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CHAPTER VI.

THE CONNECTICUT LAND BANK. THE BOSTON MERCHANTS’ NOTES OF 1733. THE NEW HAMPSHIRE MERCHANTS’ NOTES.

In order that we may take in a complete view of the various attempts of individuals to furnish at this time a medium for trade, it is important that we should temporarily turn our attention to certain events which took place in the colony of Connecticut. Perhaps the most interesting feature revealed by this study of the experiments at furnishing a paper substitute for money in that colony is to be found in the career of an organization known as the New London Society United for Trade and Commerce, a scheme obviously based upon the plan of the proposed bank in Massachusetts in 1714.

In May, 1732, Thomas Seymour, John Curtiss, John Bissell, and fifty-eight others, said to have been representative men of good standing from various parts of the colony, presented a petition to the assembly. The petitioners represented that “for the promoting and carrying on trade and commerce to Great Britain and his Majesty’s islands and plantations in America, and to other of his Majesty’s dominions; and for the encouraging the Fishery etc. . . . as well for the common good as their own private interests,” they had agreed to unite themselves together to be a society and have one common stock. For want of authority to act as societies do, by vote, they labored under great disadvantage. They prayed to be put in a politic capacity as a society.¹

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The assembly favored the petitioners, and at the same session resolved and granted that the memorialists should be declared and constituted to be for the future one society in fact and name, by the name of The New London Society United for Trade and Commerce. They and their successors were empowered to admit others; to sue and be sued by their name aforesaid, as other societies were by the law of Connecticut; to elect officers annually; and to prescribe rules for their meetings; their votes at such meetings to be computed as follows: one vote for thirty pounds and upwards to a hundred to be reckoned to him that should put the same into the stock; two votes for the first hundred pounds to him that should put in the same, and then one vote more for every hundred pounds reckoned as aforesaid, till it should amount to a thousand; which orders and rules were to be binding upon the particular members of said society, and no man should have liberty to take out his stock without leave of the society, though he might sell it. Then came provisions for organization.

The generally accepted account of the career of this company is that which is to be found in Miss Caulkins’s History of New London. It is there stated that it was formed in 1730, “being legalized and patronized by the colonial government,” and that it went into immediate operation.

“Loans upon mortgage were obtained from the public treasury, and the capital employed in trade. It had about eighty members scattered over the whole Colony. . . . To facilitate its operations, the New London Society emitted bills of credit or Society notes, to run for twelve years from the day of date, October 25th, 1732, to October 25th, 1744. These bills were hailed by the

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business part of the community with delight. They went into immediate circulation. But the government was alarmed; wise men declared the whole fabric to be made of paper; and having no solid support it must soon be destroyed. The Governor and Council issued an order denouncing the new money, and an extra session of the Assembly was convened to consider the bold position of the Society. This was in February, 1733. The Legislature dissolved the Association and the mortgages were assumed by the governor and company; and the bills allowed to run until they could be called in and the affairs of the Society settled. . . According to their own statement a great part of their stock had been consumed by losses at sea and disappointments at home. . . . At a meeting held June 5th, 1735, they unanimously dissolved themselves[.]”¹

This account of the doings of the society is made up in part from sources not indicated by the author and in part rests obviously upon the legislation of the colony. It happens that the published records of the colony contain so complete a rehearsal of the various transactions of the society after its incorporation, that these when taken in connection with the material to be derived from the publications of the Connecticut Historical Society furnish an opportunity to trace its career with considerable detail. An examination of the Connecticut archives, however, discloses the existence at a prior date, of a petition for a charter, evidently from the same source, and the consideration of this petition may aid us in placing in their true relations certain of the subsequent events in the career of the society. This petition reads as follows:²

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To the honourable the General Assembly convened in New Haven, October 9, 1729.

The Memorial of the New London Company for Trade humbly sheweth that whereas your honours most humble memorialists being united and formed into a Company for carrying on of trade or merchandize having agreed upon certain articles for a regular management of the same as may appear by our Covenant agreed upon by us New London, July first, Anno Domini 1729, we do therefore humbly address this honourable Assembly for a patent for our said Company allowing us to be a company in the manner and form of said Covenant.

That our votes passed and officers chosen by our Company from time to time may be lawful and authoritative in the execution of the designs used to the ends for which they are voted and chosen so far as may be without infringing upon the authority of the government, the interest of the public or hurting the peculiar right or property of any person but only what may be necessary for our just and lawful defence and benefit in matters relating to the concerns and interest of our Company.

That the bills, bonds, bargains or any obligations whatsoever made or signed by our Committee at any time may be effectual and rated in the law upon the Company’s account.

That our Company may be allowed to emitt bills for currency upon our own credit as we may see occasion at any time for promoting or maintaining our trade.

That there may be the same rules prescribed in the law for prosecuting and punishing such persons as shall at any time presume to alter obliterate counterfeit or forge any bill in the name of our Company or Committee as is provided or prescribed in the law for prosecuting and punishing those that shall presume to deface, alter, counterfeit or forge any bill on the credit of the Government.

etc., etc., etc.

Solomon Coit,

in behalf of the Company.

The vote on this petition in the lower house was at first in favor of granting it, but this vote was afterwards reconsidered and the petition was refused.

If we bear in mind that the foregoing petition was for power to issue company bills which should circulate practically on the same terms as the government bills, and that the petition in 1732 was so modified that the grant from the assembly was obtained, we can see what was probably the stumbling block which prevented the grant of the first petition. Nevertheless it is evident from information to be obtained from the

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sources mentioned above, that. the society immediately after it was organized under the charter granted at the May session in 1732, with disregard to the purposes set forth therein, proceeded to enter upon the work actually proposed for itself, namely, to furnish a medium of trade to the colony of Connecticut through the notes or bills of the society. The so-called stockholders turned out to be, not contributors of funds, but borrowers of notes. In short, the company was the prototype of the Massachusetts Land Bank of 1740.

The first step taken by the society of which we obtain any trace was a vote passed in August, 1732, for printing thirty thousand pounds in bills of credit of the society. For the purpose of carrying this vote into effect the committee having the matter in charge notified one Timothy Green, the public printer of the colony of Connecticut, who was then in Boston, what had been done and requested him to procure paper for the bills and to employ an engraver to cut the plates for the society. This service he performed and forwarded the sheets in parcels.¹ A fac-simile of one of the bills is given in the Connecticut colonial records. The face of it, so far as it is of importance in this connection, reads as follows:

“Three Shillings. This Indented bill of Three Shillings Due to the possessor thereof from the NEW LONDON Society United for Trade and Commerce in Connecticut in NEW ENGLAND, shall be in Value Equal to Silver at Sixteen Shillings pr. Ounce, or to Bills of Publick Credit of this or the Neighboring Governments, and shall be Accordingly accepted by the Treasurer of said Society, and in all Payments in said Society from time to time.

New-London, Aug. 1732

by Order of Said Society   

}Comt.”²

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The general features of this form, it will be observed were constructed upon the currency then in use. It anticipated the new tenor bill in stating a value in silver at which it should pass, but there is in it nothing about the twelve years which the bills, according to Miss Caulkins, were to run. The date also differs from the date given by her.

The process of emission began at once, and it was not long before knowledge of what was being done under the guise of fostering trade and commerce came to the ears of Governor Talcott. On the ninth of February, 1732-33, he issued a precept to the sheriff of Hartford County, in which he recited that he had been informed that the New London Society for Trade and Commerce had struck and signed bills, on the credit of the society, to the sum of many thousand pounds, and had sold such their bills to his majesty’s subjects, as a medium of trade, current and equal in value to current money, or bills of public credit of Connecticut or the neighboring governments, and had received for the said bills provisions and other commodities of the country in great quantities. This he alleged to be contrary to the peace of the crown, and to be a great wrong to the purchasers of the bills, and a great abuse of the powers given to the society by the assembly. The sheriff was therefore instructed to summon the said society to appear before the General Assembly at Hartford on the fifteenth of February, to show by what authority they had emitted and sold their bills, and to show cause why the assembly should not order them to refund and pay back to the possessors of their bills the sums for which they had been sold, and further order that they should thereafter cease to strike or emit any bills on their credit, or to be a society.¹

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At the same time, a precept addressed to the sheriff of New London County was issued, in which he was directed to summon Daniel Coit, the secretary of the society, to appear before the assembly at the same time and place, and to bring with him the records and doings of the society.¹

At the special session of the legislature summoned for the consideration of these matters the society put in an appearance. They were apparently disposed at first to dispute the jurisdiction of the General Assembly,² but this plea they waived and based their defence upon the ground that the bills which they had issued were not of the nature and tenor of bills of the colony, but were of the character of bills of exchange, which they had a natural right and authority to emit.

The assembly, having duly considered the plea of the society, submitted to vote a series of questions the determination of which would settle the action necessary to be taken under the circumstances. The answers to these questions may be formulated as follows:—

First. It was not lawful for any society of Connecticut, nor for any person or persons, not having authority for that purpose from the government, to emit, on private credit, bills of credit of the tenor of the bills of credit of the colony.

Second. The bills emitted by the New London society were of the tenor and nature of the bills of credit of the colony and were not bills of exchange.

Third. The society ought in justice to redeem their bills in the hands of possessors.

Fourth. It was expedient for the assembly to pass a

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bill prohibiting the emitting or uttering bills of credit, on any fund or credit within the colony of Connecticut, which were intended for a general currency in lieu of money.¹

Having determined these points, the assembly proceeded to enforce the fourth proposition, by passing a bill of the character therein suggested. They stated in the preamble that they had observed that great disorder and confusion had arisen in the government by reason of the New London Society United for Trade and Commerce having presumed to strike and emit a certain number of bills of credit on their own society, whereby many honest people were in danger of being defrauded. The peace of the government was thereby subverted and the credit of the colony might sink. Those who should violate the act then passed were made subject to the penalties imposed upon forgers and counterfeiters of bills, and also to a forfeiture of double the sums mentioned in the bills which should be emitted.

The precept issued by the governor not only required the society to show cause why it should not cease to issue notes or bills, but also why it should not cease to be a society. Up to this point, the assembly had not taken into consideration the question whether or not the act under which the society was organized had been violated. The clerk of the society had however, been summoned to produce the records, and the assembly, having first caused the act under which the society was organized and the records of the doings of the society to be read, proceeded to the consideration of this question. The result of this examination is stated in the following words:—

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“it was observed that a Stock was necessary to be made, by the proportion of which Stock put in by the members thereof, all their votes were to be computed, and that nothing but Mortgages were put in by the members thereof to make this Stock; On which the following question was put, Whether by the said Mortgages any Stock were made, according to the true intent and meaning of the grant? Resolved in the negative.”

“Nothing but Mortgages were put in by the members thereof to make this Stock.” In these words we have the description of an organization upon the same basis as that effected eight years afterward by the Massachusetts Land Bank, a society which emitted bills and loaned them upon mortgage security to borrowers, who became thereby entitled to a voice in the proceedings of the company proportionate to the extent of the loan. On the above showing the assembly determined that the New London Society had by its mismanagement forfeited the privileges granted to them, and at once proceeded to repeal the act containing the grant.¹

Miss Caulkins states that the bills of the society were hailed by the business part of the community with delight and this statement is corroborated by a correspondent of Governor Talcott, who speaks of² “the swift currency of the New London Society bills through so many hands.” Nevertheless this “swift currency” was not all that the company desired. There were those who hesitated to receive the bills and their objections were brought to the notice of the managers of the company. When the answer in the proceedings before the General Assembly was prepared the company was still in good standing in the lower house and evidently had

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hopes that the governor would not succeed in his attempt to dissolve their charter. In this answer which is on file in the archives they recapitulate the doings of the company and add thereto a petition, which if it had been granted would have made the company to all intents and purposes a government institution.¹ They said in the preamble to this petition that their notes had been emitted for purposes of trade and then continuing they added, “and not as sum suppose to lend to borrowers, it being contrary to our sincer designe, yet perceving that our bills have not yt currency yt we could wish and understanding yt wise men take these three exceptions to them, viz: First ye face of ye bill will not give action to ye possers. 2dly That we make ye morgages to ourselves and hold our fund. 31y Yt we may make bills ad infinitum.” These objections they proposed to cure by turning over their mortgages to the governor and company in trust, redeemable on payment in bills, or in silver @ 16 s., or in current currency, at the expiration of twelve years. Possessors to have three years thereafter to bring in their bills, and a limit of £50,000 to be set to the capacity of the company to emit bills.

While the lower house voted to consider this proposition the upper house declined to do so, and the assembly arrived at the conclusion, as has been already stated, that the society had forfeited the privileges granted them.

The question arose, How could these bills be withdrawn with the least disturbance to the community? The records do not state the amount supposed at that time to be in circulation, but Timothy Green the man who procured the paper and the plates in Boston, said

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in his letter to Governor Talcott, “How much of the 30,000£ are emitted is best known to the Committee, Clerk, and Treasurer of said Society; what is printed, I conclude, is about fifteen thousand pounds.”¹

The assembly concluded at the special session that under the circumstances it was expedient to emit £30,000 in bills of public credit, a part of which was to be let out for the benefit of the government, and the remainder to be tendered to such persons as the assembly should appoint and should give security, for the drawing in of the bills lately emitted by the New London Society.² The determination of the exact amount to be set aside for the relief of possessors of these bills and the manner in which the public bills should be applied for the purpose of drawing in the society bills was not then definitely concluded, though it may perhaps be considered that the limitation to such persons as should give security was meant to apply to those who as borrowers of the bills of the society had assumed certain responsibilities in connection therewith, and sufficiently indicates the intention of the assembly at the time.

At the May Session in 1733, Thomas Seymour and others presented a petition praying that the New London Society United for Trade and Commerce might be revived. They also asked for a loan of £30,000 from the colony. For the purpose of determining the attitude of the assembly towards this petition, two questions were submitted, the first of which was, Whether it was within the authority of the government of Connecticut

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to make a company or society of merchants? In response to this it was resolved that, although a corporation¹ might make a fraternity for the management of trades, arts, or mysteries, endowed with authority to regulate the management thereof, yet (inasmuch as all companies of merchants were made at home by letters patent from the King, and the assembly knew not of one single instance of any government in the plantations doing such a thing) it was, at least, very doubtful whether they had authority to make such a society, and hazardous therefore for the government to presume upon it. The second question that was submitted was, Whether it would be for the peace and health of the government to create such a society? and the answer given by the assembly to that was, that a society of merchants whose undertakings were vastly beyond their own compass, and who must depend upon the government for their supplies, must rely on their influence upon the government to obtain them. Such a society was not for the peace and health of the government.²

Having thus finally disposed of the question whether the society should be revived and permitted to adjust its own affairs, the assembly proceeded to deal with the question of protecting the rights of possessors of the society bills. With this intention an act was passed appointing a court of chancery to hear and determine, according to equity, all controversies about said bills and the doings of said society and the several officers and members thereof. The preamble opens with a statement that sundry persons have of late mortgaged their lands to Mr. John Curtiss, Treasurer of the late

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New London Society for Trade and Commerce, and to his successor, or to Daniel Coit, with a design to form themselves into a society for trade and commerce under the privilege granted to John Bissell, Thomas Seymour, and others, under the name of the New London Society for Trade and Commerce. Having thus distinctly stated the character of the organization of the society and that it took place after the passage of the act, the preamble cautiously asserts that these mortgagors then assumed to be a society for trade and commerce, and as such emitted and put in circulation many thousand pounds’ worth of their bills. It then alleges that the deception of the mortgages was discovered; that the credit and currency of the bills were lost; and that the possessors of the bills were utterly defrauded. To prevent such mischiefs for the future, a special session of the legislature was held, at which it was declared that the society had no right to emit bills of credit, and it was, therefore, by act of assembly, dissolved.

At the same session, the assembly also resolved that the society ought, in equity, to refund and pay back to the possessors of such bills so much in current money or bills of public credit as by said society bills is mentioned or expressed. At the time when the assembly originally announced this conclusion, they neglected to fix any penalty for failure to comply with it, and they did not provide any effectual means for enabling possessors of bills to recover from mortgagors. As a result of this, the mortgagors still neglected to pay to possessors the sums due them as aforesaid, or any part of the same. In order to cure this evil it was enacted that the mortgagors were liable to possessors of bills, but, inasmuch as they had in their possession certain property of which no account had been rendered, they

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were to be permitted to hold one meeting, which, however, was not to last over three days, and were authorized to proceed to settle their accounts as best they could. They had authority given them to appoint a committee who should call upon the former officers for their accounts; who could sell the property of the mortgagors, pay off possessors of bills, and sue debtors before the special court. This court had authority given it to adjust and settle differences between the various parties interested in these proceedings. In order to give the mortgagors time to convert their property, the right of action on the part of the possessors of bills was postponed until six months after the rising of the assembly. Special provision was made for discovering what mortgagors were in arrear, and it was made a condition precedent that the possessor of bills should, before bringing his action, lodge his bills in court.¹

It has been already stated that at the special session it was determined that it was expedient to aid the mortgagors in their efforts to withdraw the society bills by lending public bills to those who could give security therefor. The time had now come to give effect to this expression of opinion. £15,000 were lodged in the hands of a committee to be lent to mortgagors who should first give to the committee society bills to the amount of the proposed loan, and who could then have the public bills at the rate of six per cent. interest, on furnishing landed security equal to twice the amount of the loan.² It is evident that the security thus demanded was regarded as applying to the principal alone.

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Separate bonds were given for the interest, and later, bonds were given by John Bissell, John Curtiss, Thomas Seymour, Daniel Coit, and six others to the colony for large sums, in behalf of sundry others who were mortgagors to answer for the payment of interest. Afterwards, questions arose about the substitution of the bonds of individual mortgagors in place of this joint bond.¹ There was trouble also about obtaining proper releases for satisfied mortgages given to the governor and company of the colony, and resort was had to special legislation on the subject.² It does not appear from the records that the committee having charge of the settlement of the affairs of the company were much bothered by recalcitrant mortgagors. Perhaps the files of the special court might disclose some cases of this sort, but it seems probable that the public bills furnished by the colony for purposes of exchange, taken in connection with the funds derived from the sale of the property of the society, furnished ample means for the redemption of such bills as were presented to the committee. How it was possible for a society without capital to have acquired any property of consequence in so brief a career can only be conjectured; but if the same course was pursued in Connecticut that was afterwards adopted in Massachusetts, this property must have represented ventures in trade accomplished through unsecured notes issued by the society.

The several papers in the archives sufficiently indicate that this was the case. In the answer of the company it is set forth that “In supporting the government thereof as well as ye maintaining ourselves by reason of our selling everything at ye cheapest and buying at ye

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dearest rate, which came upon us by our trading with Boston, with our provisions, and to Newport with Lumber, etc., and having no market amongst ourselves, were obliged to sell just at such prices as they would give, and often loose by yt.” Again they say, we “have given bills or notes on our own credit to ye possessors at a certain time and with these have bought provisions, vessels, staves, boards and other manufactures for gaining ye trade afforesaid, and carrying on ye fishery.”¹ In addition to this they state elsewhere that the bills emitted by the company had been “disposed of for provisions and in building ships, etc.”²

There were controversies both with reference to the property which remained in the hands of the committee and to the adjustment of the losses in trade. In October, 1735, the committee petitioned the assembly to cause certain proceedings to be postponed, as they were about to settle the affairs speedily and divide the estate.³ The question of the responsibility for losses proved more perplexing than had been anticipated, if the committee were really of opinion that they could speedily divide the estate; and they were obliged, the next year, to ask for the appointment of a commission to determine these controversies. In response to their request a commission was appointed with full power.

It is evident that in 1742 there was a default in the payment to the colony of the interest on some of the mortgages, for Curtiss then petitioned for leave to set over to the colony real estate, in order to satisfy certain executions for “use-money” due to the public treasury of the colony from the New London Society. This

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reference to the society as debtor of the colony can be but the careless use of language. Curtiss had been the treasurer of the society when it was in existence. After its dissolution he had been active in winding up its affairs; and he was one of those who, in behalf of other mortgagors, had given bonds to secure the payment of interest on the loans. These executions for “use-money” were probably based upon some of these bonds. Through the surrender of certain property in New London and by giving a bond for what remained due, Curtiss, with the approval of the assembly, was released from the obligations that he had assumed.¹ Individuals, however, continued to occupy the time of the assembly with their petitions as late as 1749.²

The exact amount of the circulation of the bills of the New London Society does not appear. The subject is, however, alluded to in the petition for a revival of the charter which is on file in the archives. The petitioners say in that document, “The N. London Society united for trade &c by us ye sucribers committy for sd Society —Humbly sheweth that we being unnitted a Society by said Assembly in May last. In pursuance whereof we emitted about 14 or 15 thousand pounds in bills on our Creditt . . . . ”

It will be seen from what follows that it required less than £15,000 in the public bills of Connecticut, in their denominational values, to meet the calls made upon the committee of the assembly for purposes of exchange. In all probability the amount of the circulation was not far from £10,000. It would seem as if the committee having in charge the letting out of the £15,000 to the mortgagors of the late New London Society for Trade

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and Commerce in order to aid in calling in the bills of that society, must have reached the conclusion, in October, 1733, that the period of their active work was over, for they then reported that they had received £9,507 11s. 8d. in bills of the society, which bills were then ordered to be burned.¹

This was followed, in 1734, by a petition of some of the members of the late society, praying for a loan of so much of the £15,000 as was not required for the purpose of exchanging the society bills. The assembly were disposed to grant this request, but before doing so they required the representatives of the society to take steps to bring before possessors of bills throughout the entire colony knowledge that an opportunity was offered them to exchange such bills for the bills of public credit of the colony. To carry this into operation, it was resolved that the memorialists should make a proclamation in the several towns in the colony to the effect that any person having bills of the society in his possession might, upon bringing them to the committee, have bills of the colony in exchange therefor. This proclamation was to be made by affixing a notice containing this information upon the sign posts in such towns. If the committee should certify that this had been done and that six weeks had been allowed for the bringing in of the bills, then so much of the £15,000 as remained in their possession could be loaned to the mortgagors.²

The lending of the unexpended portion of this redemption fund to representatives of the company after these final efforts had been put forth to protect possessors of bills, is a distinct recognition of the compliance of

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the mortgagors with the law, and it may fairly be assumed that the circulation of the society bills must practically have ceased when this was permitted. Although, as we have seen, there were matters connected with the company which occupied the time of the assembly as late as 1749, this is, to all intents and purposes, the disappearance of the company as such from the scene.

We have been enabled through a direct statement in the archives to ascertain the date of the organization of the original society and have had before us the form of the bill which was issued. Two points alone remain in Miss Caulkins’s account which are of enough importance to demand independent examination, and these are the statements that the bills were dated in October and were to run twelve years from the day of date. The date in the fac-simile given in the records corresponds with the time when Green said that he executed the order for the company and had the bills engraved. It is reasonable to suppose that the entire issue bore the same engraved date and was similar in character. This conjecture is reinforced by the conclusion of the assembly that the bills were of the tenor of the public bills of credit, a statement which could hardly have been made if they were twelve-year notes. The variations between Miss Caulkins’s account and that disclosed by the records may all be charged to lack of familiarity on her part with business terms and legal forms. This being the case, the mortgages given to the New London Society will naturally suggest themselves as perhaps possessing power to explain the statement that the society notes were twelve-year notes. These mortgages, it will be remembered, were said by the Assembly to have been made to John Curtiss, Treasurer, to his successor

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or to Daniel Coit. Two of them at least are to be found in Hartford, and through the kind offices of Professor Franklin B. Dexter, of New Haven, I am able to give their material features. The consideration in each mortgage was defined as “current money.” The date of each was October 24, 1732, and both ran to John Curtiss, Treasurer of the New London Society United for Trade and Commerce. The proviso in each read that the deed was to become null and void upon payment being made “either in silver at sixteen shillings per ounce or in true bills of publick credit of this or the neighboring governments, or the like sum in bills of the New London Society United for Trade and Commerce upon the credit of said society, and that, on or before the thirtieth day of October which will be in the year of our Lord Christ, one thousand seven hundred and forty four.” A person who had never seen one of the society bills, if endeavoring to work out a description of them based solely upon these mortgages, might, if the rough notes taken from the deeds were confused, be led to describe the bills in terms somewhat similar to those used by Miss Caulkins.

The true character of the society seems not to have been hitherto set forth. Dr. Douglass refers to it as follows:—”Connecticut emitted bills only for the present necessary charges of the government upon funds of taxes until 1733. Having granted a charter for trade and commerce to a society in New London, this society manufactured some bills of their own; but their currency being soon at a stand, the government were obliged, in justice to the possessors, to emit £50,000 upon loan, to enable those concerned in the society to pay off their society bills in colony bills. Their charter was vacated, and a wholesome law enacted, that for any

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single person or society of persons to emit and pass bills for commerce, or in imitation of colony bills, penalty should be as in case of forgery or of counterfeiting colony bills.”¹ Dr. J. Hammond Trumbull, in his “First Essays at Banking and the First paper money in New England,” overlapped this period in his notes, but did not cover it in the text of his paper, making but a brief reference to the society in a note.² Dr. Henry Bronson’s careful study of the bills of public credit of the colony of Connecticut treated of the colonial currency exclusively. He made no effort to analyze the affairs of this society.³

In the spring of 1731, Jacob Wendell and others petitioned the General Court of Massachusetts Bay, asking for the emission of £50,000 in bills of a new form, to be loaned on real security, at fifty per cent. of the valuation, the loans to be repaid to the province treasury, one fifth part each year for five years at the rate of seventeen shillings per ounce for silver. The new form of the bill is not given but in view of subsequent events we shall not, in all probability, go far astray, if we say that it substituted for the phrase “in value equal to money” a specific silver value by the ounce. This petition was favorably considered by the committee to which it was referred and the emission was recommended with the proviso that the bills should be at the rate of sixteen shillings an ounce for silver and that they should be redeemable at the end of five years in silver and gold. On the 10th of June a bill was ordered to be prepared to this effect, and at this point

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we lose actual touch with the proceedings, although it is reasonable to infer that this must have been the bill which was passed to be enacted in the house July 16, and to which the governor refused his assent on the 20th.¹

In 1733, Rhode Island emitted £100,000, for loans, the greater part of which, it was assumed would find its way into Massachusetts. To prevent this, if possible, a number of Boston merchants entered into an agreement not to receive the Rhode Island bills in trade, and the better to enable them to carry out this agreement they formed a partnership or company² and emitted £110,000 redeemable at different periods covering ten years, in silver at 19s. an ounce. Jacob Wendell, whose petition to the General Court has already been alluded to, was one of these merchants. Hutchinson carelessly states that the notes were redeemable a tenth part annually, but the author of “Some Observations on the Scheme projected for emitting 60,000£ in Bills &c &c” gives the redemptions correctly: 3/10 in three years, 3/10 in six years and 4/10 in ten years.³ Curiously enough, each note was subject to proportionate redemption in this manner, which of course involved the idea that all outstanding bills should be called in at the end of three years and again at the end of six years, and new emissions made for the unredeemed part. The following is a copy of a half-crown note of this emission⁴ and it will be seen that

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provision is made on its face for this complicated operation.

Half a Crown		No (      )		Half a Crown
	2=6		2=6

We Joyntly And Severally Promise to pay to Richard Clarke of Boston Merch^t. or Order, two Penny weight, fifteen grains and One quarter, Troy weight, of Coin’d Silver, Sterling Alloy, or the Value in Coin’d Standard Gold, viz^t three tenth parts thereof by Decem^r 30^th 1736, three tenths more by Decem^r 30^th 1739, and the other four tenths, by Decem^r 30^th 1943; and on each of the two first payments, to renew our Bills accordingly; for Value Received. Boston New-England, Nov^r 30^th 1733.

Half a Crown		No (      )		Half a Crown
	2=6		2=6

seal. A hand holding a pair of scales on an escutcheon having the motto Justitiæ ergo at the top.

(Signed)

H. Hall Edw Bromfield Jun. Edwd Hutchinson James Bowdoin Wm Foye

This note bore the signatures of five merchants and of course depended for its value solely upon their solvency. It was known, however, that the number of the merchants of Boston who had embarked in the enterprise and who had entered into an agreement of mutual protection was greater than five, and the notes found a ready acceptance. Silver rose rapidly shortly after their emission, and the notes were hoarded by holders in consequence of the fixed rate of silver in which they were redeemable.¹

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The obligations taken by these gentlemen when they loaned their notes ran to ten persons who were described either as “Esquires” or “Merchants,” “all of Boston.”¹ The penalty of one of the bonds taken by them was stated as so many “pounds lawful silver money of the Province of the Massachusetts Bay.” The bond could be satisfied by the payment of so many “ounces of coined silver of sterling alloy” or so many “ounces of coined standard gold, both Troy Weight.²

The other was for a loan for one year at six per cent, the amount borrowed being stated in “ounces, Troy-weight, of coined silver of sterling alloy.” The debt could be satisfied by payment in kind or by the payment “of so much in certain promissory notes under the hand of the said Edward Hutchinson, John Osborne, etc., etc., bearing date November 30th, 1733, made payable to Richard Clarke, and by him endorsed as shall be equal in value.”³

The attempt of the Boston merchants to furnish a circulating medium based upon individual credit led a number of New Hampshire merchants to enter upon a similar venture in 1734. Our knowledge of this affair is based exclusively upon contemporary legislation and references in the records and the epistolary correspondence of that period. A few specimens of the notes emitted by these merchants still exist and help in clearing up certain points about which we should otherwise remain in doubt.

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The first description of the notes which we obtain is to be found in the preamble of an Act passed by the assembly of Massachusetts Bay, April 18, 1735, prohibiting the circulation of the notes in that colony. This preamble asserts that “sundry persons, principally, if not wholly, belonging to the province of New Hampshire, have, in the year last past struck, signed and issued, or are about striking, signing and issuing certain bills or promissory notes, of a most uncertain and sinking value, as they are payable in New Hampshire, Massachusetts, Connecticut and Rhode Island Bills” or in silver” gold or hemp at the unknown price they may be at Portsmouth” in New Hampshire” anno 1747.”¹

This act was before the Lords of Trade upon the question of approval December 9, 1735, and again February 17, 1735-36. Wilks, the Massachusetts agent, was present at each meeting and argued that if these bills were made current in Massachusetts it would ruin the province. On the other hand it was stated at the February meeting that an association of the best people in the Province of New Hampshire were answerable for them and that the whole sum emitted amounted only to £6,000 sterling. The Lords of Trade concluded to report in favor of disallowing the act, and on the 23d of September, 1736, sent word to Belcher that they had laid this act before His Majesty for disallowance. The report of the Lords of Trade recommending the disallowance of the act contains the following statements with reference to the notes: “To supply the want of other

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money, a set of private men who according to our information are persons of the best estates and rank in New Hampshire have entered into an Association for issuing Promissory Notes or Bills bearing an interest of one p^r cent. p^r annum, which notes no man is obliged to accept in payment, having in themselves no currency in law, but are left to stand or fall according to the credit of the Signers, and may be taken or refused at pleasure.

It would therefore in our opinion be a great hardship to set a publick mark of discredit upon the persons engaged in this undertaking, as well as a disservice to the Province of New Hampshire, to prohibit by law the circulation of these bills, which may be of service to the said Province . . . . .”¹

The following is a copy of one of the notes emitted by these merchants:²

PROVINCE N HAMPSHIRE
7s.	No	7s.

We Promise jointly and severally to Pay to Hunking Wentworth Merch^t of Portsm^o or Order the Sum of Seven Shillings on the 25th day Deer w^ch will be in the year of our Lord one thousan^d Seven hund^d and forty six in Silver or Gold at y^e then Curr^t price or in passable Bills of Cred^t on y^e Prov^s of N. Hamp^r Massach^ts Rhode Island or Connect. Col^s. with Interest of one P Cent P Ann from the date hereof being for value Rec^d as Witness our hands 25th Dec^r

A.D. 1734.
	7s.		7s.
seal A Pine tree on an escutcheon with the motto Beneficio Commercii.		(Signed)		Geo. Jaffrey Hen. Sherburne Josh Peirce

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Belcher, who was then governor of New Hampshire as well as of Massachusetts Bay, in his speech to the assembly of New Hampshire, May 3, 1735, called attention to the notes emitted by the Portsmouth merchants, characterizing their 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.”¹ 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 among merchants and traders. They were not a little concerned to see his excellency’s proclamation publishing an act of the province of the Massachusetts against taking these notes prefaced thus, “least some unwary persons be imposed upon by the said notes or bills.”² 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 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,

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doubtless 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 his correspondence, Belcher characterized these notes as “wild” and said that the hemp “bank”, as he called it, would be “a bank of wind.”²

From the reference in the preamble of the Massachusetts Statute to the redemption of the notes at a future day in gold, silver, and hemp, at Portsmouth prices, it is evident that this formed a part of the scheme of the New Hampshire merchants. This is corroborated by the allusion in Belcher’s letter. The omission of “hemp” on the notes would indicate that after the scheme was promulgated it was thought best to strike it out of the notes. The statement made that the notes were interest bearing is shown by the language used in the body of the note to have been correct.

After 1735, nothing more is heard of these notes. No order disallowing the Massachusetts act prohibiting their circulation was ever sent to this country. So long as that stood on the statute books” there was no chance for the venture to succeed.

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