PARLIAMENT AND BILLS OF PUBLIC CREDIT IN THE COLONIES.
On the 28th of March, 1740, returns were made covering these points as to New York, New Jersey, Massachusetts, New Hampshire, Pennsylvania, the counties of Newcastle, Kent and Sussex on Delaware; Maryland, and a number of the island colonies. The return from Massachusetts consisted of an account of the bills of credit made and issued by the province for the support of the government from the year 1700 to the year 1738, and of the provision made on their emission for sinking and discharging such bills, by taxes upon polls and estates, and the duties of impost and excise. Also an account of the province bills, made by order of the General Court, and delivered to the treasurer of the province, for which he also gave credit in the several years set against the sums; together with an account of what bills had been burnt, with the times when, and the price of silver and exchange. (2)
On the 10th of April, the Commons called for the instructions which had been issued concerning the observance of the act for ascertaining the value of foreign coin in America, also for the instructions which had been issued to governors not to give their assent to acts of assembly for the striking and issuing paper bills of credit in lieu of money, and likewise those instructions relating to the passing of bills, whereby the trade or navigation of the kingdom might be any ways affected. (3)
On the 15th of April, in addition to the returns already received relative to the bills of public credit of the colonies, "An account of the rise and progress of the paper bills of credit of South Carolina" was presented. (4) Copies of the instructions called for were also reported and in addition to the general instructions, sent to all the governors, particular instructions and additional instructions to the governors of Massachusetts and New Hampshire were sent in. To these were added particular instructions to the governor of South Carolina in 1730, and particular instructions to the then governor of that colony. (5)
On the 25th of the same month, Francis Wilks and Christopher Kilby, agents for the province of Massachusetts Bay, becoming alarmed at the investigations which parliament was making, petitioned for a hearing. They stated that when Belcher assumed the government of the province he found the revenue charged with the redemption of public bills, each year from 1730 to 1741, to the extent of between £16,000 and £17,000. These bills had been issued to meet the exigencies of the government caused by the long and distressing war with the Indians. The redemption of all bills issued since Belcher's accession had been laid on the years preceding 1742, so that there was to be drawn in, each year, in 1739, in 1740, and in 1741, £68,000. Beside this there was outstanding £45,000 in loans to be drawn in speedily with interest. They conceived it to be their duty to call attention to the present distressed condition of the province for want of a new emission of paper currency. Great confusion would ensue unless this were permitted. (6)
This petition having been read, the request for a hearing was granted and Kilby was called in. The committee in whose charge this matter had been placed had announced on the day previous that they were prepared to report and that they had certain motions to offer. (7) These motions they now submitted. They were, 1st, that it was the opinion of the house that the act of Queen Anne regulating the value of foreign coins in the colonies had not been observed; and 2d, that the operation of the act had been frustrated by the legal tender function of the bills of public credit, After these motions were submitted, Kilby was heard, and he then withdrew. The House of Commons then adopted the first resolution, without a dissenting voice, and with equal unanimity, they voted to request his Majesty to require the observance of the act of Queen Anne, and to issue his proclamation fixing the values at which foreign coins should circulate in the colonies.
The second resolution, after a slight verbal amendment was then unanimously adopted, and it was then resolved to address his Majesty requesting him to require the governors to observe the instructions which had been issued to them not to give assent to or pass any act whereby bills of credit should be issued in lieu of money, without a clause should be inserted in such act, declaring that the same would not take effect until it should have been approved by his Majesty. It was also voted to request his Majesty to cause the Commissioners of Trade and Plantations, to have prepared an account of the bills of credit then outstanding in the several colonies, with their then value and their value at the times when they were issued, in money of Great Britain, together with an opinion of what would be the most easy and effectual manner of sinking and discharging all such bills of credit with the least prejudice to the inhabitants of the said colonies and plantations and interruption to the commerce of the kingdom. (8)
A motion calling for memorials and papers presented by merchants and traders of London, Bristol, and Liverpool, or any other persons, relating to any act of assembly for the creating or issuing of paper money in any of the colonies since June 29, 1716, was defeated.
On the 28th of April, his Majesty signified his willingness to furnish the papers called for. (9) At that point matters slumbered until the spring of 1744. On the 18th of April of that year, a petition was presented by several traders in behalf of themselves and others concerned in the provinces of America. The petitioners stated that upon representations being made to the last parliament, setting forth the evil consequences of raising the nominal value of silver and gold, the House of Commons came to several resolutions condemning the mischievous practice of altering the rates of silver and gold by issuing bills of credit. The house had likewise by addresses to his Majesty desired him to command the colonies to obey the instructions which had been issued upon that point. From time to time orders had been given by his Majesty to the governors to obey existing laws on this subject and to refrain from giving their assent to any act for further emissions of bills of public credit. The provinces had not, however, all observed these laws. Large emissions of bills of public credit had been made, whereby estates had depreciated, and the petitioners had been injured. Some legislation on the subject was necessary.
After the reading of the petition, the journals of the House of Commons in which the action was recorded which was referred to by the petitioners were also read, and it was then ordered that leave be given to bring in a bill to prevent the issuing of bills of credit in the British plantations in America to be legal tenders in payments for money. (10) There can be but little doubt that this bill would have been passed promptly, but for the warlike spirit which was stirred up about this time in New England by Shirley, which, as matters then stood, could not have accomplished any results except through the emission of bills of public credit. The matter was then dropped, probably for this reason, and remained quiescent until attention was attracted to it by the various discussions in connection with the reimbursements for the Cape Breton expedition. That this was an opportune moment for legislation of this sort, if it was ever to be put in force, was plain. It is not strange then to find the subject again before parliament in the beginning of the year 1749. It was ordered in the House of Commons, on the 16th of February, 1748-49, that leave be given to bring in a bill to regulate and restrain paper bills of credit in the British colonies and plantations in America, and to prevent the same being legal tender in payments for money, and for the better enforcing his Majesty's orders and instructions throughout the said colonies and plantations. On the third of March this bill was read twice and ordered printed. A comparison of its title with that of the bill for which permission was given to be reported in 1744 will disclose the fact that, in addition to what was comprehended in the bill then introduced, parliament proposed to legalize the royal instructions and enforce them in the colonies.
The perils of the situation aroused the representatives of the colonies then in London and one after another they petitioned parliament to be heard. These petitions were all of them granted and seven of the governments in America were at different times heard by counsel at this stage of the bill in the House of Commons. The petitions themselves are printed at length in the journals of the house. They are of widely different merit, but those filed by the agents of Connecticut and Massachusetts Bay are especially worthy of careful perusal.
Eliakim Palmer, one of those to whom power was given to receive the reimbursement in behalf of the province of the Massachusetts Bay, was the agent of the colony of Connecticut. His petition which was presented March 15th opens with a careful review of the charter and of the rights conferred thereby and then goes on to say, "That as this charter has invested the governor and company of Connecticut with the full powers of government, and as they have never yet abused any of the privileges granted by their charter, and as the most valuable of them, should this bill pass into a law, will be irretrievably torn from them, in violation of the security and sanction of the charter"; therefore he prays to be heard. On the same day Richard Partridge petitioned to be heard both as agent of Pennsylvania and as agent of Rhode Island. In the latter petition, after reviewing the history of the charter, he gave as a reason why he should be heard because "the passing the before mentioned bill may be attended with such fatal consequences to the inhabitants of the said colony, in interfering with their charter privileges which they have hitherto enjoyed." On the 22d of March, the merchants and traders in London who were concerned in Pennsylvania put in their petition to be heard in the matter.
The petition of Bollan, the agent of the province of the Massachusetts Bay, was read on the 6th of April. This document contains an elaborate and strong presentation of the case of the colonies. Taken in connection with his bold and persistent efforts to secure for the province the total amount claimed for the reimbursement of the expenses of the Cape Breton expedition, it stamps him as one of the ablest, perhaps the ablest, among the patriots of the day, who were warring against the autocratic doctrine of governing the colonies through royal instructions. Bollan narrated the history of the charters of the colony and province in extenso and then proceeded to analyze the commission issued to Phips, taking that as the model on which all the others were framed. He said the governor of the province was required to execute all things in due manner that should belong to that trust, according to the several powers and authorities mentioned in the charter and in the commission, or such further powers, instructions and authorities, as he should then receive, or which should at any time thereafter be granted or appointed him under the royal sign manual and signet by order of the Privy Council in pursuance of the charter. A colony, he said, being the progeny of the state has an undoubted right to the liberties of the mother country. He showed that parliament had, in the days of Charles II, in an act for the encouragement of trade, declared that the colonies were peopled by his Majesty's subjects. Being subjects, they had, and their successors, the inhabitants of the province at the time when Bollan wrote, then had, a clear title to the benefits of common law and the liberties of Englishmen. The laws were then and ever ought to be the sole measure of their subjection and the rule of the King's government over them. This bill by the matter therein contained providing for the enforcement throughout the colonies of royal orders and instructions would practically approve all future orders of future princes, no matter how repugnant they might be to the present constitution of Great Britain, and all such orders, if the bill should become a law, would receive the sanction of parliament. Royal orders, no matter how illegal except for this bill, would through its agency, when ratified and enforced by it, themselves become laws and necessarily bind the people. The special powers and privileges which the inhabitants of the Massachusetts Bay then enjoyed through the charter, would be taken from them by the natural operation of the act if it should come to be law and they would likewise be deprived of all the liberties they then held in common with British subjects. The bill he thought to be disproportionate in parts, insufficient to cure the evils against which it was directed and liable to a construction prejudicial to the inhabitants of the province which he represented. (11)
April seventh, South Carolina and New York petitioned to be heard by counsel in remonstrance against the passage of the act: All of these petitions were afterwards taken up, counsel for the several colonies were duly heard and evidence admitted tending to show the injurious character of the proposed bill. In further pursuance of the matter, the House of Commons on the second of May addressed his Majesty, calling for a certain petition which had been presented to the Privy Council by sundry merchants and principal inhabitants of Boston. The Commons wished this paper laid before them. On the thirtieth of the same month they again addressed his Majesty, asking him to cause to be prepared, and laid before the house at the next session of parliament, an account of the tenor and amount of the bills of public credit which had been created and issued in the British colonies and plantations in America, and which were then outstanding, distinguishing the same in each colony and plantation, and giving the respective times when such bills so outstanding were issued. They also wished the value of these bills to be stated in the money of Great Britain, both at the time when they were issued and at the time of preparing the account. The times for calling in and discharging such bills and the funds appropriated for that purpose were also to be included.
The combined efforts of the colonies made such an impression upon the House of Commons that the clauses in the bill for enforcing the royal instructions were dropped. (12) It can hardly be doubted that the convincing manner in which Bollan presented the argument that by the passage of the bill in its original shape, parliament would commit itself to the approval in advance of any instructions that might be sent, thereby giving them the force of laws, must have opened the eyes of the house to the enormity of the proposed legislation. The power of parliament to pass the law was not at the time questioned in the discussion, but the right thus to discriminate against a portion of the subjects of the realm was disputed. The spirit in which the House of Commons resigned that power and admitted the force of the bold and unflinching presentation of the case of the colonies cannot fail to attract our attention.
About three months after Bollan's petition was read before parliament, he was on his way across the Atlantic with the money received for the reimbursement which had been shipped to Boston on the "Mermaid," by Sir Peter Warren and himself. (13) He left London fully satisfied that the clauses against which he had directed the main force of his argument were dead, but the very fact that he was about to put the Province of the Massachusetts Bay in position to resume specie payments was in itself an argument why the bill should be taken up again and enforced as to the other colonies. The mention of the name of the province in the act would count for nothing, except in case of future emergencies.
That which was inevitable happened in 1751. On the 26th of February, 1750ù51, a petition of the merchants of London trading to his Majesty's colony of Rhode Island was presented to the House of Commons. (14)
The petitioners represented that the currency of Rhode Island had depreciated in value over one-half within seven years. They said that there were then outstanding bills of the nominal value of £525,535. Notwithstanding this condition of affairs several petitions for a new bank or another emission of paper bills of public credit had been lately presented to the general assembly. (15) The most considerable inhabitants of the province had petitioned the assembly not to take this step, but in August last a vote had been passed to emit £50,000 In bills of a new tenor, to be let out as loans. These would be equal in value to £400,000 in bills of their present currency, old tenor. They were, it was said, made a legal tender in all payments whatsoever, let the stipulation of the contract be what it might. On the 12th of March, 1750-51, Bollan who had returned to London, testified that in 1742, silver was worth in Boston, in bills of credit of the old tenor, 27s. 6d. to 28s. 6d. In 1749, it was worth 60s. or thereabouts. Rhode Island bills varied but little from these rates. Barlow Trecothick testified that in 1742, exchange was £500 to £550 in Rhode Island bills of credit for £100 sterling. Alexander Grant said that the rate at the time of the hearing was £1,050 to £1,100 for £100 sterling, and that no general tax had been levied for paying off or sinking the bills of the treasury for upwards of twenty years, except one in 1744, for £10,000
currency, which was less than £1,000 sterling in 1751. The committee resolved: first, that the rates of exchange were as shown in the testimony above given; second, that the bills had circulated promiscuously in the New England colonies, and that experience had shown that it was impracticable to prevent this except through legislation by parliament; third, that the rise in silver had defrauded creditors and had discouraged trade; fourth, that notwithstanding repeated notices from parliament, Rhode Island had in August voted to prepare a bill for the emission of £50,000 new tenor; and fifth, that to remedy this, the bills should be regulated and restrained. This report was agreed to by the House of Commons. The title which was adopted for the bill presented as a result of this has already been given.
March 15, 1750-51, statements of the condition of the currency in New Jersey, Rhode Island, North Carolina, South Carolina, Pennsylvania, New Hampshire, Massachusetts Bay and New York were submitted to the house. The hearing was postponed from time to time, and other papers were produced. Bollan presented a petition for hearing on the 20th of April, 1751. He claimed that the province required credit in case of war, and that the curtailment of their power in this direction was contrary to and inconsistent with the charter rights and liberties of the province, and the well-being of the inhabitants thereof. Connecticut was heard in opposition to the bill, and New York also appeared among the remonstrants, but this time they made little impression on the House of Commons. Their arguments lacked force, and there was but little that the agents of the colonies could say, in view of the experiences which the several governments in America had undergone in connection with the issues of bills of public credit, that could command the sympathies of intelligent men, when pleas were advanced for the continuance of the rights of the colonies in this regard. The bill was passed on the 10th of June, and received the royal assent on the 25th of that month. (16)
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1. Journals of the House of Commons, vol. 23, p. 379.
2. Journals of the House of Commons, vol. 23, p. 512.
3. Journals of the House of Commons, p. 518.
4. Printed in the 9th volume of the Statutes at large of South Carolina and separately printed in vol. 5, no. 4, of Sound Currency, New York, 1898.
5. Journals of the House of Commons, vol. 23, p. 520.
6. Journals of the House of Commons, vol. 23, p. 527.
7. Journals of the House of Commons, p. 526.
8. The report of the Board of Trade in reference to the address of the House of Commons to His Majesty on April 25th, is given in "The general magazine and historical chronicle for all the British plantations in America," pp. 258-260. They say there is not enough basis for a report but they recommend that the governor be directed to take care that the funds are protected. That where bills are issued on loans, care be taken that these loans shall be called in when due, and that ineffectual funds be made good. If these steps are carried out they will help, but the charter governments do not pay much attention to instructions.
9. Journals of the House of Commons, vol. 23, p. 528.
10. Journals of the House of Commons, vol. 24, p. 658.
11. Mass. Arch., vol. 20, no. 501. Journals of the House of Commons, vol. 25, pp. 813-815.
12. Mass. Arch., vol. 20, no. 507.
13. The statement on p. 240, second line from the bottom, that the silver was shipped on the "Molyneaux" is an error. The vessel employed for this purpose was the "Mermaid" as is indicated on p. 239.
14. Journals of the House of Commons, vol. 26, p. 64.
15. The petition for a new bank meant, as the language of the text. indicates, another emission, but it includes also the idea that the bills should be loaned to the inhabitants.
16. Journals of the House of Commons, vol. 26, p. 295.