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property always in demand in the colonies; to wit, its 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 Pennsylvania; it has continued uniformly at those rates in both provinces, now near 40 years, without any variation upon new emissions, though in Pennsylvania the paper currency has at times increased from 15,000/. the first sum, to 600,000/. or near it.—Nor has any alteration been occasioned by the paper-money, in the price 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 this paper: but this notion appears to be by no means just. For if the paper purchases every thing but bills of exchange at the former rate, and these bills are not above one-tenth of what is employed [in] purchases, 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 been constantly obliged to give more in silver as well as in Vol. I. 2 A

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 the cash to Britain, and would soon strip the bank.

2. To raise a fund by some yearly tax, securely lodged in the Bank of England as it arises, which should (during the term of years for which the paperbills 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 Pennsylvania, the next neighboring 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 recovered their full value. But as a depreciating currency injures creditors, this injured debtors, and by its continually changing value appears 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 great inconveniencies were found to attend it. The bills, to fit them for a currency, are made of various denominations, and some very low for the sake of change; there are of them from 10/. down to 3d. When they first come abroad they pass easily, and answer the purpose well enough for a few months; but as soon as the interest becomes worth computing, the calculation of it on every little bill in 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 gave place to a worse; for the bills were 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 became 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 rather have employed the money in some business if it had been money of the common kind. 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, if not totally, defeated.

On the whole, no method has hitherto been formed 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 near half a century in the middle colonies, has convinced them of it among themselves, by the great increase of their settlements, numbers, buildings, improvements, agriculture, shipping, and commerce. And the same experience has satisfied the British merchants who trade thither, that it has been greatly useful to them, and not in a single instance prejudicial.

It is therefore hoped, that securing the full discharge of British debts which are payable here, and in all justice and reason ought to be fully discharged here in sterling money, the restraint on the legal tender within the colonies will be taken off, at least for those colonies that desire it, and where the merchants trading to them make no objection to it.



[Referred to in Memoirs of the Life, Part 71.]
The waves never rise but when the winds blow. Prov.


As the cause of the present ill-humor in America, and of the resolutions taken there to purchase less of our manufactures, does not seem to be generally understood; it may afford some satisfaction to your readers, if you give them the following short historical state of facts.

From the time that the colonies were first considered as capable of granting aids to the crown, down to the end of the last war, it is said, that the constant mode of obtaining those aids was, by requisition made from the crown, through its governors, to the several assemblies, in circular letters from the secretary of state, in his majesty's name; setting forth the occasion, requiring them to take the

1 This letter first appeared in a London paper, January 7, 1768, and was afterwards reprinted as a postscript to The true Sentiments of America, printed for Almon, 1768.

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