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fixed, and has so remained to this day. Also in New England, when much greater quantities were issued than were necessary for a medium of trade, to defray the expedition against Louisburg; and during the last war in Virginia and North Carolina, when great sums were issued to pay the colony troops, and the war made tobacco a poorer remittance, from the higher price of freight and insurance; in these cases, the merchants trading to those colonies may sometimes have suffered by the sudden and unforeseen rise of exchange. By slow and gradual rises they seldom suffer; the goods being sold at proportionable prices. But war is a common calamity in all countries, and the merchants that deal with them cannot expect to avoid a share of the losses it sometimes occasions, by affecting public credit. It is hoped, however, that the profits of their subsequent commerce with those colonies may have made them some reparation. And the merchants trading to the middle colonies (New York, New Jersey, and Pennsylvania) have never suffered by any rise of exchange; it having ever been a constant rule there to consider British debts as payable in Britain, and not to be discharged but by as much paper (whatever might be the rate of exchange) as would purchase a bill for the full sterling sum. On the contrary, the merchants have been great gainers by the use of paper money in those colonies; as it enabled them to send much greater quantities of goods, and the purchasers to pay more punctually for them. And the people there make no complaint of any injury done them by paper money, with a legal tender; they are sensible of its benefits; and petition to have it so allowed.

The third reason is, "That the restriction has had a beneficial effect in New England." Particular circumstances in the New England colonies made paper

money less necessary and less convenient to them. They have great and valuable fisheries of whale and cod, by which large remittances can be made. They are four distinct governments; but, having much mutual intercourse of dealings, the money of each used to pass current in all. But the whole of this common currency, not being under one common direction, was not so easily kept within due bounds; the prudent reserve of one colony in its emissions being rendered useless by excess in another. The Massachusetts therefore were not dissatisfied with the restraint, as it restrained their neighbours as well as themselves; and perhaps they do not desire to have the act repealed. They have not yet felt much inconvenience from it; as they were enabled to abolish their paper currency by a large sum in silver from Britain, to reimburse their expenses in taking Louisburg; which, with the gold brought from Portugal, by means of their fish, kept them supplied with a currency, till the late war furnished them and all America with bills of exchange, so that little cash was needed for remittance. Their fisheries, too, furnish them with remittances through Spain and Portugal to England; which enables them the more easily to retain gold and silver in their country. The middle Colonies have not this advantage; nor have they tobacco, which, in Virginia and Maryland, answers the same purpose. When colonies are so different in their circumstances, a regulation, that is not inconvenient to one or a few, may be very much so to the rest. But the pay is now become so indifferent in New England, at least in some of its provinces, through the want of currency, that the trade thither is at present under great discouragement.

The fourth reason is, "That every medium of trade should have an intrinsic value, which paper money has not. Gold and silver are therefore the fittest for this

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medium, as they are an equivalent, which paper never can be." However fit a particular thing may be for a particular purpose, wherever that thing is not to be had, or not to be had in sufficient quantity, it becomes necessary to use something else, the fittest that can be got in lieu of it. Gold and silver are not the produce of North America, which has no mines; and that which is brought thither cannot be kept there in sufficient quantity for a currency. Britain, an independent, great state, when its inhabitants grow too fond of the expensive luxuries of foreign countries, that draw away its money, can, and frequently does, make laws to discourage or prohibit such importations; and, by that means, can retain its cash.

The colonies are dependent governments; and their people, having naturally great respect for the sovereign country, and being thence immoderately fond of its modes, manufactures, and superfluities, cannot be restrained from purchasing them by any province law; because such law, if made, would immediately be repealed here, as prejudicial to the trade and interest of Britain. It seems hard, therefore, to draw all their real money from them, and then refuse them the poor privilege of using paper instead of it. Bank bills and bankers' notes are daily used here as a medium of trade, and in large dealings perhaps the greater part is transacted by their means; and yet they have no intrinsic value, but rest on the credit of those that issue them, as paper bills in the colonies do on the credit of the respective governments there. Their being payable in cash, upon sight, by the drawer, is indeed a circumstance that cannot attend the colony bills, for the reasons just above mentioned, their cash being drawn from them by the British trade. But the legal tender, being substituted in its place, is rather a greater advantage to

the possessor; since he need not be at the trouble of going to a particular bank or banker to demand the money, finding (wherever he has occasion to lay out money in the province) a person that is obliged to take the bills. So that, even out of the province, the knowledge that every man within that province, is obliged to take its money, gives the bills a credit among its neighbours, nearly equal to what they have at home. And, were it not for the laws here [in England], that restrain or prohibit as much as possible all losing trades, the cash of this country would soon be exported. Every merchant, who had occasion to remit it, would run to the bank with all its bills that came into his hands, and take out his part of its treasure for that purpose; so that, in a short time, it would be no more able to pay bills in money upon sight, than it is now in the power of a colony treasury so to do. And, if government afterwards should have occasion for the credit of the bank, it must of necessity make its bills a legal tender; funding them however on taxes, by which they may in time be pa paid off; as has been the general practice in the colonies.

At this very time even the silver money in England is obliged to the legal tender for part of its value; that part which is the difference between its real weight and its denomination. Great part of the shillings and sixpences now current are, by wearing, become five, ten, twenty, and some of the sixpences even fifty per cent too light. For this difference between the real and the nominal, you have no intrinsic value; you have not so much as paper, you have nothing. It is the legal tender, with the knowledge that it can easily be repassed for the same value, that makes three-pennyworth of silver pass for sixpence. Gold and silver have undoubtedly some properties that give them a fitness above paper as a medium of exchange; particularly

their universal estimation; especially in cases where a country has occasion to carry its money abroad, either as a stock to trade with, or to purchase allies and foreign succours; otherwise that very universal estimation is an inconvenience which paper money is free from; since it tends to deprive a country of even the quantity of currency that should be retained as a necessary instrument of its internal commerce, and obliges it to be continually on its guard in making and executing, at great expense, 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.

* Perhaps Dr. Franklin had not, at this time, read what Sir James Stewart says of the Amsterdam bank re-issuing its money. — B. V.

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