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CHAPTER XVII.

THE EMISSIONS OF THE NEIGHBORING GOVERNMENTS. NEW HAMPSHIRE.

No just interpretation of the movement in the price of silver, when measured in the paper currency of New England, 1710 to 1750, can possibly be made unless consideration be had of the course taken in regard to the emission of bills of public credit by each of the governments which then composed this region. It is not essential that we should make the same minute survey of the field covered by the legislation of the neighboring governments, that has been had of that which comprises the work of the assembly of the province of the Massachusetts Bay, but we are compelled to examine it if we would know where the responsibility rests for the rise in silver which took place between 1725 and 1745. This, as we have seen, was not only disproportionate to, but even in opposition to, the changes in amount of the bills issued by the Massachusetts Bay and outstanding during this period.

Dr. Douglass, in 1739, stated that the paper currency of the four New England colonies was promiscuously the same.¹ This was written before the complications were introduced through the different forms adopted for the new tenor notes, by means of which bills of the same denominations circulated at different values, and practically means that no matter what the circumstances were under which the bills were issued, or by what governwent,

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they circulated side by side, upon an equality, provided the forms were identical.¹

We have already seen that they were not entitled to do so if intelligent discrimination had been applied to the conditions under which the emissions were made by the different governments, but there is abundant evidence that within the limitation above given, viz.: that the forms of the bills should be identical, this was practically the case.²

New Hampshire alone among the other governments of New England was placed under the same restraints in regard to the issue of bills as those imposed upon the province of the Massachusetts Bay; but the influence of her public bills was for many years too feeble to be entitled to any extended investigation. Dr. Douglass, in his “Discourse concerning the Currencies, etc.,”³ disposes

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of this province in the following words: “New Hampshire (too diminutive for a separate province, of small trade and credit) their public bills are so much counterfeited they scarce obtain a currency, hence it is (the governor’s instruction is also a bar), that at present their outstanding bills of public credit, some on funds of taxes, some on loan, do not exceed £72,000, gradually to be cancelled by December, 1742. Their ordinary charge of government is about £1,500 New England currency per annum.” The same writer estimated the annual expenses of the province of the Massachusetts Bay at that time at £40,000 New England currency. New Hampshire, apparently, had at that time eight times the amount of the annual expenses of her government outstanding in public bills, and Massachusetts had out at the same time a little over seven times the amount above stated as the annual expense of her government. Preponderant as was the influence of the more important province, the emissions of the smaller government became at a later date of enough importance to contribute perceptibly towards the depreciation of the currency. Shirley writing in 1743, and referring probably to an emission of 25,000, new tenor, then pending, said: “The exchange between this province and London will, I expect, upon the present New Hampshire emission rise twenty or thirty per cent higher.” This condition of affairs had only been reached by slow and, at the outset, reluctant footsteps. The disadvantages under which the province of New Hampshire labored in its financial affairs are illustrated by the report of the treasurer to the council in 1705, at a time when the amount annually allowed the governor did not exceed £100, to the effect that “the money in specie received in the Treasury did not amount to the Governor’s salary.”¹

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Towards the end of 1709, the government found itself compelled to resort to paper money, but, even then, the first thought of the assembly was that it would be better to borrow from the province of the Massachusetts Bay than to risk their own credit. A committee was sent to Boston to obtain leave of the government there to impress and perfect four thousand pounds in bills and to sign the same, “unless,” as the resolve conferring this authority went on to say, “which we rather desire, they can obtain of the government of the Massachusetts to lend us the said sum of four thousand pounds of their bills, and take security upon our fund   *   *.” The aid of the printing press having thus been invoked for the purpose of meeting the debts of the province, the career of New Hampshire was in close imitation of its more powerful neighbor. A five per cent. allowance on public bills, when received by the treasurer, was sometimes allowed, but the policy of the province in this respect was changeable.¹

The manner in which alternative authority to print or borrow was conferred upon the committee having in charge the preparation of the first emission of public bills will, perhaps, explain the absence from the records of the form of the bill. The committee adopted the same phraseology as that which was in use in Massachusetts. For some reason there was an apparent necessity for printing in advance a supply of bills for future emissions, and we find that many of the original resolves or votes of the assembly bearing upon the emission of public bills were simply orders to print. The printing having been accomplished, the bills were stored in blank

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sheets in the “province box,”¹ whence they were withdrawn, signed and issued from time to time. It was, of course, desirable under these circumstances to reissue or, as they termed it, “repeat” the bills and keep them in circulation as long as possible. Dudley said to the assembly, October 8, 1711: “I must desire you to enable the treasury, by repeating and further impressing so many bills, if you choose that way, as will pay the province debts.”²

We find that the bills of the first emission were afterwards spoken of as “the cypher bills,”³ “the old cyphered bills,”⁴ or as “the cyphered bills of the first impression on the province.”⁵ This title was doubtless based upon some feature in the engraving, for we find another set of bills designated as “the old red figured bills.”⁶ The plates were put in the custody of a keeper designated by the assembly.⁷

We have seen what Douglass said about the bills being counterfeited. By statute passed at the May session,

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1711, a penalty of double the value of the counterfeited bill was laid for this offence.¹ In the 12th of George II, (covering parts of 1738 and 1739) the penalty was changed to death without the benefit of the clergy.²

Apparently, the treasurer permitted tax collectors to make their remittances in any of the public bills current in the province. As a result of this practice, some difficulty was experienced in retiring the province bills under the funds provided for that purpose. May 12, 1714, it was naively remarked that the burning of the bills of the other governments then in the hands of the treasurer would not answer the fund of this province, and to avoid charges which might arise from changing them into New Hampshire bills, it was voted to loan the bills of these governments then in the treasury to persons who would oblige themselves to repay the province in New Hampshire bills. This process was resorted to from time to time, and ultimately caused much trouble.³

The assembly, when it was inconvenient to levy a tax for the retirement of bills in accordance with the fund established at the time of the emission, exercised its discretion in the matter and suspended payment.⁴ January 24, 1716-17, the general policy of lending the bills of public credit by the province was inaugurated.⁵ £10,000 were

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then lent for twenty years, principal and interest to be adjusted by payment annually of 5 per cent. May 18, 1717, £15,000 were let out for eleven years, the principal and interest to be adjusted by the payment of 10 per cent.¹ of the principal each year.² The same conflicts between the governor and the representatives prevailed in New Hampshire that we have found in Massachusetts. In March, 1732-33, the house proposed a loan of £20,000 for sixteen years, which the council unanimously rejected. The representatives then proposed to loan the same amount for eight years and to make the bills redeemable in silver. This also the board unanimously rejected. The house then fell back upon the proposition so often urged in Massachusetts, that they could see no other way of supplying the treasury.³ The feelings of the representatives in regard to bills of public credit are sufficiently indicated in a vote of the house, January, 17, 1733-34, to make bills of credit a lawful tender for special contracts, and their disposition to use the power which was lodged in their hands through control of the supplies, was indicated by the statement that, inasmuch as his excellency had informed them that he could not postpone payment of the sums already emitted, nor emit any further sum unless it should be repaid between

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that time and the year 1742, which years were already saddled with as much as people could pay, they would suspend consideration of the question of supplies until the next spring session.¹ May 3, 1735, Governor Belcher, in a speech to the assembly, called attention to the notes emitted by the Portsmouth merchants, characterizing the scheme as “an unwarrantable attempt made by a set of private gentlemen to strike and issue paper notes or bills to pass in lieu of money.” He added, “if the legislature are restrained by his Majesty’s royal orders from a practice of this nature, any other way than may be for the necessary charge of the province, surely private persons ought not to presume upon it.”² The house replied that they were not sensible wherein such an attempt was unwarrantable, unless some notorious fraud or cheat might be designed and discovered therein, inasmuch as they could not apprehend that his Majesty’s royal instruction upon the head of province bills was ever intended to extend to negotiable notes amongst merchants and traders. They were not a little concerned to see his excellency’s proclamation publishing an act of the province of Massachusetts against taking these notes prefaced thus: “least some unwary persons be imposed upon by the said notes or bills.”³ At a later date, May 17th, Belcher recurred to the subject. He regretted that instead of justifying the merchants’ notes they had not passed a law against their circulation. Since coming into the province, several complaints had been made to him from some unwary people who had been imposed upon by these paper

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notes. Some of the principal founders and undertakers of the scheme had refused to give credit to their own notes. They would become a dead loss in the hands of persons who had parted with their substance for them, and thus doubtless would disclose to the world a notorious fraud. The Massachusetts act, he said, could not take away their value, if they had any, but could only confine their circulation to this province.¹

In February, 1740-41, Belcher warned the assembly concerning the Massachusetts land bank notes, but the members of the house although not prepared to defend a scheme which had its origin and its operations in another province, nevertheless declined to accept the governor’s conclusions. Not having the scheme before them, and many of them being unacquainted with it, they said it would be rash for them to act in the matter till they knew more about it.²

In some of the tax acts the treasurer was instructed to receive produce. Thus March 23, 1736-37, he was authorized to receive hemp, flax, and bar iron. Silver was rated in the act at 18s. per ounce.³

The course of the depreciation of the currency is indicated in an appeal made by Belcher to the assembly to protect him from loss through the effect of the depreciation of the public bills upon his salary. He furnishes therein a statement of the premium on silver from 1730-1739 inclusive. He says that in 1730 and 1731, it was 250; 1732, 270; 1733, 300; 1734-1739, 425.⁴

A new tenor bill was adopted in January, 1741-42,

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which was to be equal to silver at 6s. 8d. per ounce and in which old tenor bills were rated in the proportion of four and two-tenths for one of the new, 6s. 8d. of the new bills being made equivalent to 28s. of the old in the payment of old debts.¹ The rule was changed February 19, and the treasurer was ordered to receive these bills in payment of taxes on the basis of one of the new for four of the old.² In the adjustment of debts, similar differences of opinion as to the rights and powers of the assembly were disclosed in the discussions, as have been found in our examination of affairs in Massachusetts. The right was reserved to the General Assembly to settle the value of the public bills once every year in the month of September, or October. In September, 1747, the representatives voted unanimously to set aside the last determination made by the judges of the superior court in March, and ordered them to adopt a determination made in February, 1742-43. This was too great a departure from the facts of the case for the council, who notified them that it was their duty under the act to ascertain the value of the bills. The next day the assembly voted to enforce the act which provided a penalty for passing the bills at a greater value than that at which they were emitted, and instructed the judges to enter up judgments in these bills at their expressed value in silver at 6s. 8d. an ounce. A certificate was prepared December 31, 1739, showing the amount of the public bills issued by the province up to that date, and the amount then outstanding. From this it appears that the total emissions upon funds up to that time had been £56,384, of which there was

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then outstanding £10,576 16s. Of the £15,000 loan there was still u[n]paid at that date £2,000. In addition, there was still outstanding a loan of 11,730, of which the Lords of Trade in 1734 said that it had been out near twenty years at only two and one-half per cent. interest. The total amount of the public bills then in circulation, according to this certificate amounted, therefore, to £14,306 16s. In 1743, £25,000 new tenor, equivalent practically to £100,000 old tenor, was loaned for ten years.¹ This was the loan which, according to Shirley, affected the rate of silver in Massachusetts. £13,000 new tenor, equal to £52,000 old tenor, were emitted in February, 1744-45, to meet the expenses of the Louisburg expedition.² This was followed by loans of £6,000 new tenor in June, and £8,000 in November of the same year, the retirement of which was carried forward to 1766, thus adding the equivalent of £56,000 old tenor to the circulation.³ The last emission which concerns us in this discussion, was in response to a letter from the Duke of Newcastle, calling upon the province to furnish clothing, arms, etc., for an expedition against Canada, the expenditures to be repaid by General St. Clair. This was in June, 1746, and the amount emitted was £640,000.⁴ If this was new tenor, as was probably the case, the circulation was thereby increased £240,000 in old tenor. In the wild confusion which then existed in the province of the Massachusetts Bay, the contributory effect of this last emission upon the rate of silver

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was, perhaps, not so perceptible as was that of the emission to which Shirley alluded, but it explains the necessity for including the New Hampshire bills, no longer insignificant in nominal amount, in the prohibition which was placed by Massachusetts upon the circulation of the bills of other governments.¹

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