Chap. 7. 



POLITICAL INSTITUTIONS. 



133 



OLD TENOR. 



COKTINENTAL AND LAWFUL MONEY. 



therefore confine ourselves principall}' to 

 a brief account of banking operations in 

 this state.* 



* We have, doubtless, most of us heard our fathers 

 or grandfathers speak of OW Tenor and of Continen- 

 tal Money, and as it will, doubtless, be gratifying 

 to the rising generation to understand the meaning 

 of these terms we will here endeavor to explain 

 them. 



Old Tenob. 



The first issue of paper money in America was 

 made by the provincial government of Massachu- 

 setts in 1690, under the denomination of bills of 

 credit, and for the purpose of defraying the expense 

 of an expedition against Canada. As specie could 

 not be had for that purpose, new issues were made 

 from time to time fur the redemption of these bills, 

 and various other means were resorted to for sustain- 

 ing their credit. By the laws of that province we 

 find the following issues of bills of credit authorized, 

 from 1700 to 17-20, viz.: in 1702 £10,000, in 1703 

 £ IO:000,in 1714, 50,000, iu 1717, 100,000, and in 1720 

 £50,000. In 1712 a law was passed making bills of 

 credit a tender for ten years» and in 1722 the same 

 law was continued for ten years longer. But, with- 

 out an adequate specie basis, legislative enactments 

 could not avail to sustain the credit of such an 

 amount of paper money. ' Its value depreciated very 

 rapidly till 45 shillings came to be the value of one 

 dollar, at which it stood many years, and was de- 

 nominated Old Tenor, (nld lender ;) in this, accounts 

 were then kept and contracts were made.' 



The following bill may serve to illustrate this 

 matter : 



Boston, July 23d, 1763. 

 T/ie Province of Massachusetts, 



To ThO.MAS WlLLISTON, Dr. 



For sundries bought for the use of the gentlemen 

 selectmen, in going down to Rainsford Island : 



£ s. d. 

 Rump of Beef and pieces to roast, 5 



Two Tongues, 1 10 



Cucumbers, Mustard, Salt and Meal, 14 

 Bread and Biscuit, 2 15 



Lemons, hundred and a half, 15 



Two bottles of Claret and Cider, 3 15 



Pipes and Tobacco, 10 



Butter, Pork and Fat, 2 10 



Onions and Pepper, 110 



Sweet Majorum and Twine, 4 



Cheese and Cayenne, 1 18 



Spirits, 3 



For roasting the Beef and Charcoal 15 



Old Tenor, 



£39 12 



Lawful money, £5 5 7 

 When these bills of credit were finally redeemed, 

 by a grant made by the British parliament to defray 

 the military expenses of the colonies, their value had 

 so far depreciated that \U. old tenor were consid- 

 ered equivalent to only 11. in specie or lawful money. 

 Continental and Lawful Monet. 

 The United States having no adequate sources 

 of revenue, Congress found it necessary, in the early 

 part of the revolution, to resort to the former prac- 

 tice of the colonies and make large issues of bills of 

 credit. These at first possessed the same value as 

 Bppcie,and in these the troops and all the other expen- 

 Fcs of the government were paid. But the United 

 States not having the ability to redeem these bills 

 with specie, they began, in the early part of tlie 

 year 1777, to deprecate in value, ard, before the 

 close of the war, they became nearly worthless. 

 These bills of credit constituted what was called 

 Continental Monet/, and as this formed almost the 

 entire circulating miMliuni of the countrv during the 

 revolution, bargains were very generally made anil 

 accounts kept in it during that period. After the 



For many years after the organization 

 of the government of this state, a large 

 majority of the peopl3 were decidedly op- 

 posed to the issue of paper money ; nor 

 could they be brought to consent to the 

 establishment of banks within the state till 

 they felt themselves compelled to such a 

 measure in self defence, in consequence 

 of the great multiplication of banks in the 

 neighboring states. While bank bills 

 were the circulating medium in other 

 states, it was found to be impossible to 

 prevent their introduction here, and the 

 consequence was that the people of Ver- 

 mont suffered by being imposed upon by 

 counterfeit bills andbylhe failure of banks, 

 while neitlier tlie state nor any of its in- 

 habitants shared any of the profit accruing 

 from the banking operations. The only 

 remedy, which they could devise for this 

 evil, was to establish banks within the 

 state, which should furnisii to the people 

 a medium of tJieir own, similar to that 

 possessed by other states, and serve as a 

 guard against the circulation of spurious 

 bills and the bills of insolvent foreign 

 banks. 



Thouo-h we had nothinjr which could 



continental money began to depreciate in value, 

 although accounts -were still kept in it, the specie 

 value was usually entered upon the account book 

 under the denomination of /aw/ui money, as in the 

 following item copied from the account book of 

 the first treasurer of this state: 

 1779. June 5. — To cash paid Reuben Dean for a 



Screw for a Stale Seal, Con.'j/. — Law.0Z.,U5s,4d. 



By this item it appears that, at the time tho 

 charge was made, 111. in continental money were 

 valued at 11. in specie. The rates of deprecia- 

 tion of continental money, in the several states, 

 were in most cases fixed by law. That was the 

 case in Vermont. In April, 1781, an act was pass- 

 ed, which declared that all contracts made on or 

 before the first day of September, 1777, for money, 

 shall be deemed equal to the same nominal sum iu 

 gold or silver ; and that all contracts made between 

 that period and the first day of September, 1780, it 

 understood at the time to be for the common cur- 

 rency of the United States, shall be rated in specie 

 agreeably to the following table, where the num- 

 bers denote the amount of continental money, to 

 which $100 in specie shall be equivalent on corn- 

 tracts made at the time, against which that amount 

 stands. 



