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been made easier, the laws more harmonious, the commercial policy of England more possible of execution, and above all more effective military service would have been rendered by the colonists. However pardonable such a recommendation might have been from an English official, from a native it seemed the act of a traitor, and Dudley was so regarded. Yet it must be remembered that from 1681 he had identified himself with the movement to increase the control of England, and his present action was but a consistent result of his principles. Doubtless Dudley was ambitious and desirous of increasing his own power and position; but the fact that his views were presented before he took office and were urged at the expense of personal popularity while he was in office, and that he attempted loyally to make the best of conditions after the ministry had abandoned his plans for colonial union, points to some other motive than mere personal ambition. Dudley's ideas were the result of his long colonial experience and of the knowledge which he had gained in his long and varied career as a colonial administrator; they were the views of an English official rather than of a leader of the colonial spirit of individualism as exemplified in New England. Though his motives were questioned and distrusted by his fellow-colonists, his ideas and attempts at colonial union were wise and statesmanlike.

CHAPTER VIII

THE CURRENCY AND BANKING PROBLEMS DURING DUDLEY'S ADMINISTRATION AS GOVERNOR

The poverty of Massachusetts emphasized the need of a colonial currency. In the early years there was practically no specie in the colony, and the settlers were driven first to barter and then to the use of furs as a medium of exchange. The most common medium, however, was wampum, which continued to be legal for taxes until 1649 and for private debts until 1661.1 As trade and wealth increased, the colonists gradually accumulated a small stock of silver, chiefly Spanish coins, some of which remained in the colony and became the circulating medium. Since this silver was of different value from the English sterling silver coins, the General Court in 1642 voted that a Spanish dollar in Massachusetts should be equivalent to five shillings sterling.2 Perceiving that the European trade drew off the little stock of coin circulating in the colony, the colonists in 1652 determined to set up a mint of their own to coin a purely colonial currency, which they hoped would remain at home.3 An additional reason for having a mint was found in the fact that the coins brought in trade were frequently clipped, sweated, and of light weight, "whereby many people were cousened, and the Colony in danger of being undone thereby."4 Finally, according to Hutchinson, the trade with the West Indies brought in con1 Massachusetts Colony Records, ii. 279; iv. pt. ii. 4.

tIbid. ii. 29. 'Ibid. iv. pt. i. 84. * Felt, Massachusetts Currency, 30. siderable uncoined bullion, which had been the spoil of the pirates.1

The coins produced at the colonial mint were purposely made to contain less silver than the English sterling shillings, and soon passed in London at twenty-five per cent discount.2 This fact, however, was considered an advantage by the colonists, since the coins were designed solely for circulation in Massachusetts and their exportation was forbidden by law.3 The natural result of this depreciation was that sterling and Spanish silver soon appreciated in value, a fact recognized by the General Court in 1672, when the value of the Spanish dollar was raised from five to six shillings.4 These values were increased from time to time by the action of the courts,6 and silver passed according to a legal but fictitious value. This state of things caused Colonel Quarry, an acute observer of colonial affairs, to advise the government to reduce "all Coyns of America to one standard," since this would make most of the money centre in England.4 Accordingly the queen issued a proclamation fixing the value of the coins which most commonly circulated in America, and directing that these should pass according to the proclaimed values rather than at the values assigned them in the colonies.7 Dudley laid this proclamation before the General Court at its session in 1704; 8 but, although various bills were introduced to make its provisions effective, nothing was done, and the Council finally voted that the governor should issue a proclamation

1 Hutchinson, History of Massachusetts, i. 164.

* Felt, Massachusetts Currency, 32; Massachusetts Colony Records, iv. pt. i. 84.

* Massachusetts Colony Records, Hi. 353.

* Ibid. iv. pt. ii. 533.

* Douglass, Discourse concerning the Currencies of the British Plantations in America, ed. C. J. Bullock, in Economic Studies, ii. 303-304.

* Felt, Massachusetts Currency, 38.

''Massachusetts Acts and Resolves, viii. 472. 'Ibid.

officially publishing that of the queen.1 Although Dudley did this and the governors of the other colonies followed a similar course, the queen's proclamation was nowhere obeyed save in the Barbadoes;2 and the first attempt of the government to regulate the value of money contrary to natural laws failed.

The next attempt on the part of Massachusetts to increase her currency was unfortunately more pernicious than the simple depreciation of the specie coin, and was followed by a train of disastrous consequences. The unexpected return of the ill-fated expedition led by Sir William Phips against Quebec in 1690 produced a financial crisis. "The government was utterly unprepared for the return of the forces. They seem to have presumed, not only upon success, but upon the enemy's treasure to bear the charge of the expedition."3 Instead of a profitable venture, the government found "forty thousand pounds, more or less, now to be paid, and not a penny in the treasury to pay it withal . . . [and the] sailors and soldiers now upon the point of mutiny." * To meet this difficulty the General Court authorized the emission of £7000 in bills of credit, and soon increased this to £40,000;6 and it voted that these bills should be receivable for public dues at five per cent premium.6 A tax was levied to redeem them, and the bills were regarded as merely loans in anticipation of the collection of taxes; for, as Sewall says, they were "not made for want of Money; but for want of

•March 3, 1704-1705, ibid. 473.

• Felt, Massachusetts Currency, 60.

• Hutchinson, History of Massachusetts, i. 336. 'Mather, Magnolia, i. 173.

Massachusetts Acts and Resolves, vii. 375; Records of the General Court (Ms.), vi. 185.

'Davis, Currency and Banking, i. 10-13; Records of the General Court (Ms.), vi. 170, 171, 185.

Money in the Treasury."1 But in spite of the action of Phips, who "chearfully laid down a considerable quantity of ready money for an equivalent parcel of them,"2 the bills first passed at a discount, the soldiers getting no more than twelve or fourteen shillings in the pound. Then, as the time for the payment of taxes came, the notes went to a premium, and thus the loss fell upon the first holders.3 However, by adhering scrupulously to the method of redeeming the bills by taxes, and by offering five per cent premium when they were taken in payment for taxes (an offer which was duplicated by the town of Boston),4 the government was able to put out in issues and re-issues about £82,000 of these bills between 1690 and 1702, which were accepted willingly and passed freely in the colony.' Thus on Dudley's accession to office, he found the colony committed to a financial policy from which there seemed little hope of escape. Throughout the greater part of his administration, England and France were at war, and Massachusetts was burdened with taxes for the defence of her frontiers and for the various expeditions that she sent against Canada. Consequently it was a difficult task to force the unwilling assembly to vote taxes to retire the bills of credit; and the task was still more difficult from the fact that many of the assembly held that the bills were not an evil, but a genuine advantage to the colony in that they supplemented the deficiences of the colonial currency. Dudley's difficulties were

1 Sewall's Diary, November 3, 1712, Massachusetts Historical Society, Collections, 5th Series, vi. 366. •Mather, Magnolia, i. 174. 1 Hutchinson, History of Massachusetts, i. 357.

'Davis, Currency and Banking, i. 19; Record Commission, Boston Town Records, viii. 24-25.

•Davis, Currency and Banking, i. 14, 18. "In New England sterling exchange was 133 in 1702, a rate corresponding exactly to the rating of the dollar at 6s." — Bullock, Monetary History of the United States, 39.

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