Eight (seven Eights of an Ounce of Silver) at 6s. Currency, and one Ounce of Silver at 6s. 8d. is out of Proportion: the true Proportion is 6s. 10d. two 7ths.
5. In Place of sending over the Reimbursement in foreign Silver-Coin, if the Provincial Treasurer were empowered from Home and here, to draw partial Bills for the same upon the British Treasury, or where else it may be lodged; this would save Commissions, Insurance, Freight, and small Charges, to the Value of about 12,000£. Sterling upon the 183,000£. Reimbursement, sufficient to discharge 120,000£. Old Tenor, of our Debts. I shall not say that private pecuniary Views, but not Oeconomy are in the Case.
Upon the Supposition of this Reimbursement Money being remitted by Bills of Exchange, consulting the best Advantage of the Province; perhaps by appropriating one half of the Reimbursement for that End, 910,000£. O.T. of our Debt or Bills would in the most expeditious Manner be instantly sunk; all Merchants, Shop-keepers, and others would gladly purchase with our Paper such good and punctual Bills, preferable to any other private Bills of Exchange: The other half of the Reimbursement to be by the like Bills of Exchange purchased here by Silver to introduce a silver Currency, the only proper commercial Medium; providentially in Favour of this Purpose, we have lately had imported a Capture from the Spaniards of 54 Chests of Silver, which the Owners would gladly have exchanged for such Bills; all Merchants and others in New-England and the adjacent Provinces who send Pieces of Eight Home as Returns, or to purchase fresh Goods, would be fond of bringing their Silver to purchase good Bills free from all the Charges of other Remittances; Thus besides a Silver Currency commencing, of 910,000£. Old Tenor Value, we shall have a remaining Paper-Currency of 1,495,000 to be cancelled gradually by Rites and other Taxes, suppose in 10 Years, is about 150,000£. Old Tenor, or 37,500£. New Tenor per Annum; thus the two Years 1748 and 1749, perhaps oppressively loaded, will be much eased, and the infatuated Paper-Currency Men made easy by sinking of it gradually; with the Proviso of an Act of Parliament prohibiting, for ever hereafter, any more publick Bills of Credit to be emitted.
This remaining 1,493,000£. Paper Currency, abstracting from the 910,000£. Silver, Part of the Reimbursement, is more than a sufficient Medium for Trade and Business, in a quick Circulation, in the Province of Massachusetts-Bay. Let us recollect, that in the latter part of Governor Belcher's Administration 1741, immediately preceeding Governor Shirley's Accession, this Province in its full Vigour and Extent of Trade, seemed to be sufficiently supplied, by a Sum not exceeding 160,000£. A Fund for Taxes not assessed, for Taxes assessed but not collected, and for Arrears of Loans; let us suppose a like Sum of 160,000£ from the neighbouring Governments, obtained a Credit of Circulation with us (the four Colonies of New-England hitherto as to Currencies have been as one Province) makes 320,000£.; at that Time Silver was at 29s. per Ounce, at this Time 1748 it is 58s. per Ounce; therefore upon this Foundation we must suppose 640,000£. Old Tenor Value, the Medium sufficient or requisite for our Trade and Business, whereas we have allowed 1,495,000£. Old Tenor Value, being more than double that Sum, to remain for a Paper Currency.(1)
[Vol II, p. 88, footnote]
N.B. To annihilate Plantation Currencies in a general Sense, is very laudable; but to do it suddenly or in the Space of one Year, when there is no other Medium or Currency; puts a Stop to all Trade and Business; this Obstruction may divert our Commerce into some other Channel; We have a notable Instance of this in the Province of Massachusetts-Bay, 1750.
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1. Douglass is underestimating Massachusetts currency in circulation in 1741. Brock shows £359,919.