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During the war, vaft fums of paper currency had been emitted by Congrefs, and large quantities of fpecie had been introduced, towards the clofe of the war, by the French army, and the Spanish trade. This plenty of money enabled the ftates to comply with the firft requifitions of Congrefs; fo that during two or three years, the federal treasury was, in fome measure, fupplied. But when the danger of war had ceafed, and the vaft importations of foreign goods had leffened the quantity of circulating fpecie, the ftates began to be very remifs in furnishing their propertion of monies. The annihilation of the credit of the paper bills had totally stopped their circulation, and the fpecie was leaving the country in cargoes, for remittances to Great-Britain; ftill the luxurious habits of the people, contracted during the war, called for new fupplies of goods, and private gratification feconded the narrow policy of ftate-intereft in defeating the operations of the general government.

Thus the revenues of Congress were annually diminishing; fome of the ftates wholly neglecting to make provifion for paying the intereft of the national debt; others making but a partial provifion, until the fcanty fupplies received from a few of the rich states, would hardly satisfy the demands of the civil lift.

This weakness of the federal government, in conjunction with the flood of certificates or public fecurities, which Congrefs could neither fund nor pay, occafioned them to depreciate to a very inconfiderable value. The officers and foldiers of the late army were obliged to receive for wages these certificates, or promiffary notes, which passed at a fifth, or eighth, or a tenth of their nominal value; being thus deprived at once of the greateft part of the reward due for their fervices. Some indeed profited by fpeculations in these evidences of the public debt; but such as were under a neceffity of parting with them, were robbed of that fupport which they had a right to expect and demand from their country

men.

Pennsylvania indeed made provifion for paying the intereft of her debts, both ftate and federal; affuming her fuppofed proportion of the continental debt, and giving the creditors her own ftate notes in exchange for those of the United States. The resources of that state are immense, but she has not been able to make punctual payments, even in a depreciated

paper currency.

Maffachusetts, in her zeal to comply fully with the requifitions of Congrefs, and fatisfy the demands of her own creditors, laid a heavy tax upon the people. This was the immediate cause of the rebellion in that ftate, in 1786. But a heavy debt lying on the ftate, added to burdens of the same nature, upon almoft every corporation within it; a decline, or rather an extinction of public credit; a relaxation of corruption of manners, and a free use of foreign luxuries; a decay of trade and manufactures, with a prevailing fcarcity of money; and, above all, individuals involved in debt to each other-thefe were the real, though more remote causes of the infurrection. It was the tax which the people were required to pay, that caused them to feel the evils which we have enumerated—this called forth all their other grievances; and the first act of violence committed, was the burning or destroying of a tax-bill. This fedition threw the ftate into a convulfion which lafted about a year; courts of justice

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were violently obftructed; the collection of debts was fupended; and a body of armed troops, under the command of General Lincoln, was employed, during the winter 1786, to disperse the infurgents. Yet fo numerous were the latter in the counties of Worcester, Hampshire, and Berkshire, and fo obftinately combined to oppose the execution of law by force, that the governor and council of the ftate thought proper not to intruft General Lincoln with military powers, except to act on the defenfive, and to repel force with force, in cafe the infurgents fhould attack him. The leaders of the rebels, however, were not men of talents; they were defperate, but without fortitude; and while they were fupported with a fuperior force, they appeared to be impressed with that consciousness of guilt, which awes the most daring wretch, and makes him fhrink from his purpose. This appears by the conduct of a large party of the rebels before the magazine at Springfield; where General Shepard, with a small guard, was ftationed to protect the continental ftores. The infurgents appeared upon the plain, with a vast fuperiority of numbers, but a few fhot from the artillery made the multitude retreat in diforder with the lofs of four men. This fpirited conduct of General Shepard, with the industry, perfeverance, and prudent firmness of General Lincoln, dispersed the rebels, drove the leaders from the state, and restored tranquillity. An act of indemnity was paffed in the legislature for all the infurgents, except a few leaders, on condition they should become peaceable fubjects and take the oath of allegiance. The leaders afterwards petitioned for pardon, which, from motives of policy, was granted by the legislature.

But the lofs of public credit, popular disturbances, and insurrections, were not the only evils which were generated by the peculiar circumftances of the times. The emiffions of bills of credit and tender laws, were added to the black catalogue of political disorders.

The expedient of fupplying the deficiencies of fpecie, by emiffions of paper bills, was apopted very early in the colonies. The expedient was obvious, and produced good effects. In a new country, where population is rapid, and the value of lands increasing, the farmer finds an advantage in paying legal intereft for money; for if he can pay the intereft by his profits, the increafing value of his lands will, in a few years, discharge the principal.

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In no colony was this advantage more fenfibly experienced than in Pennsylvania. The emigrations to that province were numerous— natural population rapid-and these circumstances combined, advanced the value of real property to an aftonishing degree. As the firft fettlers there, as well as in other provinces, were poor, the purchase of a few foreign articles drained them of fpecie. Indeed, for many years, the balance of trade must have neceffarily been greatly against the colonies.

But bills of credit, emitted by the state, and loaned to the industrious inhabitants, fupplied the want of fpecie, and enabled the farmer to purchase stock. These bills were generally a legal tender in all colonial or private contracts, and the fums iffued did not generally exceed the quantity requifite for a medium of trade, they retained their full nominal value in the purchase of commodities. But as they were not received by the British merchants, in payment for their goods, there was a great demand

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for fpecie and bills, which occafioned the latter at various times to appreciate. Thus was introduced a difference between the English sterling money and the currencies of the colonies which remains to this day *.

The advantages the colonies had derived from bills of credit, under the British government, fuggefted to Congrefs, in 1775, the idea of iffuing bills for the purpose of carrying on the war. And this was perhaps their only expedient. Money could not be raised by taxation-it could not be borrowed. The first emiffions had no other effect upon the medium of commerce, than to drive the fpecie from circulation. But when the paper fubftituted for fpecie had, by repeated emiffions, augmented the fum int circulation, much beyond the ufual fum of fpecie, the bills began to lofe their value. The depreciation continued in proportion to the fums emitted, until feventy, and even one hundred and fifty nominal paper dollars, were hardly an equivalent for one Spanish milled dollar. Still from the year 1775 to 1781, this depreciating paper currency was almoft the only medium of trade. It fupplied the place of fpecie, and enabled Congrefs to fupport a numerous army; until the fum in circulation amounted to two hundred millions of dollars. But about the year 1780, fpecie began to be plentiful, being introduced by the French army, a private trade with the Spanish islands, and an illicit intercourfe with the British garrison at New-York. This circumftance accelerated the depreciation of the paper bills, until their full value had funk almoft to nothing. In 1781, the merchants and brokers in the fouthern ftates, apprehenfive of the proaching fate of the currency, pushed immenfe quantities of it fuddenly into New-England-made vaft purchases of goods in Boston-and inflatly the bills vanifhed from circulation.

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The whole hiftory of this continental paper is a hiftory of public and private frauds. Old fpecie debts were often paid in a depreciated currency and even new contracts, for a few weeks or days, were often difcharged with a small part of the value received. From this plenty and fluctuating ftate of the medium, fprung hofts of fpeculators and itinerant traders, who left their honeft occupations for the profpect of immenfe gains, in a frauduent business, that depended on no fixed principles, and the profits of which could be reduced to no certain calculations.

To increafe thefe evils, a project was formed to fix the prices of articles, and reftrain perfons from giving or receiving more for any commodity than the price flated by authority. Thefe regulating acts were reprobated by every man acquainted with commerce and finance; as they were intended to prevent an effect without removing the caufe. To attempt to fix the value of money, while ftreams of bills were inceffantly flowing from the treafury of the United States, was as ridiculous as an attempt to restrain the rifing of water in rivers amidst showers of rain.

* A Dollar, in Sterling money, is 4s. 6d. But the price of a Dollar rofe in New-England currency to 6s. in New York, to 8s. in New-Jersey, Pennfylvania, and Maryland, to 7s. 6d.; in Virginia, to 6s. in North Carolina, to 8s. in South Carolina and Georgia, to 4s. 8d. This difference, originating between paper and fpecie, or bills, continued afterwards to exift in the nominal eftimation of gold and filver. Franklin's Mifcel. Works, p. 217.

Notwithstanding

Notwithstanding all oppofition, fome ftates framed and attempted to enforce these regulating acts. The effect was, a momentary apparent stand in the price of articles; innumerable acts of collufion and evafion among the dishoneft; numberless injuries done to the honest; and finally a total difregard of all fuch regulations, and the confequential contempt of laws, and the authority of the magistrate.

During thefe fluctuations of business, occafioned by the variable value of money, people loft fight, in fome measure, of the fteady principles which had before governed their intercourfe with each other. Speculations followed and relaxed the rigour of commercial obligations.

Industry likewife had fuffered by the flood of money which had deluged the states. The prices of produce had rifen in proportion to the quantity of money in circulation, and the demand for the commodities of the country. This made the acquifition of money eafy, and indolence and luxury, with their train of defolating confequences, fpread themselves among all descriptions of people.

But as foon as hoftilities between Great-Britain and America were fufpended, the scene was changed. The bills emitted by Congrefs had long before ceased to circulate; and the fpecie of the country was foon drained off to pay for foreign goods, the importations of which exceeded all calculation. Within two years from the close of the war, a scarcity of money was the general cry. The merchants found it impoffible to collect their debts, and make punctual remittances to their creditors in Great-Britain and the confumers were driven to the neceffity of retrenching their superfluities in living, and of returning to their ancient habits of industry and

œconomy.

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The change was however progreffive and flow. In many of the ftates which fuffered by the numerous debts they had contracted, and by the diftreffes of war, the people called aloud for emiffions of paper bills to fupply the deficiency of a medium. The depreciation of the continental bills, was a recent example of the ill effects of fuch an expedient, and the impoffibility of fupporting the credit of paper, was urged by the oppofers of the measure as a fubftantial argument against adopting it. But nothing would filence the popular clamor; and many men of the first talents and eminence, united their voices with that of the populace. Paper money had formerly maintained its credit, and been of fingular utility; and past experience, notwithstanding a change of circumftances, was an argument in its favor that bore down all oppofition.

Pennfylvania, although one of the richest states in the union, was the first to emit bills of credit, as a fubftituse for fpecie. But the revolution had removed the neceffity of it, at the fame time that it had destroyed the means by which its former credit had been supported. Lands, at the close of the war, were not rifing in value-bills on London could not fo readily be purchased, as while the province was dependent on Great-Britainthe state was split into parties, one of which attempted to defeat the meafures most popular with the other-and the depreciation of continental bills, with the injuries which it had done to individuals, inspired a general diftruft of all public promifes.

Notwithstanding a part of the money was loaned on good landed fecurity, and the faith of that wealthy ftate pledged for the redemption of

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the whole at its nominal value, yet the advantages of specie as a medium of commerce, especially as an article of remittance to London, foon made a difference of ten per cent. between the bills of credit and fpecie. This difference may be confidered rather as an apppreciation of gold and filver, than a depreciation of paper; but its effects, in a commercial state, must be highly prejudicial It opens the door to frauds of all kinds, and frauds are ufually practised on the honest and unfufpecting, especially upon all claffes of labourers.

This currency of Pennsylvania is receivable in all payments at the cuftom-house, and for certain taxes, at its nominal value; yet it has funk to two-thirds of this value, in the few commercial transactions where it is received.

North Carolina, South-Carolina, and Georgia had recourse to the same wretched expedient to fupply themselves with money; not reflecting that industry, frugality, and good commercial laws are the only means of turning the balance of trade in favour of a country, and that this balance is the only permament fource of folid wealth and ready money. But the bills they emitted fhared a worse fate than those of Pennfylvania; they expelled almost all the circulating cafh from the ftates; they loft a great part of their nominal value, they impoverished the merchants, and embarraffed the planters,

The ftate of Virginia had too much wisdom to emit bills; but tolerated a practice among the inhabitants of cutting dollars and fmaller pieces of filver, in order to prevent it from leaving the ftate. This pernicious practice prevailed also in Georgia*.

Maryland escaped the calamity of a paper currency. The houfe of delegates brought forward a bill for the emiffion of bills of credit to a large amount; but the fenate firmly and fuccessfully refifted the pernicious scheme. The oppofition between the two houfes was violent and tumultuous; it threatened the flate with anarchy; but the queftion was carried to the people, and the good fenfe of the fenate finally prevailed.

New-Jersey is fituated between two of the largest commercial towns in America, and confequently drained of specie. This ftate also emitted a large fum in bills of credit, which served to pay the intereft of the public debt; but the currency depreciated, as in other states.

Rhode-Ifland exhibits a melancholy proof of that licentiousness and anarchy which always follows a relaxation of the moral principles. In a rage for supplying the ftate with money, and filling every man's pocket without obliging him to earn it by his diligence, the legislature paffed an act for making one hundred thousand pounds in bills; a fum much more than fufficient for a medium of trade in that ftate even without any specie. The merchants in Newport and Providence opposed the act with firmnefs; their oppofition added fresh vigor to the refolution of the affembly, and induced them to enforce the scheme by a legal tender of a moft extraordinary nature. They paffed an act, ordaining that if any creditor fhould refuse to take their bills, for any debt whatever, the debtor might lodge

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* A dollar was ufually cut in five pieces, and each paffed by toll for a quarter; fo that a man who cut it gained a quarter, or rather a fifth. If the tate fhould re-coin this filver, it must lofe a fifth.

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