Hayward’s United States Gazetteer (1853) page 711

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setts, though the currency of Pennsylvania never depreciated so low in value as in other colonies.
During the period from 1690 to 1760, no other efforts were made to improve the currency, if we ex-
cept the paper scheme, called the Land Bank, in 1740.

Upon the redemption of a failed currency in New England in 1760, the colonial assembly estab-
lished a silver currency at six shillings and eight pence per ounce. The apprehensions of a shock in
trade, as consequent upon this, proved groundless; silver soon took the place of bills, every branch of
business prospered, and was carried on with greater facilities than before.

The States of Bhode Island and Connecticut were invited by Massachusetts to conform their cur-
rency to a specie standard, but declined to comply with the request. The effect of adopting a specie
standard of currency by a portion of New England, while the other colonies refused to conform their
currency to a standard, caused so much suffering and inconvenience, that an act of Parliament was
passed in 1763, to prevent paper bills of credit being issued in any of his majesty's colonies or planta-
tions in America. This act caused paper bills of credit to be reduced to a very small amount; and
from this time to the commencement of the war, the colonies were generally free from a depreciated
paper currency.

From this brief account of the provincial paper money, the reader may estimate properly that
provision of the constitution of the United States which forbids any state to emit bills of credit, or
make any thing but gold or silver a legal tender for the payment of debts.

The next period of paper issues was brought on at the commencement of the war of the revolution.
The colonies being without a sufficient currency to meet all their exigencies in raising armies and
equipping fleets, the government was compelled to resort to the issue of bills of credit. This was called
the Continental currency. The first emission was dated May
10, 1775, though no notes were
issued till August following. The bills passed for nearly their declared value till the end of the
year 1777, when the issue was about $26,000,000. From that date to the year 1781, the value was
constantly depreciating, until $1000 of the continental paper money would not produce one dollar in
eoin. During a period of six years, the government issued
$357,476,541 of what was called the old
emission, and
$2,070,485 of what was called the new emission. It is worthy of remark that the
depreciation of the continental currency never retarded its circulation as long as it retained any value.
The depreciation of the paper currency, during the period of its issue, caused successive acts of Con-
gress for the purpose of sustaining its value, which in the end proved ineffectual.

The distress occasioned by the failure of the currency was universal for a time. It brought specie,
hdwever, directly into circulation, large amounts of which had been hoarded during the five years
previous. The quantity was sufficient for all the ordinary purposes of trade. The country soon
revived from the shock, but with a deep seated prejudice against a paper currency.

The country being now without any paper currency, or even a bank of deposit or discount, in any
of the colonies, a new principle, based upon the true science of banking, was brought before the pub-
lic by Robert Morris and others, who applied for a charter for a bank, to rest upon a
specie basis, or
that of the conversion of bills into coin at the will of the holder. This was the origin of the bank
called the
Bank of North America, which was established in Philadelphia in 1781, with a capital of
$2,000,000. The charter was obtained from Congress, and was advocated upon the ground that it
would assist the country by loans, and otherwise render aid to the treasury of the United States,
The bank was to have a portion of government deposits, and consequently the United States became
a stockholder to the amount of $254,000.

The bank commenced its business in January, 1782, under very flattering circumstances, being
supported by some of the most distinguished men of the day; also having the sanction of Congress
and the assistance of the United States to give it public credit. Notwithstanding the strong position
of the bank, however, great difficulty was encountered in giving currency to its notes or bills. The
experience of the evils suffered from the failure of the continental money was still fresh in the minds
of the people. Having been so often disappointed in the colonial and continental currencies, they
could not be made at once to feel the necessary confidence that the same results might not follow
the new scheme. The public were slow to believe that the bank had coin in its vaults, or could
redeem its bills on demand. Great efforts were made by the bank to remove these unfavorable im-
pressions from the public mind, and to give the necessary credit and confidence to its circulation ; and
these efforts proved at length successful.

The second bank in America, established upon the principle of a specie basis, was the Massachu-
setts Bank,
established in Boston in 1784, which institution has retained a good reputation down to
the present time. The date of the institution of some of the earlier banks in the several states of

A Gazetteer of the United States of America by John Hayward.

Hartford, CT: Case, Tiffany and Company. 1853. Public domain image

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