Suffolk County, Massachusetts - The whole text, 1894 (part 5 of 17)

Before passing from the review of the period from 1857-58 to 1807- 08, we would say that it was only in its foreign trade, or a portion of it, that Boston for the time failed to advance, or even to hold its own. The imports fell from $44,840,083, in 1857, to $3;5,i)57,021, in 180-2, and to $24,540,4!)4, in 1805. In 1807 they exceeded the figures of 1857, although in 1808 they declined somewhat. The exports of domestic merchandise fell from $24,8!)4,01!), in 1857, to $12,183,040, in 1802, and in 18<)8 their value was only $15,090,873. But during most of this time other branches of business were doing well, and the general prosperity of the city was very considerable. The taxable valuation advanced from $254,714,100, in 1858, to $493,573,700, in 1808. How much of this increase was due to the inflation of the currency, we will not attempt to decide; but, after making all proper allowance for this disturbing influence, we think that there was still a substantial advance.

In ISO'.) Mr. James Alexander was sent from Glasgow as the agent of the Cunard Company in Boston. He at once put himself in communication with the officers of the Board of Trade, and with others competent to give him full and correct information, and after much correspondence with his principals, he induced them to attempt the loading of two or three of their cargo steamers at Boston for Liverpool direct. This was done in 1870. The Palmyra sailed September 22, being the first departure of a steamship to Liverpool since the Africa left the port on the 1st of January, 1808. Other vessels followed the Palmyra at irregular intervals, but on the Sth of April, 1871, the Siberia sailed as the first of a regular line. The Boston and Albany Railroad Company co-operated cordially with the steamship company and joined it in some large purchases of grain, which at the outset it was necessary to make in order to insure full cargoes for the ships. The exports of domestic merchandise which for the year ended June 30, 1871, were $12,901,291 advanced in the next fiscal year to $21,443,154, and steadily increased year by year. Owing to the completeness of the arrangements at East Boston the foreign immigration at this port also made a decided advance, increasing from 15,128 in 1808, to 31,042, in 1873; and again, after a falling off here in common with the other seaboard cities, to 33,020 in 1880. In the winter of 1879-80 the Cunard Company suspended its trips to Boston for a time, and its future policy with reference to this port seemed to be quite undetermined. A year or two later it resumed its business here on something Uke the old-time basis, and placed vessels upon the route with comfortable passenger accommodations as well as large capacity for cargo. With these it has maintained weekly sailings between Liverpool and Boston as against its biweekly sailings previous to isr.s. The Botluiia and Scythia, which now come to Boston, are four times the size of the Britannia and her sister ships; and the Ccplialonia and Pavonia, which, we believe, were expressly built for the Boston trade, are not only five times as large as the Bri/annia but twice as large as the Cuba unCi. Java, the withdrawal of which from our port was regarded as such a misfortune acjuarter of a century ago.

The successors of Enoch Train & Company - Thayer & Warren, afterward Warren & Company - were among the earliest to appreciate the commercial importance of iron screw steamers, and they gradually substituted them for sailing vessels in the Boston and Liverpool trade. Through their English house they were in a very favorable position for engaging all such steamers as they required, having abundant room for freight and steerage passengers. The first steamers of this line proceeded from Boston to other ports to obtain return cargoes, but as soon as the conditions here made it practicable they went back to Liverpool direct. The carrying capacity of the ships has increased since 1800 from fifteen hundred to nearly five thousand tons; and this increase is represented in its dift'erent stages by the names of the Propoutis, the Posp/iorns, the Jl/innrsota, the Victoria, the Iowa, the Missouri, the Kansas, and the Ottoman. The Warren line may be regarded as in fact a Boston line, although its ships have always borne the British flag.

In the winter of 1872-73 the Inman line was disposed U) have a share in the growing business of the port, and sent the City of Boston here, as a pioneer, on her way to New York; on her return trip to Liverpool this steamer called at Halifax, and then proceeded on her way never to be heard from again. This was a sad discouragement to begin with. Then the shipments consigned to Boston were smaller than had been anticipated by the company ; the steamers were slow and were detained by their call at Halifax, so that iinportcrs preferred to bring their goods by faster vessels coming direct. Other considerations had weight and the service was abandoned after a few months.

to Boston in the sprinLT of lS7(i. The service was fortnii^htly at first, but was made a weekly one in January, 1878. It bej^'an with tlie Bavixriau, the Batavian and the Boluuiiau, and the htriaii, the Illyriaii and tile Iberian. The / 'in^iniaii and the / alcncian came out a few years later, and they have been followed by the Lancastrian, the Culiiinbian, the Bostoman, and the Georgian. The weii^ht capacity of their present steamers is lifty-five hundred tons, not including" coal, and the space for cargo under deck is estimated at eight thousand tons measurement. The Boluinian was lost on the Irish Coast, on her voyage from Boston to Liverpool, in February, 1881.

Branches of the Allan and Anchor lines have been maintained at this port at intervals, and there are now two lines, the Johnston and the Furness, which ply regularly between Boston and the Thames. We doubt whether in the whole history of commerce there is to be found a record of any such commercial development as that which Boston can boast - an advance from nil, no sailing of a steamship for Europe in 18li!i, to one hundred such sailings in 1877, to three himdred and twentytwo in 1880, and to more than four hundred in 18'.C^. Certainly the projectors of the American vSteamship Company were not too sanguine in 1805-(i7, when they insisted that there was plenty of business to be done between Boston and Liverpool if only the proper facilities were supplied and the proper efforts put forth.

The more recent history of Boston is so fresh in the minds of most of us, and the record of everything relating to it is .so easily accessible to all, that we have thought it preferable to use the space at our disposal in making mention of events less near to the present day and less generally known or remembered. Of the newer development since the period of the Civil War, of the city which hasattaineil metropolitan proportions, of the vast business here carried on in accordance with modern methods, and of all the commercial conditions so utterly changed since the last generation of merchants passed from the scene, we can only give the merest intimation. It must be the duty of some later writer to describe the material activities and resources of Boston in the last third of the current century, and to compare them with those which marked the earlier years in the history of the town and city, and, particularly, the exceptionally prosperous years from 1850 to 1857.

We must recall one event, however, perhaps the most momentous in the history of Boston as a city, and of its trade - the fire of the 9th and 10th of November, 1872. The territory devastated by this fire was about sixty-five acres, comprising- thirty streets and containiny between seven and eight hundred buildings. With the exception of a few streets near the water, this area was wholly devoted to business purposes, and the buildings which covered it, in size and architectural eiTect, were unsurf)assed, and perhaps unequaled, by those of any other city in the world. Here was concentrated the wholesale trade in hides, leather and shoes, in dry goods, domestic and foreign, in wool, in ready-made clothing, in hardware, and in part in earthenware and china. The value of the property destroyed was out of all proportion, therefore, to the extent of the land burnt over as compared with the great fires of other cities. The loss was variously estimated at from sixty to seventy million dollars, but there was a vast amount of property destroyed - papers, portraits, antiquities, libraries, on storage - the value of which could not be estimated in figures.. The blow was a terrible one to the business men of the city, but never for a moment did they lose heart. The work of rebuilding was entered upon without delay, and soon the territory was built over again, but with wider streets and more stately warehouses than those which had been swept away. To many individuals and firms the loss was irretrievable, but the business community, as a whole, proved its inherent vitality and soundness by its recovery from the disaster in a marvelously short time. The terrible eclipse which shadowed the general prosperity soon passed oif , and in a very few years hardly a trace remained " of that dark hour of destiny."

We enriched one of our earlier pages with a quotation from Emerson. In closing our sketch of the commercial enterprise and activity of our city, we cannot do better than to reproduce other words written by the same shrewd tibserver and profoimd thinker in the spinng of 18()1. The message was addressed to another generation of Bostonians, but it may not be altogether without meaning or value to the ear of that upon which the respon.sibility rests for what the city is to become in the twentieth century :

"And thus our little city thrives and enlarges, striking deep roots and sending out boughs and buds, and propagating itself like a banyan over the continent. Greater cities there are that sprang from it, full of its blood and names and traditions. It is very willing to be outnumbered and outgrown, so long as they carry forward its life of civil and religious freedom, of education, of social order, and of loyalty to law. It is very willing to be outrun in numbers and in wealth, but it is very jealous of any superiority in these its natural instincts and privileges. You cannot conquer it liy numbers, or by square miles, or by counted millions of wealth. For it owes its existence and its power to principles not of yesterday, and the deeper principle will always prevail over whatever material accumulations.

"As lonsjf as she cleaves to her liberty, her education, and to her spiritual faith as the foundation of these, she will teach the teachers and rule the rulers of America. Her mechanics, her farmers, will toil better; she will repair mischief; she will furnish what is wanted in the hour of need; her sailors will man the Const itnlion, her mechanics repair the broken rail, her troops will be the first in the field to vindicate the majesty of a free nation, and remain last in the field to secure it. Her Lcenius will write the laws, and her historians record the fate of nations. "

The Financial History Of Suffolk County

Two hundred and .sixty-two years have passed away since the foundation of Boston, and althoug-h this seems a long time, yet if a human life is taken as the term of measurement, it i.s found that the period since Boston was first settled is no more than five successive human lives of fifty-two years each. Viewed in this way the changes which have been brought about during the interval are both wonderful and enormous.

These have been the results of human effort exerted at first under conditions of great difitieidty and hardship, but later under the extraordinary stimulus of public education, free institutions, and admirable opportunities for the acquisition of wealth.

It is proposed in this paper to briefly review the progress of our cit}' in its financial aspect, bearing in mind that the results of human effort for any long period of time are best measured as the fruits of successive human lives, and that in this way it is possible to secure some guide to the probable Boston of the future.

The first element in a financial .s)\stem is money; and in going back to the early days of our city we find that this was a subject of great interest and importance to its fotmdcrs. These no doubt brought with them from the mother country a few of the stamped coins of the time, but in amounts evidently insufficient for the needs of a growing and trading community. They found on arriving here that Europeans who had visited America, trading along the coast for fi.sh and peltry, had been accustomed to irse in bartering with the natives, beads, knives, hatchets, blankets, and especially tobacco, powder, shot, gnns, and alcoholic beverages. There were not only philanthropic reasons for a discontinuance of the latter practice, in consequence of its demoralizing effect upon the Indians, but it was also evident that to supply their possible enemies with powder, .shot and guns, was to jeopardize the future safetv of the settlements. In trading among themselves the set- tiers could resort in part to barter, exchanging hardware for boots and shoes, or household utensils for Indian corn, oats, and potatoes; but this method, although maintained for a long period of time, was unsatisfactor}', and by nnconscioiis consent wampum seems to have been adopted as a medium of currency with which trade transactions were carried on, not only with the Indians, but among the white people as well.

Roger Williams in his observations on the money of the Indians said : " This is of two sorts; one white, which they make of the stem or stock of the periwinkle when all the shell is broken off, and of this sort six of their small beads, which they make with holes to string their bracelets, are current for a penny. The second is black, inclining to blue, which is made of the shell of a fish which some English call ' hens-poquahock,' and of this sort three make an English penny. One fathom of this string of money is worth 5 shillings."

This was a crude form of currency, but perhaps the best that could then be obtained. It was utilized in the same way that during the early days of the war postage stamps were used by our people to make good deficiency in change. Apparently the Pequots and Narragansett Indians, who manufactured this form of currency, prospered by it, for according to the chronicles of the times they grew rich and potent, whereas the rest, who were without these advantages, remained jxior and beggarly.

Besides this wampum and the occasional u.sc of peltry, it was deemed desirable to make use of the products of the ground in payment for standard services. It was a custom when a surveyor ran the lines of a lot of land to compensate him with a peck of corn. The records of the Massachusetts Colony give a great number of instances where grain, salt fish, meal and other commodities were used in payment of taxes, official fees, and for other services. Thvis in 1(J;50 »Sir Richard Saltonstall was fined six bushels of malt for his absence from court, while in the folloAving year the Indian Chief Chickatawbut was fined a skin of beaver for shooting a swine of the same Sir Richard.

Great trouble was experienced by the early settlers of Boston in keeping such coin as they had in this country. The Gresham law, which affirms that where several forms of currency exist, the most valuable will find its way into export, was apparently brought into play in these early colonial experiences. Thus on March (;, l(i;i2, the magistrates enacted the following: " It is ordered, that no planter within this juris- diction returning- for Enq-land shall carry money with him without leave from the governor under pain of forfeiting the money so intended to be transported." How far this acted as a restraint it is impossible to say, but it is known that traders, who were not planters, within the jurisdiction of the colony, preferred to take beaver skins or silver in return for their purchases, and that these two forms of currency were constantly tending to diminish both in Boston and the surrounding country.

It became necessary, as the use of perishable commodities in the way of barter tended to increase, to lay down some definite basis of exchange; hence the price of corn was set at a certain rate per bushel, and the same restrictions applied to other commodities. Corn was at that time the leading farm product, and was thought to be better adapted than anything else as a substitute for specie. In view of its great demand for these purposes no pcr.son was, by order of the magistrate, allowed to feed his swine with it " except such as is surveyed by two of his neighbors and by them judged unfit for man's meat." Knowing that the prices for mechanical cmjjloyments were likch' to be disarranged by an inordinate charge for imported goods and thereby the currency depreciated, the Court of Assistance passed the following law:

"Whereas by order of Court, holden in October last, the wages of workmen were reduced to a certainty in regard of the great extortion used by divers persons of small conscience and the great disorder which grew thereupon by vain and -idle waste of much precious time and expense of those inordinate gains in wine, strong water, and other superfluities, now lest the honest and conscionablc workmen should be wronged or discouraged by excessive prices for those commodities which are necessary for their life and comfort, we have thought it very just and equal to set order also therein ; we do thcrcf(n-e hereby order that after public notice hereof no persons shall sell to any of the inhaliitants within this jurisdiction any provisions, clothing, tools, or other commodities above the rate of \ pence in a shilling more than the same cost or might be bought for ready money in England, on pain of forfeiting the value of the thing sold, except cheese, which in regard to the much hazard in bringing, and wine and oil, vinegar and strong waters, which in regard to leaking ma)- be sold at such rates, provided the same be moderate, as the buyer and seller can agree."

Kill:;, al'fcird a fair sample: " No person that keeps an Ordinary shall take above G penee a meal for a person, and not abo\-e 1 ]jenny fur an ale quart for beer out of meal time, under the penalty of 10 shillings for every offence, either of diet or of beer."

In UV.ib it was ordered that musket bullets of a full bore shall pass currently for a farthing apiece, provided that no man shall be compelled to take above l'^ pence at a time of them.

The currency troubles did not lessen as time went on. In October, lUlU, the Legislature passed the following resolve: "Whereas many men in the plantation are in debt and here is not money sufficient to discharge the same, though their cattle and goods should be sold for half their worth, as experience hath showed upon some late executions, whereby a great part of the people in the country may be undone, and yet their debts not satisfied, though they have sufficient upon an equal valuation to pay all and live comfortably upon the rest, it is therefore ordered, that upon every execution for debts passed, the officer shall take land, houses, corn, cattle, fi.sh or other commodities and deliver the same in full satisfactit)n to the creditor at such prices as the same shall Ijc valued at by three understanding and iiidift'erent men, to be chosen, the one by the creditor, another by the debtor, and the third by the marshal, and the creditor is at liberty to take his choice of what goods he will have. If he hath not sufficient goods to discharge it he is to take his house or land as aforesaid."

The elder Winthrop in referring to the condition of affairs at this time said: "The scarcity of money made a great difference in all commerce. Men could not pay their debts though they had enough. Prices of land and cattle fell soon to one-half and less, yea, to a third, and after to one-fourth part."

In l'j41, to enlarge the funds of exchange and aid in canceling the public debt, the civil authorities let out the wampum trade as well as that of fur to a company. For this privilege the stockholders were to reserve one-twentieth of all their peltry for the colonial treasury, and also to purchase whatever wampum the college (Harvard College) might have paid to it, if not exceeding at one time the sum of 25 pounds sterling. The company was authorized to collect wampum due the government as a tribute from the Indians.

The additions to the currency made in this way seem to have forced the authorities later on to make a new regulation as to its value, for it was ordered that wainpum should henceforth be entire without breaches, both the white and the blaek, without deforming spots, and should be suitably strung in eight known parcels, \d, '?)d, Vld, and S-f in white, and -Id, {}d, 'ZYzS and Ms in black. In 1049 the wampum came more into use than was considered expedient, and it was therefore enacted, "that it shall not be in the liberty of any town or person to pay wampum in their country rate nor shall the treasurer accept thereof." This example set by the government was quickly imitated by the people, who refused to take this form of money, and to prevent untoward consc- (pienees that would ensue, an order of the court was issued to the effect that wampumpeage shall pass current in payment of debts to the value of -iO-f, the white at 8 a penny, the black at 4, "so as they shall be entire and without breaches and deforming spots except in payment of country rates to the treasurer."

The only silver that found its way in any cjuantity to Boston seetns to have been derived from commerce carried on with the West Indies, the bullion received in exchange for our exports being that taken by numerous buccaneers from the vSpaniards. This, however, was in a form well calculated to encourage its exportation, and as a means of retaining it here it was thought advisable to establish some system of minting. The occasion was peculiarly fitting to undertake this work, as the English people had thrown off the yoke of royalty and were on the eve of establishing a commonwealth imder Oliver Cromwell.

In 1(152 the General Court voted, that "it is ordered, and by the authority of this court enacted, that from and after the first of September next, and no longer, the money hereafter appointed and expressed shall be current money of this commonwealth and no other, unless English, in pursuance of the intent of this court herein. Be it further ordered and enacted by the authority of this court, that all persons whatsoever have liberty to bring in unto the mint house at Boston all bullion, plate or Spanish coin, there to be melted and brought to the allay of sterling silver, by John Hull, master of the said mint, and his sworn officers, and by him to be coined into 12 penny, 0 penny, 3 penny pieces, which shall be for form flat and scpiare on the sides, and stamped on the one side with N. E. and on the other side with the figure XII, VI, and III, according to the value of each piece, together with a privy mark, which shall be appointed every three months by the governor, and known only to him and the sworn officers of the mint."

The master of the mint was therefore recjuired to coin all the money of good silver of the alloy of new sterling English silver, but to have the shilling pieces of -^ pence less value than the then English coin and the lesser pieces in the same proportion. For his services the mint master was to receive one shilling out of every 20 shilling's which he should stamp. It will thus be seen that our forefathers hit upon the plan of keeping- the money that they coined at home by making it of a less value than equivalent English money, although they attempted to give to it a purchasing- power in the colony, the same as that posses.sed by sterling- silver. The English financiers, when the coin was brought to their attention, through exchange, valtied it at a discount of 25 per cent., this growing out in part of the somewhat crude way in which the bullion was alloyed at the Boston mint. This was the first attempt made in the English colonies to coin money, and, curiously enough, although it was continued for a number of years the coinage all bore the date of the first mintage, that is, 1052. The act was looked upon with not the least favor by the English authorities.

Shortly after the accession of Charles II, royal commissioners were sent here on the ground that the right to coin money was a royal prerogative, and that the people at Boston had no right to usurp this function. To pacify the home authorities the General Court ordered that two very large masts be transported to London for His Majesty's navy, something which in his war with the Dutch he was likely to need, and they furthermore sent a petition to the king stating that they did not believe that those who had been sent as royal commissioners to Boston properly represented his views. They still continued to coin the money in spite of objections, one of which, made b}' the officers of the London mint to the commissioners of the Royal Exchecpier, was that if the king should continue the Boston mint he should order its emissions to be of equcd value with his own specie so as to have unanimity throughout the empire. Shortly after, however, the charter of the colony was suspended, greatly to the regret of the colonists, an event growing largely out of this attempt on their part to better supply their financial needs.

With the closing of the mint the project was started of organizing a bank. President Dudley and his council stated in a memoir: "Upon the consideration of the great decay of trade, obstructions to manufacture and commerce in this country, and multiplicity of debts and suits thereupon, principally occasioned by the present scarcity of coin, and for that it is not visible how the same may be remedied unless some other secure medium be approved than the species of silver which very injuriously have been transported into other parts hence. And for as much as it hath been suggested and may appear to us that the defects aforesaid may be supplied with bank bills or credit given by persons of estate and known integrity and repute, which may pass with greater ease and security in all payments twenty shillings or above than moneys coined, and that other cotmtries have found their banks useful to their great flourishing in trade and wealth. And bank credit or bills are of greater value than ready money there. Also that His Majesty's revenues in this country cannot be so well answered by the present species of silver without a great straining, impairing and damage to the merchandising trade and dealings of His Majesty's good subjects in these his territories and domains, and having perused and considered a" proposal made to us by John Blackwell, of Boston, Esquire, on behalf of his own and divers other his participants, as well in England as in this country, liberty is granted for the directors or conservatives of the bank to commence the issuing of bills on security of real and personal estate and imperishable merchandise."

This is the charter under which the first bank of Boston was started. It was in form and regulations like one established in London in 10813, and like that was a sh(jrt lived institution. The notes were chiefly founded on land security; but at the time of the revolution of 1089, which appears to have occasioned more or less of a panic in the colonics, the bank proved unequal to the strain imposed upon it and passed out of existence. With its failure passed away, also, the hope of our ancestors to obtain a larger circulating medium than they possessed. That the effect of the stoppage of the mint and the failure of the bank was a severe blow is found in the fact that at about this time the royal governor. Sir Edmund Andros, permitted the people of Hingham to pay their taxes in milk pails, the only commodity they had which seemed to possess any exchangeable value; while the report of the colonial treasury was given in this way: "Value of corn remaining in the treasury unsold, ^938 lis Id. Money, ^1,340 10.y 'id."

In the year 1090 matters reached a crisis which made decisive action of some kind imperative. Sir William Phips returned unexpectedly from an unsuccessful expedition against Canada. There was absolutely no money in the treasury with which to pay the soldiers, who became mutinous in consequence of this failure on the part of the authorities. The General Court saw no other course open to it but to issue paper currency on its own account, and on the luth of December, 1090, the following was adopted: "Whereas, for the maintaining and defending of their Majesty's interests against the hostile invasions of their French and Indian enemies, who have begun and arc combined in the prosecntion of a bloody war upon the English of their Maiest3''s colonies and plantations of New England, this colony hath necessarily contracted sundry considerable debts, which this court, taking into consideration and being desirous to prove themselves just and honest in the discharge of the same, and that every person who hath credit with the country for the use of his estate, disbursements or services done for the the public, may in convenient time receive due and equal satisfaction ; withal considering the present poverty and calamities of the country, and, through scarcity of money, the want of an adequate measure of commerce, whereby they are disadvantaged in making present payments as desired, yet being willing to settle and adjust the accounts of said debts, and to make payment thereof with what speed they can, a committee are empowered to made an immediate issue of ^7,ihi(1 in bills from 5^" to £h." The form of these notes was as follows:

This indented bill of 5j-, due from the Massachusetts colony to the possessor, shall be in value equal to money, and shall be accordingly accepted by the treasurer and receivers subordinate to him in all piiblic payments, and for any stock at any time in the treasury.

With this issue began the .system of paper currency on government credit, which continued for .sixty j'ears with all of the evils incident to an irredeemable circulation of this class. Althotigh the government had expressed its desire to deal justly, and although the people were in great need of a mediimi of circulation, the notes that it issued were received with great suspicion. To aid in preventing a panic, Sir William Phips exchanged at par value a large amount of silver that he had obtained from successful ventures in the Spanish Main for this provincial paper mone}'. But the soldiers who came back from the expedition to Canada, and the widows and orphans of those who perished in that disastrous enterprise, were compelled to part with the money they had obtained at a discount of about one-third.

It was ordered by the General Court, that the bills out and to be emitted should not at any time exceed ;^40,()U0, but this was on the assumption' that the war was not to continue, and it was also assumed that such bills as were redeemed would be destroyed. That this was not the case is made evident by the fact that by a report made to the House of Representatives in 1702 it was shown that there had been emissions and re-emissions of paper money to the amount of ,/;n 0,00(1.

In order to create greater confidence in its money the General Court decreed in 1()92 that the notes issued by the colony should be equivalent to money in making all payments within the province, and that in all public payments there should be a credit of five per cent, accorded to them. This means of restoring paper to a par with specie was efficacious for the time being. The bonus of five per cent, was allowed as often as the bills were brought to the exchequer, although several times in a year, which frequently occurred, because they were repeatedly issued.

To show the financial conditions under which business was carried on at that time the following extract is given from a diary of the period: " They give the title of a merchant to every trader who rates his goods according to the time and specie they pay in, namely, paj', money, pay in money, and trusting. Pay means grain, pork, beef, or an}- other commodity exchanged at the prices set by the General Court. Money is pieces of 8 reals, Boston or Bay shillings or good hard money, as sometimes silver coin is called, also wampum, namely, Indian beads, which sei'ves as change. Pay as money, means the commodities such as grain, pork, beef, etc., only at a rate one-third cheaper than that set by the General Court; and trust is the purchase for payment at the end of an agreed upon period. When the buyer comes to ask for a commodity, before the mei-chant answers that he has it he says ' Is your pay ready?' Perhaps the buyer replies, ' Yes.' ' What do you pay in? ' says the merchant. The buyer having answered, then the price is set. If he wants a (1 penny knife, in pay it is 12 pence; if in pay as money, 8 pence; if in hard money its price is its own value, (i pence. "

But besides these complications growing out of these different measures of value, to which paper money added a fresh uncertainty, there was the difficulty of determining the true value even of hard money, for the foreign coins which came into circulation, together with the Pine Tree money, as the Boston mintage was called, were washed, clipped, filed, and in various other \va3's made to lose a considerable part of their value by unscrupulous holders of them. The General Court enacted strinjrent laws to prevent these frauds. It was ordered that anv one found .guilty of the crime of debasing;- the coins in use should stand in the pillory and have one of his ears cut off; and at another period the crime was made one warrantint^- a capital punishment. But in every store and in every family it was customary in the early years of the last century to keep a pair of scales to ascertain the value of all g'old and silver coin before it was taken or passed.

Although the emissions of paper money were tolerably extensive from l'7(tO onward, bringing about such a debasement of the currency as to increase the price of labor to quite double its ordinary proportions, there was still a belief on the part of the people that their condition would be a great deal better if they had more money. As a writer speaking of the time (1714) says: " At this period there were three different views as to finance held by different sections of the people. One adopted the rule in regard to money, that nothing is useful but what is honest, expressing in their views of paper currency the conclusion that this should be abolished and no currency allowed except that of the precious metals ; a second, both numerous and respectable, was made itp of those who believed that it was desirable to form a bank and issue money based on real estate; a third favored a system of loaning by the province to the people on interest, payable annually, and applicable when applied to the liquidation of the public charges."

The hard money advocates, while having a great deal in current experience to sustain their contention, seem never to have had a popular following. They were looked upon as theorists, whose opinions were entitled to very little weight in the every day affairs of life. The advocates of a bank were decidedly influential, and for a time seemed to have a fair chance of carrying their project to a successful ending. But they were opposed in this by Governor Dudley, who, while advocating the banking method some years previous, had at the time we refer to (1714-15) come to the conclusion that notes of this kind should be issued by the government rather than by corporations.

Shortly after the arrival of Governor Shute, in the fall of ITlfi, the General Court passed an order: "That there be an additional loan of ;^l()0,()()i)." The reasons assigned for this enactment was the heavy debt incurred in the French War, that mo,st of the silver money had been sent to pay debts contracted in England, and that there was then a scarcity of province bills. The new loan was to be committed to the care of county treasurers, and was to be proportioned to each county according to its taxes, to be loaned out in mortgages on real estate of double the value of the sum borrowed, each loan not to exceed £bW), nor be under ^'25, to be at ten years at five per cent, interest per annum. The profits upon this were to pay the expenses of the government, and the bills issued were to be returned at the end of the period and burned.

It will be seen from the above that the action of the provincial government on this occasion was closely analogous to that which the Farmers' Alliance has repeatedly petitioned Congress to take. There was a scarcity of money ; debts could not well be paid, and on this account the government advanced money to the farmers upon their land at what was then a low I'ate of interest, giving them ten years in which to make good the advances made. This might seem to be a highly desirable arrangement, but as -a matter of fact its effect upon the currency system of Boston and colony was exceedingly pernicious. There was a sudden depreciation in the value of paper currency, so that on the basis of silver it sold for not much more than half its value.

That one bad act of this kind is productive of a long train of sad consequences is made evident by the address which was sent to the governor (if the province by the House of Representatives in March of 1721. "Your Excellency," it said, " was pleased to acquaint us that you lately assembled some of the principal gentlemen and merchants of Boston with a view to public good, that they might propose or receive schemes for the relief of this people under their grievance for want of a good medium of trade. If these gentlemen when assembled did agree upon any method and had laid the same before the House, it had been very readily received and due consideration had thereon, but none such as yet hath been shown forth. Last session a bill for emitting ;^100,000 to help the inhabitants to pay their public debts passed the House, but stopped in the Council. We feel it our duty to do all we can this session to promote such an object. We agree with Your Excellency that if a new emission should depreciate the bills out it would be pernicious. To prevent this a bill was passed the present and last session to hinder buying and selling, bartering or exchanging silver money or bullion at higher rates or prices than hitherto stated by act of Parliament. Our judgment is that had such an act been made by Massachusetts when they first issued paper bills, they had to this day been equal in value and credit to silver money. We, therefore, think that

It will thus be seen that our forefathers entertained ideas closely analogous to those that have been held by representatives of the farming classes in the West, that it is possible by simple legal enactments to create value where value does not exist under the ordinary laws of trade. In other words, they seemed to suppose that it was possible to issue as much paper mone}' as the printing presses could turn out, and if by statute it was enacted that the buying and selling of silver money or bullion was prohibited, then this paper naoney would have the same value as silver and would in no way depreciate as the result of its excessive quantity.

In y\-l-l it was found that the small coin, as well as the large, was exceedingly scarce, and for this reason the General Court ordered that there should be an emissi(m of _^500 in bills of one, two and three pennies each. The form of the first of these bills was round, the second square, and the third rectangular.

For some time past the authorities of England had insisted through the representative of the home government. Governor Shutc, that there should be a redemption made of as many as possible of the outstanding bills of credit. This brought the governor into constant conflict with the representatives of the people, and on this accoiint great (jpposition was raised to the payment of his salary, so much so that the governor in despair decided to leave the colony for England.

During this period the people of Massachusetts had to contend not only with depreciation, due to their own excessive paper currency, but the colony was flooded with paper money coming from Connecticut, Rhode Island and New Hampshire, the issues of these provinces find- ing- llicir way in lai\L;e amounts across the border line, and, as it was said, havinj;- for their reason for existence the opportunity that was afforded by them of purchasing goods at Boston, which was the chief town, at lower rates than would otherwise be possible.

The distressful state of financial affairs in Boston was made an object lesson and warning to other American communities. James Logan, writing on the subject from Pennsylvania to the Proprietors in 1730, in referring to the bills that were issued there, said: " I dare not speak one word against it. The popular frenzy will never stop till their credits will be as bad as they are in New England."

But as if this superabundance of currency were not sufficient, a number of merchants tmd others of Boston, in order, as they said, to supply the deficiency of a medium for trade, engaged in 1733 in a project of issuing paper money to the value of ;^110,000. This was known as the Private Bank, and the bills that it issued were redeemable in ten years in silver at the rate of nineteen shillings an ounce. There is this to be said in favor of these Private Bank bills, that while they were in circulation they were a better medium of exchange than the government bills of credit. They depreciated in value during the interval between their issue and redemption, but almost invariably commanded a premium equivalent to about thirty-three and one-third per cent, over the government issue.

In 1734: Governor Belcher, who had been appointed chief magistrate of the colony of Massachusetts, said in his address to the General Court: " I must observe to you to what a low ebb our bills of credit are reduced, which carry in the face of them these words, ' in value equal to money.' And yet His. in these bills will not at this day purchase os. lawful money. It will then become the wisdom of the Legislature to search into this matter, and to apply a speedy remedy, for next to the defence of the province I take this to be an affair of the greatest consecpience. I should also think it prudent to look carefully into the several loans of the province, and after so many years' indulgence to the borrowers, to order them to be paid in without more delay. For a sacred observation of the terms of the several acts by which the bills have been issued, must have a natural tendency to support their credit. I think it would be an instance of the wisdom and justice of this government not to suff'er an emission of any sort of notes or bills for the future but such as will instantly and at all times honestly and truly command the value expressed in them. I look upon the land and commerce of the country to be but one j(jint interest, and should be always equally encouraged. And it is with much concern I mention to you the decaying state of the trade of the province. While our importations are so exceeding as constantly to leave us a large balance in arrear to our friends abroad, it is impossible we should carry on a gainful trade or have among us gold and silver, the only valuable medium of commerce. Happy would it then be for the province if the Legislature would establish some large premiums to encourage the cultivation of the lands, as on hemp and other naval stores, and our English grain. Something of this kind may gradually bring the balance of trade in our favor, which will, of course, fix the standard of money among us."

In spite of these valuable suggestions, the General Court could not make up its mind to adopt an heroic course; but in 1737 it decided upon a half-way measure. Perceiving that with all of its vigilance and exertions it could not restore the credit of their notes, the General Court resolved to have others made, differentl)' expressed. Thus on February 4 of that year it was voted to make an emission of ^18,000 in bills of the current form, and ^i»,00() in a different form. The first sum was to be recalled in a year, and the last in 17-12. As a sinking fund for bills of these amounts, the people were allowed to pay their taxes in hemp at four pence a pound, and flax at six pence, to the treasurer, or in money, both hard and paper, if they could. As the conditions of the ^0,000 differed from these preceding bills of credit, it caused them to be denoininated new tenor, and the others old tenor. The new tenor notes stated :

"This bill of ^^.y. , due from the Province of Massachusetts Bay, in New England, to the possessor thereof, .shall be in value equal to o ounces of coined silver, Troy weight, of sterling alloy, or gold coin at the rate of 4 pounds IS.?, per ounce; and shall be accordingly accepted by the Treasurer and receivers subordinate to him in all payments (the duties of import and tonnage of shipping and incomes of the Light House only excepted) and for an}' stock at any time in the treasury."

A reason why these notes were not to be received for the excepted duties was because such duties were ordered to be paid in hard money, with which the notes were to be redeemed. As the act authorizing the issue of these bills limited the preceding ones in the payment of like taxes, the merchants complained bitterly that this was a breach of pulilic faith, and the dissatisfaction thus engendered tended to injure both classes uf bills. Thus, though the government set the new tenor bills at one for three of the old, the people passed them at one for four.

In 177-1 Mr. Thomas Hntchinson, afterwards sj^overnor, and then a leading member of the General Conrt, brought forward a proposition which he believed would have the effect of setting the currency question upon a satisfactory basis. This was to hire 320,000 ounces of silver, or gold equivalent, for ten years at four per cent. , in England on the credit of the province. This was to be used for the redemption of the outstanding bills of credit and to provide a guarantee for the colony. Although this plan was urged with great force and with much clearness of reasoning, it did not at the time receive the support needed to secure its adoption.

Instead of thus turning toward hard money, the minds of the people seem to have been infected by the mania for a larger emission of paper money, and the powers of the General Court falling under parliamentary restraints and the unwillingness of the chief executive, instructed from England, to sanction large issues of bills, a petition was presented in the spring of 1740 to the Legislature, signed by John Colman and three hundred and ninety-five others, for authority to issue _;^150,000, to be loaned in notes on land security and payable in twenty years by various articles of merchandise. Another petition presented to the Legislature by Edward Hutchinson and one hundred and six partners, was for the issue of ^130,000, by them redeemable in fifteen years with silver at 20^. an ounce, or gold, pro rata. The latter plan was similar to the Private Bank referred to above, and its bills were denominated merchants' notes. It was promoted chiefly to oppose the Colman Bank, which was called the Land Bank, while the Hutchinson combination went popularly under the name of the Specie Bank.

The authorization for the establishment of these two banks was never definitely given, but both began operation. The Land Bank aroused the strenuous opposition of Governor Belcher, who, in July, 1740, issued a proclamation warning all his Majesty's good subjects of the danger they were in and cautioning them against receiving or passing the notes of the Land Bank " as tending to defraud men of their substance and disturb the peace and good order of the people, and give great interruption and bring much confusion into their trade and business." In spite of this strenuous appeal of the governor, the Land Bank proposition was taken up with great cordiality b}' the people in all classes of society.

Governor Belcher, being assured that part of the military of the colony encoiiraged the circulation of Land Bank paper, issued, November, 17-iO, a proclamation, in which he said: "I hereby warn all commissioned officers of the militia from signing or giving any countenance in passing of said notes of hand, directly or indirectly, and as I apprclicnd, that if these should obtain a currency, it will reflect great dislionor on his Majesty's government here, and be very detrimental to the public interests of this province and people, I do hereb}^ declare my firm resolution that, if after this public notice is given, any of the military officers of this province persist in being in any way concerned in or giving any encouragement whatsoever to the passing of the said notes of hand, and full proof be made thereof to my satisfaction, I will immediajfely dismiss them from their said offices."

This pledge was kept on a number of notable occasions, and aroused a strong spirit of resistance. Samuel Adams, the father of the patriot of that name, sent in his resignation of the commission he held under the government, and his cour.se was adopted by a number of the justices of the peace and other prominent officials. In order to obtain a clear idea of the character of the banking institution that was at that time receiving great popular encouragement, and that was calling forth the denunciation of the representative of the English government, the following agreement of association of the Land Bank is of value, especially as it has an important bearing on not a few projects that have been brought forward in this country within the last two or three years :

In order to redress the distressing circumstances which the trade of this province labors under for the want of a medium, other methods having failed, it is proposed to set up a bank on land security, no person to be admitted but such as dwell in this province, and hath a real estate therein.

I. The stock to be one hundred and fifty thousand pounds lawful money; no man to .subscribe more than two thousand pounds, and none less than one hundred pounds; the subscriptions not to be binding, unless one hundred thousand pounds be subscribed, each subscriber for one hundred pounds to have one vote, five hundred pounds two votes, one thousand pounds three votes, two thousand pounds four votes, and no person to have more than four votes.

II. Each subscriber shall pay into the hands of the committee forty shillings lawful money for one thousand pounds, and so in proportion for a greater or less sum, toward the charge of bringing forward the affair.

III. Each subscriber shall make over an estate in lands to the satisfaction of the directors, and shall pay in three per cent, per annum interest for the same in any of the following manufactures, being the produce of this province, viz.: Hemp, flax, cordage, bar iron, cast iron, linens, sheep's wools, copper, tanner! leather, flax seed, bees-wax, bayberry-wax, sail cloth or canvas, nails, tallow, lumber or cord wood, or logwood brought from New Spain ; whoever pays in any of them shall deliver them to the directors or such as they shall appoint, at such prices as the directors shall from time to time regulate, or pay in the same in the company's bills.

IV. Every subscriber shall pay annually five per cent, as part of the jirincipal until the whole is paid, under the same regulations, and in the same manner, as in the foregoing Article expressed.

V. There shall be twelve directors and a treasurer chosen on such allowances as shall be thought proper, who shall appoint clerks and other attendants as they shall find necessary, and agree with them for their salaries, and as there may be occasion, may dismiss them and choose others; they shall also appoint persons to value the lands taken for securities, who shall be paid by the mortgager. All the said officers to be under oaths, and give security for the faithful discharge of their trust. The appraisers to be under oath.

VI. No person shall be capable of being a director or treasurer who signs less than five hundred pounds, and if any director or treasurer die, or is removed, the vacancy shall be filled at the next meeting of the company by a major vote of the partners present; and if any of them be found guilty of fraud in the execution of his office, a major part of the directors, concurring with a major part of the partners, shall put his bond in suit, and he shall be declared no longer a partner.

VII. All mortgages and bonds shall be made to the directors for the use of the company, except what is given by any director, which shall be made to the rest of the directors; and all mortgages shall be put upon public record, to prevent clandestine conveyances, the charge of recording to be paid by the mortgager; and every partner shall be obliged on demand of the directors, or the major part of them, to give such better security as they shall think needful, in case their security already given be by them esteemed insufficient, and if any of them refuse so to do, his mortgage shall be sued out, and he shall no longer be partner.

VIII. To oblige all partners to pay their interest and dividend of the jjrincipal pimctually, whoever neglects paying above three months after it is due, his mortgage shall be put in suit, and he shall be no longer a partner.

IX. The directors shall from time to time put out upon lawful interest on good security all such sums as shall be in the treasurer's hands for the use and benefit of the company; the annual contingent charge first deducted; the borrowers to pay principal and interest in the company's bills, or in the aforesaid manufactures.

X. There shall be a meeting of the partners on the second Tuesday in June annually, and at the end of five years at that meeting there .shall be a dividend made of so much of the profits as shall be agreed on by a major part of the directors, concurring with a major part of the partners then present, and from that time there shall be a dividend at every annual meeting; provided always that in such dividends care shall be taken that there still remain in the stock double the principal paid in from time to time as aforesaid.

XI. It shall be in the power of any partner to redeem the estate he hath mortgaged at the end of five years, or afterwards, he having the con.sent of the major part of the directors, with the major part of the partners, by paying in the money he received out thereon, with the interest then due, either in the company's bills, or in the manufactures before mentioned.

XII. Whereas it is principally designed that all the subscribers shall give land security, as before mentioned in the third Article, yet as there are many artificers and traders m this town of Boston, in good credit, who have not real estate to mortgage, but can give good personal security to the satisfaction of the directors ; Now that such persons and they onl)- be encouraged in their respective occupations, it shall be in the power of the directors to admit such persons to be subscribers, but none for more than one hundred pounds, they giving bonds with two sufficient sureties in double that sum.

XIII. As the signers of the bills oblige themselves to the possessors in behalf of the partners, so the partners must oblige themselves by an instrument to indemnify the signers.

XIV. At the annual meeting in June all accounts relating to the company shall be laid before them by the directors and treasurer, and a major part of the directors, concurring with a major part of the company then present, may agree upon any other rules or methods for the better observing and fulfilling the Articles aforesaid.

We promise for ourselves and partners to receive this Twenty Shilling Bill of Credit as so much lawful money, in all payments, trade and business, and after the expiration of twenty years to pay the possessor the value thereof in manufactures of this Province. Boston, etc.

It is worthy of remark that the anticipations of Governor Belcher were sig-nally verified as time went on. The bank, no doubt, labored imder the disadvantag-e of bavins'- opposed to it the hiqfhest colonial authorities; but it is easy to see that the basis upon which it was formed was not one which could be fairly sustained under varying conditions, and with the tendency of human nature to throw disagreeable burdens upon others rather than to assume an equitable share of the load. The bank issued notes to a large amount, btit when it became necessary to recall and redeem them it was found that quite a number of the associates were not in a condition to make good their pledges, and the more responsible of their number had to bear a disproportionate share in the work. Thus as late as 1760 the stockholders of the Land Bank petitioned the Legislature for authority to start a lottery for the purpose of raising money to meet their indebtedness, and as late as 1768 there were petitioners to the General Court asking that they might be relieved from obligations that had been asstimed twenty-eight ^-ears before. The settlement led to a vast amount of litigation, the holders of the notes having to content themselves, after expen.ses had been paid, with a relatively small return upon the face vahie of the bills, while, as we have just said, the bitrden of redemption fell upon a relativelj'' small number of the original incorporators.

And yet, this bank, so crudely organized, and bearing upon its face the marks of speedy dissolution, was for a time so popular as to almost occasion a local revolution. In May of 1741 the governor had assurance that a thousand men were to rise in Boston and to be joined by a number of thousands from the countr\% for the purpose of demanding his reasons for opposing the Land Bank, and to mob the traders who refused to sell coin for its bills. The insurrection did not materialize, partly for the reason that Governor Belcher took the initiative and arrested a number of those who were thought to be the leaders in the contemplated disturbance.

To show the mixed state of the currency of Boston at that period, it is well to quote from a letter written by a resident of Boston to a merchant in London. " We have in Massachusetts," he says, "public bills of four provinces at ->0,s- for an ounce of .silver. New tenor of Massachusetts at i\s Si-/ of silver. Connecticut new tenor at S.y, and Rhode Island new tenor at (ij \)ii. Of Private Bank bills there are ^11(1,<>I)(), issued in 17o;5, to prevent an enormous Rhode Island emission from depi-eciating our currency. They are punctually paid in gold and silver, and are S:] per cent, better than Province bills. There is another sum of ^120,000 in merchants' notes emitted in 1740, on a silver bottom to stifle the Land Bank, which are ecpiivalent to cash. They who are responsible for them are eminent and wealthy merchants. The bills of the Land Bank are payable in 20 years, and then only in goods at an arbitrary price."

It will thus be seen that the little town of Boston at that time was not only overloaded with depreciated currency, but had a vast and curious assortment of different kinds of notes in circulation, so that the ordinary tradesman, as well as the ordinary citizen, needed to possess an intimate kntnvledge of the varieties of paper bills and their respective values, which would now be found only among those trained in the office of an exchange broker.

Matters seem to have gone for the next few years from bad to worse, for while the paper issues of the Province of Massachusetts were not materially extended, the emis.sions of bills of credit b)' the adjoining colonies were extremeh' frecjuent. In 1744 the governor in a message to the Legislature stated that there were at that time ^^440, 000 of Rhode Island bills in circulation, of which ^350,000 were passing in Massachusetts, and that other adjoining colonies seemed to consider that Boston was the best place in which they could dispose of their paper money.

Financial History

On May :J1, 1744, in the annual election sermon, Rev. James Allen said, referring;- to these troubles: "And yon (the governor) will be the means of delivering us from the perplexin_sr difficulties we are involved in, particularly by an unhappy medium, uncertain as the wind, and fluctuating- like the waves of the sea, which lies at the mercy of every one to rise or sink at his pleasure. Through the unrighteousness whereof the land mourneth, and the cries of man}' are going up into the ears of the Lord of Sabbaoth."

A changed condition, when it came, was brought about by circumstances that could not have been foreseen, and yet through a line of action suggested several 3'ears before by Mr. Thomas Hutchinson. In 174:7 a report was made by the English Lords of the Treasury on the expense of the North American colonies in the expedition against Cape Breton. They stated the proportion of Massachusetts to be ;^-2ii 1,700 in the new tenor bills. This computed at 142 per cent, for exchange made about ,^18:), 000, which was said to be the credit of this colony. On the receipt of this estimate, Mr. Hutchinson moved in the Legislature that the public notes be redeemed by specie to be received from the Ro\'al Exchequer for charges in the capture of Louisburg.

In the meanwhile the merchants of London who traded in Boston petitioned the Parliament to the same effect. The project of Mr. Hutchinson did not at first receive much encouragement, at least from the House of Representatives, and it seems to have required all of his persuasion, eloquence and influence to sectire its adoption. But in time he succeeded, and a committee was designated to meet similar bodies from other New England governments on the same subject. These other colonies did not, however, seem to be favorably impressed with the ])lan, hence it was necessary for the Province of Massachusetts to undertake the work of redemption on its own account.

The redemption law pas.sed the Legislature on the 20th of January, 1748. It reqtiired all of its bills of credit to be exchanged at the treasury by March 31, 1750, at the following rates: For ibs in bills of the old tenor, one piece of eight or a dollar ; for 1 Is and "id of the middle and new tenor, the same coin ; and so in proportion for greater or less sums. If any of such bills were kept back for a year after the time de.signated, they were to be irredeemable. The enactment further provided that as the paper system was to be dispensed with, all public and private demands contracted after the date fixed for recalling the treasury notes should be accounted as payable in silver coin estimated at Oj 8c/ for an ounce. It was further pro\-idcd tliat what the specie, to be received from Eni^'land, shcnild lack of paying' these notes, should be cancelled by a tax.

In addition the following penalty was enacted for taking or passing any of the New Hampshire, Connecticut and Rhode Island notes, the oath in question to be taken at the renewal of licenses of all innholders and all oflicers of towns and states: " Yon, A. B. , do in the presence of God solemnly declare that you have not, since the last day of March, 1750, wittingly and willingly, directly or indirectly, either for yourself or any for or under you, been concerned in receiving or paying within tills government any bill or bills of credit of either of the governments of Connecticut, New Hampshire or Rhode Island. So help you God."

It is probable that this oath was more formidable in its reading than in its execution, for it is a matter of record that bills of these adjoining colonies circulated to some extent in Boston after the period designated.

On September 18, 1749, the public were informed that the specie paid by the crown had arrived in Boston under the charge of Mr. William Bollan, then the provincial agent of Massachusetts in London. This money consisted of 053,000 ounces of silver and ten tons of copper.' There is reason to believe that this was more coin than there had ever before been in Massachusetts at the saute time. The remittance and other subsequent ones, in connection with the prohibition of bills of credit here, gave to Massachusetts the name of the "hard money colony."

In the following winter, in order to prevent the farthings and coined silver and gold from passing at a proportionately higher rate than a milled dollar at Oj-. , it was thought desirable by the Legislature to issue a paper bill of small denominations, and for this reason it was voted that ^3,000 of bills be struck off, to be denominated Id., 2d., od., 4:}id.. i\d. and l^d.

While it is probable that among the business men the change in the system of currency was received with imqualified satisfaction, there appears to have been serious doubts in the minds of the agricultural classes who traded in Boston. This is brought out in the following poetical dialogue, printed in the Boston Weekly A'Cics Letter of 1750, Honestus representing a country trader and Politicus a merchant:

When once the dollars shall come out, Ther '1 be no want of money then ; Eager you '1 catch the glittering Coin, And bless the golden era when This paper trash is no more seen.

Ah, Sir, we hear the Province bills Do lie recluse within the tills Of some great men, to wait the time The dollars shall the same redeem. And what is worse than all, 'tis said To foreign lands they '1 be conveyed. Then what 's our fate - the silver gone - The paper burnt - and we undone.

This feeling of distrust was ftirther increased by artful agitation on the part of those who had previously benefited through the paper issues of neighboring colonies, and the House of Representatives took into consideration the ease of two individuals who were suspected of publishing and dispensing a printed paper containing sundry expressions tending to bring into contempt and subvert the constitution of this government. These persons appear to have been concerned in having verses printed in Rhode Island containing a lamentation for the death of old tenor currency and having very hard reflections on the General Court. In April of 1751 a large number of people from Abington and other towns came to Bost(jn with riotous intentions to force the Legislature to condeinn a system which was threatening to cut down the wages of those dependent on labor for their support, while granting to the wealthy an opportunity to hoard up silver and gold. The rioters, however, when they arrived in Boston were not met by the large party of co-operators that they had expected, and their courage consequently evaporated.

The commissioners appointed to exchange the public notes for specie closed their labors June W, 1751, and reported at the time that they had redeeiTied_^ 1,702, 331! 5j.-, \i/. of the different credit bills of the colony, at the rate in the- total of about one in siK'cie for ten in paper. This was nearly all of the paper currency that was out. For years followingpetitions came in from time to time to the Legislature asking that the paper money found might be redeemed, some having been discovered in old desks, bottoms of leather chairs, and other private places of deposit. The government of the time seems to have been exceedingly lenient and to have allowed the claims of these subsequent petitioners for losses sustained in bringing about this wholesome and healthy change.

It is only fair to point ont that the one chiefly responsible for the reform was Mr. Thomas Hutchinson. As he remarked afterward to a correspondent in England: " I think that I may be allowed to call myself the father of the present fixed medium, and perhaps have a natural bias in favor of it." It is well to have this fact kept clearly in view, for Governor Hutchinson, as he afterwards became, was later one of the most unpopular men in Boston, and the historical accounts that have come down to us concerning him have referred almost entirely to his opposition to the patriotic wishes of the colonists, and have made little reference to the very able part he took in rescuing the colony from this quagmire of depreciated currency.

On June 25, 1751, a law was enacted by Parliament that the Massachusetts Bay colony should not thereafter issue bills of credit, and should emit only such paper money as was needed for the expenses of the governnient each year, or in case of invasion by an enemy, but never as a legal tender for debt. That this requisition might be complied with, any governor who should consent to a rule of different signification on this subject was to be dismisjsed from office and ever after be ineligible to public employment.

In spite of the large volume of specie that had been received in 174'.i, in 1755 the contraction of the currency, due to the necessit)' of paying bills abroad, was so great that the General Court voted to negotiate a loan of ;^23,000 in London for six years at lawful interest. This course was adopted several times as a means of obtaining the silver needed for the conduct of business.

In 1760 the Lords of the Treasury in London, in settling the account of expenses due to carrying on the war with Canada, allowed to Massachusetts the sttm of ;^200,000 as its proportion. It was thought desirable by some that this should be remitted to the colony in silver, in the same manner that the former remittances had been made; but the chief magistrate for the time being, Governor Bernard, considered it desirable to give to the General Court a simple lesson in finance, as had some of his predecessors. He said: "If we look for the advantages which are to balance the great cost of importing the reimbursement in hard money, we shall find them all imaginary. They are not of the real value of one shilling. If there is any want of specie for circulation, it would be but a temporary convenience, and not a lasting gain to introduce specie, and the want must be great to justify so lai'ge a premium as ten per cent. It is the nature of trade, like water, to bring itself to a level. It is just the same thing, whether you bring a certain quantity of specie into the province, or prevent the like quantity from going out of it. As, therefore, the advantages of negotiating your money by bills are very plain and certain, the only question will be whether it is practicable."

In accordance with the advice of the governor it was ordered by the Legislature that the treasurer draw bills of exchange on London for the proportion of money granted by Parliament to Massachusetts for military charges.

At this time a new question arose in the colon}- in relation to our local cuiTency, which is curiously the antithesis of the controversies that have been going on for some time past in relation to the currency system of the United States. Silver was found to be most profitable by the merchants for the payment of debts due in England, and for this reason silver was the metal oftenest exported. At the same time gold not being of so ready an exchange there for mercantile obligations, and not being a legal tender for debt here, although it was current as individuals might agree, was exceptionally plentiful. To prevent the inconvenience arising from this unsettled relationship between the two metals, a majority of the House of Representatives, as well as the business community, were desirous of having gold made a legal tender.

This led to the introduction of a bill into the General Court in November, 1701. This said: "Whereas, divers species of foreign gold coin are current in this province, and are received into and paid otit of the public treasury, but are not lawful money in public or private payments, by which it is apparent many inconveniences have arisen to the prejudice of trade and commerce, and consequently very detrimental to the public, therefore such money is to be placed on the same footing of legal it}- as silver." Curiousl}- enough, in this effort to give a legal tender v^alue to yold Mr. Thomas Hutehinson was found in the opposition. vSo far as one can judge, he was profoundly convinced of the desirability of having a single standard of value, and was of the opinion that silver best performed that function. He said, writing to a correspondent in December, ITOl : " The last session of the Court was spent in a controversy about our money. The House passed a vote for making gold a law'ful tender at the rate it passes. This would have driven away our silver and eventually depreciated the currency. I stood in front of the opposition, and it was with difficulty the Council was kept from concurring. I am afraid the next session, as the governor at present is not sensible of the ill consequences of the proposal, it will pass. If it succeed I look upon it to be the first step of our return to Egypt."

A part of his premonitions were correct. In January, Kli-J, in again writing to his correspondent he says: " The House has passed a bill for issuing notes payable in dollars at lii', or in gold at the rate now set, which sinks our currency four or five per cent. It will pass the Board with little opposition. The secretary, Irving, Bowdoin, and two or three more are with me, and a great clamor is raised against my papers. Pray tell me if I am wrong and let me know what people say on your side of the water. If the party see them condemned I shall have no chance. Our debts will be paid in a twelvemonth."

Apparently the evils that Mr. Hutchinson anticipated did not come to pass. The people of Boston were severely straitened in their resources by depreciations in trade, and by their inability to export in commodities values to the amount that they imported. But the driving out of silver by gold, and the necessary adoption of a single standard of gold, did not seem to follow.

The financial affliction which was next felt, and which aroused the quickest opposition, was the imposition of taxes by the English Parliament, which necessitated the payment of coin into the British treasury. It may be well to point out at this time that the indignation that was aroused in Boston and its vicinity by the vStamp Act and other similar imperial enactments, was due quite as much and perhaps more to the belief that they would deplete the colony of its currency than to any theoretical feeling concerning the injustice of imposing a tax without according representation. We are disposed to believe that this basis for resistance was an afterthought. Thus in 17(i8 a majority of the Massachusetts Council petitioned the House of Commons to aid in the removal of grievances it endured. The petition says: " This province is still in debt on account of the charge incurred by the late war. The yearly taxes upon the people for lessening the debt, thoiigh not so great as during the war, are nevertheless with more difficulty paid by reason of the great scarcity of money. The scarcity of money in the colonies is owing to the balance of their trade with Great Britain being against them, which balance drains them of their money to the great embarrassment of their trade, and the only source of it. This embarrassment is much increased by the regulations of trade and by the tax acts, which draw immediately from trade the money necessary to support it, on the support whereof the payment of the balance aforesaid depends. The exports of the colonies, all their gold and silver, and their whole power of remittance falls short of the charged value of what they import from Great Britain."

In other words, the imposition of taxes which drew the money directly from the colony without hope of its return, tended, in the opinion of the Boston merchants, to bring their currency system again into the demoralized condition in which it had been prior to its establishment upon a specie basis. In spite of these protests the tax still continued, and, curiously enough, the industrial and financial condition of the province seemed to improve.

Thus in January of 1774 Governor Hutchinson said: "There never has been a time since the first settlement of the country when the treasury has been in so good a state as it is now. I may congratulate the province upon its being entirely free from debt, the tax of last year with a stock in the treasury being equal to all the securities due from the government and to the charges of the current year." The people of Boston were not in the least disposed to receive these flattering statements in good part, and maintained that the governor's description was due to his desire to pacify the political animosities of the people, and that they were not justified by facts, though so far as evidence shows they were incorrect in this supposition, for the statements of Governor Hutchinson appear to have been strictly true.

In May of 1775 the Committee of Safety appointed by the Provincial Council, passed the resolve that, "Whereas, many of our brethren of the colonies of Connecticut and Rhode Island are now with us to assist us in this day of piiblic and general distress, in which we are deeply concerned, and whereas our brethren of said colonies have brought with them some of the paper currencies of their respective colonies, which liave not of late had a currency with us, and for want of which our common interests may greatly suffer, Resolved, that said paper currencies shall, and after the date hereof, be paid and received within this colony in all payments to all intents and purposes in the same proportion to silver as the same are paid and received within the respective colonies by which the same have been issued."

This was the first act of financial independence, setting, as it did, at defiance the severe restrictions and penalties that the English Parliament had imposed. To sustain the defences of the colony money was needed, and the Provincial Congress empowered the treasury to borrow ;^100,000 lawful money secured by notes of the province at six per cent., and the General Congress was asked to promote the circulation of this currency throughout the Union. The form of note was substantially the same as had been previously issued, bearing the heading of the colony of Massachusetts Bay, and stating that the notes "will be received in all payments in the colony, and no discount or abatement shall be made thereon in any payment, trade or exchange whatsoever."

This was a revival of paper money as a legal tender, after a lapse of more than a quarter of a century, during which time the people had become accustomed to and had realized the advantages of a specie currency or of a currency founded distinctly upon specie. These provincial bills of credit with the notes to the amount of $2,000,{)00 issued by the Continental Congress, soon had their effect in bringing about their own depreciation, although the congressional bills were issued under the order that "whoso refuses to take these notes without some discount shall be deemed an enemy to his country;" while the Committee of Public Safety of Massachusetts voted on their second issue of paper money in July of 1775 that they were a legal tender in all pecuniary transactions as equivalent to specie at the usiial rates, under penalty of treble damages to both the payer and receiver.

The General Court of the colony under the new order of things, which assembled in August, 1775, authorized a fresh emission of _;^10t),- 000 in paper, and at this time decreed that on the back of it should be stamped the figure of an American citizen, with a sword in his right hand, and with an inscription which is still our State motto. This money received the appellation of "sword in hand money" because of the armed image on its back.

While the discounts at which the colonial and continental pajier money circulated were at first comparatively slight, during the year 1775 loss

"f credit became apparent. In the early part of 1776, as a sign of the scarcity of specie, as well as of a distrust in the security of paper money, strenuous efforts were made to raise £'i'dS)'dQ of hard money in Massachusetts on exchange for bills, this to promote the expedition of our forces to Canada ; but the effort met with a disheartening degree of success.

In order to. meet this growing trouble the New England colonies sent delegates to a convention which was held in Providence, R. I., to see if something could not be done by general action to strengthen their credit. The result was a passage of resolves that "whoever pays, or receives the colonial or continental currency at a less rate than originally prescribed, besides being accounted a foe to the liberties of his country, shall forfeit the svim so exchanged. " They also advise several States to make this paper a legal tender for debts as previously required, and to provide that a refusal of it in such a mode should be the extinguishment of all claims.

In accordance with agreements made at this convention the State of Massachusetts in January, 1777, adopted a statute in which it set forth the value in money of practically all the commodities sold in the colony and the value as well of services paid for by the day. These were to be the prices at which goods were to be sold and services given, the same to be paid in the legal tender of the country, and any discount therefrom or other charge would constitute a serious offence.

In spite of these strenuous efforts depreciation still continued, and it was asserted that to intensify this the British put in circulation a large amount of counterfeit bills in imitation of those that had been emitted by Congress. In June of 1770 Congress felt constrained to take into account the serious question of currency depreciation. It therefore issued a proclamation which the Legislature of Massachusetts had printed and read by all of the ministers in its jurisdiction on the first Sunday after it reached them.

This document said: "The present situation of public affairs demands your serious attention, and particularly the great and increasing depreciation of your currency requires the immediate, strenuous and united efforts of all true friends to their country for preventing an extension of the mischiefs that have already flowed from that source. For defraying the expenses of this uncommon war, our representatives to Congress were obliged to emit paper money. They were very .sensible of the inconveniences with which too fi'equent emissions would be at-

Icmlcd and to avoid them. Forthispurpo.se they estabhshed loan offices as early as in October, 177l), and have from that time to this repeatedly and earnestly solicited you to lend them money on the faith of the United States. The sums received on loan have nevertheless proved inadequate to public exigencies. Our enemies prosecuting the war by sea and land with implacable fury, and with some success, taxation at home and b(jrrowing- abroad in the midst of difficulties and dangers were alike impracticable, hence the continued necessity of new emissions. Your government being now established and your ability to contend with your invaders ascertained, we have on the most mature deliberation judged it indispensably necessary to call upon you for $45, ()(>(->, 1)00, in addition to the fifteen millions required by resolution of Congress on the 2d of June last."

At that time the paper issues of the national government were about $1()0,000,000; but the proclamation, we are sorry to say, although appealing to patriotism, did not produce the desired result in strengthening the credit. In September of the same year (1779) the conditions of the currency were such that the Legislature of this (State passed the resolve that, "Whereas, this State are using their utmost endeavors to appreciate the currency of the United States, there is great danger that their laudable exertions will be entirely defeated if measures are not speedily taken to prevent the inhabitants of this and the other United States from conveying articles out of this State, therefore be it enacted," etc., " there shall be no exportation of them either by land or water."

The articles included were wines, spirits, coffee, molasses, sugar, cocoa, cotton wool, sheep's wool, flax, salt, linen and cotton and woolen goods, etc. In certain respects this law seemed necessary, for in consequence of the fluctuations in different localities in the value of continental and State bills advantages were taken in trade somewhat disastrous to our people. For example, while in the latter part of 1779 forty dollars in continental money was worth one dollar in specie in Boston, the value elsewhere might be sixty dollars in continental money to one in specie ; and it is related that a merchant in Boston received a large amotmt of this paper from a friend of his in Philadelphia with instructions to buy whatever salable articles he conveniently could. Accordingly he went to the principal stores which were filled with dr}- goods, pointed to the .shelves of cotton or linen and so on, inquired the price, and when told said that he vi^ould take the whole lot, paying for this in

The representatives in Congress, although they continued issuing paper money, allowed themselves to believe, or tried to make the people think that they believed, that the depreciation in it was due to artificial rather than other reasons. In the proclamation which they sent out they said that " the depreciation oi this money is always either natural or artificial. The latter is our case. The artificial depreciation is a most serious sul.iject, a distrust, however occasioned, entertained by the mass of the people either in the ability or inclination of the United .States to redeem their bills is the cause of it. The ability of the United States must depend on two things, first, the success of the present revolution, secondly, on the sufficiency of the natural wealth, value and resources of the country. That the time has been when honest men might, without being chargeable with timidity, have doubted the success of the present revolution, we admit ; but that period is past. The redemption of these bills and the settlement of the accounts of the several States for expenditui-es or services for the common benefit are among the objects of this confederation, and consequently it cannot, so far as it may respect snch objects, be dissolved consistent with the laws of God or man. In order to prevent further natural depreciation of our bills we have resolved to stop the presses and to call upon you for supplies by loans and taxes. Leave us not, therefore, without supplies, nor let in that flood of evils which would follow from such neglect. Let it never be said that America had no sooner become independent, than she became insolvent, or that her infant glories and growing fame were obscured and tarnished by broken contracts and violated faith in the very hour when all the nations on the earth were admiring and almost adoring the splendor of her rising."

In spite of these protestations and this almost burning eloquence the credit of the country did not improve. In fact the depreciation of currency went on at a more rapid rate during the three or four months after the issuance of this proclamation than it had at any previous time. This became so obvious that in the following year Congress decided to abandon the hopeless ta.sk of restoring credit to its currency and raise its existing condition, by agreeing to consider forty dollars of national paper to be equal to one of specie, to call in its notes upon this basis, and to redeem them by a new emission of bills equal to and payable in silver and gold within six years at five per cent, interest.

It was a singular I'act that in 17'S() hard nK.mey had becnine quite plentiful here and in i)ther parts of the country. Large quantities of it came from the French and British forces, from Havana and other foreign parts, and from prizes captured in the West Indies. But, while it passed freely among the people, not a dollar of it could be f(jund in the State treasury, because a thousand claims stood there unsatisfied and ready to seize upon it as soon as it made its appearance.

To show the steady decline that had taken place in the continental bills, it may be said that they circulated in 1781 - if they could be said to have any circulation at all - at $500 for $1 of specie. That is, that was the value of the early issues, while the later issue, which had been put out partly to redeem the former one, circulated on the basis of three paper dollars to one of specie.

It was at about this time that the Bank of North America received its charter, although the representatives from Massachusetts have to be put down as voting against the proposition. No doubt the bank did a great deal to solve the financial problem by giving stability to our currency system. In 1782 an act passed by the Legislature incorporated a branch of it in Boston, in compliance with the wish of the general government. The condition of this act was that no other similar association should be allowed in this jurisdiction while the war lasted with Great Britain. Penalty of death was affixed to the offence of embezzling the funds of this branch by any of its officers, and a resolve was passed that the paper of this institution and the securities of others, as signed by Robert Morris, shall be received toward a tax of ^500,000 assessed on the people of the United States.

The close of the war left the people of Boston and its vicinity in an exceedingly trying condition. This State had contributed much more than her fair proportion in money to the national cause, and it was with feelings of indignation that it was realized that the obligations thus assumed were hardly likely to be liqiudated. The soldiers who had been paid off in depreciated currencj^ could hardly consider that their services had been justly requited, and it was long before the evils incident to a deranged currency system could be corrected.

It was at this time that the State, with its old fondness for specie currency, concluded to undertake the work of minting its own money. Congress had already decided that the coins of the country should be cents and half cents of copper, dollars, half dollars, double dimes and dimes of silver, and eagles and half eagles of gold, and had decided upon the Troy weig'ht of these. But the mimey was not sent out with the readiness that was desired. On this account mints were established with tlie needed machinery, part of the works on Boston Neck, and the rest at Dedham.