The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-01-08
From the .Ns,c York Express.
MERCANTILE LIBRARY ASSOCIATION
JARED SPARKS HI ,roalcAL LECTURE.

CONTINENTAL MONEY.
In our report of Mr.. Sparks lecture on Friday
evening detail of the plan adopted for the first
issue of paper money was deferred for want of room
II was as follows;
During the first hundred wears after the settlement
Of the Colonies, they were dependent upon foreign
sources for their currency, which necessarily sub
jected them TO many Inconvenience, and had an
embarrassing effect upon trade. a the circulating
medium was utterly incompetent to the transaction
of even their rdinary affairs. This Inconvenience
was felt more severely when the Indian war broke
out. Public funds were wanted, but there was none
to be had and this the moving cause of their
resorting to the expedent of issuing paper money.
In the year 1870, Massachusetts made the first issue
of this kind Of currency Three modes were tried
First, by issuing bills on the credit of the Govern
ment simply, with promise TO redeem them within
given time. Second, certain taxes were pledged
for the redemption of the bills Third the bills were
secured by mortgages on lands. This last plan Mr.
Sparks considered the best in lis operation For
instance, 100000 in notes was put in circulation,
to be redeemed in fifteen years. This was done by
establishing loan offices in various parts of the pro-
vince, where money was lent on mortgages OF Lands,
at per cent one-tenth of the sum lent to be repaid
annually, so that at the end of ten years the whole
f50, 900 was paid back As fast as the loans were
repaid they were lent out again for shorter period
and at the end of fifteen years the whole sum was re-
turned by the borrowers and the bills DESTROYED BY
this operation the government gained only the interest
of the money but the people bad all the benefits arts
ing from active capital of $50 900 and circulate
ing medium To that amount. This money was gene
rally lent To farmers, and they were thereby enabled
TO cultivate their lands and to purchase Of the
chants necessary imported articles The lecturer
considered the first SYSTEM of issuing notes on the
simple credit of the government highly pcrnicous
in s tendency. True, it kept up its value for
while but when the time for its redemption came
round, without any means provided, the bills became
greatly depreclaed and this continued just in proper
tlOn Ia REDEMPTION
When we remember said Mr. S that this money was
made legal tender and that every creditor was
Obliged TO receive it at lis nominal value and thus
lose the amount Of its depr, citation, il will readily he
seen that the system fraught with mischief Each
of he colonies too, had lis own peculiar paper money
which Of course circulated more less IN the Others,
and this added TO their emhorrassments.
In the Colony Of Maryland, they adopted plan Of
raising taxes dcpositing the amount raised in the
Bank of England and issuing bills of credit on it
This appeared to be sound basis of credit, but when
the bills issued they at fell in value in the
ratio of interest between the time of issuing and that
of payment. True, as the time Of payment approach
ed, they gradually to par, bat as there was no
fixed value 10 the bills the effect of this approaching
currency was Just bad that of the depreclatng,
and moreover had tho effect of withdraw ing money
from circulation as it would be taken when at it,
lowest value and boarded up until it came to par.
The experiment was not repeated although few
bills of small denominations issued bearing IN
erest, in the hope Of keeping up their credit, but
these being of the nature OF depreclating currency
were likewise boarded. Mr. Sparks said that in re-
ference to this Colonial currency should be borne
in mind that what was lost by the people in this de-
probation was gain TO the Government, the bills rare
" or never being redeemed al their real value. II
operated therefore, in the nature of tax the differ
ence between their nominal and real value, though a
loss to the bill holder gain to the public SER
vice