The many Schemes at present upon the Anvil in Boston, for emitting enormous Quantities of Paper Currencies; are the Occasion of this Discourse. The Writer does not vainly pretend to dictate to Government, or prescribe to Trade; but with a sincere Regard to the publick Good, has taken some Pains, to collect, digest, and set in a proper Light, several Facts and Political Experiences especially relating to Paper Currencies; which tho’ plain in themselves, are not obvious to every Body. If any Expressions should sound harsh, they are not to be understood as a Reflection upon this Province in general: It was always my Opinion, That the Province of the Massachusetts-Bay, is by far the most vigorous and promising Plant (with proper Cultivation) of all the British Plantations; in the best of Countries at Times, bad Administrations, and private evil Men of Influence have prevailed. The Author is not a transient Person, who from Humour or Caprice, or other Views may expose the Province; but is by Inclination induced, and by Interest obliged to study the Good of the Country.
All Commerce naturally is a Truck Trade, exchanging Commodities which we can spare (or their Value) for Goods we are in want of. Silver it self is a Merchandize, and being the least variable of all others, is by general Consent made the Medium of Trade. If a Country can be supposed to have no Dealings but within it self; the Legislature or tacit Consent of the People, may appoint or receive any Currency at Pleasure: But a trading Country must have regard to the universal commercial Medium, which is Silver; or cheat, and trade to a Disadvantage: It is true, that in some Countries of Europe Billon (a base mixture of Metals) is used for small Change, but not as a Medium of Trade.
Every Country or Society have their own peculiar Regulations, which may be called their Municipal, or By-Laws in Trade: but the universal trading Part of the World, as one tacit Confederacy have fallen into some general Rules, which by Custom of Merchants are become as Fundamental: One of these is a Silver Medium of Trade, that all Contracts (Specialties excepted) are understood to be payable in this Medium, being always of the same fixed Value, or easily adjusted by the Par, and accidental small Differences of Exchange from one Country to another.
There can therefore be no other proper Medium of Trade, but Silver, or Bills of Exchange and Notes of Hand payable in Silver at certain U’sos or Periods, which by a currant Discount are reducible to Silver ready Money, at any Time. The Debitor Party (I am ashamed to mention it) being the prevailing Party in all our Depreciating-Paper-Money Colonies, do wickedly endeavour to delude the unthinking Multitude, by perswading them, that all Endeavours of the Governour, or Proposals and Schemes of private Societies, to introduce a Silver Medium, or a Credit upon a Silver Bottom, to prevent the honest and industrious Creditor from being defrauded; are Impositions upon the Liberty and Property of the People.
Depreciating the Value of nummary Denominations, to defraud the Creditors of the Publick and of private Persons; by Proclamations of Sovereigns, by Recoinages, and by a late Contrivance of a depreciating Paper-Credit-Currency; were never practised but in notoriously bad Administrations.
All over Europe for many Ages preceeding the 14th Century, the nummary Pound, and the Ponderal or Pound Weight of Silver were the same: but in some following Ages in bad Administrations the Values of nummary Denominations were gradually reduced; as in England to 4 oz. Silver value (upon all Occasions I use the nearest round Numbers) one third of its original Value; in Holland the Pound Ulams (6 Guilders) to 2 oz. Silver being only one sixth of its original Value. A general Stop has been put to those notorious publick Frauds ever since Trade began to flourish; the civil Governments becoming more polite, found it their Interest in Affairs of a Medium of Trade, to be advised by the more knowing and experienced Traders: Thus, since the Reign of Edward VI. in England, the Shilling Denomination hath lost only 2 gr. Silver. We have two or three Instances of late in Europe, that have deviated from that Maxim of a fixed Value of Silver in Trade; these were in arbitrary Governments, under most arbitrary Administrations. 1. France by Recoinages from A. 1689, to the wise Administration of Cardinal Fluery, was obliged to defraud the Subject, to maintain unjust Wars and Rapines upon its Neighbours, and lessen’d the Value of nummary Denominations from a Mark of Silver at 27 Livres to 80 Livres. 2. The King of Spain A. 1688 lowered his Denominations 25 per Cent. A heavy Piece of Eight formerly 8 Ryals Plate, passed for 10 Ryals currant. 3. Sweden under the Administration of Baron Gortz.
In all Sovereignties in Europe where Paper-Money was introduced, great Inconveniencies happened; upon canceling this Paper Medium all those Inconveniencies did vanish. 1. In Sweden, Baron Gortz, by imposing Government Notes (and Munt tokyns) reduced the People to extreme Misery (this was one of the principal Crimes alledged against him when he suffered capital Punishment) but these being called in, and the Coin settled upon the same Foundation as it was before Charles XIIth Accession, Sweden flourished as formerly. 2. The late Regent of France, by the Advice of Mr. Law, did form a Project A. 1720, and by his arbitrary Power, endeavoured to put it on Execution; to defraud State Creditors and others, by banishing of Silver Currency, and by substituting a Paper Credit: the Effect was, the greatest Confusion, and almost utter Subversion of their Trade and Business: The Remedy was (Mr. Law having sneak’d off, became a Profugus, and at last died obscurely) after a few Months the Court of France were obliged to ordain, that there should be no other legal Tender but Silver-Coin; and Commerce was flourished in France more than ever. At present, under the wise Administration of Cardinal Fleury (who allows no Paper Currencies, nor Re-coinages, which had the same Effect in depreciating nummary Denominations in France, that frequent and large Emissions of Paper-Money have in our Colonies) their Trade, bids fair to outdo the Maritime Powers (as Great Britain and Holland are called) and has a much better Effect in advancing the Wealth and Glory of France, than the Romantick butcherly Schemes of Conquest over their Neighbours, under the Administrations of Richelieu, Mazarine and others, in the Reigns of Lewis XIII and XIV. 3. In Great Britain A. 1716, were current four and a half Millions of Pounds Sterling in Exchequer Notes, being the largest Quantity current at one Time: although they bore about half of legal Interest, and not equal to one third of the concomitant national Silver Currency; they laboured much in Circulation, and the Government to prevent their being depreciated, was obliged to give considerable Premiums to the Bank for cancelling some of them, and circulating the remainder.
It is not easily to be accounted for, how England, France and Holland, have tacitly allowed their several American Colonies; by Laws of their several Provinces, by Chancerings in their Courts of Judicature, and by Custom; to depreciate from Time to Time, the Value of their original Denominations, to defraud their Principals and Creditors in Europe. The British Plantations have not only varied, from Sterling, but have also very much varied from one another; to the great Confusion of Business, and Damage of the Merchant. This will appear plain by inserting at one View the State of the Currencies in the several British Plantations; whereof some are per Exchange, some in Spanish Silver Coin, and some in Paper Money called Colony or Province Bills of publick Credit.
Originally and for some Years following in all the English American Colonies, 5s. Denomination was equal to an English Crown Sterl. after some Time Pieces of Eight, being the general Currency of all foreign American Colonies, became also their Currency; and they remitted or gave Credit to the Merchants at Home (by Home is meant Great Britain) a Piece of Eight (value 4 s. 6d. Sterl.) For a Crown or 5 s. Sterl. this was a Fraud of 11 per Cent. In sundry of our Colonies were enacted Laws against passing of light Pieces of Eight; these Laws not being put in Execution, heavy and light Pieces of Eight passed promiscuously; and as it always happens, a bad Currency drove away the good Currency; heavy Pieces of Eight were ship’d off. This current Money growing daily lighter, a Difference was made between heavy Money which became Merchandize, and light Money in which they paid their Debts gradually from 10, 15, 20, to 25 per Cent. as at present in Jamaica: this was another and continued Course of cheating their Creditors and Employers at Home. From a Complaint of Merchants and others dealing to the Plantations; Q. Anne by Proclamation, and the Parliament of Great Britain, afterwards by the Proclamation Act, ordered, that after A. 1709, A heavy Piece of Eight and other Pieces in Proportion to their Weight, in all our Colonies should pass not exceeding 6 s. Denomination. This Act continues to be observed in none of our Colonies, excepting in Barbadoes, and Bermudas. Virginia Currency was formerly, and continues still better than what the Act directs. . . .
MASSACHUSETTS-BAY: This being more especially the scene of our Discourse, we shall be more particular. At the first settling of the New England Colonies; their Medium was Sterling Coin at Sterling Value, and Barter; some Part of their Taxes was paid in Provisions and other Produce, called Stock in the Treasury. When they got into Trade a heavy piece of Eight passed at 5 s. A. 1652, They proceeded to coin Silver Shillings, six Pences, and three Pences, at the Rate of 6s. to a heavy Piece of Eight; Silver continued current at this Rate by sundry subsequent Acts of Assembly till A. 1705, by a Resolve of the General court Silver was to pass at 7s. per Oz. A. 1706 the Courts of Judicature chancered Silver to 8s. per Oz. in satisfying of Debts, being nearly after the Rate of 6s. a light Piece of Eight as then current. At this Rate Silver and Province Bills continued upon Par until A. 1714, the Assembly or Legislature fell into the Error of making from Time to Time large superfluous Sums of Paper Money upon Loans, and the Emissions for Charges of Government not cancellable for many Years, so that these Publick Bills have been continually depreciating for these last 26 Years, and are now arrived to 29 s. per Oz. Silver
Massachusetts-Bay was the Leader of Paper Currencies in our Colonies. Their first Emission was of £40,000 A. 1690 & 1691, to pay off the publick Debts incurr’d by that expensive, tho’ unsuccessful, Expedition against Canada; of this Sum £10,000 was cancelled and burnt in October A. 1691: In the following Years no more new Emissions, but some Re-emissions of the remainder, and that only for the necessary Charges of Government, called in by Rates or Taxes within the year; the last Remission of these Bills was A. 1701, of £9,000 Bills all this Period continued at the Rate of 6s. a heavy Piece of Eight, and were called Old Charter Bills. A.1702 began new Emissions of Province Bills; but, as it ought to be in all wise Administrations, cancelled by Taxes of the same and next following Year, until A. 1704, the Rates for calling them in, were in Part postponed two Years; they began A. 1707 to postpone them in Part for three Years; A. 1709 for 4 Years; A. 1710 for 5 Years; A. 1711 for 6 Years; A. 1715 for 7 Years; A. 1721 for 12 Years; A. 1722 for 13 Years: Thus unnaturally instead of providing for Posterity, they proceeded to involve them in Debt. This long publick Credit and the enormous publick Loans, have depreciated our Province Bills to the small Value they bear at present; the Issues and cancellings of their Bills being for a long Series of years too tedious to be particularly and minutely inserted.
The Province of the Massachusetts-Bay besides the Emission & Re-emissions of the £40,000 old Charter Bills, have since A. 1702 emitted and re-emitted Bills of publick Credit, £1,132,500 upon Fund of Taxes, and £310,000 upon Loans, being in all near one and a half Million; whereof about £230,000 still outstanding, and if publick Faith be better kept will be gradually cancelled by A.1742. The ordinary Charges of Government may be about £40,000 New England Currency per Ann. Exchange with Great Britain 450 per Cent. Advance, or five and an half New England for one Sterl. . . .