34 BULLETIN OF THE 



attempt to return to specie payments. Some progress had been 

 made, when war with France broke oa,t, and the printing press 

 furnished the ways and means. Fortunately, the large ransom 

 paid by the French for the return of Louisbourg put Massachu- 

 setts in possession of a considerable sum of silver and gold, with 

 which that colony was enabled to buy up her paper at about 

 eleven for one, and base her transactions for a time thereafter 

 upon specie. The interval of specie payments, however, was a 

 short one ; but it was full of instruction, and inculcates a lesson 

 which mutatis mutandis may be pondered with great advantage 

 at the present time. 



" Scarcely had specie come into circulation in Massachusetts 

 when it was found that, although the remittance had been in 

 silver, gold from the West Indies began to stay in the colony. 

 The question of making it legal tender as well as silver soon 

 began to be agitated. It circulated of course, not being legal 

 tender, at its weight. An act was passed in 1762 to make gold 

 legal tender at 2^(i. per grain. At this rate it was more profit- 

 able for the debtor to pay in gold than in silver. The [silver] 

 currency was depreciated five per cent, by this operation, and, as 

 Hutchinson declared at the time must follo-\v, this drove silver 

 out of circulation. Some hints also show that barter currency 

 was still allowed in the payment of taxes. Silver now became 

 scarce, and the next stage was a new agitation in IT 67 for paper 

 money." [Prof W. G. Sumner, History of American Currency.] 



For several years the agitation in favor of paper money in 

 Massachusetts was not successful. But the other colonies were 

 flooded with it, and when the war of the Revolution commenced, 

 Massachusetts was forced to admit the circulation of notes from 

 other colonies. The principal facts connected with the issue of 

 paper by the Congress of the Revolution are familiar to all. 

 When the war came there was scarcely any other currency in use 

 in the colonies; the specie had flown away to other countries, 

 and there was apparently no other resource. How far this pro- 

 ceeding was wise it is difficult at this time to judge. It seems 

 certain, however, that nothing less than utter desperation can 

 ever warrant such extravagant use of this expedient as was made 

 at that time. The needless suffering and cruel injustice which 

 it inflicted upon the very class which was most patriotic and 

 deserving passes all estimate. In 1780 it ceased to circulate 

 from sheer worthlessness, and the scanty supply of coin which 

 had been hoarded during the paper deluge camQ forth and took 

 its place. 



In 1781 the Bank of JSTorth America was chartered at Phila- 

 delphia, which issued notes redeemable in specie. This bank 

 appeared to be solvent, but people had become so distrustful of 

 paper money that it found difiiculty in circuhxtiiig its notes, until 

 a long period of maintenance of specie payments slowly created 

 confidence. The example gave rise to other banks of similar 



