University of Virginia Library

CHAPTER XII.
THE MONEY PAID AND SPECIE PAYMENTS RESUMED.

While the "act for drawing in the bills of credit of the several denominations which have at any time been issued by this government and are still outstanding, and for ascertaining the rate of coined silver in this province for the future" was under consideration, a number of influential Boston merchants[321] submitted a petition to the assembly in which they set forth that the subject was one in which every individual was most nearly interested. Although not insensible to the wisdom and integrity of the General Assembly, yet they prayed that any bill relating to this important affair might be submitted to the public, before it should be enacted. Such was the custom of the parliament of Great Britain they apprehended in cases of like moment. The presentation of this petition aroused the friends of the bill who filed a counter petition, on the 23rd of January, 1748-49.[322] They had heard with satisfaction of the progress of the bill, and with concern that suggestions had been made by a body of merchants of Boston, that it might prove pernicious. Notwithstanding the fact that the rate of

redemption which was proposed would prove less advantageous to the merchants of Boston than to any other part of the community, yet as they apprehended, the said rate would be greatly for the ease of the major part of the people. They agreed to use their endeavors that the good design of the bill might be answered. The act was actually passed three days after this, and before it was known what course was to be taken as to the payment of the money to the province, one motive for its passage being indeed, to facilitate the same by committing the province to a course of action which would meet with the approval of the Lords Commissioners of the Treasury. It was. therefore, conditional in character and future in its action. Sir Peter Warren, William Bollan, and Eliakim Palmer of London, were appointed to receive the money and to give a full discharge for the same. They were also authorized to petition his Majesty to transmit the sum in foreign coined silver, in a government ship, to the province. On arrival the treasurer was empowered to receive the same. For one year after March 31, 1750, the treasurer was to redeem outstanding bills in silver at the following rates for every forty-five shillings in old tenor bills, one piece of eight; for every eleven shillings and three pence in middle tenor and new tenor bills, one piece of eight, and so proportionably for larger or smaller sums. All rights of redemption were to cease after March 31, 1751. All contracts after March 31, 1750 were to be understood to be payable in coined silver, and executions on judgments upon existing debts contracted in public bills could be satisfied in coin upon the same terms as those prescribed for the redemptions.[323]

The sum granted by parliament £183,649, 2s. 7 1/2d. sterling was equal to about £244,866 "lawful money" of Massachusetts. The current rate of silver was about 60s. and it had been proposed to effect the redemptions at the rate of 55s. per ounce. It was found desirable, however, to adopt a compromise rate of 50s. or seven and one-half in bills for one in silver.[324] At this rate the £244,866 to be derived from the reimbursement would provide for £1,836,495 of the public bills reduced to old tenor rates, no thought being had of the possible cost of laying the money down in Boston. It was estimated that after this amount had been applied for redemptions there would still remain in circulation about £300,000 more rated in old tenor. A tax was, therefore, laid in this act, in terms of new and middle tenor bills for £75,000.[325] In case the General Court should fail to apportion this tax the treasurer was directed to issue his warrants to the selectmen or assessors, basing the same upon the next preceding assessment. These proceedings, if they should take effect, would render unnecessary the provisions which had been made in the several acts of emission for the future redemption of the bills and these provisions were, therefore, made void.

The act then went on to declare that after March 31, 1750, all contracts and debts were to be paid in silver at six shillings and eight pence an ounce, and after that date all persons were forbidden under severe penalties to account, receive take or pay any bill or bills of credit of either of the neighboring governments, a proviso being added that if these governments should take steps to sink their bills, then the clauses of the act forbidding their circulation should become void. If the sum granted

by parliament should not reach the province before March 31, 1750, then the legislation formerly passed for drawing in the bills was to be revived and the special provisions of this act for their redemption were to become void.

For four years after March 31, 1750, no person elected to office could enter upon the performance of his official duties until he had made oath that he had not since March 31, 1750, wittingly and willingly, directly or indirectly, either by himself or by any for or under him, been concerned in receiving or paying within this government, any of the bills of the neighboring governments.[326] On the passage of this bill a letter to the neighboring governments was prepared, and the same was adopted on the 28th of January, 1748-49.[327]

A copy of the bill accompanied the letter when it was forwarded, and the respective governments were notified that since the effort to secure co-operation had failed, this province had determined not to let slip so favorable an opportunity for drawing in its own bills. In doing this it was impossible to avoid prohibiting the

circulation in this province of the bills of credit of other governments, past experience having shown that it was impracticable to keep a silver currency while paper money was in circulation. Hopes were expressed that the other governments might still see their way to taking steps toward the adoption of a silver currency, in which case this province stood ready to do everything reasonable to cultivate a good agreement with its neighbors in pursuing a general design of so great importance. In speaking of the prohibition of the circulation of the bills of the neighboring governments, reluctance was expressed at the necessity for this step, especially with reference to those of Connecticut. An address to his Majesty was adopted at the same time expressing thanks for the reimbursement and petitioning for the free transportation of the money in a government ship.[328] A new attempt was made January 20, 1748-49, to secure the submission of the act to the towns which resulted in a failure,[329] but an order that the act should be separately printed and a copy be furnished to each member of the assembly and to each town was duly passed February 1st, 1748-49.[330]

On the 31st of January, 1748-49, Shirley had certified a copy of the act which the assembly had passed for drawing in the bills of credit and this was forwarded to Bollan and by him was delivered to the clerk of the Privy Council. On the 16th of March it was referred to the Board of Trade and by that body was submitted on the 18th of April to Matthew Lamb for his opinion. Lamb made no objection to the act in point of law and on the 11th of May, 1749, the Board of Trade

reported to the council that they thought it advisable that the act should be laid before his Majesty for confirmation. The confirmation was finally accomplished on the 28th of June, 1749.[331]

On the 15th of June, 1749, Bollan announced that he had received an order for the money, and on the 30th he added that the same had been paid over on the 16th of June, with a reduction of the fees to 1d. in the pound.[332] Three persons had been appointed to receive the reimbursement on behalf of the province, Sir Peter Warren. William Bollan and Eliakim Palmer, and, to meet the objections raised by the attorney general, this appointment had been duly authorized by the assembly under a law of the province.[333] In case of the death or disability of either Warren or Palmer, Bollan and the other were authorized to act. Bollan, if alive, was to be one of the two who should act, in any event. The contingency which this clause was meant to cover actually arose. Palmer died before the money was delivered and Warren and Bollan received it. The transfer to them was made by a draft upon the Bank of England. The agents purchased with it Spanish silver and English copper coin. Including the expense of marine insurance and sacking and boxing the coin, their purchases came to £179,260, 3s. 2d.[334] The remainder of the amount allowed for the reimbursement was absorbed by fees and commissions. The fee at the exchequer took £765, 18s. 1d. The owners of the "Molyneaux", a vessel chartered for

some purpose by the agents, were allowed £802, 19s. 9d, and this was reserved by the agents and paid to them.[335] On shipments of this character on government vessels, it was customary to allow the captain a liberal gratuity. They thought it would be unwise to oppose a well established custom in this respect and, therefore, had not pressed the government for an absolutely free passage for the shipment. Besides, the Lords of the Treasury were well aware that the silver rate in this adjustment was favorable for the province, and the opening of this question might have had its dangers. Mr. Bollan, with Sir Peter's approval, agreed to give Captain Montague, of the government ship "Mermaid," a present of £1500, which they said was short of one per cent., in consideration of freight as expressed in his bills of lading.[336]

A commission of £2,710, 16s. 10d. was charged by Warren and Bollan. The object of this was to furnish Bollan with funds. He had incurred many expenses, and had proposed to Sir Peter Warren to withhold a portion of the money on that account. To this Sir Peter would not assent, but he suggested that they could with propriety charge a commission. Personally he did not wish any remuneration for his services, and after making certain payments out of his share of the commission amounting to £455, 8s. 4d. by way of gratuities to persons he had made use of, he held the balance, £900, subject to the draft of the province.[337] Bollan stated that he held the whole of his commission subject to the disposal of the province, leaving the question of remuneration to be settled by the assembly.[338] He had taken the

money, as it was the only method to which Sir Peter Warren would agree for reserving any of it, and he had need of money to meet liabilities already incurred and for province expenses. There remained in Bollan's hands a balance not used amounting to £109, 4s. 9 1/2d., with which he personally stood charged.

The Bank of England at first demanded 5s. 6d. for silver, and afterward reduced the price to 5s. 5d. At that time the Bank was paying 5s. 3 1/2d. for silver. The fact that the province was known to be in the market as purchaser of so large an amount of coin affected the price of silver, but Warren and Bollan thought it was best to go ahead and secure the total amount. The market as a general thing was about a farthing an ounce above the purchasing rate made by the bank. They secured 110,000 ounces, a promiscuous lot of milled and pillared coins at 5s. 3 3/4d., and later they purchased at 5s. 4d. a shipment from Spain of 300,000 milled pieces 8 / 8 which came in one remittance. The bank then lowered its rate and let them have £65,000 sterling in milled silver at 5s. 4d. A few more purchases made up the 650,000 ounces. There were some exchanges of hammered for milled money for which allowances had to be made.[339]

The silver was first sacked and then boxed. Copper coin was procured from the mint and boxed. The whole was then transferred to Portsmouth under the escort of the horse guards and then shipped on the "Molyneaux."[340] The exact form of the shipment was as follows:

               

		Ounces
1-206	Chests, each 3,000 oz. milled pcs of 8/8 in bags, . . . .	618,000
207-214	Chests, each 3,000 oz. pillared pcs. of 8/8 in bags, . . .	24,000
215	halves, ditto	3,000
216	1000 oz. halves, 876 3/4 " mixed, 281 1/4 " milled, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 1/2 " " half, 418 1/2 " " small,	3,000
217	containing milled	2,000
		—
		650,000

This was purchased at prices ranging from 5 s. 3 1/4 d. to 5 s. 4 d., and the whole cost amounted to £173,129, 5 s. 11 3/4 d. The copper coin was purchased by the ton, and was packed in 100 cases.

       

7 tons, 18 cwt., 1/2 pence at £10, 11 s., 4 d., cwt, cost, . . . .	£1,1669, 10 s. 8 d.
2 tons, 2 cwt., farthings, £10, 10 s., 4 d., cwt, cost, . . .	£441, 14 s,
	—
	£2,111, 4 s. 8 d.

The net cost of the money was therefore £175,240 10 s. 7 3/4 d. They effected marine insurance for £175,000, at 2 per cent. to pay 98 in case of loss, the expense of which was included in their former statement of total cost. The expenses of the shipment in addition to marine insurance, sacking and boxing were, therefore, £4,019 12 s. 6 1/4 d., and the net amount received in coin in the province, £175,240 and a fraction, sterling, was equivalent to £233,634 New England money. The expenditure may be tabulated as follows:[341]

                   

	£	s.	d.	[OMITTED]
Cost of silver,. . . . .	173,129	5	11	3
Cost of copper,. . . . .	2,111	4	8	0
Sacking, boxing and insurance,. . . . .	4,019	12	6	1
Exchequer,. . . . .	765	18	1	0
Shipping charge,. . . . .	802	19	9	0
Agents' commission. . . . .	2,710	16	10	0
In Bollan's hands,. . . . .	109	4	9	2
	—	—	—	—
	183,649	2	7	2

At the rate of conversion into old tenor which was fixed in Hutchinson's bill, the coin imported would redeem only £1,752,405 in bills of public credit. The original act had been based upon the theory that the whole grant could thus be applied and it was conceived that the impossibility of thus applying the entire sum in consequence of the reductions made for fees and expenses might render the act void and of no effect. Legislation was, therefore, secured at a later date to cure this supposed defect.[342]

Under the act for drawing in the bills of credit it was made the duty of the treasurer of the province, in case the General Court failed to pass an act apportioning the tax for £75,000 in bills of the middle and last tenor before the 20th of June, 1749, to send his warrants to the tax collectors of the several towns, basing his apportionment on the last preceding tax. when this date arrived, the money had been in Bollan's hands only four days, and of course, the assembly had no knowledge of this payment. They, therefore, took no action in the premises. The law was, however, imperative, so far as the treasurer was concerned, and he proceeded to carry it out as best he could. It happened that he made a mistake in his apportionment, which he afterwards discovered. He, therefore, sent a corrected apportionment to the collectors, and the assembly on the 14th of December ratified this correction of the assessment.[343]

In September, 1749, the people of Boston, to quote from Palfrey, "little used to the sight of money, saw seventeen trucks dragged up King Street to the treasury offices, laden with two hundred and seventeen chests

full of Spanish dollars, and ten trucks bearing a hundred casks of coined copper." In November, Lieutenant-Governor Phips said to the assembly, "I congratulate you, gentlemen, upon the favor of Divine Providence in the safe arrival of the money allowed by the parliament of Great Britain, for our expense in reducing Cape Breton, whereby we are enabled in great measure to pay off the great debt contracted by the charge of the late war and now lying upon this province."[344] Bollan, who had come over with the money, was summoned before the court to tell his story, and, on the 15th of December, it was "unanimously resolved that it appears to this court that the said William Bollan has discharged the trusts reposed in him with great zeal and faithfulness."

Six months intervened between the time of the arrival of the money and the date set for the redemption of the bills of public credit. As the time approached there was evident doubt as to whether the coined silver, and especially the small change, would remain in circulation. In any event, it was thought that there was not enough small currency, and the assembly appointed a committee to prepare a bill for restraining the currency of half pence, farthings and coined silver at a higher rate than in the proportion of the milled dollar to 6s. This committee recommended that small bills of the following denominations should be printed: One-quarter of a dollar, equal to eighteen pence lawful money of Massachusetts Bay; one-eighth of a dollar or nine pence; one-twelfth of a dollar or six pence; one-sixteenth of a dollar or four pence half penny; one-twenty-fourth of a dollar or three pence; and one-seventy-second

of a dollar or one penny. The total amount to be struck off was not to exceed three thousand pounds lawful money, and the treasurer was to hold as a fund for the redemption of this fractional currency three thousand milled dollars.[345] On the 27th of January, 1749-50, persons were designated to sign this fractional currency.[346] Those of us who remember the Spanish coinage which circulated so freely in this country before the rebellion, will recognize the titles of the nine pence and four pence ha'pennies which the eighths and sixteenths of a dollar retained down to that time throughout this part of the country. The entire amount of this fractional currency was prepared for emission, but Hutchinson says that "a small part only was issued," "scarcely any person would receive them in payment, choosing rather a base coin imported from Spain called pistorines, at 20 per cent. more than the intrinsic value."[347]

Apprehension was felt that silver might still be held at a premium,[348] even after the province was furnished with a metallic currency, and efforts were made to prevent by legislation what was termed in the preamble of the act passed for that purpose, a great inconvenience, but what would really have been a great menace to the prosperity of the province. It was provided in this act that it should not be lawful after March 31, 1750, to receive

or pass any of the following coins at higher rates than those fixed by the act, namely : a guinea, at 28s. an English crown at 6s. 8d.; a half crown at 3s. 4d>. ; an English shilling at 1s. 4d.; an English sixpence at 8d. a double Johannes, or gold coin of Portugal of the value of three pounds twelve shillings, sterling, at £4 16s. ; a single Johannes of the value of thirty-six shillings, sterling, at 48s.; a moidore at 36s. ; a pistole of full weight at 22s. ; three English farthings for one penny, and English half pence in the same proportion. Penalties were provided for violation of the act.[349]

"In order to dispense the silver" as the council phrased it, they voted on the 31st of March, 1750, that on the 2nd and 3rd of April, not more than fifty dollars in value should be paid to any one person and in every payment there should be included a certain proportion of copper money and of hammered dollars.[350] The house would not agree to this, the limitation of the amount of payment being evidently the basis of their objections, since the instructions as to forcing out the copper and the hammered money were accepted by them in another resolve. A scheme was also proposed for the purpose of preventing inhabitants of the neighboring governments from presenting bills for redemption either in person or by proxy. Inhabitants of this province were permitted to deposit bills of the neighboring governments, then in their possession, with the treasurer. In presenting bills of this province for redemption the inhabitants of this province were to make oath that the bills were their own property. If it was discovered that any were presented for redemption which actually belonged to inhabitants of the neighboring governments, they were to be redeemed

in bills of the respective governments, lodged as above for this purpose by the inhabitants of this province, -credit being duly given to those who had thus lodged bills of these governments.[351]

On the same day a committee of six was appointed to sit daily until further orders for the purpose of receiving the bills presented for exchange for silver and for receiving bills of the neighboring governments presented by inhabitants of this province, to be held for exchange for bills of this government, in case any should be sequestered as the property of inhabitants of the neighboring governments and held for exchange as above. Every precaution was taken to prevent the silver from passing into the hands of residents of Rhode Island, Connecticut and New Hampshire. The suggestions as to requiring each person to take a proportionate share of copper and hammered money were incorporated in the definition of the duties of this committee, and they were also to be at liberty to pay unto any person (that might desire the same) three pence in every twenty shillings that might be exchanged, in the bills that were proposed to be emitted for small change. Large powers were conferred upon the committee to examine depositaries under oath as to the ownership of the bills, in order that the benefit of the act might be secured exclusively to residents of the province.[352] The time within which possessors of bills could present them for redemption under the original act for drawing in the bills of credit expired March 31, 1751, but apparently the committee appointed under this resolve was still in session on the 26th of April, 1751, for it was then ordered to close its labors on the third day of June

of that year.[353] An examination of the situation of affairs will show that it was impossible for the province to have enforced the clause limiting the period of redemptions to one year.

Attention has already been called to the fact that the original scheme for the redemption of the bills was based upon the theory that the total amount of the grant of parliament would he received by the province. The amount absorbed by the expenses attendant upon collecting and remitting the money created a deficit in the means appropriated for the redemptions for which legislation had not as yet made provision. The province was unable to redeem its promises and the assembly frankly recognized the situation. They said that there was not silver in the treasury sufficient to redeem the bills and possessors would be injured unless relieved by the government. It was admitted that the paper currency of the province could not "be brought to a period" by the time proposed. In view of the fact that the designated time, at any rate as fixed by the original act of redemption, was already in the past, this admission was, perhaps, unnecessary. In order to meet the emergency which had arisen it was provided that possessors of bills who should bring them in by the third of June, 1751, were to be paid one-eighth in coin and seven-eighths in a certificate, which was to have added to it a premium of one per cent, and to carry interest at six per cent, from March 31, 1751. Apparently this method had been devised by the committee having in charge the redemption of the bills, for it was ordered that not only the certificates issued under this act but also those issued by the committee prior to March 31, 1751, should be redeemed in silver by December 31,

1751. The committee was to act as an intermediary between the possessors of bills and the treasury. Upon surrender of bills they were to issue orders on the treasurer for the eighth in coin and the seven-eighths in the form of a certificate. Special provisions were made as to the reception of these certificates by collectors of taxes and also as to their redemption.[354]

This act went through a process of evolution before reaching the shape in which it now stands upon the statute books,[355] and the records show that, except for the rigid adherence of certain individuals to principle, the assembly would even at this stage of the game have practically resumed the old practice of issuing a legal tender paper currency.

There is on file a protest of Andrew Oliver and Thomas Hutchinson against the proposed legislation of April 4, 1751, which sets forth the following objections to the act: 1st, because it fixes another means of discharging debts, a legal tender of uncertain value; 2nd, if the certificates are as good as money, it will be unnecessary to compel people to take them. If they are not as good it is unjust to do so; 3rd, a presumption on the part of the government that the value of the certificate is not equal to silver will tend to drive that metal out of circulation; 4th, no currency ought to bear interest. The established medium or instrument of trade ought to be certainly known, fixed and invariable.[356]

The bill as it originally passed the house was defeated in the council. On the second effort it got through both houses, and it was at this stage that Oliver and Hutchinson protested. The lieutenant-governor refused his consent

to this bill, influenced, perhaps, by this very petition, giving as reasons therefor that the certificates were made a tender in law in discharge of all private debts and contracts whatsoever, thus repealing or enervating the act to, which this was called an addition, in one of its most material parts, and that he was further of the opinion that it would prove fatal to the country. In the modified form above described in which it afterwards passed, the act met with his approval.[357]

This was the last legislation on the statute books connected with the redemption of the bills. The province had already established a credit upon which it could secure loans. In June, 1750, the treasurer had been authorized to borrow five thousand pounds in Spanish milled dollars, on his notes payable with six per cent. interest in June, 1752.[358] Hutchinson says, "Few people were at first inclined to lend to the province though they were assured of payment in a short time with interest. The treasurer, therefore, was ordered to make payment to the creditors of the government in promissory notes, payable to bearer in silver in two or three years, with lawful interest. This was really better than any private security; but the people, who had seen so much of the bad effects of their former paper money, from its depreciation, could not consider this as without danger, and the notes were sold for silver at discount, which continued until it was found that the promise made by government was punctually performed."[359]

It will be noticed that Hutchinson dwells upon the fact that the notes issued by the treasurer were payable

in silver. His statement was based upon the custom which prevailed during the period which he was discussing, but it happens that in the first attempt made by the province to provide itself with funds through loans, this precaution was omitted. There is nothing in the form of note to be issued by the treasurer which required its payment in silver. Doubtless, the custom of inserting this clause arose from the difficulties then experienced in negotiating the notes.

Although the change from paper money to a metallic currency was welcomed by the mass of the people, the advocates of the former, especially in the country, where the land bank had been strong, were still inclined to battle for their supposed rights and were even disposed to use force if necessary to maintain them.[360] Hutchinson says, "the prejudice in the town of Boston was so much abated, that when a large number of people from

Abington, and other towns near it, came to Boston expecting to be joined by the like people there, they were hooted at and insulted by the boys and servants, and obliged to return home disappointed."[361] These demonstrations were, however, of sufficient importance for the assembly to pass a special act for preventing and suppressing of riots, routs and unlawful assemblies.[362]

We have the authority of Hutchinson for the statement that the shock to trade which was apprehended from the resumption of specie payments was not felt. A good currency was insensibly substituted for a bad one, and every branch of business was carried on to a better advantage than before. On the other hand, the depressing influence of the paper currency continued to exert a disastrous result upon the business of the colonies which had not resumed specie payments from which at the time when Hutchinson wrote they had not recovered.[363]

On the 25th of June, 1751, his Majesty gave his royal assent to an act to regulate and restrain paper bills of credit in his Majesty's colonies or plantations of Rhode Island, and Providence plantations, Connecticut, The Massachusetts Bay and New Hampshire in America; and to prevent the same being legal tenders in payments of money.[364]

By this act it was not lawful after September 29, 1751, for the governor of any of these colonies or plantations to assent to any new emissions, or to reissues of those

then in circulation, or to the postponement of the time for calling in the bills then in circulation; nor to give his assent to any act whereby the bills should in any manner be depreciated. All bills in circulation were to be called in according to the terms of the existing laws providing for their retirement. An exception to the restraining clause as to emissions provided that bills might be issued for current expenses, but must be retired within two years from the date of emission. Reasonable sums might be emitted in time of war for emergent expenses. There was specific legislation through which an attempt was made to cover delinquencies on the part of borrowers of these bills, and to prevent such delinquencies from affecting the question of the retirement of the bills. It was provided that after September 29, 1751, there should be no legal tenders. A penalty was prescribed for disobedience on the part of any of the governors.[365]