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CHAPTER IV.

THE INFLUENCE OF ENGLISH PUBLICATIONS IN AMERICA.

The influence of the publication of Potter’s books in 1650, upon opinion in the colony of the Massachusetts Bay has been traced by the late J. Hammond Trumbull.¹ Aided by his labors in this field, we turn now to the consideration of that subject. It must be remembered that however backward in Great Britain the condition of knowledge upon the topic of finance, the colonists were followers of English opinion in such matters and that, too, at some considerable distance from their leaders. This was caused partly by their surrounding circumstances, and was to some extent to be explained by the natural delays in the transmission of information and the time required for its acceptance and adoption. The first settlers in New England brought with them but little coin and as a consequence all transactions were for a long time by barter. The accounts of Harvard College show that, for many years, term-bills were paid in produce, live-stock, meat, and occasionally, with curious articles raked up from the family chests of student debtors.

The difficulty of appraising odds and ends like these is obvious. Other questions arose in connection with the use of live-stock in settlement of debts, such as the time and place of delivery, which involved consideration of charges for driving and for pasturage. In 1649, Rawson, a student, settled his college term-bill with “an old cow.” She was apparently turned over to the butcher, for we find that the steward made an allowance

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for her “hide” and for her “suet and inwards.” On the other hand, a charge was made for sending for her twice. A student who delivered a cow at Cambridge before the steward was ready to appraise her was charged for pasturage. In the account of the transactions in connection with the construction of the first college building which Samuel Shepard rendered, we find this entry:—”Received a goat, 30s, of plantation of Watertown rate, which died.” Perplexities in the adjustment of their daily affairs, such as these, confronted at every turn a people who attempted to get along without some recognized medium of exchange. To provide against them, as far as precautions could be furnished by legislation, cattle were rated by law and the price was fixed at which corn could be received by collectors of taxes in payment of public dues. Corn was, to a certain extent, accepted as a medium of exchange and, when thus used, was spoken of as corn-specie or corn-money.¹ Merchantable beaver skins were at one time ordered to pass at ten shillings a pound.² Experiments were made in a limited way for brief periods with bullets³ and wampum⁴ as a legal currency. Notes were made payable in commodities. Contracts and engagements for money, corn, cattle or

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fish were to be satisfied in kind according to covenant, or in default of the very kind contracted for, in one of the said kinds.¹

In 1652, the deplorable condition of the merchants which resulted from this state of affairs, was brought before the General Court through the presentation by several gentlemen of a paper concerning “the settling of trade and the well improvement thereof.”²

The matter was referred to a committee which after deliberation recommended the formation of a council of trade. This recommendation was approved by the General Court in May, that being in all probability the time when the committee reported. One of the remedies for existing evils proposed to the committee during their deliberations, was the founding of a bank. They avoided the expression of any opinion upon this point, saying in their report:—

“What hath bin thought of by any for raiseing a banke or engageing in a generall trade or relating to monies in regard of the badnesse of it or the highnesse or lownesse of it with very many other matters tending to the promoting and well regulating of trade to a more comfortable state then wee now find in time present . . . we forbare to present³ . . .”

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At the same session of the General Court, and under the entries in the published records nominally on the same day that the recommendation of this committee with reference to a council of trade was approved, it was also ordered by the court and the authority thereof that a mint should be established, which should issue coins of sterling alloy, the pieces to be of less value than the corresponding English coins, to the extent and at the rate of two pence to the shilling.¹ It is quite probable that the discussion of the proposition to establish a mint was known to the committee which had under consideration the petition referred to above and that they preferred the experiment of a mint rather than than that of a bank as a measure of relief.

There is evidence that there were in circulation at this time paper bills,² but whether they were issued by the colony or were merely the promises to pay of individuals does not appear. From the allusions at a later date to shop-notes and other similar devices and the lack of reference in the records to any issue of bills by the colony, it would seem quite probable that the bills referred to were founded upon individual credit and did not have the legislative approval of the colony. Occasional

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statements are also made by writers upon financial subjects connected with the colony when treating of this period, which sustain this conclusion and show that the lack of a circulating medium was sometimes supplied by the notes of individuals. Mr. Trumbull attributes to Cotton Mather the following language, which is quoted from a pamphlet issued in 1691:¹

“’Tis strange that one Gentleman’s Bills at Port-Royal for divers years, and that among Forreigners, or another Gentleman’s Bills in the Western Parts for as many or more years should gain so much Credit as to be current pay, among the Traders in those places; yea, that the Bill as I have heard of any one Magistrate in the Western English Plantation shall buy any Commodities of any of the Planters.”

The direct influence of Potter’s writings upon colonial thought about 1650 is to be traced through the statement made by a writer at a later date (1682,) that, “About the latter end of the year 1649, an intimate friend of the Author’s in London, Mr. William Potter, who was likewise no Trader, imparted to him a Designe for the accommodation of Commerce, in the nature of a Bank of Money; but to be founded upon personal Credit, by a considerable number of able Men Ingaging, as to the Found thereof, to pass forth Credit, as a medium to enlarge the Measure of money; or, by depositing of Goods, in the nature of a Lumber of Merchandise,

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to pass out Credit thereon, until sold.”¹ In addition to this the writer acknowledges that he received from Potter, a copy of a book in folio, which he printed about that time, and this book he gave to a kinsman in Boston. Here we find the admitted influence of the writings of Potter upon a colonial pamphleteer and are able to trace a copy of the “Key of Wealth” to this country.

We have other evidence than this that the discussion precipitated by the publication of Potter’s books stimulated thought in the colonies upon these topics, although not so direct in its nature, perhaps, as that which has just been given. Governor John Winthrop, of Connecticut, was a friend and a correspondent of Samuel Hartlib, the author of the Essay upon Master W. Potter’s Designe which was published in 1653. On the fifteenth of April, 1661, John Winthrop, jr., wrote to Thomas Lake as follows:—

“I make bold w^th you to transmitt by your hand to Colonell Temple those books [illegible] w^ch you will receive heerw^th (want of fitt artists heere must be my excuse that they appeare in that dessolate forme); they were sent me before winter, from the great intelligence of Europe, M^r Samuell Hartleb, a Germa gentlema, as conteining something of novelty. That they are yet in sheets may have this convenience, that, being divers distinct relations, the Govern^r, M^r Wilson, & M^r Norton (if there be anything worth their notice), or any other friends he please, may have the pusall of some pts [illegible] while the other parts are reading.”²

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If, when Hartlib sent these loose sheets, he was aware that Governor Winthrop was himself deeply interested in the subject of banking, he would certainly have sent with them a copy of his own pamphlet on the subject. We can not trace this knowledge on the part of Hartlib quite far enough back to make it certain that he knew of the turn which Winthrop’s studies had taken when he forwarded the novelties for his consideration, but we can come very near to it. In the summer of 1661, Winthrop went to England.¹ While he was there, as appears from his subsequent correspondence, he submitted for the consideration of the Royal Society of which he was a member, a proposition for a bank. In a letter in which he referred to this fact, he stated that previous to his leaving home he had written to Hartlib on the subject. It may be assumed that when Hartlib wrote to the governor, on the third of September, 1661, offering his services for the improvement of his friend’s “Talent of y^e Bank of Lands & Commodities” and saying, “I passionately long for your Anonymous Friend’s (whom also before you have named) Method to raise such vast Profits without such engagement of Lands as the said Bank of Lands requireth”, that he was referring to statements made in the very letter mentioned by Winthrop. The language used by Hartlib carries with it a strong probability that his pamphlet had been under consideration by Winthrop and that the plan of the anonymous friend had been suggested as a measure to avoid certain objections which had been raised to Hartlib’s scheme for a land bank. Potter had proposed a currency based upon individual credit. Hartlib had suggested a credit founded exclusively upon mortgages of land. The

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plan which the anonymous friend had submitted was one which would raise vast profits without such engagement of lands as was required by the bank of lands, that is to say, it avoided the objection to the bank proposed by Hartlib in his essay. Hartlib was not, however, prepared to abandon his bank founded upon lands because Winthrop had suggested what he conceived to be an improvement upon it. Later on in the same letter, he even claimed to have enlisted Potter as a supporter, and so stated:

“If G. spare my life & health, I shal acquaint you more largely with the Banke of Lands. For the times of such a Publique and Universal Happines seems not yet to bee at hand. Mr. Potter hath very much elaborated y^at whole Designe, but is not so willing to act for ye present.”¹

We do not know what was the form of the proposition for a bank which Winthrop submitted to the Royal Society, but in a letter to William Brereton, November 6, 1663, he referred to a meeting of the council of the Royal Society at which he “declared some proposalls concerning a way of trade and banke without money.” Brereton, his correspondent, was a member of the council and Winthrop himself was then a fellow of the society, having been elected in January, 1661-62. It is in direct connection with the above that he alludes to the letter which he had written from New England to Hartlib, and in the same paragraph he refers to conversations which he had held with Brereton, when in England upon the same subject. The council apparently could not give him time enough to present

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his memorial in full. He, therefore, read only the beginning of it and agreed to leave a copy of the paper for their consideration at their leisure. This copy he was too busy to make, but Mr. Oldenburgh, the secretary of the society, kindly made it for him and it was left with Oldenburgh with a stipulation that it was not for public perusal, but only for submission to the council and the society. Mr. Oldenburgh undertook to present it at a suitable time. Winthrop was willing that the society should, if they conceived the plan to be one of public use and benefit, acid to it what they thought necessary for perfecting it. It was wholly their own. He had neither given out copies of it, nor had he disclosed to others the particulars of his plan. While he thought it probable that it would be approved by the society, still he wished for advice from his friend, whether in case of its rejection it would be best for him to move in some other way in order to secure the cooperation of merchants for setting it afoot, or whether he had better abandon the scheme altogether.¹

This letter to Brereton was written in November. He had already received a letter from Oldenburgh from which it appears that the latter was commissioned to ascertain and report what was the opinion on the subject of experts or as he defines them of “understanding men”. The communication was then in the hands of Brereton, who expressed doubts as to the wisdom of submitting it to some other person who had been named by Winthrop.²

This episode of Governor Winthrop’s attempt to secure the co-operation of the Royal Society in the foundation of a bank in England, made so little mark

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that it remained unknown until the publication of the “Correspondence of several of the Founders of The Royal Society with Governor John Winthrop of Connecticut,” in 1878 by the Massachusetts Historical Society brought the matter to the attention of Mr. Trumbull, who was thus enabled to use it in his “First Essays at Banking and the first paper money in New England.”¹ If Winthrop had succeeded in arousing the Royal Society to an effort to establish a bank in England, we should undoubtedly have heard more of it this side of the water. It is scarcely conceivable that he could have refrained from discussing the matter with his friends in Connecticut and Massachusetts and it is not improbable that allusions to the scheme may be found in other correspondence of the period.

Reference has already been made to a publication in 1682, in which the author acknowledged his obligation to Potter not only for ideas but also for a copy of a book, the name of which was not given, but which was evidently the “Key of Wealth.” So far as is known all that has been preserved of the edition of the pamphlet referred to is the imperfect copy now in possession of the Watkinson Library. Mr. Trumbull identifies with confidence the Rev. John Woodbridge, of Newbury, as its author, and in the council report of the American Antiquarian Society in October, 1884, he gives an analysis of the contents of this curious and interesting publication. The tract has neither title page nor imprint, but the title occupies the upper half of the first page. It is as follows:—”Severals relating to the Fund Printed for divers Reasons, as may appear.” The date of the publication is assigned by Mr. Trumbull to

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March, 1682. The author speaks of his design as a thing which had not been tried, although there had been of late some discussion on the subject in England. In Massachusetts the name of the thing and the benefits to be derived from it had hardly been heard of. He had about the end of the year 1649, met Mr. William Potter who had imparted his design of a bank to be founded upon the personal credits of individuals, which credit was to be issued “as a medium to enlarge the Measure of money, or by depositing of Goods, in the nature of a Lumber of Merchandise, to pass out credit thereon, untill sold.”

In 1664, the author being then in New England, “imparted to a publick-spirited Merchant, with what ease and safety their Measure¹ might be enlarged.” Other merchants were consulted and it was concluded “that something might be done about it in due season.” Nothing came of these consultations, but the author was not inclined to drop the matter, and about three years thereafter, he brought the subject to the notice of divers “Country Gentlemen, Yeomen, and others,” and the discussion finally attracted the attention of the council. Thereupon notice was sent him that “the Council would send speedily for him about this Concern.” This caused him to prepare a second draught of his design, “in the dress of a Proposal,” which was duly presented to the council.

In 1674 and again in 1678, “divers well-wishers to the Fund” urged the author to put his scheme in print and to furnish the public with a narrative of what had taken place in connection with it. He was, however, apparently of opinion that the best way to teach the people was to put the proposed plan in actual practice.

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He proceeded, therefore, in 1671, as we may infer from what he afterwards says, to effect an organization of some sort, but for some reason, those interested in the matter concluded not to issue any bills at that time.

In September, 1681, however, he began “to pass forth Bills, to make an experiment of that which had passed the scrutiny of above 30 years, with approbation.” He then goes on to say that “in 6 moneths a considerable number espoused the designe; besides those that were concerned in the years ’71 and ’72. Whereupon, it became as a Galley floating upon the stream of opinion, into which He and He would thrust an oar.” This aroused opposition, and the opponents to the project, “wanting weighty objections, let fly broad-sides of potgun-pellets, chained with fallacies and buffoonry.” Whereupon his friends urged him to hasten the publication of the design and this was done in “Severals relating to the Fund.”

The pamphlet embodied substantially the proposition said to be “on file in the Records of the General Court,” although in some respects amended by additions and explanations. The scheme for a bank is therein entitled, “A Proposal for erecting a Fund of Land, by Authority, or Private Persons, in the nature of a Money-Bank; or Merchandise Lumber, to pass Credit upon, by Book-Entries; or Bills of Exchange, for great Payments and Change-bills for running Cash. Wherein is demonstrated, First, the necessity of having a Bank to inlarge the Measure of Dealings in this Land, by shewing the benefit of Money, if enough to mete Trade with; and the disadvantages, when it is otherwise;” and, “Secondly, That Credit pass’d in Fund, by Book, and Bills, (as afore) will fully supply the defect of Money. Wherein is related, of how little value Coin

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as the Measure of Trade, need be, in itself; what Inconveniences subject to. The worth a Fund-Bill, or Payment therein, is of: & not of that Hazard.”

The portion of the pamphlet which has been handed down to us ends with a statement of the rules relating to the fund, the style of entries, the forms of pass-bills, etc. These rules which are technical and deal with the methods of issuing the bills and keeping the accounts of the depositors are not given by Mr. Trumbull, but they evidently contemplate the establishment of a sort of clearing house where dealings between depositors could be adjusted by transfers of accounts. The last rule of the portion of the pamphlet which has been preserved reads as follows: “That no Acceptor give, nor Depositor take more Fund Credit, than they see their way how to receive or pay the same again, among those in the Company with them; nor deal in said credit with any but those entered in the Fund-rowl, which all concerned may take a copy of. N. This rule to be of force but until persons see it to be to their interest, to accept Fund-pay. And the Credit thereof pass without hazard of any prejudicing the same, through wilfulness or ignorance.” A narrative of “the manner of erecting the Fund, which was March 30, 1671, and the carrying it on in private, for many moneths, and the reasons for putting a stop to it, when bills were just to be issued forth”, is lost to us, as it was contained in the portion of the pamphlet which is missing.

We are indebted to Mr. Trumbull for rescuing these facts and for presenting them in such form as to attract public attention to this pamphlet. No trace of the existence of these two experiments, the second only of which was carried to the point of an issue of bills, has been noted by any other student of the times. Notwithstanding

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the “broadside of pot-gun-pellets” which the opponents of the project “let fly”, it is not probable that the experiment amounted to anything. The publication by its progenitor of an account of it has not given it greater notoriety than was accorded Winthrop’s abortive attempt to secure the interference of the Royal Society. Both propositions lay dormant until unearthed by an investigator of the present day.

Mr. Trumbull, referring to the first of these experiments, says “a ‘Fund of Land’ or bank of credit was started in Massachusetts in March, 1671, and was ‘carried on in private for many months’, though without issue of bills.” As to the second, he adds, “ten years later, a private bank of credit was established and began to issue bills in September, 1681.”

In stating his first proposition, Mr. Trumbull practically quotes from the pamphlet with the exception that he, inserts the phrase “or bank of credit”. The so called “Fund” could only have been held for the benefit of depositors so long as bills were not emitted. The sole apparent purpose of the experiment was to demonstrate the value of credit as a substitute for coin, and until there shall be some explanation of what was done during these months, it would seem as if the conclusion must be that the experiment was a failure. The assertion made by Mr. Trumbull that “a bank of credit was established and began to issue bills in September, 1681,” must be measured by the language used by the author of the tract. The paragraph upon which this is based reads as follows: “Having by accident, some respit time this year, 1681, and accomodated with Spirit, Purse, and Hand, the ingredients that must center, as in one, for any considerable undertaking, he did, in September, begin to pass forth Bills, to make an

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experiment,” etc. This may be interpreted that the writer considered that energy, capital and executive capacity were essential for the success of any undertaking of magnitude and that this power and wealth should be under the control of one head. This concentration he succeeded in accomplishing in September, 1681, and then began to put forth bills. We have already seen that the community were not unaccustomed to the use of individual credits, and to the extent that the fact was appreciated that the signer of the bills had capital behind him, his individual notes might have circulated without attracting attention. If this is what the author meant it would explain why the experiment did not attract attention, but if this were all, it would not justify the statement that a bank of credit was established and began to put forth bills.

It would seem probable if we examine the rule which has been quoted that the stage of testing the public with the bills was not reached. Trial of the experiment according to this rule was to be made among the subscribers. This was to continue until outsiders saw that it was to their interest to accept “Fund-Pay”. If this point had been reached, it would seem as though the experiment ought to have left its mark behind it. Mr. Trumbull quotes from Cotton Mather, the following passage touching upon the worldly affairs of the Rev. John Woodbridge after his suspension from the ministry: “the remarkable blessing of God upon his own private estate abundantly made up to him the publick stipend which he had parted withal.” The inference to be drawn from this that this prosperity was attributable to the banking experiment may be correct, but it is evident from Mather’s account of the career of Woodbridge that he was not without a fair share of prosperity.

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Perhaps the strongest indication that this experiment did not reach a conclusive stage is to be found in the statement of the author of the pamphlet that his proposed design had not been tried.

The condition of affairs in the colony may perhaps explain why divers well wishers of the fund desired the author to put his scheme in practice. The following order passed by the General Court, November 3, 1675, may aid us in this respect: “It is ordered, that the committees of militia in the severall townes shall heare, determine, & settle the whole accounts of the severall townes respecting all disbursements of armes, aminition, horses, furniture, provissions, &c, not exceeding three pounds for a horse, and as neare as may be proportioning the accounts of disbursements, whose bills to the Treasurer or Committee of that affayre shall be payed when the assessments are come in, raysed upon that account.

For prevention of the charge and trouble of transportation of the rates to be levyed to the Treasurer of the county, as also matter of conveniency therein appearing,—

It is ordered, that bills for wages, horses, provisions, etc., being regularly passed to the said Treasurer, the Treasurer, uppon the desire of persons concerned, shall repasse bills to the constables of such townes where sums are due upon the aforesaid accounts.”¹

Felt saw in this the germ of the colonial currency and introduced the clause which he quoted from this order with the following words:—”A mode having some approximation to paper currency is now introduced.”²

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This was followed a few months thereafter by another act in which the credit and the lands of the colony were pledged to creditors in such formal terms as would preclude the idea of the transferable character of these obligations taking any root in the popular mind. This act was passed February 21, 1675-76 and was as follows:

Whereas the present warr with the Indians hath so farr exhausted the country tresury, that there is not a sufficiency to prosecute the said warr to effect; for the encouragement of such general merchants, or any other person or persons, that are able & willing to disburse & send to the publicke, it is hereby declared, that the Generall Court of this colony shall from time to time, and at all times, stand firmely obliged for the repayment of all & every summe or summes disbursed & lent for the use of the publicque, as above said, and the receipt of the same, being given under the hand & seale of the tresurer of the country, or his successors, shall be sufficient and vallid proofe of the said disburrs; and for further security to those that shall disburse, as above said, this Court doeth also obleige unto them all publicque & comon lands within this jurisdiction, and all the interest that this colony hath, may, or ought to have, in any conquered lands in any other jurisdiction, so as that no part of these lands shall be granted, given, or otherwise disposed of, (save for the payment of debts that shall be contrated (sic) as above) untill the said debts be fully payed.¹

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