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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, 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 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; 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-penny worth 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 uni. versal estimation ; especially in cases where a country has occasion to carry its money abroad, either as a



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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 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 sunı ; 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 colo. nies, 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 and trading companies were to be abolished, because there have been, once in an age, Mississippi 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 froin 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? Coined silver is now wanted here for change, and 1 per cent. is given for it by some bankers : are gold and bank notes therefore depreciated 1 per cent.? The fact in the middle colonies is really this : on the emission of the first paperwoney, a difference soon arose between that and silver ;


the latter having a property the former had not, a pros perty 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 ano. ther for it, and a dollar thereby coining to be rated at 8s. in paper-money of New York, and 7s. 6d. in paper of Pensylvania, it has continued uniformly at those rates in both provinces now near forty years, without any variation upon new emissions; though, in Pensylvania, the paper-currency has at times increased from 15,0001. the first sum, to 600,0001, 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, 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 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 bave been dearer, the purchaser has been constantly 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 fur


nishing 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 colonytrade; which, as it 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 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 Pensylvania, 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 short.. ened, 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 10 be the measure of the value of other things.

3. To make the bills carry an interest sufficient to support their value.


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