exceedingly; they will, by well ordering of them, bring back the gold and silver drained out of this land by the Hollanders' banks,” &c. The result of this discussion, which was continued for years, was the establishment of the bank of England in the year 1694. This institution, at once on commencing business, issued its notes payable without indorsement to the bearer on demand. Prior to this time bank notes, properly speaking, with an extended circulation without indorsement, were unknown in Europe, unless those issued in 1658 by the bank established by Palmstruck in Stockholm were of this character. The bank of England was the first in the world which agreed to issue its notes, payable on demand, in exchange for individual paper, payable at a future date. “The bank thus undertook,” in the words of Stephen Colwell, “to perform an impossibility, in the hope that it would not be called upon to redeem the promise or make the attempt;” and he adds: “What the bank could do was to give its own notes of convenient denominations for circulation in exchange for individual paper, and payable at the same time as it; and in doing this alone the bank could have rendered a great service to the public with small risk.” The same writer regards this step of the bank as “a Pandora's box of evils opened to trouble the commercial world,” and to be the main cause of the unpopularity of banks even unto the present hour, by reason of their irregular action and instability. In America, “the several provinces in their infancy,” says Wright, the author of “The American Negotiator” (London, 1767), “had but little trade, and consequently little money. The tools, utensils, and necessaries for planting they were at first supplied with from Britain, involved them in debt before they were able to raise goods for exportation to pay their creditors; and the goods they first raised were often so ordinary in quality or so little in quantity that they were able to export to a foreign market, that the net proceeds of the same often turned out poorly; by which means the planters remained continually in debt to the British merchants, and occasioned the balance of trade to be always against them; and having neither goods nor cash sufficient to remit to their creditors, the consequence has been that many bad debts have been made and great losses sustained, as the merchants of Great Britain have but too fatally experienced.” As the northern colonies improved in their condition, the British merchants received their claims in part; but this “prevented the cash staying with them” (the colonists), “and obliged them to ship it off with their other merchandise toward paying their debts.” The consequences, as already shown, were that the colonists were forced to use as money wampum, musket balls, beaver skins, tobacco, corn and beans, and in fact to resort to a general barter. About the middle of the 17th century the trade with the West Indies brought into Massachusetts a considerable quantity of silver, and in 1652 that colony set up a mint in Boston and commenced the coinage of the “pine tree” currency, shillings, sixpences, and threepences, and continued to do so for a number of years. This being inadequate to their wants, the barter currency continued to be used. In 1690 the first paper money was issued by the colony of Massachusetts for the purpose of paying off the troops employed in an expedition against Canada, fitted out with the hope of booty which they had failed to obtain. In 1709 another expedition was proposed by this and other colonies, and more notes were issued. In 1698 Schuyler and Dillon, who made an expedition to Canada, reported with apparent surprise that there the currency consisted only of paper. Subsequently banks were established and currency issued by the various colonies, and made a legal tender; but in 1751 legal tender for paper money in the colonies was abolished by act of parliament, and in 1763 that body declared any issue void. Nevertheless, in 1773 bills issued by any of these colonies were allowed to be legal tender at their several treasuries. When Louisburg was captured by the New England colonies in 1745, parliament ransomed the place, and the sum coming to Massachusetts, £138,649 sterling, was shipped from England in specie. This enabled the colony to retire all of her currency at the then existing rate of 11 for one, and as a consequence in 1774 she was entirely out of debt. The rate of exchange in Massachusetts in the under-mentioned years was as follows:
| YEARS. | Sterling exchange in Mass. currency. |
Value of an oz. of silver in currency. |
| 1702 | 133 | 6s. 10½d. |
| 1705 | 135 | 70 |
| 1713 | 150 | 80 |
| 1716 | 175 | 93 |
| 1717 | 225 | 120 |
| 1722 | 270 | 140 |
| 1728 | 340 | 180 |
| 1730 | 380 | 200 |
| 1737 | 500 | 260 |
| 1741 | 550 | 280 |
| 1749 | 1,100 | 600 |
The currency of Rhode Island suffered such a depreciation between 1744 and 1759, that while in the former year it required £450 to obtain £100 sterling, in the latter it required £2,300. However, in or about the year 1767, measures were taken to place the currency of some of the colonies on a better footing. The following were then the rates of sterling exchange in the provinces named: Massachusetts, 13313; New York and East Jersey, 175 to 17157; Pennsylvania and West Jersey, 165 to 16037; Virginia, 125; Maryland, 145; North Carolina, 145; South Carolina, 700; Georgia, 100; Jamaica, 140; Barbadoes, 135; Nevis and Montserrat, 175; Antigua and St. Christopher, 165.—The continental congress as originally constituted was as feeble a government as any that
