A LETTER From a Gentleman in BOSTON, To his Friend in CONNECTICUT.
A LETTER, &c.
AGREABLE to your Desire, I now send you the best Information I can get, concerning an Application to England. And the following is said to be a Copy of the Heads of a proposed Act of Parliament, with the Case of the Colony of Rhode-Island added, as an Exemplification of the pernicious Effects of Paper Currency: Which I shall take for granted, till such Time as the Gentlemen concerned in the Application, shall give the World a genuine Copy of what they have sent Home.
[Page 4]Heads proposed for an Act of Parliament, to regulate and finally suppress Paper-Currencies in the Provinces and Colonies of Massachusetts-Bay, New-Hampshire, Connecticut, and Rhode-Island, in New-England, in North-America; and to ascertain their Currencies in all Time coming.
WHEREAS for many Years last past, the British Provinces and Colonies of Massachusetts-Bay, New-Hampshire, Connecticut, and Rhode-Island, in New-England, in North-America; have emitted, from Time to Time, enormous Sums of publick Bills of Credit, to defray the necessary Charges of Government; and also upon Loan to themselves, Members of the Legislature, and to other Borrowers, their Friends, at easy and fallacious Lays, to be repaid at very long Periods; and by their provincial Laws, made a Tender in all Contracts, Trade, and Business, whereby Currencies, various and illegal, has been introduced, which from their continued depreciated Nature, in the Course of many Years, have much oppressed Widows, and Orphans, all other Creditors, more especially the Merchants of Great-Britain, trading to those Plantations; their outstanding Debts have suffered incredible Discount, to their very great Loss and Damage. The Act of Parliament. VIth of ANNE, ascertaining the Rates of foreign Coins in her Majesty's Plantations in America, the good Intentions thereof have been frustrated; the Affairs of Coinage and Currencies being solely in the Crown, the Prerogative has been notoriously abused and infringed: Therefore to regulate and finally suppress those Paper-Currencies in the Provinces and Colonies, and to ascertain their Currencies in all Time coming,
Be it enacted, & c. That in the British Provinces and Colonies of Massachusetts-Bay, New-Hampshire, Connecticut, and Rhode-Island, in North-America, after (left blank) Day of (left blank) in the Year (left blank) Bills of Credit commonly called Paper-Money, shall no more be a Tender in Commerce and other private Business, and be receivable only in Course for publick Taxes. That during said seven Years, it shall be in the Option of all Persons to pay their publick Taxes and Duties in provincial or colony Bills, or in Silver and Gold Sterling Alloy, after the following Rates, viz. During the first Year, Silver at 31 s per Ounce; during the Second at 30 s [Page 5] per Ounce; the Third at 29 s; during the Fourth at 28 s; during the Fifth at 27 s; during the Sixth at 26 s; during the Seventh and last Year at 25 s per Ounce of Silver, and Gold in Proportion; to be understood Bills of the old Tenor, and the several other Tenors in Proportion, as current at passing of this Act; that during the seventh and last Year, the Possessors of the outstanding Bills are required to bring them into the Treasury to be redeemed with Silver, after the Rate of 25 s per Ounce; and if Silver and Gold shall not be sufficient in the Treasury, the Possessor shall notwithstanding deliver his Bills into the Treasury, the Treasurer giving him a Receipt for the same; which shall intitle him to Interest thereupon after the Rate of 10 per Cent. per Ann. until redeemed as aforesaid. The Treasurer refusing or neglecting to exchange said Bills, or grant said Receipts, shall (left blank) as a Penalty. That after the Expiration of seven Years, no publick Bills shall any more be received into the Treasury to be exchanged, and their Legislature shall upon no Pretext whatsoever in Time coming emit any Bills of publick Credit.
That all Bills of publick Credit formerly emitted by the said Provinces and Colonies shall be punctually cancelled, according to the Tenor of the several emitting Acts, where their Periods do not exceed the Space of seven Years from this Act's taking Place; and where the Periods are longer, the several Sums of the exceeding Years shall be distributed, proportioned and assessed amongst the seven Years, at the Direction of their respective Legislatures, so as to be fully cancelled at or before the Expiration of the said seven Years. Where any of these Provinces or Colonies shall refuse or neglect to call in, and cancel their respective Bills of publick Credit, in Conformity to this Act, the King in Council may appoint Commissioners, with full and proper Power, at the Charge of the Colony, to assess the same. And the Possessors of any of said Bills may recover in common Course, in any of his Majesty's Dominions, the Value of such Bills from any Person who shall have acted as a Member of those respective Legislatures in any of the seven Years, excepting such Members as shall have in Form entred their dissent.
To prevent the great Damage and Confusions in Commerce, and all other Business, which for many Years past have prevailed in said Provinces and Colonies, from their various, perplexed and fallacious Currencies;
[Page 6] Be it enacted, That from and after (left blank) all Contracts (Specialties excepted) made in said Provinces and Colonies shall be understood to be a Currency the same as in Great-Britain, on Sterling Value, and shall be recovered accordingly.
Provided, That in order to extricate, with more Ease, the People of said Provinces and Colonies from their present Confusions of Currencies and Contracts, they may be INDULGED as follows, viz. That all Contracts (Specialties excepted) made preceeding this Act, may be satisfied in their provincial Bills, according to the Value of such Bills, as settled by their provincial Acts, in Force at the Commencement of this Act.
That any Governour or Commander in Chief in any of those Provinces and Colonies, whether immediately appointed by his Majesty, or elected by the Freemen or Company of the Charter-Governments, where the Governour has not a negative Voice, giving his or their Assent, or not entring their Dissent from any Resolve, Bill or Act of any of their General Assemblies, contrary to this Act, shall be deemed guilty and shall be disqualified, dismissed, and for ever rendred incapable of any Place of Profit or Trust under his Majesty; and such Resolve or Act shall be ipso facto void with a Salvo of the Prerogative of the Crown as to Currencies.
To vouch and illustrate the pernicious Effects of Paper Currencies (publick Bills of Credit issued by Act of the provincial Assemblies in the British American Plantations) which from the indirect (iniquitous, fraudulent and fallacious) Practices of their Legislatures, have lessen'd the commercial Credit of those Parts, and in Consequence become a Discouragement to the Commerce of Great Britain, we shall instance the Case of the Colony of Rhode-Island, as an Exemplification of the Whole. In the Affair of Currencies the British American Colony of Rhode-Island have defrauded more in a few Years than any of the most wicked Administrations in the several Nations of Europe have done in many Centuries. A Contract made 30 Years ago for 100 l. Sterling in Value, that is, Silver at 8 s. per OZ. is at present reduced to a nominal 32 s. per OZ. This they have effected by large and frequent Emissions of publick Bills of Credit, bearing no Premium or Interest, not to be cancelled 'till after 10 or 20 Years, and notwithstanding [Page 7] made a private Tender in Law as ready Cash; naturally Bills upon such a Footing do suffer large growing Discounts in all Trade and Business, and gradually become of little Credit or Value. This Expedient of depreciating their Government-Bills, by their Laws made a Tender and Currency, is promoted by the fraudulent Debtors, and desperate Part of the Colony, in order to pay former Contracts with a much less Value than was contracted for, and more especially to defraud the British Merchants in their outstanding Debts. The Paper-Money-Promoters are the Desperate and Fraudulent, these being vastly the Majority in the Colony, carrying all Elections (both legislative and executive Parts) of their Government are annually elective. Thus Government is perverted, and become worse than a State of Nature. If by Chance any of the Elected opposes the Emission of those fraudulent Bills, he is drop'd next Election, as a professed Enemy to the Interest of the Colony.
Industry and Frugality are banished, Extravagancies encouraged by copious Loans of those publick Bills of Credit to private Persons easily obtained, the present and succeeding Generations are inextricably involved, and will become a Colony of desperate Debtors to the neighbouring Colonies, who inadvertently have given their Bills a Credit; which will terminate in the Loss of the Merchants of Great-Britain trading to New-England. This poor small Colony, from a late exact Perlustration, contains not exceeding 20,000, Men, Women and Children, Whites, Indians and Negroes, have extant about 400,000 l. Paper Money. And of this above three Quarters is in the Possession of People of neighbouring Colonies.
The Rhode-Island Charter Government Emissions of Paper Money, to all Intents and Purposes, are attended with the same fraudulent Effects as was that infamous private Combination, called Land-Bank, in the Province of the Massachusetts-Bay in New-England, lately suppressed by Act of Parliament, and do supply the Place of the same. Their Bank Emissions of Anno 1738 and 1741 seem to fall within the late Act of Parliament, against the American Banks or Combinations: The Clause is "all Corporations acting under any Charter formerly granted for particular Purposes, who shall endeavour to raise any Stock, transfer Shares, & c. not intended in such Charter to be raised, or by Abuser, of [Page 8] said Charter, shall forever be deemed illegal and void." Rhode-Island Emissions cannot in any Sense be said to defray the Charges of the Government, but a Corporation fraudulent Stock (called by themselves Bank-Money) to let to Interest; which Interest, about 3000 l. for their small annual Charges of Government is deducted, is a Dividend for the Benefit of their several Townships. People with so loose a Charter, and so capable of being perverted, may be called an incorporated Mob or Corporation; and are of worse Consequence than common Mobs, because they pretend the Authority of a Charter, to colour and skreen their Iniquities.
It is instilled into the Populace, That Currencies are a Privilege of the common Consent of the People, and not a Prerogative of the Crown; that notwithstanding the unwarrantable Latitude they may take, they are safe, because Charters are reckoned sacred; the King and Parliament will not meddle with their Charter-Privileges; vacating of Charters being deemed odious.
Some Instances of particular Effects of their Fallacies and Frauds.
1. The Preamble to their several Acts of Emissions are fallacious, deceitful and imposing "always depending upon our dread Sovereign's Countenance and Toleration therein, unto whose royal Command this Colony, as in Duty bound, will at all Times readily submit": More especially in the Preamble to their Emissions Anno 1740, 1741, they pretend a Government-Necessity for emitting those Bills; whereas almost their whole Emissions were divided by Way of Loan amongst the Members of their Legislature, and their Friends; they very falsely say, "A constant Charge attends the Inhabitants of this Colony above other Parts of New-England; they are a Barrier to other Parts of New-England." Whereas by Land the Colony of Rhode-Island is entirely encompassed and protected from the Indians by the neighbouring Colonies; and have, ever since the Emissions of their Bills, refused to contribute toward the New-England Indian Wars.
2. The Borrowers of this Loan-Money (with much Propriety called themselves the Sharers) are generally the Members of their Legislature; and the most considerable of the Electors, their Friends, being much in Debt, do find that the more they multiply this depreciating Currency, the real intrinsick Value of their Debts becomes [Page 9] less, and the very great Loss of the fair Creditor, and Benefit to the fraudulent Debtor. Their first Loan was in 1715, Exchange with London being 65 per Cent. Advance, the last Re-payment of this Loan was Anno 1735, Exchange 410 per Cent. Advance, that is, for 100 l. Sterling in Value borrowed, they pay in only 33 l. Sterling in Value; so that their Profit is 66 l. Sterling on the 100 l. Sterling.
3. In Consideration of this great Profit, the Sharers in the late Loans do or may sell and transfer their Shares at 35 per Cent. Advance, ready Money being upon easy Lay, viz. for the first ten Years only 5 per Cent. Interest, and lately only 4 per Cent. and for ten Years more ten partial Payments of the Principal, without Interest, and sometimes post-pon'd.
4. Those Sharers upon the Fund of a small Parcel of Land may continue borrowing this publick Money indefinitum. By an Act of the Colony, a Man may borrow to the Half of the reputed Value of his Land: Thus upon 1000 l. reputed Value of Land he borrows 500 l. By fraudulent, multiply'd, depreciating Emissions, this Land, as real Estate, continuing of a permanent intrinsick Value, becomes worth 2000 l. nominal Value. In this depreciating Money here is a Fund for borrowing 500 l. more. In Progress of more Years Depreciations the nominal Value of this Land becomes 3000 l. which creates a Fund for borrowing 500 l. more, and so progressively indefinitum.
5. The only Credit for circulating their Bills in their Face, is that the Bills shall be received in the Treasury in all publick Payments. Their publick Payments, or Taxes, do not exceed 3000 l. per Annum, and upon this Fund they pretend to circulate Four hundred thousand Pounds.
I SHALL not be ashamed to make my Observations on the before recited Heads for an Act of Parliament, and their Illustrations, altho' I should be rank'd with you as a Patriot for making Paper-Money. And however merry the Newport Gentleman may make himself with this Affair; I take it to be a Matter of such Consequence to the Provinces and Colonies, as to require our most serious Attention.
[Page 10]For in the Preamble to the proposed Act, it is set forth, That the Governments have emitted from Time to Time enormous Sums of Bills of publick Credit, to defray the necessary Charges of Government; and also upon Loan to themselves, Members of the Legislature, and to other Borrowers, their Friends, at easy and fallacious Lays. And the Affairs of Coinage and Currencies being solely in the Crown, the Prerogative has been notoriously abused and infringed.
So that the Crimes objected indiscriminately against all the Governments are, emitting enormous Sums of Bills of publick Credit, the Members of the Legislature and their Friends sharing the Bills emitted, and breaking in upon the Prerogative of the Crown respecting Coinage and Currencies. These are the three Articles of Charge to be exhibited by these Gentlemen, who have sent Home the before recited Sketch of an Act of Parliament; against the poor unhappy Provinces and Colonies.
I shall consider each of these respective Articles of Charge by themselves, and then endeavour to shew, That according to the present State of Things in this Province, there is no Occasion for the proposed Act of Parliament.
And First, As to the enormous Sums of Paper Bills of publick Credit emitted, it is absolutely necessary to adjust what shall be deemed an enormous Sum for all the Provinces and Colonies. Whether what is at present extant in all the four Governments, be an enormous Sum for them inclusively? Or, Whether the Sum emitted by one Province or Colony, be an enormous Sum for that Province or Colony? These two Questions seem to be absolutely necessary to be settled before this Article of Charge can be fairly affixed upon the Provinces and Colonies, whatever it may be on any one individual Province or Colony. For if in the Massachusetts there is extant l. 350,000 Old Tenor: Now if this Sum be not an enormous One ( i.e. as much again as it ought to be, which is the Meaning of this Word, enormous, when applied in this Manner) then the Representation, as to the Provinces and Colonies, is unjust. And if 400,000 l. for Rhode-Island, and 100,000 l. for New-Hampshire, all upon Loan, (and New-Hampshire has not above an eighth Part of the Business negotiated in it as Rhode-Island) be judged an enormous Sum for them to emit; yet 350,000 l. not one Six Pence of it upon Loan (and in perpetuam rei memoriam, a considerable Part [Page 11] of it was for defraying the Expence of victualling and transporting five hundred Troops, free of Charge to the Crown, to the Rendezvous at Jamaica, during the Administration of the late Governour Mr. BELCHER, and some Recruits since his Excellency came to the Chair) can't, considering the Trade of the Province, be judged an enormous Sum. Nor can 50,000 l. in your Colony, who likewise contracted a considerable Debt to shew your Loyalty in sending Troops to Jamaica, be deemed an enormous Sum for you, because it is well known, altho' you don't trade to Sea so much as Rhode-Island, yet your Colony is much richer than Rhode-Island. And New-Hampshire, in Point of Riches, bears no Proportion to you; notwithstanding all which, and your remarkable Care to preserve the Value of your Money, you and we are indiscriminately represented as culpable as Rhode-Island and New-Hampshire, whose Bills are out upon Loan, and neither of our Governments can be said to have any out upon Loan. Therefore this Representation, with respect to the Province of the Massachusetts-Bay, and the Colony of Connecticut, is very unjust.
And as to the Second, That the Members of the Legislature and their Friends, shared the Bills among them upon Loan, on easy and fallacious Lays. Of this Article of Charge, the Massachusetts and Connecticut are entirely free, because they have no Moneys out upon Loan, however it may be with Regard to Rhode-Island and New-Hampshire.
Thirdly, That Coinage and Currencies being solely in the Crown, the Prerogative has been notoriously abused and infringed. This is no less than a Charge of High Treason, if true: But I apprehend the Gentlemen are much mistaken, and that Coinage and Currencies are not synonimous and convertable Terms; Coinage being only applicable to Metals: Hence Coin differs from Money. Because Money is any Matter, whether Metal, Wood, Glass, Horn, Paper, & c. which have Course as a Medium in Commerce. And therefore he that counterfeits the King's Coin is punished as a Traitor; he that counterfeits a Bank Note, or a Banker's Note, is punished with Death, but not as a Traitor. And in the Act of Parliament, against the last Silver-Scheme and Land-Bank Companies, the emitting their Notes in Lieu of Money, is not adjudged Treason, nay so far was it judged from being Treason, that the first Merchant's Company was excepted out of the Act, by a special [Page 12] Proviso: And why the Provinces and Colonies emitting their Bills is a more treasonable Act, than the Silver-Scheme and Land-Bank Companies emitting their's, needs some further Explication. Wherefore the Provinces and Colonies must stand acquitted of the Crime of High Treason, with respect to Coinage: And [...] verily believe this is the first Instance of Coinage, amongst the English, being applied to Paper, it being never usual in England to call Exchequer Notes (which are Bills of publick Credit) East-India Bonds, Bank-Notes, & c. Coins; and yet they are as much so, as our Bills of publick Credit.
Currencies being a mercantile Affair, and applicable to all Sorts of Commodities, does not seem to me to be a Prerogative solely vested in the Crown, if it is, there is no Occasion for an Act of Parliament, because the Crown has sufficient Power to support its own Prerogative, when invaded, as can be sufficiently evinced from the English Story. This therefore seems to be put in, in order to raise an Indignation in the Ministry against our Privileges; which by this private Application they have made a greater Invasion on, than ever all America did on the Prerogative. And I would just say, That an Attempt to destroy the Rights and Privileges of the People is the highest Species of Treason.
I shall now add, That considering the present State of Things in this Province, there is no Need of an Act of Parliament, (if all that is meant in this Application, is to ascertain the Value of Debts.) For in October 1741, the Laws for making Province Bills a Tender expiring, the Judges made up Judgment after the Rate of Silver when the Debt was contracted; and two Persons, who look'd upon themselves to be aggrieved by said Judgments, applied by Petition to the General Assembly for Relief, who referr'd the Petitions to the May Sessions, staying Execution in the mean Time; and pass'd a Bill in both Houses, intitled, An Act in Explination of sundry Acts of this Province relating to the Payment of private Debts contracted since the 31st Day of October, 1741. To this Bill the Governour did not give his Assent; but assured the Houses, That, as he was sensible that some hard Cases may arise to particular Persons among them, he would very readily concur with them in doing every Thing for their Relief, which was consistent with his Majesty's Instructions, the Laws of the Province, and the Rule of natural Justice; And had the engross'd Bill, which was projected for that Purpose, received [Page 13] some Amendments towards the End of it, he should not have scrupled giving his Consent to it. Thus ended that Sessions without any Thing being done. At the next May Session, as soon as the Court was settled, the Governour made a Speech relating to old Bonds and Mortgages. And on the 30th of May sent them a Message, informing them the Money when stated in their last Act was stated Seven and an half per Cent. above the Value. The 2d of June his Excellency sent the House of Representatives the following Message, viz.
As the usual Time for your making a Grant for the Support of his Majesty's Governour is now come, I would take this Opportunity of observing to you, that the Sum granted at the last May Session for my Support, fell short of the Value, which was evidently designed me by that Grant; the Bills of Credit in which it was made being computed as equal to Silver at Six Shillings and Eight Pence per Ounce, which is now known to be an Overvaluation of them: Wherefore, as it seems a Point of Justice that this Mistake in the former Assembly's granting and my accepting that Sum, should be set right, and I flatter my self that I have not forfeited my Claim to such Justice, I hope you will consider it at the same Time that you make the Grant for my future Support.
Upon this Message the House made his Excellency a Grant of Five Thousand Four Hundred Pounds old Tenor; and the General Court pass'd a Resolve in Lieu of the Bill projected at the Sessions in April, recommending to the Justices of the Superiour Court, to reconsider such Judgments as they had already given for Debts due upon Bonds and Mortgages. But a solemn Debate being had before the Judges, they did not see Cause to reconsider their Judgment. This being the true State of Things here, shows, that as to the Point of ascertaining the Value of Debts, the Application to Parliament was needless.
As to the Case of the Colony of Rhode-Island, cited as an Exemplification of the pernicious Effects of Paper Currency, it is plain, That it is given as a Specimen for all the other Governments, to involve them all, as well as Rhode-Island, in the Penalties of the Act of Parliament against the Land-Bank, not excepting New-Hampshire [Page 14] it self. And if Rhode-Island is an incorporated Mob or Corporation, no doubt but the Application will be also made to Massachusetts and Connecticut; tho' I confess I am at a Loss to know what an incorporated Mob is, for if I understand the Meaning of the Word Mob, it is this, "An unlawful Assembly met to do an unlawful Act." Now a Government incorporated by his Majesty's Charter, convened by the Powers granted in said Charter, if they should do an unlawful Act, can't be called a Mob, because the Illegality of the Meeting is as necessary to constitute a Mob, as the Illegality of the Actions done. And I can't but observe, that this is a most insolent Treatment of the People. However, as I am contracted in Time, and as your Colony, Government and Governed, are so abusively treated, I hope some able Hand among you will make some more particular Remarks on this Affair.
POSTSCRIPT
I CAN'T but think it very unreasonable for those Gentlemen to be so severe in their Complaint against the Rise of Exchange, Silver and Gold; when they are the only Purchasers of Bills of Exchange, Silver and Gold, to make Remittances for the enormous Quantity of English Goods they import; and while they continue so to do, our Case must remain remediless, by either Acts of Parliament, or Acts of our Legislatures; it being impossible in this Course of Trade, to keep Silver or Gold among us: The Effect ever following the Cause. All such Attempts being as fruitless as to enclose the Cuckow by a Wall. Wherefore, I would beg Leave to ask this one Question; Whether the Merchants bidding one upon another, in the purchasing Bills of Exchange, Silver or Gold, is not as great a Cause of the depreciating our Money, as the multiplied Emissions of Paper Bills?