at a great Expence, the Laws that are to prevent the Trade which exports it.

Paper Money, well funded, has another great Advantage over Gold and Silver, its Lightness of Carriage, and the little Room that is occupied by a great Sum, whereby it is capable of being more easily, and more safely, because more privately conveyed from Place to Place. Gold and Silver are not intrinsically of equal Value with Iron, a Metal in itself capable of many more beneficial Uses to Mankind. Their Value rests chiefly in the Estimation they happen to be in among the Generality of Nations, and the Credit given to the Opinion that that Estimation will continue: Otherwise a Pound of Gold would not be a real Equivalent for even a Bushel of Wheat. Any other well-founded Credit is as much an Equivalent as Gold and Silver, and in some Cases more so, or it would not be preferred by commercial People in different Countries. Not to mention again our own Bank Bills, Holland, which understands the Value of Cash as well as any People in the World, would never part with Gold and Silver for Credit, (as they do when they put it into their Bank, from whence little of it is ever afterwards drawn out), if they did not think and find the Credit a full Equivalent.

The 5th Reason is, That Debtors, in the Assemblies, make Paper Money with fraudulent Views. This is often said by the Adversaries of Paper Money, and if it has been the Case in any particular Colony, that Colony should, on Proof of the Fact, be duly punished. This, however, would be no Reason for punishing other Colonies who have not so abused their legislative Powers. To deprive all the Colonies of the Convenience of Paper Money, because it has been charged on some of them that they have made it an Instrument of Fraud,

is, as if all the India, Bank, and other Stocks trading Companies and public Funds were to be abolished, because there have been once in an Age Missisippi and South-Sea Schemes and Bubbles.

The 6th and last Reason is, That in the Middle Colonies, where the Paper Money has been best supported, the Bills have never kept to their nominal Value in Circulation, but have constantly depreciated, to a certain Degree, whenever the Quantity has been increased. If the Rising of the Value of any particular Commodity, wanted for Exportation, is to be considered as a Depreciation of the Values of whatever remains in the Country, then the rising of Silver above Paper to that Height of additional Value which its Capability of Exportation only gave it, may be called a Depreciation of the Paper. Even here, as Bullion has been wanted or not wanted for Exportation, its Price has varied from 5s. 2d. to 5s. 8d. per Ounce. This is near 10 per Cent. But was it ever said or thought on such an Occasion, that all the Bank Bills, and all the coined Silver, and all the Gold in the Kingdom, were depreciated 10 per Cent? Coin'd Silver is now wanted here for Change, and one per Cent is given for it by some Bankers; are Gold and Bank Notes therefore depreciated one per Cent?

The Fact in the Middle Colonies is really this. On the Emission of the first Paper Money, a Difference soon arose between that and Silver, the latter having a Property the former had not, a Property always in Demand in the Colonies, to wit, it being fit for a Remittance. This Property, having soon found its Value, by the Merchants bidding on one another for it, and a Dollar thereby coming to be rated at 8s. in Paper Money of New-York, and 7s. 6d. in Paper of Penn

sylvania, it has continued uniformly at those Rates in both Provinces now near forty Years, without any Variation upon new Emissions, tho' in Pennsylvania the Paper Currency has at times increased from £15,000 the first Sum, to £600,000, and in New-York from £40,000 to £600,000 or near it. Nor has any Alteration been occasioned by the Paper Money in the Prices of the Necessaries of Life. When compared with Silver, they have been for the greatest Part of the Time no higher than before it was emitted, varying only by Plenty and Scarcity according to the Seasons, or by a less or greater foreign Demand. It has, indeed, been usual, with the Adversaries of a Paper Currency, to call every Rise of Exchange with London, a Depreciation of the Paper: But that Notion appears to be by no Means just: For if the Paper purchases every Thing but Bills of Exchange at the former Rates, and those Bills are not above one-tenth of what it is employed to purchase, then it may be more properly and truly said, that the Exchange has risen, than that the Paper has depreciated. And as a Proof of this, it is a certain Fact, that whenever in those Colonies Bills of Exchange have been dearer, the Purchaser has constantly been obliged to give more in Silver, as well as in Paper, for them, the Silver having gone Hand in Hand with the Paper, at the Rate above. mentioned; and therefore it might as well have been said, that the Silver was depreciated.

There have been several different Schemes for furnishing the Colonies with Paper Money, that should not be a legal Tender, viz.

1. To form a Bank, in Imitation of the Bank of England, with a sufficient Stock of Cash to pay the Bills on Sight.

This has been often proposed, but appears impracticable

under the present Circumstances of the Colony Trade, which, as is said above, draws all their Cash to Britain, and would soon strip the Bank.

2. To raise a Fund by some yearly Tax, securely lodg'd in the Bank of England as it arises, which should, during the Term of Years for which the Paper Bills are to be current, accumulate to a Sum sufficient to discharge them all at their original Value.

This has been tried in Maryland, and the Bills so funded, were issued without being made a general legal Tender; the Event was, that as Notes payable in Time are naturally subject to a Discount proportioned to the Time, so these Bills fell at the Beginning of the Term so low, as that Twenty Pounds of them became worth no more than Twelve Pounds in the Bills of Pennsylvania, the next neighbouring Province; though both had been struck near the same Time, at the same nominal Value, but the latter was supported by the general legal Tender. The Maryland Bills, however, began to rise as the Term shortened, and towards the End recover'd their full Value. But, as a depreciating Currency injures Creditors, this injured Debtors; and by its continually changing Value appears a Currency unfit for the Purpose of Money, which should be as fixed as possible in its own Value, because it is to be the Measure of the Value of other Things.

3.

To make the Bills carry an Interest sufficient to support their Value.

This too has been tried in some of the New-England Colonies; but Inconveniencies were found to attend it. The Bills, to fit them for a Currency, are obliged to be of various Denominations, and some very low, for the Sake of

Change; there are of them from Ten Pounds down to Three pence. When they first come abroad they pass easily, and answer the Purpose well for a few Months; but as soon as the Interest becomes worth computing, the Calculation of it on every little Bill that makes up a Sum between the Dealer and his Customers in Shops, Warehouses and Markets, takes up much Time to the great hindrance of Business. This Evil, however, soon gives Place to a worse, for the Bills are in a short Time gathered up, and hoarded, it being a very tempting Advantage, to have Money bearing Interest, and the Principal all the while in a Man's Power, ready for Bargains that may offer, which Money out on Mortgage is not. By this Means Numbers of People become Usurers with small Sums, who could not have found Persons to take such sums of them upon Interest, giving good Security; and would therefore not have thought of it, but would have employed the Money, if it had been of the common Kind in some Business. Thus Trade, instead of being increased by such Bills, is diminished, and by their being shut up in Chests the very End of making them, viz. to furnish a Medium of Commerce, is in a great Measure defeated.1

On the whole, no Method has hitherto been found to establish a Medium of Trade in lieu of Money, equal in all its Advantages to Bills of Credit, funded on sufficient Taxes for discharging it, or on Land Security, of double the Value for repaying it, at the End of the Term; and in the mean Time made a GENERAL LEGAL TENDER. The Experience of now

1 I understand that Dr. Franklin is the friend who assisted Governor Pownall in drawing up a plan for a general paper currency for America, to be established by the British government. See Pownall's "Administration of the Colonies," 5th edition, pp. 199, 208. - V.