GIFT OF 
 
 SEELEY W. MUDD 
 
 and 
 
 GEORGE I. COCHRAN MEYER ELSASSER 
 
 DR. JOHN R. HAYNES WILLIAM L. HONNOLD 
 
 JAMES R. MARTIN MRS. JOSEPH F. SARTOR! 
 
 to the 
 
 UNIVERSITY OF CALIFORNIA 
 
 SOUTHERN BRANCH 
 
 L__
 
 This book is DUE on the last date stamped below 
 
 
 f9^ 
 
 URL 
 
 A«4/?9 
 
 Southern Branch 
 of the 
 
 University of California 
 
 Los Angeles 
 
 Form L 1 11 Q^ 
 
 M3Da
 
 I > > > 
 
 Proceedings of the American Academy of Arts and Sciences. 
 Vol. XXXllI. No. 12. — Febkuauy, 1898. 
 
 CERTAIN CONSIDERATIONS CONCERNING THE COIN- 
 AGE OF THE COLONY AND THE PUBLIC BILLS 
 OF CREDIT OF THE PROVINCE OF THE MASSA- 
 CHUSETTS BAT. 
 
 By Andrew McFauland Davis. 
 
 85532
 
 DIAGRAM SHOWING DISAPPEARANCE OF SILVER, INCREASE OF 
 
 PROVINCIAL CURRENCY AND CORRESPONDING MOVEMENT 
 
 OF SILVER RATE, 1700-1750. 
 
 Price of 
 
 Silver, 
 
 7s. 1700 to 60s. 1750. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 / 
 
 T 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 I 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ■- 
 
 57 
 
 47 
 
 37 
 
 27 
 
 n 
 
 7SHII. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ;i 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ; 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ,' 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ,,; 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 --... 
 
 /' 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 / 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 / 
 
 ^■-'' 
 
 
 
 
 
 j 
 
 
 
 
 
 
 
 
 
 
 
 D 
 
 X 
 
 <I> 
 
 
 
 r- 
 
 
 
 / 
 
 H 
 
 
 
 
 
 
 
 r 
 
 -^ 
 
 / 
 
 \ 
 
 ^y' 
 
 
 
 
 
 
 
 "^ 
 
 ^ 
 
 
 
 
 
 
 
 
 I 
 
 
 c 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ,IM< 
 
 *^ 
 
 
 -^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 /; 
 
 ^p. ■, \ ■•■■•„■, /v/O^ocoi 
 
 ^-^ /72.0 /730 
 
 /74-0 77.50 
 
 
 
 
 
 
 
 Bills in 
 Circulation. 
 
 2200 
 
 2100 
 
 2000 
 
 1900 
 
 1800 
 
 1700 
 
 1600 
 
 1500 
 
 1400 
 
 1300 
 
 1200 
 
 1100 
 
 1000 
 
 900 
 
 800 
 
 700 
 
 600 
 
 500 
 
 400 
 
 300 
 
 200 
 
 100 
 
 100 
 200 
 
 Volunie of Currency 
 
 Price of Silver 
 
 A. Quebec Expedition, £50,000 Loan. 
 
 B. €50,000 Loan. 
 
 C. £100,000 Loan. 
 
 D. £50,000 Loan. 
 
 E. ,€(;0,000 Loan. 
 
 F. Merchants' Notes. 
 
 G. W. I. Expedition, Land Bank. 
 n. Cape Breton Expedition. 
 
 I. Price of Silver checked by propo.sed reimbursement. 
 
 Unit of Scale of Silver Price one shilling. 
 
 Unit of Scale of Circulation £1 ,000. 
 
 The shaded block underlying the currency represents the Silver Circulation in New England. 
 
 The years are indicated along the base line between Currency and Silver. 
 
 I
 
 
 CERTAIN CONSIDERATIONS CONCERNING THE COINAGE 
 OF THE COLONY AND THE PUBLIC BILLS OF CREDIT 
 OF THE PROVINCE OF THE MASSACHUSETTS BAY. 
 
 By Andrew McFauland Davis. 
 
 Presented June 9, 1897. 
 
 The New England shilling was, according to the terra.s of the Act 
 establishing a Mint,* to be of the just alloy of new, sterliog, English 
 money, and for value to be twopence in a shilling of lesser value than 
 the corresponding English coin. It was to weigh tliree penny-weights, 
 Troy weight. Like the guinea, this shilling is to-day a mere reminis- 
 cence, yet until a very recent period it held its own in many parts of 
 New England, in the price lists of tradesmen, as the sixth of a dollar. 
 Douglass says : f "At the first settling of the New England Colonies, 
 their medium was sterling coin at sterling value, and barter. When 
 they got into trade a heavy piece of eight passed at 5s. A. 1652, they 
 proceeded to coin silver shillings, sixpences, and threepences, at the 
 rate of 6s. to a heavy piece of eight." There is no reference to the 
 value of the piece of eight in the Act establishing a Mint, but it will 
 be seen that the conversion of the New England shilling into sterling 
 would have been on the basis of exchange at 120, whether the rate be 
 estimated from the corresponding values given in the Act in pence, or 
 from those given by Douglass in pieces of eight. Douglass, however, 
 states elsewhere,^ that the actual value of the piece of eight was only 
 4s. Qd. If this was so, then the New England shilling was from the 
 outset worth only ninepence and the normal rate for the conversion of 
 New England currency to sterling was 133. These are the rates thitt 
 prevailed during the period of the Province, and the only question is 
 whether the shilling ever did have the value of tenpence according to 
 
 " * Mass. Col. Rec, Vol. Ill pp. 261, 262. 
 t A Discourse concerning tlie Currencies, etc., p. 10. In addition to the above 
 coins, silver twopences were authorized in 1662. Mass. Col. Hec, Vol. IV. p. 51 
 t A Discourse, etc., p. 8.
 
 192 PROCEEDINGS OF THE AMERICAN ACADEMY. 
 
 the language of the act. The heavy jiiece of eight not only passed 
 within the Colony at five shillings in early days, but, according to 
 Douglass,* it was remitted to Great Britain on that basis. This being 
 the case, it is easy to understand how the law makers came to rate a 
 piece actually worth only ninepence sterling at tenpence, an effective 
 value accomplished through the remittance of pieces of eight at a rate 
 above their market value, and we need no explanation for its decline 
 from this nominal rating to its proper place in the scale of exchange, so 
 soon as the immediate causes which led the London tradesmen to accept 
 this discrimination against them should have passed away. 
 
 The mint was established in the hope of retaining a metallic currency 
 in the Colony, through the agency of the lighter coinage, but it was 
 soon evident that it was not performing this work, and in August, 1654, 
 a law was passed against the exportation of coin.f Mere legislation, 
 however, was no more effective than the system of coinage, and in 
 May, 1669, searchers were appointed with extraordinary powers whose 
 duty it was to examine outgoing vessels which had weighed anchor with 
 the intention of leaving our waters.^ They were to seize all money 
 which they should find, and were invested with power to break open 
 packages and examine personal effects. Notwithstanding these arbitrary 
 proceedings silver still left the country, and in October, 1672, the 
 General Court prefaced an Act legalizing the currency of pieces of 
 eight with a preamble in which it was stated that these coins were of 
 more value to carry out of the country than they woidd yield at the 
 mint, and, what was of more consequence, that they were actually carried 
 out of the country instead of being taken to the mint. To prevent this, 
 it was ordered that pieces of eight, of full weiglit and good silver, Mexico, 
 Seville, and Pillar, should pass current at six shillings, after they had 
 been duly stamped at the mint with the letters N. E. to indicate that 
 they had been inspected. § Light weight pieces of eight were to be 
 stamped with their actual weight, and to pass for a proportionate 
 value. 
 
 This is the first point at which we obtain a legal rating of the piece of 
 eight in New England currencj'^, and it might be inferred that this value 
 was assigned in consequence of the depreciation of the coinage from the 
 rate at which it was originally minted. If this opinion should prevail, 
 
 * A Discourse, etc., p. 8. 
 t Mass. Col. Kec, Vol. III. pp. 353, 354. 
 t Mass. Col. Rec, Vol. IV. p. 421. 
 § iMass. Col. Rec, Vol. IV. p. 533.
 
 DAVIS. — MASSACHUSETTS CURRENCY. 193 
 
 the date of this Act will be accepted as that at which the value of 
 niuepence sterliug was recognized as the true value of the New England 
 shilling. It seems much more probable, however, that the Act was the 
 result of two circumstances : first, that, the piece of eight having a 
 recognized value, people could and did avail themselves of it as a medium 
 of trade without paying seigniorage at the mint for its conversion into 
 New England money ; and second, that the General Court was desirous 
 of protecting the public against the light weight pieces, if possible. So 
 far as this latter reason may have had influence in promoting this legis- 
 lation, it is evident that it produced little result; for in May, 1682,* the 
 General Court authorized the currency of light weight pieces of eight 
 according to their weight. Under the Province, it was enacted in 1692 
 that pieces of eight, Seville, Pillar, and Mexico, should pass current if 
 of full seventeen penny-weight at six shillings, and this value was again 
 assigned them in 1697.t The expression " full seventeen penny-weight," 
 is probably the equivalent of " not less than seventeen penny-weight." 
 The rate of silver per ounce to be deduced therefrom is a little over 
 seven shillings. The same year the legislation against the export of 
 bullion or money was renewed,^ and shipmasters on clearing were 
 required to take an oath that they did not have on board their vessels 
 over five pounds in bullion or current silver money. 
 
 In 1704, a proclamation was issued by Queen Anne fixing the rates at 
 which certain foreign coins should pass current in her Majesty's dominions 
 in America. The weight and intrinsic value of these coins were given, 
 and also the rates at which they should pass in the Plantations, the latter 
 being fixed in terms of New England currency. It may be inferred from 
 this proclamation and the parliamentary statute passed in 1706 for en- 
 forcing it, as well as from colonial legislation, both before and after this 
 date, with regard to the value at which pieces of eight should pass, that 
 the New England coinage had been supplanted by the Spanish and INIexi- 
 can dollars and fractional parts thereof. The mint had been closed fur 
 twenty years when the proclamation was issued, and thenceforth New 
 England money when used to express silver values was known as " proc- 
 lamation money " or '• lawful money," equivalent expressions, found in 
 the acts of the several governments, meaning nothing more nor less than 
 the rate fixed at which coined silver should pass when measured in terms 
 
 * Mass. Col. Rec, Vol. V. p. ?..51, 
 
 t Province Laws, Vol. I. pp. 70 and 296. 
 
 t Province Laws, Vol I. p. 306. 
 
 VOL. XXXIII. — 13
 
 194 PROCEEDINGS OP THE AMERICAN ACADEMY. 
 
 of the New England currency.* By this proclamation, the Seville piece 
 of eight, old plate, and the Mexican piece of eight, were each valued at 
 4s. 6rf. and the weight of each was given at 17 dwt. 12 grs. The Pillar 
 piece of eight was given a slightly higher value in this table. The rate 
 at which these coins were to circulate was fixed at 6s. the same value as 
 that assigned by the pi-ovincial legislation " if of full seventeen penny- 
 weight." The rate of conversion was exactly 133, the 4*. Gd. sterling 
 being equal to 6s. New England money. The rate for silver in London 
 was then os. 2d. per ounce. At 17^ dwt. for the piece of eight, silver was 
 rated at Gs. lOfrf. per ounce, or at a fraction less than 5s. 2c?. sterling. 
 
 The Provincial Act of 1697 seems to have been the basis for the 
 rates fixed in the proclamation. In 1706, the Lords of Trade informed 
 Governor Dudley that this was the fact. " You are further to represent 
 to the Assembly," they said,t " that there lies a particular obligation on 
 them to enforce a due obedience to her Majesty's commands herein, for 
 that the regulation of the rates at which foreign coins are to pass was 
 calculated from a law of their own." The establishment of the value at 
 which foreign coins should pass in the Plantations, by the standaird fixed 
 for the value of the New England shilling in an Act passed by the 
 General Court of Massachusetts, instead of reversing the process and 
 taking sterling money as the basis, at first glance seems peculiar. It 
 must be remembered, however, that at that date, apart from the fact that 
 the Province was dependent upon foreign silver for its currency, New 
 England money was to a great extent but a nominal measure of value, 
 the mint having been closed for over twenty years and the Province 
 having been compelled in tlie mean time to resort to legislation against 
 the export of silver, in order to keep within its borders the miscellaneous 
 coins then in circulation. Moreover, the circumstances connected with 
 the silver coinage in Great Britain at that time were such as may serve 
 to some extent to explain this readiness to accept a measure of value 
 set by the Province itself in terms of a foreign coin. The table of 
 values for foreign coins contained in the proclamation was prepared by 
 
 * Felt, on page 116 of his Historical Account of Massachusetts Currency, saj's, 
 " As debtors, who confided in the last emission of Go vernment notes, had promised to 
 pay lawful money, meaning these bills. ..." This expression is susceptible of 
 the interpretation that Felt thought the public bills of the issue referred to were 
 lawful money, which may or may not have been liis intent. The statute which 
 he was interpreting was passed for the purpose of relieving debtors who had 
 incautiously agreed to pay lawful money for debts incurred in public bills. 
 
 "The Editor has been unable to find any definition or explanation of what is 
 meant by 'proclamation money.'" — New Hampshire Prov. Papers, Vol. V. p. 672. 
 
 t Province Laws, Vol. I. p. 580.
 
 DAVIS. — MASSACllUSKTTS CURRENCY. 195 
 
 Sir Isaac Newton, who had been called to the charge of the mint for the 
 purpose of sui)erintending the recoinage of the silver of the realm. Prior 
 to this process and during its continuance, the relations of the values of 
 English gold and silver coins were greatly disturbed. After the recoin- 
 age, contidence was re-established in London, but it was still fresh in 
 the minds of men that the upward career of the guinea, when measured 
 in the clipped and sweated silver in circulation prior to this measure, had 
 been decreed by parliamentaiy enactment to stop at 30s., and that by 
 successive laws its measure in silver had been ordered to be reduced to 
 22s., while as a matter of fact it had, at the time the table was made, 
 actually fallen to 21s. 6(/. Thus it will be seen that the recent instability 
 of the English silver coinage may have influenced the politic course 
 taken in accepting the measure of value, established in terms of a foreign 
 coin, by the colonists themselves. The rate having been thus fixed 
 between a nominal measure of values and an actual coinage, there was 
 nothing to disturb it, and it was passed on to our day, six New England 
 shillings being equal to the dollar, Mexican or Spanish, and to their 
 successor, our own dollar, 13os. New England money being in the days 
 of the Province equal to 100s. sterling. 
 
 Until dollars came into use, all transactions in Massachusetts were stated 
 in New England money. All accounts given in terms of " lawful money " 
 must therefore be reduced twenty-five per cent if we would obtain the 
 corresponding amount in sterling. During the progress of the currency 
 inflation which took place iu this counti-y in the first half of the eigh- 
 teenth century, the Province of the Massachusetts Bay was the leader. 
 The other New England Colonies copied the form of note first issued in 
 this Province, which was in effect a mere certificate that the bill was due 
 from the Province to the possessor and should be in value equal to money, 
 and oil these terms would be accepted by the Treasurer in all public pay- 
 ments. The bills of the different governments circulated side by side 
 promiscuously, even after legislation was invoked to prevent it, no matter 
 what the terms on wliich they were issued or the amounts outstanding of 
 the bills of the several governments, and when they all of them became 
 so seriously depreciated that they were worth only about twenty-five 
 per cent of the value at which they originally circulated, Massachusetts 
 adopted a new form of bill in which the value of the bill was expressed 
 in coined silver or gold. The other Colonies also adopted the new form, 
 and bills of the respective forms were thereafter known as old and new 
 tenor bills. Of the new tenor bills Massachusetts used three different 
 forms, but they all preserved the feature of stating a value in silver at
 
 196 
 
 PROCEEDINGS OF THE AMERICAN ACADEMY. 
 
 which the bill should pass, though changes were made in the silver rate 
 and in the phrase which defined their use in payments. The new tenor 
 bills were at first held at the rate of one for three, but very shortly there- 
 after the fact that the depreciation of the old tenor bills was not fully 
 recognized in this estimate compelled the establishment, when the second 
 form of new tenor bills was adopted, of the ratio of one to four. Old and 
 new tenor bills were sometimes emitted, side by side, in the same Act, and 
 thus it became necessary that one of these forms should be accepted as 
 the measure of value. Inasmuch as all values had been stated in old 
 tenor up to the issue of the new form, and as there were for a short time 
 two forms of new tenor having different measures of value in old tenor, it 
 was customary for writers to convert the bills of the new tenor into old 
 tenor in making statements of the amount in circulation. When, there- 
 fore, it is stated that there was in circulation in 1749 £1,900,000 of 
 public bills of the Province of the Massachusetts Bay, it must be 
 remembered that, if the taxes which were laid for the purpose of with- 
 drawing from circulation the old tenor bills had been paid exclusively in 
 these bills, there would have been in circulation at that time only 
 £475,000 in bills of the different forms of new tenor, and exchange, 
 instead of being 1100 or thereabouts, would have been only 275. While 
 such facts as these add greatly to the confusion of the situation, no just 
 appreciation can be acquired of the statements which I am about to sub- 
 mit, showing the movements of exchange, etc. during this period of 
 inflation, which does not take into consideration that in 1737 these disturb- 
 ing elements were introduced through the emission of the new tenor bill. 
 The following table, showing the rate of exchange and the price of 
 silver at different dates, 1702 to 1749, was made up by Dr Douglass.* 
 
 Periods. 
 
 Exchange 
 with London. 
 
 1 oz. Silver. 
 
 Periods. 
 
 Exchange 
 with London. 
 
 1 oz. Silver. 
 
 A. D. 1702 
 1705 
 1713 
 1716 
 1717 
 1722 
 
 1.33 
 135 
 150 
 175 
 225 
 270 
 
 6s. lO^d. 
 7s. 
 8s. 
 9s. .3a. 
 
 12s. 
 14s. 
 
 A. D. 1728 
 1730 
 1737 
 1741 
 1749 
 
 340 
 380 
 500 
 550 
 1.100 
 
 IBs. 
 20s. 
 20s. 
 28s. 
 60s. 
 
 * Douglass's Summary, Historical and Political, etc., "Vol. I. p. 494.
 
 DAVIS. 
 
 M.VSSACIIUSETTS CUUIJKNCY. 
 
 107 
 
 The Suffolk files funii.';h us with two papers which give the fiuctuations 
 in silver somewhat more in detail tluiu the foregoing table between 1700 
 and 1738, inclusive. This record is copied from a book kept by Edward 
 Winslow, who was sheriff of Suffolk County, and it has therefore a 
 certain ollicial character. * 
 
 Years. 
 
 Rate of Silver 
 per Ounce. 
 
 Years. 
 
 Rate of Silver 
 per Ounce. 
 
 Years. 
 
 Rjite of Silver 
 per Ounce. 
 
 1700 to 1704 
 
 7s. 
 
 1721 
 
 J 12s. Gd., 13s., 
 j 13s. 6d. 
 
 1731 
 
 S 18s. 6d., 
 ( 19s. 
 
 ( 19s. 6d., 
 \ 20s., 
 /20s. Gd. 
 
 1705 to 1710 
 
 8s. 
 
 1722 
 
 14s -14s. Gd. 
 
 1732 
 
 
 
 
 
 
 1711 
 
 8s. 4d. 
 
 172;] 
 
 \ 14s.6d.-15s., 
 ( 15s. Gd. 
 
 
 (21s.,21s.Gd., 
 {22s.,22s.Gd., 
 /23s. 
 
 
 
 
 1733 
 
 1712, 1713 
 
 8s. Gd. 
 
 1724 
 
 16s.-16s. 6d. 
 
 
 
 
 
 
 
 ( 24, 25, 26s., 
 \ 26s. Gd., 
 /27s. 
 
 1714, 1715 
 
 Os. 
 
 1725 
 
 16s.-15s. 
 
 1734 
 
 
 
 
 
 
 1716, 1717 
 
 10s. 
 
 172G, 1727 
 
 IGs. 
 \ 16s Gd.-17s., 
 
 1735 
 
 27s. Gd. 
 
 1718 
 
 lis. 
 
 1728 
 
 I 18s. 
 
 1736 
 
 27s., 26s. Gd. 
 
 1719 
 
 12s. 
 
 1729 
 
 S 19s.-19s. 6d , 
 ■( 20, 21, 22s. 
 
 1737 
 
 1738 
 
 26s. 6d., 27s. 
 27s. 
 
 1720 
 
 12s. 4d. 
 
 1730 
 
 21,20, 19s. 
 
 
 
 From scattered sources we can fill in the missing quotations from 1738 
 to 1749, with sufiicient accuracy for our purposes. f As to the rate of 
 exchange at the latter date, the confusion was so great that no person 
 knew just what it was, but silver was generally quoted at about 60s., 
 and exchange at about 1100. In 1700, the Province was practically on 
 a specie basis, and exchange was quoted at its normal rate, 133. Doug- 
 lass gives silver in 1702 at Gs. \i)yL Hutchinson practically adopts 
 the same rate. J If the piece of eight was permitted to circulate on the 
 
 * Suffolk files, 40,289 and 46,659. There is a table incorporated in the draught 
 of an act wliicli failed of passage, given in the Massachusetts Arcliives, Vol. CI., 
 p. 473, wliich includes tlie rates from 1710 to 1727. Anotlier is to be found in the 
 Diary and Letters of Tliomas Hutchinson, p. 53. Felt gives the table from the 
 Archives, Historical Account of ^lassachusetts Currency, p. 83. 
 
 t The important points being 1744, 30*-.; 1745, 36s.; 1746, 41s.; 1747, 60s.; 
 1750, 60s. 
 
 I History of Massachusetts, Vol. II. p. 393.
 
 198 PROCEEDINGS OP THE AMERICAN ACADEMY. 
 
 basis of 17 dwt. the rate of silver was 7-^\s. per ounce. If the condi- 
 tions of the proclamation of 1704 were adhered to, then the rate was 
 6s. lOfd. per ounce. The general rating of the period appears, however, 
 to have been that given by Winslow, 7s. per ounce. A committee of the 
 General Court recommended tl)at pieces of eight should pass at 7s. per 
 ounce, in 1701.* Another committee in 1703 f proposed that plate, 
 bullion, and silver of sterling alloy should pass at 7s. per ounce. Seven 
 shillings may therefore be adopted as the generally accepted value at 
 that time. I 
 
 All through the Provincial legislation 6s. Sd. is treated as the normal 
 rate of silver in lawful money, and os. 2d. as the sterling rate. With 
 exchange at 133, and silver rated at os. 2d. sterling, the rate in lawful 
 money should liave been Gs. llr^., a fraction above the rate to be derived 
 from the proclamation. The question naturally arises, Whence came 
 this rate of Gs. Sd. ? My conjecture is that it dates back to the days of 
 the Colony, at which time silver is sometimes quoted at 5s. § This ster- 
 ling rating would be the equivalent of 6s. 8d. New England money. Its 
 use would in that event have been merely traditional, but a traditional 
 rate might have fixed itself upon a denominational money. 
 
 During the period of the decline of the notes, the influence of the 
 Governors and of the Councillors, especially after the decline became 
 
 * Mass. Archives, Vol. CI. p. 18i. 
 
 t Court Records, Vol. VII. p. 373. 
 
 J Tlie autlior of " Observations on the Scheme for £60,000 in bills of a new 
 Tenour," p. 18, gives the rate in 1702 at seven shillings. The same author, how- 
 ever, in " An Inquiry into the Nature and Uses of Money," etc., p. 4, gives the 
 rate the same year as eight shillings. Deeember 27, 1704, Dudley announced that 
 he had received the proclamation. Court Records, Vol. III. p. 95. On the .^d 
 of March, 1701-5, the Council passed an order that no money should pass by tale 
 but what was of due weight, according to her Majesty's proclamation. Light 
 money and plate of sterling alloy were to pass until further provision should he 
 made at the ne.xt session of the Assembly at seven shillings per ounce. The 
 House non-concurred, and the Governor summoned them to a conference. After 
 the conference, the order was amended by striking out the seven shillings, and 
 making it read that light weight coins, etc. should pass and be good in payments 
 by the ounce Troy pro rata until the end of the session of the Court in May. 
 Court Records, Vol. III. p. 113. On the same day Dudley issued a proclamation 
 to that effect. Mass. Arcliives, Vol. CI. pp. 287 and 290. 
 
 § A Discourse, etc., p. 24. Douglass, speaking of the effect of the depreciation 
 of the currency on the salaries of clergymen, says the preachers " when silver 
 was at 5s. had £3 per week ; at present, silver at 29s. per oz., they have only £6 
 to £8, equal to 40s. of former times."
 
 DAVIS. — MASSACHUSETTS CURRENCY, 
 
 199 
 
 sufficiently pronounced for them to recognize tiie causes, was as a rule 
 on tiie side of conservatism. Tliey had no remedy to propose, but the 
 Governors in tlieir speeches repeatedly pointed out the evils which would 
 arise from failure ou the part of the Assembly to call iu the notes at the 
 appointed time, and the Council many times refused to concur in hills 
 which by their terms postponed the withdrawals. The effect of the 
 decline was felt most by individuals living upon salaries, or having fixed 
 incomes payable in current funds, but it also reached certain branches of 
 the government. The post office, for instance, was dependent for its 
 support upon a schedule of fixed charges, and no compensation was pos- 
 sible for the loss occasioned by the decline of tlie currency. In 1713, 
 the department lodged a complaint with the Board of Trade, for this 
 reason.* The Governors not infrequently pointed out that the allowances 
 made them for their services ought to be increased proportionately to the 
 diminution in the purchasing power of the bills, and the members of the 
 Board and of the House took care that their joer diem pay was at least 
 approximately adjusted. "I own, some part of this community can 
 fence against this evil," said Governor Sliute, in 1716, "and ward it off 
 from themselves by advancing their commodities, but the other part mu.<t 
 unavoidably suffer. All rents must fall of consequence, and what will 
 your ministers do, who are highly worthy of their salaries? how heavily 
 it will fall upon them and their families, when what they are paid in 
 grows low in value, and tlieir necessaries of life are daily advancing." 
 Douglass saw that through the changes made in the allowances to the; 
 Governors and in the per diem pay which the members of the General 
 Court voted to themselves, a sort of scale could be constructed with 
 which to measure the diminution of the purchasing power of the bills, 
 and he therefore put together the following table. f 
 
 A. D. 
 
 1702. 
 
 1720. 
 
 1730. 
 
 1740. 
 
 1743. 
 
 1745. 
 
 1747. 
 
 1748. 
 
 Gov'nors j 
 
 Dudley 
 
 Shute 
 
 Ijek'lier 
 
 Belcher 
 
 Shirley 
 
 Shirley 
 
 Shirley 
 
 Siiirley 
 
 Per Ann. ) 
 
 £600 
 
 £1,000 
 
 £2,400 
 
 £3,600 
 
 £5,400 
 
 £6,000 
 
 £7,600 
 
 £9,600 
 
 Councillors 
 per day 
 
 5s. 
 
 6s. 
 
 10s. 
 
 1.5s. 
 
 18s. 
 
 18s. 
 
 ms. 
 
 40s. 
 
 Kepresenta- 
 tivesperday 
 
 3s. 
 
 4s. 
 
 Gs. 
 
 10s. 
 
 12s. 
 
 12s. 
 
 20s. 
 
 30s. 
 
 Rates 
 
 £6,000 
 
 £6,000 
 
 £6,000 
 
 £.35,000 £60,000 
 
 £120,000 
 
 £168,324 
 
 £381,672 
 
 * Board of Trade .Tournnl, quoted by Palfrey, Vol. IV. p. .332. 
 t Douglass's Summary, etc., Vol. I. j). 508.
 
 200 
 
 PROCEEDINGS OP THE AMERICAN ACADEMY. 
 
 The growth of the rates or annual charges of the government is almost 
 as instructive as the advance of tiie pay of the legislators, but is of 
 course complicated by causes outside the currency. The changes in the 
 pay of the Councillors and Representatives, as laid down in the Province 
 Laws, are as follows. 
 
 A. D. 
 
 lC!t2. 
 
 1714. 
 
 1728, 
 1737. 
 
 1738, 
 1740. 
 
 1741. 
 
 1742, 
 1746. 
 
 1747. 
 
 Councillors 
 per day 
 
 Representa- 
 tives per (lay 
 
 5s. 
 
 OS. 
 
 4s. 
 
 10s. 
 
 Gs. 
 
 15s. 
 10s. 
 
 12s. 
 
 8s. 
 
 18s. 
 r2s. 
 
 30s. 
 20s. 
 
 It will be seen that the records practically confirm Douglass's table, so 
 far as the per diem pay of the legislators is concerned, the brief varia- 
 tion in 1741 not being of sufficient importance for consideration. The 
 increase in the Governor's pay in 1748, would indicate a probable increase 
 at the same time in the pay of the Councillors and Representatives; but 
 there is no record preserved of any action on tins point. The Annual 
 Tax Acts all contain statements of the amounts respectively levied for 
 the Province tax and for Representatives' pay and fines. If the service of 
 the Representatives had been uniform each year, we conld test the table 
 by a comparison of the appropriations for Representatives' pay for diflFer- 
 ent years ; but an examination of these amounts from year to year shows 
 that the growth to be found there does not exactly follow the law which 
 would be deduced from the amount of the per diem pay. It is a fact, 
 however, that while the amount assessed in June, 1747, for Representa- 
 tives' pay and fines, was £2878 l\s. Gd., the corresponding amount in 
 the levy next year was £4508 5s. The presumption is tliat Douglass 
 was correct in the figures which he gave for the pay of the Councillors 
 and Representatives in 1748. 
 
 A variety of circumstances complicates the attempt to analyze the 
 allowances made the Governors during tliis period, but on the whole 
 Douglass's table fairly represents the changes. Phips had three annual 
 allowances of £500 each. Bellamont, who was very popular, had two 
 allowances of £1000 each. Dudley was allowed £500 in 1702. Shute 
 was at first allowed £1200, but this was afterwards cut down to £1000. 
 Belcher's first allowance was £2400, from 1731 to 1737 inclusive he was 
 allowed £3000, then for three j'ears the sum was fixed at £3600. From 
 this point Shirley's allowance was advanced by stages to £5400, £5760, 
 £6000, £7600, and finally it was, in 1748, £9600.
 
 DAVIS. 
 
 MASSACIiUSH;TTS CURRENCY. 
 
 201 
 
 It was stated hy a contemporary writer that there was in circulation 
 in the four New England Colonies, when the first issues of Province 
 bills were made, about £200,000 in silver.* Douglass says that in 1713,1 
 one third in value of the circulating medium of the New England gov- 
 ernments was silver, and the other two tliiids paper. The bills he esti- 
 mated at £175,000. Silver was then rated at 85. per ounce. They 
 were therefore equivalent to 437,500 ounces of silver. He called them 
 438,000 ounces, and thus got a total of 657,000 ounces. A comparison 
 of some of these estimates may be useful. 
 
 Year. 
 
 Silver in 
 Circulation. 
 
 rills in rivcnln- 
 
 tioii in all New 
 
 England. 
 
 R;ito of Silver 
 per Ounce. 
 
 Corresponding 
 ounce.s of Silver 
 in Circulation. 
 
 V;ilne of Ciicu- 
 
 lation at Gs. 8d. 
 
 per Ounce. 
 
 1700 
 1713 
 1718 
 1731 
 1739 
 
 £200,000 
 21U,000 oz. 
 
 4.38,000 
 300,000 
 470,000 
 030,000 
 
 7s. 
 
 8s. 
 
 12s. 
 
 20s. 
 29s. 
 
 571,428 
 657,000 
 500,000 
 470,000 
 434,482 
 
 £ 
 190,476 
 
 219,000 
 
 106,660 
 
 150,666 
 
 144,827 
 
 If there is any rule to be deduced from the foregoing table it would 
 seem to be substantially the same as that laid down by Douglass: J '* The 
 more paper money we emit, our real value of currency or medium be- 
 comes less, and what we emit beyond the trading credit of the country 
 does not add to the leal medium, but rather diminishes from it by creat- 
 ing an opinion against us, of bad economy and sinking credit." 
 
 The apparent exception to the rule, in the excess in the purchasing 
 capacity of the circulation shown in 1713, may be capable of explana- 
 tion. When the Colony began the emission of public bills of credit there 
 was in circulation an amount of silver i^ractically adequate for the trans- 
 actions of local business affairs. Until it had been totally displaced and 
 superseded by paper money, any estimate of the amount remaining in 
 circulation at any given time nnist have been conjectural. Douglass's 
 estimate of one third in circulation in 1713 may have been too higli, 
 and was indeed disputed by one of his contemporary controversialists. 
 Whether this be so or not, time was required for the emissions to pro- 
 duce their effects upon the discount of the bills and the displacement of 
 
 * The .Second Part of South Sea Stock, p. 22. 
 
 t A Discourse, etc., p. 29. J A Discourse, etc., pp. 29, 30.
 
 202 PROCEEDINGS OP THE AMERICAN ACADEMY. 
 
 silver, and it is quite probable that the £50,000 emitted for the Hill and 
 Walker expedition against Quebec in 1711 had not then fully done its 
 work. Still another exception to the rule is to be found in 1749. There 
 were outstanding that year, in the month of May, about £2,200,000 old 
 tenor. A tax of £75,000 new tenor was laid that summer. This was 
 equal to £300,000 old tenor, and reduced the amount outstanding to 
 £1,900,000. Silver was then quoted at 60s. an ounce, and the outstand- 
 ing circulation, thus reduced, was equivalent to 633,333 ounces, which at 
 6s. Sd. an ounce was equal to £211,111. It must not be forgotten, how- 
 ever, that when that tax was laid it was known that the government of 
 Great Britain had completed its preparations for reimbursing the Province 
 for its expenditures in behalf of the Cape Breton expedition, and a law 
 had been passed in the Province fixing the terms of the redemption of 
 the bills. One cause of the delay in paying over the money to the Prov- 
 ince was the opposition of certain merchants in London, who believed 
 that speculators were gathering in the bills in the hope of reaping a 
 profit out of their redemption. These exceptions, therefore, do not fur- 
 nish adequate reasons for doubting the correctness of the rule deduced 
 by Douglass. 
 
 The influence of large emissions on the part of the Province of the 
 Massachusetts Bay upon th& silver quotations can be easily distinguished, 
 and in some instances, where the rise of silver was stimulated by causes 
 not connected with the issues of this Province, the coincidence with large 
 emissions in Rhode Island furnishes an adequate explanation of this 
 change in rate. Douglass was of opinion that two thirds of the bills 
 emitted by Rhode Island were absorbed in the circulation of Massachu- 
 setts. The table on the opposite page, mainly made up from facts brought 
 together by Douglass in his pamphlets, will illustrate these points. 
 
 Wages did not rise proportionately with silver. In a pamphlet pub- 
 lished in 1721, when silver was between 12 and l3s. an ounce, the writer 
 says,* " I will next ask the poor laborer that works for five shillings per 
 day, half money, half goods, whether he lives better now than when he 
 received four shillings per day in good silver money at the rate of 
 seventeen penny-weights for six shillings." Douglass, writing in 1739 
 concerning the effect of the depreciation on wages, says : f " How much 
 they have suffered and continue to suffer is obvious. For instance, a 
 carpenter, when silver was at 8s. per oz., his wages were 5s. a day all 
 
 * The Second Part of South Sea Stock, p. 16. 
 t A Discourse, etc., pp. 23, 24. 
 
 I
 
 DAVIS. 
 
 M.\SS.\CHUSETTS CUHUENCV, 
 
 •203 
 
 Vear. 
 
 Rate of Silvor 
 per Ouiiie. 
 
 Loans and Extraordinary Emissions. 
 
 1700 
 1706 
 1712 
 1715 
 1717 
 1722 
 1728 
 1732 
 1733 
 1738 
 
 7s. ' 
 
 8s. 
 
 8s. 6(1. 
 
 9s. 2(1. 
 12s. 
 14s. 
 18s. 
 21s. 
 27s. 
 29s. 
 
 £50,000 atlvanccd ace. Quebec Expedition. 
 
 £50,000 loan, 1714. £40,000 R. I., 1715. 
 
 £100,000 loan. 
 
 £50,000 loan, 1721. £40,000 R. I. 
 
 £60,000 loan, 1727. £40,000 R. I., 1728. 
 
 £60,000 R. I. loan, 1731. 
 
 £76,000, 1733; £104,000, R. I. ; £50,000 Conn. 
 
 £100,000 R. I. loan. 
 
 cash. The Towa House, A. 1712, was built at this rate; whereas at 
 preseut, A. 1739, from the bad influence of paper money, silver being 
 29s. per oz., he has only 12s. a (3ay, equal only to 3s. 4d. of former 
 times ; and even this is farther reduced, by obliging him to take one 
 half in shop goods at 25 per cent or more advance above the money 
 price." He then proceeds to show how the purchasing power of the day's 
 wages has diminished, selecting butter for his illustration on the ground 
 that it rose the most uniformly of all provisions. When wages were 5s. 
 per day, butter was Ad. per pound, and the laborer could buy 15 pounds 
 with one day's wages. His 12s. would only jiurchase 7 pounds, butter 
 being then 20c?. a pound. The salaries of clergymen had more than 
 doubled, but the purchasing power of the salaries had diminished thirty- 
 three per cent. 
 
 There is much to be learned from a study of the attempts at remedial 
 legislation during this period. The subject of the adjustment of the 
 relations between debtors and creditors, and the application of the legal 
 tender function to the bills, raised complications which occupied much of 
 the time of the General Court, and the various attempts to reconcile 
 the divergent interests of the debtor and creditor classes are entitled to 
 cai'eful consideration. The material bearing upon these questions is, how- 
 ever, too prolific for any attempt at analysis here. 
 
 The form of the public bill has already been indicated. It was in 
 effect a certificate of indebtedness, and on that theory, when it found its
 
 204 PROCEEDINGS OF THE AMERICAN ACADEMY. 
 
 way back to the treasury, the debt was extinguished and the temporary 
 function of the bill was perfui'med. Under this theory the amounts 
 originally issued each year were simply intended to meet the immediate 
 needs of ihe government, and provision was made for their I'etirement 
 in the next tax bill. The withdrawal from circulation, and the lucking 
 up in the hands of a treasurer, of large sums collected by taxation, is 
 recognized as a serious disturbance to the circulating medium of a 
 government, and various devices are to-day resorted to in order to pre- 
 vent as far as possible the consequent reduction of the circulation. In 
 a similar way, after the country became dependent for a circulating 
 medium upon the amounts thus annually emitted, the sudden emission 
 and the withdrawal each year of so large a proportion of the medium of 
 trade must have created a serious disturbance in commercial affairs, 
 and the cry of a scarcity of bills during the period of the year when the 
 taxes were being collected was based upon a genuine want, even when 
 the bills were most abundant. The increase in the amounts issued, the 
 postponement of the periods for retirement, and the distribution of the 
 withdrawals ovt;r several years, were only partial remedies for this evil. 
 Confidence in the bills was based upon their ultimate withdrawal, and the 
 greater the emissions the greater the taxes that must be levied to provide 
 for their retirement. While this was evidently true, and while there 
 were indications that pointed to a loss of confidence in the bills when 
 the Assembly failed to provide the promised fund for the withdrawal of 
 an emission, yet it cannot be doubted, however paradoxical it may 
 seem, that whenever a fund was called in for the purpose of redeeming 
 the government, promises and maintaining confidence in the bills, it was 
 expected that there would be an emission to fill the gap thus occasioned 
 in the circulating medium. 
 
 The emissions in Massachusetts from 1702 to 1749 reached the sum 
 of £4,630,000, while the withdrawals during the same period, includ- 
 ing the £300,000 in 1749, were £2,730,000. It was doubtless to over- 
 come the disturbance occasioned by this annual process of absorption 
 and emission, that the system of distributing bills of public credit 
 among tiie inhabitants, on loans secured by real estate, w^as resorted to. 
 £310,000 was thus put out at different times. The first loan was to 
 the Boston merchants who furnished supplies for the Quebec expedition 
 in 1711. This was only a temporary loan, to enable them to carry the 
 sterling exchange paid to them by the paymasters of the expedition, 
 until it should be met in London. In 1714, when it was about to 
 be paid, it was replaced by a loan of £50,000 to the inhabitants of
 
 DAVIS. — BIASSACHUSETTS CURRENCY. 205 
 
 the Province. Wlieii the first instalments on this loan fell due, in 17 IG, 
 £100,000 was put out and this was followed by £50,000 more imme- 
 diately after the last instalments on the first popular loan were payable, 
 in 1721. When by the terms of these loans they should have been 
 i-etired, a new loan of £60,000 was made, and doubtless this process 
 would have been continued but for the interference of the Board of 
 Trade. The meaning of the attempt is obvious. The Assembly was 
 seeking to furnish a medium for trade, which should not be subject to 
 the annual calls for retirement under which bills for government expen- 
 diture were issued. 
 
 Among the various experiments then made there were but two 
 attempts to give these bills a credit based upon a promise that they 
 should be paid in coin, the first being of little consequence, as it ap- 
 plied to only £1500 emitted in 1693.* The ^aromise in this, as well as 
 in the later and more important instance, was not on the face of the bill, 
 but was in the Act of emission, and in the second case was so worded 
 that in [)ractical operation it did not prove beneficial for the bills in 
 question. The Act under which the £9,000 in bills of the first new 
 tenor were emitted in February, 1736-7, contained a provision for 
 levying a tax in 1741, adequate for their retirement, payable not only 
 in the bills themselves, but in old tenor bills or in certain produce. It 
 was further provided that after that session, and until 1742, the duties of 
 impost and excise should be j)aid in coin, and although it was thought 
 that the several funds established for the retirement of the outstanding 
 bills would be adequate for the purpose and all would be out of the way 
 by that time, these duties were pledged as a still further security. If by 
 chance it should happen that any of these new tenor bills should be 
 outstanding at any time after December 31, 1742, the possessor was to 
 be entitled to receive from the treasurer for every six shillings and 
 eightpence in these bills, an ounce of silver or the like value in gold. 
 All of the first new tenor bills were issued with this promise of redemp- 
 tion in December, 1742, attached, and all of them were declared to be in 
 value equal to silver at six shillings and eightpence an ounce, an esti- 
 mate which was above the true rating of silver based upon sterling 
 exchange, as has already been pointed out, and also above the rate at 
 which the bills circulated, as appears from the discussions which subse- 
 
 * The dehisive promises to be found in some of the later Acts of emission, to 
 the effect that the silver and gold wliich should be received for commodities 
 timed in by tax collectors were to be held for the benefit of possessors of bills, 
 were not entitled to grave consideration.
 
 206 PROCEEDINGS OP THE AMERICAN ACADEMY. 
 
 quently took place iu conuection with the adjustment of debts. These 
 bills were declared to be worth three times as much as bills of the 
 corresponding denominations of the old tenor form, and were to be 
 received by the treasurer on the basis of one of the new tenor for three 
 of old tenor. In January, 1741-2, when the second new tenor form was 
 first issued, the bills were rated in the Act on the basis of one of the 
 form mentioned in the Act for four of old tenor, no provision being 
 made in the Act for their redemption in coin. From that time until 
 December, 1742, the Province saw circulating side by side two forms 
 of bills, each declared to be equal to silver at six shillings and eight- 
 pence an ounce, one of these forms being rated in the statutes at a 
 premium of 33 per cent above the other, and the bill that was at a 
 discount having behind it a specific pledge for its redemption in coin 
 within less than twelve months. It was also true that at the same time 
 Rhode Island bills issued on twenty-year loans, to an amount vastl\ dis- 
 proportioned to the resources of the Colony, when compared with the 
 circulation of the Massachusetts bills, were freely received at a premium 
 above these first new tenor bills. It is possible that the discredit iu 
 which these bills were held during the spring and summer of 1742 was 
 intentional, for the Assembly, just in time to save the credit of the 
 Province, made provision for the exchange of such as were outstanding 
 December 31, 1742, on terms nearly equivalent to their redemption in 
 coin. Thus ended this absurd attempt to give credit to the public bills 
 by promising to redeem in silver and gold such as were outstanding 
 after the fund provided for their withdrawal from circulation was closed. 
 How far it may have affected public opinion at the time, and prevented 
 a more liberal and reasonable attempt at the establishment of a currency 
 redeemable in coin on demand, must be a matter of personal judgment, 
 but it will be admitted that this experience was capable of an interpre- 
 tation in the hands of those hostile to such a movement which would 
 have militated against any such experiment. 
 
 I have prepared and submit herewith a table showing the various 
 amounts annually emitted, inclusive of loans from 1702 to 1750. In 
 parallel columns with these, the amounts retired each year and the amount 
 left outstanding are given, the withdrawals being made up on the 
 assumption that the loans were called in when due. It is known that 
 this was not the case, but it would be impracticable to attempt to follow 
 these payments in detail. It is also known that the tax collectors were 
 at times delinquent in their returns, so that the funds provided for the 
 withdrawal of the bills were not collected according to the terms of the
 
 DAVIS. — MASSACHUSETTS CURRENCY. 207 
 
 legislation, but in the long ruu these things took care of themselves. 
 The emissions in tlie table are procured from the Acts and Kesolves of 
 the General Court. The Tax Acts furnish the withdrawals or i-etire- 
 ments. The figures to be obtainetl from this table corresj)ond in their 
 final result with those given by contemporary writers as to the amount 
 outstanding in 1749. There are some fj-agments of treasurer's state- 
 ments and some committee reports showing the amounts outstanding at 
 different dates. These reports require examination before they can be 
 applied to test the accuracy of this table. The treasurer was apparently 
 accustomed to charge himself with all bills which w'ere emitted against 
 future funds, but the bills intended for loans he charged to the commis- 
 sioners of the loans, and they made their reports direct to the Assembly. 
 The treasurer's reports, tlierefore, as to the amount of bills outstanding 
 at any given date require correction by the addition of the loans then 
 outstanding to the net amount with which he stands charged after 
 having deducted from the emissions the credits to which he was entitled. 
 For instance a report, the bulk of which is given by Felt,* shows that 
 up to November llih, 1724, the treasurer stood charged with bills 
 amounting to £397,006 Is. During the interval which his statement 
 covered, there had been paid in £194,917 25. 10c/., which had been 
 burned by committees of the General Court, and there was in the 
 treasury at that date £10,558 12s. If/., leaving outstai.ding according to 
 this statement £191,530 C)S. Id. Now there were actually outstanding 
 at that time the entire amounts of the £100,000 loan and the £50,000 
 loan of 1721, and in addition thereto the taxes were to a great extent 
 pledged for several years ahead as funds for the retirement of bills 
 which must then have been in circulation. The estimate of the amount 
 outstanding to be found in my table, which is made up from the-Acts 
 and Resolves of the General Court, shows £326,000 in May. If we add 
 the £150,000 loans to the treasurer's statement we get £341,000 in 
 November. This difference might easily be explained, but not all the 
 comparisons of the figures to be obtained from these reports with the 
 estimates given in the table will turn out so favorably as this. 
 
 The diagram setting forth the disappearance of the silver circulation 
 of the Province and the line of growth of the currency shows also the cor- 
 responding movement which took place in the price of silver, all values 
 being stated in the old tenor currency of the Province. Had it been 
 possible to sustain the bills at par until the amount in circulation was 
 
 * Historical Account of the Massachusetts Currency, p. 80.
 
 208 PROCEEDINGS OP THE AMERICAN ACADEMY, 
 
 equal to the silver in use in 1700, we should have had the starting point 
 for the curve of the silver rate at the date when the emissions were in 
 excess of the trading wants of the Province. The circumstances of the 
 Province necessarily controlled and limited its trading capacity. A 
 greater amount than was needed could not have been kept in circulation. 
 Hence the maintenance at par of an adequate substitute for the silver 
 could only have been attained by the displacement of that metal. If the 
 currency had remained at par up to the point suggested, there would 
 have been no necessity for considering the relations of the increase of 
 the currency to the decrease of the silver. Each emission of bills would 
 have required the displacement of a corresponding amount of coin in 
 order that it should circulate. As a matter of fact, however, the rise of 
 silver began almost as soon as the Province adopted a form of bills of its 
 own. Up to 1702, use was made of the Old Colony bills, to meet by 
 emissions the extraordinary wants of the Province. The adoption at 
 that date of a form of bill specially adajDted to the use of the government 
 was a practical announcement that the policy of emitting public bills was 
 to be continued, and was followed so promptly by a rise in silver that 
 the (luotation in 1704 shows an advance of a shilling. The displacement 
 of silver was apparently slower in taking effect, so that it would appear 
 that the bills increased slightly the purchasing capacity of the circulation 
 for a few years. 
 
 The graphic delineation of the disappearance of the silver is based 
 upon the statement of one of the pamphleteers of the day as to the 
 amount of silver required for the trade of New England,* and the 
 assertions of Dr. Douglass that there were 219,000 oz, still remaining in 
 circulation in 1713 which had entirely disappeared in 1718.t Since the 
 disappearance of the silver was practically simultaneous throughout New 
 England, the only effect of adjusting this representation to the proportion 
 in use in Massachusetts alone would be to reduce slightly the area in- 
 cluded between the two curves. The main features would be the same. 
 
 With regard to the time of the disappearance of silver, it is not im- 
 probable that the £100,000 loan at the end of 171 6, following so closely on 
 the £50,000 loan of 1714, caused the coin to be hoarded in 1717, Then 
 came the process of ailjustment, through which the silver rate reduced to 
 its just proportion a paper medium having a nominal valuation in excess of 
 the trading needs of the Province. When distrust and lack of confidence 
 
 * Tlie Second Part of South Sea Stock, p.'22. 
 t A Discourse, etc., p. 29.
 
 DAVIS. — MASSACHUSETTS CURRENCY. 209 
 
 added the force of their weiglit, this reduction actually brought the pur- 
 chasing capacity of the bills in circulation, notwithstanding the "reat 
 excess of their denominational value, below the amount forinei'h- deemed 
 essential for the use of the Province. 
 
 By reference to the table showing the coincidences between certain 
 movements in the price of silver and emissions of large amount by this 
 Province and the Colony of Rhode Island, the dates of some of the 
 Rhode Island loans can be obtained. A glance at the diagram will 
 disclose the effect of these emissions, but it is desirable for the iull 
 appreciation of this effect to take note of certain facts in connection 
 with affairs in Massachusetts at the same time. A contemporary writer* 
 says, in 1740, that the highest point which the Massachusetts currency 
 had then reached was in 1721. This statement would be true, if no 
 consideration were had of the £50,000 loan made that year ; but when 
 this is borne in mind, the culminating point prior to 1741 would seem to 
 have been in 1726. The necessity of including the emissions of the 
 other governments, if we would deduce any law from the subject under 
 consideration, is forcibly illustrated by the divergence, between 1727 and 
 1741, of the lines which mark the currency volume on the one hand, and 
 the silver rate on the other. Under pressure from the Board of Trade 
 the Provinces of the Massachusetts Bay and New Hampshire were not 
 only prevented from further increasing their public bills of credit during 
 this pei-iod, but were actually compelled to reduce the amounts in circu- 
 lation. Meantime Rhode Island had flooded the Province with emission 
 after emission of public bills, some issued upon funds, but nearly all 
 loaned out at interest for terms varying from ten to thirteen years, and 
 then to be liquidated in annual instalments covering ten years more. Of 
 these bills there were £340,000 outstanding in 1741, the greater part of 
 which were in circulation in Massachusetts. Owing to their presence, the 
 Assembly of this Province had witnessed the silver rate advance from 
 16s. in 1727 to about 29s. in 1741, in the face of the fact that the circula- 
 tion of their own public bills had been reduced from £396,000 in 1726 to 
 £229,000 in 1741. The purchasing capacity of the bills of the Province 
 in circulation, rated in silver at 6s. 8d. per ounce, had through this cause 
 been reduced from £165,000 to less than £53,000. Attempts had been 
 made, without success, to pi'event the circulation of the bills of the neigh- 
 boring governments. The Colony of Rhode Island was drawing a reve- 
 nue from the interest of the loans. The borrowers were able, in turn, to 
 
 * An Inquiry into the Nature and Uses of Money, p. 19. 
 VOL. xxxiii. — 14
 
 210 PROCEEDINGS OF THE AMERICAN ACADEMY. 
 
 lend in Massachusetts the public bills which they thus secured at a higher 
 rate of interest than that charged by the Colony, so that they in turn 
 made a profit. The privilege of obtaining shares in these loans com- 
 manded a ready sale at a premium. Douglass quotes the premium on 
 the privilege to subscribe to the £100,000 loan in 1738 at 35 per cent. 
 To all of this the people of the Province of the Massachusetts Bay had 
 to submit, through the obstinacy and stupidity of the traders, who in- 
 sisted upon giving currency to the Rhode Island bills. 
 
 The rate of silver should naturally have gone in 1748 above seventy 
 shillings, but the belief that the expenses of the Cape Breton expedition 
 would be reimbursed must have held it in check. Certainly this must 
 have been the case after the passage of the Act in January, 1748-9, 
 providing for the future redemption of the bills, if the coin should be 
 received by the Province, in settlement of the claim for reimbursement. 
 Furthermore, this Act contained arbitrary measures for the prohibition of 
 the circulation of the bills of the other governments, and this again had 
 a tendency to reduce the silver rate. 
 
 The addition of another line to the diagram, showing the volume of 
 the entire currency in circulation, including the contributions of the other 
 governments, might perhaps have added to its interest. It will not be 
 difficult, however, to make use of the figures heretofore given to obtain 
 an approximate result of this sort. In its present shape, the diagram 
 brings forth vividly the peculiar condition of this Province, just prior to 
 the inflation under Shirley, when suffering vicariously for the sins of 
 Rhode Island. The Province had responsibilities enough of its own to 
 bear in this connection, and it is well that so much of the burden as can 
 be lifted shall be deposited where it belongs.
 
 DAVIS. 
 
 MASSACHUSETTS CURRENCY. 
 
 211 
 
 EMISSIONS AND RETIREMENTS MAY 1 TO MAY 1, 
 INCLUDING LOANS. 
 
 Tear. 
 
 Emissions. 
 
 Retirements. 
 
 Outstanding. 
 £ 
 
 
 1702 
 
 5,000 
 
 £ 
 
 170;3 
 
 32,000 
 
 6,000 
 
 5,000 
 
 
 1704 
 
 32,000 
 
 22,000 
 
 31,000 
 
 
 1705 
 
 22,000 
 
 22,000 
 
 41,000 
 
 
 1706 
 
 40,000 
 
 26,000 
 
 41,000 
 
 
 1707 
 
 32,000 
 
 22,000 
 
 55,000 
 
 
 1708 
 
 32,000 
 
 22,000 
 
 65,000 
 
 
 1709 
 
 46,000 
 
 
 75,000 
 
 
 1710 
 
 44,000 
 
 22^006 
 
 121,000 
 
 
 1711 
 
 95,000 
 
 
 143,000 
 
 £50,000 loan. ace. Quebec Expedition. 
 
 1712 
 
 25,000 
 
 22^000 
 
 238,000 
 
 
 1713 
 
 14,000 
 
 22,000 
 
 241,000 
 
 
 1714 
 
 64,000 
 
 47,000 
 
 233,000 
 
 £50,000 loan to inhabitants of Province. The 
 payment of the loan aoc. Quebec Expedition 
 
 1715 
 
 8,000 
 
 47,000 
 
 250,000 
 
 1 was about this time. Wirhdrawals arbitra- 
 1 rily assigned to the years 1714 and 1715. 
 
 
 
 
 
 1710 
 
 111,000 
 
 32,000 
 
 211,000 
 
 \ £100,000 loan passed Dec. 4, 171fi. Emitted 
 l_ 1717. The £60,C00 loan of 1714 wa.s to l.o 
 j paid in five annual instalments, £10,000 each 
 1 1715-1719 inclusive. 
 
 1717 
 1718 
 1719 
 
 9,000 
 11,000 
 15,000 
 
 82,000 
 32,000 
 26,000 
 
 290,000 
 267,000 
 246,000 
 
 1720 
 
 65,000 
 
 27,000 
 
 235,000 
 
 
 1721 
 
 17,000 
 
 16,000 
 
 273,000 
 
 1 £50,000 loan to towns, to be drawn in by 
 ( taxes, 1726-1730 inclusive. 
 
 1722 
 
 45,000 
 
 16,000 
 
 274,000 
 
 
 1723 
 
 40,000 
 
 17,000 
 
 303,000 
 
 
 1724 
 
 55,000 
 
 25,000 
 
 326,000 
 
 
 1725 
 
 70,000 
 
 30,000 
 
 356,000 
 
 
 1726 
 
 25,000 
 
 39,000 
 
 396,000 
 
 ^ 
 
 1727 
 
 88,000 
 
 142,000 
 
 382,000 
 
 £100,000 loan expired in 1727. 
 
 £50,000 loan to towns, paid in instalments, 
 
 1728 
 
 36,000 
 
 39,000 
 
 328,000 
 
 - 1726-1730. 
 
 1729 
 
 20,000 
 
 30,000 
 
 325,000 
 
 £60,000 loan to towns, to be paid in taxes in 
 
 1730 
 
 13,000 
 
 30,000 
 
 815,000 
 
 the years 1734-1738 inclusive. 
 
 1731 
 
 24,000 
 
 24,000 
 
 298,000 
 
 
 1732 
 
 
 26,000 
 
 298,000 
 
 
 1733 
 
 79,000 
 
 21,000 
 
 272,000 
 
 
 1734 
 
 27,000 
 
 47,000 
 
 380,000 
 
 ' 
 
 1735 
 
 39,000 
 
 58,000 
 
 310,000 
 
 
 1736 
 
 48,000 
 
 59,000 
 
 291,000 
 
 £60,000 loan withdrawn by taxes. 
 
 1737 
 
 81,000 
 
 81,000 
 
 280,000 
 
 
 1738 
 
 26,000 
 
 62,000 
 
 280,000 
 
 
 1739 
 
 
 
 244,000 
 
 
 1740 
 
 80^000 
 
 95!ob6 
 
 244,000 
 
 
 1741 
 
 120,000 
 
 
 229,000 
 
 
 1742 
 
 117,000 
 
 86,000 
 
 349,000 
 
 
 1743 
 
 85,000 
 
 95,000 
 
 380,000 
 
 
 1744 
 
 344,000 
 
 115,000 
 
 370,000 
 
 
 1745 
 
 1,040,000 
 
 140,000 
 
 599.000 
 
 
 1746 
 
 741,000 
 
 124,000 
 
 1,499,000 
 
 
 1747 
 
 208,000 
 
 168,000 
 
 2,116,000 
 
 
 1748 
 
 400,000 
 
 415,000 
 
 2.216,000 
 
 
 1749 
 
 
 300,000 
 
 2,201,000 
 
 
 1750 
 Total 
 
 
 
 1,901,000 
 
 
 4,630,000 
 
 2,729,000 
 
 855:^;^
 
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