In Pennsylvania, as well as in the other colonies, a considerable traffic was carried on by barter: and we recollect having read in the Minutes of Assembly, that, about the year 1700, a proposition was made to make domestic products a legal tender, at their current rates. The proposition was rejected. But Holmes states that, in Maryland, as late as the year 1732, an act was passed ” making tobacco a legal tender at one penny a pound, and Indian corn at twenty pence a bushel.” The colonists had hardly become numerous enough to require more than two or three hundred thousand dollars of medium for domestic uses, before specie began to flow in abundantly. Their trade with the West Indies and a clandestine commerce with the Spanish Maine, made silver so plentiful, that, as early as 1652, a mint was established in New England for coining shillings, sixpences and three penny pieces.* Gabriel “Thomas, in his account of Pennsylvania, published about the year 1698, says silver was more plentiful in that province than in England.Plentiful, however, as it was, there was not enough to satisfy the wishes of every body. Attempts were, therefore, made to keep the precious metals in the country, by raising the official value of the coin. Virginia, in 1645, prohibited dealings by barter, and established the Spanish piece of eight at six shillings, as the standard currency of that colony. the other colonies affixed various denominations to the dollar, and the country exhibited a singular spectacle. Its money of account was the same nominally as that of England. Its coin was chiefly Spanish and Portuguese. But, what was a shining in Pennsylvania, was more than a shilling in New York, and less than a shilling in Virginia. In the third year of Queen Anne, an attempt was made to put an end to this confusion, by a Royal Proclamation and act of Parliament, fixing the plantation pound at two ounces sixteen pennyweights sixteen grains of silver, of the fineness of common pieces of eight, at six shillings and ten pence half-penny per ounce; but, from various causes, the act proved effective in Barba does only. Tn South Carolina, the dollar was estimated at 4s. 8d , in Virginia and New England at 6s., in Pennsylvania, New Jersey, and Maryland at 7s. 6d., and in New York and North Carolina at 8s. These are to be understood as the rates at which the currencies of the different colonies were finally settled. They were varied from time to time to suit the varying views of the lawgivers. * Confusion in dealing was thereby introduced, and some injustice was done to individuals: but the chief object of these changes, namely, that of keeping a great stock of the precious metals in the country, was not effected. In proportion as the denominations of the coin were raised, the merchants raised the price of their goods. The laws of nature counteracted the laws of the land. The people exchanged their surplus gold and silver for such things as they wanted still more than gold and silver-leaving just as much money in the country as its domestic trade required, and not one shilling more.
The ill judged expedition of the Carolinian against St. Augustine, in 1702, entailed a debt of 6000 pounds on that colony, for the discharge of which a bill was passed by the Provincial Assembly for stamping bills of credit, which were to be sunk in three years by a duty laid upon liquors, skins and furs. For five or six years after the emission, the paper passed in the country at the same value and rate as the sterling money of England. t To defray the expenses of an expedition against the Tuscaroras, and to accommodate domestic trade, the Legislature of South Carolina established a public Bank in 1712, and issued 4t,000 pounds in bills of credit, called Bank bills, to be lent out on interest on landed and personal security, and to be sunk gradually at the rate of 4000 pounds a year. Soon after the emission of these Bank bills, the rate of exchange and the price of produce rose, advancing in the first year to 150, and in the second to 200 per cent By the year 1731, the rate of exchange rose to 700, at which, says Holmes, ” it continued with little variation upwards of forty years.” In the year 1723, ” the province of Pennsylvania made its first experiment of a paper currency. It issued, in March, 15,000 pounds, on such terms as appeared likely to be effectual to keep up the credit of the bills. It made no loans, but on land security 7 or plate deposited in the loan office: obliged the borrowers to pay five per cent. for the sums they took up; made its bills a tender in a11 payments, on pain of confiscating the debt, or forfeiting the commodity; imposed sufficient penalties on all persons, who presumed to make any bargain or sale on cheaper terms in case of being paid in gold or silver; and provided for the gradual reduction of the bills, by enacting that one-eighth of the principal,.as well as the whole interest, should be annually paid.”
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