DAVIS. MASSACHUSETTS CURRENCY. 209 



added the force of their weight, this reduction actually brought the pur- 

 chasing capacity of the bills in circulation, notwithstanding the great 

 excess of their denominational value, below the amount formerly deemed 

 essential for the use of the Province. 



By reference to the table showing the coincidences between certain 

 movements in the price of silver and emissions of large amount by this 

 Province and the Colony of Rhode Island, the dates of some of the 

 Rhode Island loans can be obtained. A glance at the diagram will 

 disclose the effect of these emissions, but it is desirable for the iuU 

 appreciation of this effect to take note of certain facts in connection 

 with affairs in Massachusetts at the same time. A contemporary writer* 

 says, in 1740, that the highest point which the Massachusetts currency 

 had then reached was in 1721. This statement would be true, if no 

 consideration were had of the £50,000 loan made that year ; but when 

 this is borne in mind, the culminating point prior to 1741 would seem to 

 have been in 1726. The necessity of including the emissions of the 

 other governments, if we would deduce any law from the subject under 

 consideration, is forcibly illustrated by the divergence, between 1727 and 

 1741, of the lines which mark the currency volume on the one hand, and 

 the silver rate on the other. Under pressure from the Board of Trade 

 the Provinces of the JMassachusetts Bay and New Hampshire were not 

 only jirevented from further increasing their public bills of credit during 

 this period, but were actually compelled to reduce the amounts in circu- 

 lation. Meantime Rhode Island had flooded the Province with emission 

 after emission of public bills, some issued npon funds, but nearly all 

 loaned out at interest for terms varying from ten to thirteen years, and 

 then to be liquidated in annual instalments covering ten years more. Of 

 these bills there were £340,000 outstanding in 1741, the greater part of 

 which were in circulation in Massachusetts. Owing to their presence, the 

 Assembly of this Province had witnessed the silver rate advance from 

 16s. in 1727 to about 29s. in 1741, in the face of the fact that the circula- 

 tion of their own public bills had been reduced from £396,000 in 1726 to 

 £229,000 in 1741. The purchasing capacity of the bills of the Province 

 in circulation, rated in silver at 6s. 8d. per ounce, had through this cause 

 been reduced from £165,000 to less than £53,000. Attempts had been 

 made, without success, to prevent the circulation of the bills of the neigh- 

 boring governments. The Colony of Rhode Island was drawing a reve- 

 nue' from the interest of the loans. The borrowers were able, in turn, to 



* An Inquiry into the Nature and Uses of Money, p. 19. 

 VOL. xxxiii. — 14 



